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<s>[INST] Summarize the judgementCivil Appeal Nos.
1568 76, 1609 12, 1656, 1672, 1675 80, 1707, 1616, 1644, 1645, 1646, 1671, 1673, 1708 of 1974.
From the Judgment and order dated 14th August & 12th September, 1974 of the Allahabad High Court in Civil Writ Petition Nos. 3422, 3498, 3430, 3462, 3491, 3429, 3427, 3423, 3472, 3443, 3473, 3474, 3494, 3439, 788, 774, 786,787, 791, 793, 869, 3428, 3502, 3420, 3421, 3528, 3478, 3477, & 3478 of 1974.
Yogeshwar Prashad, section C. Manchanda, section K. Bagga, 353 Pramod Swarup, O.P Agarwal, Ms, Baby Krishnan G.S. Chaterjee.
Mrs. S.Dikshit, R.N. Trivedi Miss R. Govind for the Appellants.
The following Judgments were delivered THAKKAR, J. The Constitution which promises a socialistic pattern of Society in the preamble and traces the contours of the socialistic philosophy which permeates the spirit of the Constitutional can neither command nor commend the exercise of the Constitutional Jurisdiction to issue HIGH PREROGATVE WRITS under article 32 226 or 227 in order not to remove injustice but to do injustice in order not to prevent exploitation of the poor by the rich, but to permit such exploitation.
And yet the CONSTITUTIONAL JURISDICTION of the Court (as polarzed from its 'ERROR JURISDICTION ' has been invoked in order to use the hand of the Court for transferring money from the pockets of poor cultivators (who feed the Nation) to the pockets of the dealers in fertilizers (who feed themselves) by Challenging a notification on technical grounds.
Such jurisdiction is invoked to enable the dealers to reap a 'rich ' harvest of 'unjust enrichment ' through the instrumentality of the Court at the cost and expenses of the cultivators.
We firmly believe that the Court exercising CONSTITUTIONAL JURISDICTION is not obliged to grant a writ in such circumstances.
But we need not elaborate on the theme furthermore as the High Court has rejected the petition on merits and as we are of the same opinion.
Events leading to the institution of the Writ Petitions under Article 226 of the Constitution of India giving rise to this group of appeals (by certificate of fitness granted by the Allahabad High Court) have taken the following course: (i) On October 11,1973 the Central Government issued a notification fixing the maximum retail selling price of certain varieties of fertilizers to the consumers.
It was issued in exercise of powers under clause (3) of the Fertilizer (Control) order of 1957 promulgated under Section 3 of the of 1955.
(referred to as 'Act ' hereinafter).
(ii) Some time later, on June 1,1974 the Central Government issued a Notification whereby the maximum retail selling price of different varieties of fertilizers was steeply revised upwards in order to compensate the 'manufac 354 turers ' in the context of the spurt in the prices of various inputs.
The extent of the rise may be illustrated by taking the instance of 'Urea 46% Nitrogen.
Its price was revised upwards from Rs. 1090 per ton to Rs 2000 per fon.
(iii) On June 14 1974 the State of ' Uttar Pradesh issued the Uttar Pradesh Fertilizer Prices (Supplementary) Order 1974 in exercise of the powers conferred by Rule 114 of the Defence of India Rules, 1971 adverted to as 'D.I.R. hereinafter.
Under this notification the registered 'dealers ' were prohibited from charging to the cultivators price in excess of the maximum price prevailing immediately prior to the upward revision authorised by the Central Government on June 1, 1974 in respect of stocks acquired at pre revision rates held by the dealers on the eve of the upward revision of prices.
(iv) The net result of the two last mentioned notifications was as follows: The dealers could sell to the cultivators fertilizers at the higher rates authorised by the notification dated June 1 1974 from out of the stocks acquired thereafter under both the notifications.
As regards the stocks acquired after June 1 1974 the registered dealers were not affected by the notification issued by the State Government under the DIR in as much as the notification issued by the Central Government authorising the upward revision remained unaffected by the notification issued by the State.
The dealers however could not sell the fertilizers at the higher rates from out of the existing stock acquired by them at the lower rates immediately prior to the upward revision effected on June 1 1974 in view of the aforesaid notification issued by the State Government on June 14 1974.
Taking the instance of 'Urea 46% Nitrogen ' the net impact of the impugned State notification was that the 'dealers ' were not permitted to charge to the cultivators Rs. 2000 per ton instead of Rs. 1090 per ton in respect of stocks acquired at the lower rates.
(v) It was in this background that the dealers instituted the petitions giving rise to the present appeals by certificate, challenging the legality and validity of the 355 impugned notification issued by the State Government on June 14 1974.
Now, the following facts are not in dispute: (i) The registered 'dealers ' were entitled to a fixed profit margin of Rs. 45 per ton (and no more) under the terms and conditions of the licence held by them.
(ii) The stocks acquired prior to June 1 1974 were meant for sale to the cultivators at the pre upward revision rates at which rates the dealers had acquired the stocks.
This stock had remained unsold with the dealers till than because the cultivators had not been able to effect their purchases till that date.
(iii) The price rise was authorised to compensate the 'manufacturers ' in the context of the spurt in the price of various 'inputs ' and had no bearing on the selling price for the 'dealers ' who were not concerned with the cost of production.
(iv) In case the State Government had not issued the impugned notification dated June 14 1974 the dealers would have been enabled to charge about twice the prices at which the stocks were made available to them for sale prior to the notification.
For instance 'Urea 46%.
Nitrogen ' made available to the dealers for effecting sales to the cultivators at Rs. 1090 per ton could have been sold to the cultivators at Rs. 2000 per ton.
Thus they would have been enabled to make a wind fall bumper profit of Rs. 910 per ton (in respect of 'Urea 46% Nitrogen ') as against permitted profit margin of Rs. 45 per ton (i.e. about 1000% in place of about 5%) and to secure unjust enrichment ' for themselves to such an unconscionable extent at the cost of the cultivators.
It is in the backdrop of these undisputed facts that the question regarding the validity of the impugned notification dated June 14 1974 issued by the State of Uttar Pradesh came to be challenged before the High Court of Allahabad.
The impugned notification was issued in order to meet a problem 356 which arose in the peculiar facts and circumstances of the situation.
The problem arose apparently because the competent authority exercising the powers of the Central Government under the overlooked that the dealers who were concerned with the distribution of the fertilizers to the cultivators on a fixed and assured profit margin of Rs 45 per ton would be having with them stock in trade obtained at the pre enhancement prices.
And that they might take under advantage of the situation by charging a higher rate to the consumers even in respect of the stocks acquired at the lower rates The dealers could and should have sold the stock in trade acquired at the pre enhancement price at the hiterto prevailing rates till the old stocks were exhausted.
That is what would have been expected of them having regard to the fact that they were getting a fixed and assured margin of profit of Rs. 45/ per ton and that the enhancement of the price was necessitated and made solely to neutralize the rise in the cost of the inputs which phenomenon affected only the 'manufacturers ' and not the 'dealers '.
There was therefore no occasion or justification on their part for charging a higher price to the consumers in regard to the sales effected from the existing stocks acquired at the lower rates.
The notification issued by the Central Government on June 1 1974 was silent on the question of selling prices in respect of sales from out of stocks acquired earlier at the lower rate.
Since the said notification issued by the Central Government was silent the State Government which appears to have been more vigilant stepped in and exercised powers which were conferred on it by the DIR.
The challenge before the High Court was made on three main grounds, viz: (A) The Central Government having issued a notification in exercise of powers under the the State Government could not have issued the impugned notification under the Uttar Pradesh Fertilizer Prices (Supplementary) order 1974 issued in exercise of the powers conferred under Rule 114 of the 'DIR.
The power to fix the maximum price in respect of fertilizers could be exercised only under the Essential.
Commodities Act it being a special Act and could not have been exercised by the State Government by issuing an order under the 'D.I.R. ' (B) Even if the State Government had the power to issue 357 the notification under the D.I.R. the notification was invalid by reason of its inconsistency with the notification issued by the Central Government on June 1 1974 under the .
(C) The impugned notification was violative of Article 14 of the Constitution of India.
The High Court of Allahabad negatived all the three contentions by an extremely well considered and well reasoned judgment.
In the present group of appeals by certificate the original petitioners have reiterated the same contentions before this Court.
Re: Ground A: The argument in substance is that is a special Act under which the price relating to a commodity declared to be an essential commodity can be regulated.
The power to regulate the price in respect of such an essential commodity cannot therefore be exercised under Defence of India Rules 1971 or under any other provision of law.
Now, both the as also the Defence of India Rules of 1971 are Central legislations enacted by the Parliament.
The 'D.I.R. ' were brought into force by the Parliament in 1971 in order to meet an emergency situation.
The legislative competence of the Parliament to enact the legislation.
On the subject in question namely fixation of prices of all articles is not questioned.
The Parliament having competence to legislate in regard to the subject has enacted both the legislations one in 1955 another in 1971.
The impugned notification has been issued under the latter statute.
The 'D.I.R. ' having been enacted later it cannot and it has not been contended that the doctrine of repeal is attracted.
Since there is legislative competence since the statute is not eclipsed by the doctrine of express or implied repeal how can the power exercised under the valid statute be assailed ? The only argument advanced a misconceived one in our opinion.
is that since the 'Act ' deals with essential commodities and fertilizer has been declared under the Act as an essential commodity the power conferred by the 'D.I.R. ' cannot be exercised in respect of regulation of the price of such a commodity or article.
It is not disputed that 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 358 to envelope 'fertilizers '.
The fact that 'fertilizers ' have been declared as an essential commodity and its price can be regulated under the powers conferred by the Act is altogether immaterial.
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.
There is nothing in principle or precedent to support the proposition that two avenues or sources of power cannot be validly created.
What then is the fabric of the challenge ? The only answer offered by the counsel is that the Act is a statute specially enacted inter alia for regulation of the prices of commodities declared to be essential and therefore in respect of such commodities the power can be exercised only under the Act.
We are unable to accede to this argument Since as discussed earlier Parliament can constitutionally and validity 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 '.
Counsel however seeks support from the following passage from Craies on Statute Law(1) "Acts of Parliament some times contain general enactments relating to the whole subject matter of the statute and also specific and particular enactments relating to certain special matters; and if the general and specific enactments prove to be in any way repugnant to one another the question will arise which is to control the other ? In Pretty vs Solly. ; 610.
Romilly M.R. stated as follows what he considered to be the rule of construction under such circumstances.
"The general rules" said he "which are applicable to particular and general enactments in statutes are very clear; the only difficulty is in their application.
The rule is, that whenever there is a particular enactment and a general enactment in the same statute and the latter taken in its most comprehensive sense would over rule the former the particular enactment must be operative and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply." (Emphasis added) It is overlooked that the said passage deals with different pro 359 visions in the "same" statute.
That when there is a special provision in the very same statute in regard to a subject matter the special provision of the statute will ordinarily prevail in rivalry or competition with the general provision is a proposition with which there is no quarrel.
But then we are not at all concerned with any rivalry between two provisions of the 'same ' statute.
We are faced with two enactments by the same legislature which create two sources of power to achieve the same purpose.
To repeat what has been observed earlier there is no legal bar to creating two sources of power.
And there is no authority in principle or precedent for contending that one source of power is more valid than the other.
Or that the power validly conferred by the same legislature can be exercised only under one and not the other of the two statutes leaving aside the question of irreconcilable or intolerable inconsistency.
We therefore confirm the view of the High Court and repel the challenge.
Re: Ground B: The validity of the impugned notification issued by the State under the 'DIR ' is assailed on the ground that it is inconsistent with the earlier notification issued by the Centre.
As discussed earlier the Central notification does not 'specifically ' deal with the question as regards selling price in respect of sales from the existing stocks acquired by the dealers at the pre enhancement prices which remained unsold with them as the cultivators could not effect purchases till then.
In other words the Central notification does not deal with this ramification at all.
It does not show awareness of this dimension and is altogether silent on the subject.
The impugned State notification issued later on the other hand deals specifically pointedly and solely with this dimension.
It is in this perspective that the issue has to be judged bearing in mind the undisputed position that there is no Centre State conflict involved in the sense that (1) the Centre which is not even impleaded as a party does not question the power of the State or the validity of the notification as impinging on its (Centre 's) jurisdiction or authority; (2) Centre has not asserted its superior authority from the standpoint of Centre State power equation in order to supersede the State notification.
The question clamoring for solution in this scenerio has two facets viz: (1) Whether there is any inconsistency between the Central notification on the one hand and the State notification on the other and; 360 (2) whether the inconsistency is an irreconcilable or intolerable one: Is there inconsistency? The Central notification as discussed earlier 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 on speaks on a refinement of the subject about which the Central notification is blissfully unaware and on which it is altogether silent.
The two do not overlap.
There is therefore no real inconsistency.
The principle may be stated thus.
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, in a friendly manner towards the same destination.
If the Centre has built a wall and 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 '.
The Centre can object to the State speaking on the same channel or sitting on its shoulders and perhaps even override the State.
But the Centre and the State can certainly accommodate each other in a friendly spirit in the overall NATIONAL INTEREST when both of them are trying to supplement each other.
In the present case both notifications can safely be construed as supplementary and friendly rather than inconsistent or hostile.
The Centre does not question to the State speaking on the nuance on which the Centre has maintained silence.
There is therefore no real element of inconsistency in the two notifications.
The following passage extracted from Statutory 361 Construction by Sutherland (para 2022(1),) shows that the aspect relating to 'refinement ' is a well recognized factor and that the state law can be treated as an exception when the inconsistency is not irreconcilable : "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.
Likewise where a later statute adapted for a particular locality conflicts with a general law of state wide application, the special or local law will supersede the general enactment.
Where, however, the later special or local statute is not irreconcilable with the general statute to the degree that both statutes cannot have a coterminous operation, the general statute will not be repealed, but the special or local statute will exist as an exception to its terms." (Emphasis added) Assuming for the sake of argument that it is considered to be an inconsistency, it does not appear to be an irreconcilable or intolerable one so as to invalidate it, as will be presently shown.
Is the alleged inconsistency irreconcilable or intolerable one ? There are degrees of inconsistency in the context of conflict of laws.
There can be apparent or surface inconsistency which may be considered as a non hostile, tolerable, benign, one, subject to the unquestioned power of the Centre to override the State if so minded.
On principle, every apparent inconsistency cannot be presumed to be hostile or intolerable.
More so when the Centre does not even raise a whisper of discord.
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 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 'promootes ' the real object of both the 362 laws, and is in the real sense 'supplementary ' or 'complementary ' to the Central law.
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 maximum 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.
It is not contended even by the petitioners, for the very good reason that it is incapable of being so contended, that the object of the price regulation is to enable the dealers to make unconscionable profit.
Thus the impugned State notification promotes rather than 'defeats ', the 'life aim ' of Central as also the State notifications.
It 'helps ' rather than 'hurts ' the objectives and goals of the Centre, and there is no conflict whatsoever of 'interest ', 'purpose ', or 'perspective '.
The State has done only that which the Centre presumably would have readily done if it was fully aware of the situation from all angles of vision.
For, the only impact of the impugned notification is that the 'cultivator ' for whose protection the price regulation is essentially made, is saved from exploitation without hurting the legitimate claim of the dealer, who, in any case, gets his fixed profit margin of Rs. 45/ per ton.
In Australian Boot Trade Employee 's Federation vs Whybrow Co.,(1) the High Court of Australia in a somewhat similar situation held that there was no inconsistency between a State law fixing a minimum wage for workers in the boot trade of 1$ per hour and a federal law fixing a minimum wage for the same workers of 1 1/2 $ per hour.
Speaking through Barton, J. the court observed : "The determinations of the wages boards (in effect the State law) and the proposed award (in effect, the Commonwealth law) are courched in the affirmative in respect of the material part of each, the provision as to the minimum wage.
None of them prescribed an inflexible rate.
The (State) determinations prescribe a minimum and it is in each case 363 lower than the minimum named by the proposed (Commonwealth) award.
By paying the latter minimum an employer will be obeying both laws.
The affirmative words of the (Commonwealth) award, therefore, do not "impart a contradiction" between it and the (State) determinations.
It is impossible to say that the employer cannot obey the one without disobeying the other.
Therefore, the former and the latter may stand together.
Therefore, according to the proper test, they are not inconsistent." (Emphasis added) It would thus appear that in a somewhat parallel situation the Australian High Court had taken the view that since both laws can be obeyed without disobeying any, there is no conflict.
In the present case also an endeavor must be made to place a harmonious interpretation which would avoid a collision between the two.
Another way of looking at the problem is this: The impugned notification, though issued by the State, has its source of power in the 'DIR ' which is a Central Statute enacted by the Parliament.
The State is merely an instrumentality for executing the purpose of the Central Act.
The impugned notification which is 'later ' in point of time must, therefore, prevail to the extent it 'speaks ' on the refinement or nuance of the matter on which nuance the earlier notification is 'silent '.
In any view of the matter, therefore, the challenge from this platform cannot succeed.
It may be mentioned that a half hearted argument was advanced that article 254(2) would be attracted and Presidential assent would become necessary in order to give effect to the impugned notification.
There is no merit in it in as much as article 254(2) does not envision Presidential assent to 'notifications ' issued under an Act (as distinguished from 'laws made by legislature ') as has been observed by a Constitution Bench of this Court in Kerala State Electricity Board vs Indian Aluminium Co.,(1) wherein Alagiriswami, J. speaking for himself and for Bhagwati, Goswami and Sarkaria JJ.
says: "Was it necessary to get the President 's assent for this notification as contended by some of the respondents ? Quite clearly no Presidential assent was possible to the notification.
Article 254(2) does not contemplate Presidential 364 assent to notifications issued under the Act.
The article contemplates Presidential assent only to laws made by the legislature of a State.
" This ground of attach also accordingly fails.
Regarding ground (C): The appellants contended that the impugned notification was violative of article 14 of the Constitution of India and was therefore invalid.
The argument was advanced on the assumption that the State Government had permitted governmental agencies falling within the definition of 'dealer ' in the Fertilizer Control Order, 1957 to sell the stocks held by the said agencies immediately preceding the issuance of the impugned notification dated June 1, 1974 at the higher rates.
This allegation has been controverted by the State of Uttar Pradesh.
A reference to the counter affidavit sworn by the Accounts Officer, Fertilizers and Manuals Directorate of Agriculture, field in C.M.P. No. 6773 of 1974 clearly shows that the State Government had not granted any such permission.
Thus, the very basis of the challenge on the score of hostile discrimination is found to be non existent.
The High Court was perfectly justified in rejecting this contention.
We, therefore, confirm the view taken by the High Court.
Thus all the grounds called into aid by the appellant for challenging the impugned notification are found to be devoid of substance.
Under the circumstances the appeals fail and are dismissed.
Having regard to the facts and circumstances of the case there will be no order regarding costs.
The interim orders passed by this Court are hereby vacated.
In the result, the concerned District Magistrate will now have to take appropriate steps to pass on and pay to the cultivators the differential amount deposited by the dealers pursuant to this Court 's orders dated September 2, 1974, and, October, 10, 1974, as early as possible.
And, in any event, within six months of this order, after proper verification.
We order accordingly.
Appeals dismissed.
Interim orders vacated.
365 VARADARAJAN, J. Civil Appeal 1656 of 1974 is by special leave.
The other appeals are by certificate granted by the Allahabad High Court.
All the appeals arise out of the judgment of a Division Bench of that High Court in a batch of writ Petitions out of which W.P. No. 3421 of 1974 was treated as the leading case.
Civil Appeals 1568 1576 of 1974 and batch have arisen out of that batch of Writ Petitions.
In the other set of Civil Appeals another Writ Petition of 1974 is said to have been treated as the leading case by the High Court.
The decisions were rendered in Writ Petition No. 3421 of 1974 for one batch and in another Writ Petition of 1974 for the other batch.
But in all the appeals before us, the judgment in W.P. No. 3421 of 1974 alone was referred to.
The Writ Petitions filed under Article 226 of the Constitution challenged the validity of a notification dated 14 6 1974 issued by the Government of Uttar Pradesh in exercise of the power conferred by Rule 114 of the Defence of India Rules, 1971, directing that no registered dealer of fertilizer shall charge or retain, enter into or enforce any contract for charging, in respect of any fertilizer sold to any person on or after 1.6.1974, from any stock held on 31.5.1974, a price exceeding the maximum price fixed by the Central Government for the sale of fertilizer under an earlier notification dated 11.10.1973 issued under Clause 3 of the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by section 3 of the , as it prevailed on 31 5 1974.
The Writ Petitions challenged also an order dated 18.6.1974 passed by the District Agricultural Officers directing registered dealers of fertilizers to refund the excess price charged on the sale of fertilizer effected on or after 1.6.1974 from out of the stock which was in existence on 31.5.1974.
The Writ Petitions sought the quashing of the said notification dated 14.6.1974 and also a direction to the District Agricultural Officers and other District Authorities not to ask the dealers to refund the excess in respect of sales completed prior to the date of that notification.
The High Court has, while upholding the validity of the notification dated 14.6.1974 and dismissing the prayer for quashing the same, directed the District Agricultural Officers and other District Authorities not to enforce the order for refund of the excess price realized on the sale of fertilizer up to 14.6.1974 from the stocks which were in existence on 31.5.1974.
This part of the High Court 's order has become final and has not been challenged by the State Government.
This Court has directed by orders dated 2.9.1974 and 30.10.1974 that the excess price charged on the sale of fertilizer which was in the possession of the appellants before 1.6.1974 should be deposited 366 with the District Magistrate concerned within a fortnight of the sales to remain in a separate account.
The fertilizer in question is admittedly a commodity controlled under the Fertilizer (Control) Order, 1957 issued by the Central Government in exercise of the power conferred by s.3 of the , 19555.
The maximum price for sale of fertilizers by registered dealers to consumers is fixed under Clause 3 of the Fertilizer (Control) Order, 1957 by notifications issued from time to time.
The sale price of one of the varieties of fertilizers with which we are concerned in these appeals has been fixed at Rs. 1050 per ton by a notification dated 11.10.1973 which was in force on 31.5.1974.
The price fixed in that notification for the sale of that variety of fertilizer to registered dealers was Rs. 1005 per ton leaving a margin of Rs. 45 per ton on sale to consumers at Rs. 1050 per ton.
The Central Governments in supersession of the notification dated 11.10.1973 fixed the maximum sale price of that variety of fertilizer at Rs. 2000 per ton by a notification dated 1.6.1974, thus giving an increases of Rs. 950 per ton for that variety to the dealers.
The dealers started selling at the new rates fixed in that notification for the several varieties of fertilizers.
The Government of Uttar Pradesh being of the view that the Central Government 's notification dated 1.6.1974 was not intended to apply to old stock procured by dealers at considerably lower prices from producers which was in existence on 31.5.1974 issued the impugned notification dated 14.6.1974 directing that the old stock should be sold at the old rate of Rs. 1050 per ton with effect from 1.6.1974.
The Writ Petitions were filed by the dealers, some of them for quashing the State Government 's notification dated 14.6.1974, some for quashing that notification as also for directing the District Agricultural Officers and other District Authorities not to enforce the order mentioned above and some for the latter direction alone.
The question for consideration by the High Court was the validity of the State Government 's notification dated 14.6.1974 as regards the stock of fertilizer available with the dealers at the end of 31.5.1974, i.e., whether that notification will prevail over the Central Government 's notification dated 1.6.1974.
The first contention urged for the dealers before the High Court was that fertilizer was not a commodity essential to the community within the meaning of s.3 of the Defence of India Act, 1971 and, therefore, the State Government had no power to fix its price or give 367 any other direction in regard thereto.
The learned Judges of the High Court held that chemical fertilizers being necessary for increased production of food crops and oil seeds crops under modern scientific methods of agriculture would be commodities essential for the life of the community and that the argument that trade in chemical fertilizers cannot be regulated under s.3 of the Defence of India Act, 1971 is untenable.
Before us no argument was advanced by the learned counsel for the appellants that chemical fertilizers are not essential commodities.
On the other hand, it was repeatedly contended that it is an essential commodity within the meaning of s.2(1)(a) of the and is specifically mentioned as such in s.2(1)(a) (xi) of that Act.
There is no dispute before us about this matter though there is dispute whether fertilizer can be brought within the words "any article" mentioned in Rule 114(2) of the Defence of India Rules, 1971.
Therefore, that question does not arise for detailed consideration by us.
The second ground of attack before the High Court was that the State Government lacked the power to control the price of chemical fertilizer on the ground that no such power is conferred on it by the Defence of India Act, 1971 and the rules framed thereunder in respect of chemical fertilizer as being needed for the preparation of the defence or connected with the prosecution of war.
This contention was rejected by the learned Judges of the High Court.
It is not necessary for us to consider this aspect of the matter as no such argument was advanced before us by the learned counsel for the appellants.
The dispute before us is as to whether chemical fertilizer would fall within the words "any article" found in Rule 114(2) of the Defence of India Rules framed in exercise of the power conferred by s.3 of the Defence of India Act, 1971 though it is not disputed that the impugned State Government notification dated 14.6.1974 was issued when the emergency which was lifted on 22.3.1977 was in force.
The next contention urged before the High Court was that as the Central Government had already fixed the price of chemical fertilizer by the notification dated 1.6.1974 issued under the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by s.3(2) (c) of the , the State Government had no power to fix its price under Rule 114(2) of the Defence of India Rules, 1971 by the later notification dated 14.6.1974 in exercise of its delegated power.
This contention was rejected by the learned Judges of the High Court as being unacceptable.
The argument of the learned Advocate General appearing for the State of Uttar Pradesh 368 before the High Court was that by the impugned notification dated 14.6.1974 the State Government had not fixed any price, but had only directed that certain stocks of fertilizers which were in the possession of dealers on 31.5.1974 shall be sold at the rates fixed by the Central Government in the earlier Notification dated 11.10.1973 which had been superseded by its own notification dated 11.6.1974, has not been accepted by the learned Judges of the High Court as the basis of their decision.
On the other hand, they have proceeded on the basis that the State Government has fixed the dealers ' sale price of the fertilizer by the impugned notification in exercise of the power conferred by Rule 114 of the Defence of India Rules, 1971.
The undisputed fact is that the price fixed for the sale of the fertilizer to dealers was Rs. 1005 per ton under the Central Government 's previous notification dated 11.10.1973 which was superseded by its subsequent notification dated 1.6.1974 in which the price fixed for sale of the same variety of fertilizer to dealers was Rs. 1960 per ton from the date of that notification.
The price fixed for sale by dealers was Rs. 1050 per ton under the superseded notification dated 11.10.1973 and Rs. 2000 per ton in the notification dated 1.6.1974.
The learned Judges of the High Court noted the obvious fact that the dealers would get an excessive margin of Rs. 995 per ton in respect of the old stock purchased by them at Rs. 1005 per ton by selling that stock at the new sale price of Rs. 2000 per ton fixed by the notification dated 1.6.1974, whereas under the notification dated 11.10.1973 their margin was only Rs. 45 per ton.
They have expressed the view that it could be a legitimate circumstance to persuade them to exercise their discretion under Article 226 of the Constitution against the appellants.
The learned Judges rejected the contention urged on behalf of the dealers that there is conflict of power exercised by the Central Government and the State Government in the same commodity, fertilizer, by the two notifications dated 1.6.1974 and 14.6.1974 on the ground that the under which the Fertilizer (Control) Order, 1957 has been made and the Central Government 's notification dated 1.6.1974 has been issued and the Defence of India Act, 1971, under which the Defence of India Rules, 1971 have been framed and the State Government 's notification dated 14.6.1974 has been issued, are both Central enactments operating in different fields and have different objects, that it is only an accident that the two notifications relate to the same commodity, fertilizer, considered as an essential commodity by the Central Gov 369 ernment under the and as a commodity essential to the community by the State Government under the Defence of India Rules, that the State Government has unfettered power under Rule 114 of the Defence of India Rules, 1971 to fix the price of fertilizer and regulate its supply notwithstanding the fact that fertilizer is an essential commodity under the and that the State Government can also do under the Defence of India Rules, 1971 framed under the Defence of India Act, 1971 what the Central Government can do under the Fertilizer (Control) Order, 1957 made under the .
The learned Judges rejected the argument of the learned Advocate General that the Central Government 's notification dated 1.6.1974 does not apply to stock of fertilizer which the dealers had carried forward from the stock which was available on 31.5.1974 and held that in view of s.37 of the Defence of India Act, 1971 which says that the provisions of that Act or any Rule made thereunder or any Order made under any such Rule shall have effect not withstanding anything inconsistent therewith contained in any enactment other than that Act, or in any instrument having effect by virtue of any enactment other than that Act confers supremacy on the later State Government notification dated 14.6.1974 over that of the Central Government dated 1.6.1974.
They held that the similar provision in s.6 of the which says that any order made under s.3 of that Act shall have effect notwithstanding anything inconsistent therewith in any other enactment or any instrument having effect by virtue of any enactment other than that Act will not have any effect on the power of the State Government exercised under the Rules made under the later Defence of India Act, 1971 which also is a Central enactment on the ground that the provisions of the later enactment prevail over those in the earlier enactment of the same legislative body in view of s.37 of the later Act.
The learned Judges of the High Court rejected the contention urged on behalf of the dealers that the is a special Act dealing with essential commodities and the Defence of India Act, 1971 is a general Act dealing with all other commodities and, therefore, the notification dated 1.6.1974 issued by the Central Government under the Fertilizer (Central) Order, 1957 made under the provisions of that Act must prevail over the State Government 's notification dated 14.6.1974 issued under the Defence of India Rules, 1971, framed under the Defence of India Act, 1971.
They have observed that no question of special or general Act arises in these cases in view of the provisions contained in s.37 of the Defence of 370 India Act, 1971 and that s.6 of the draws within its ambit only those Acts which were in existence and in force on the date of commencement of that Act and that it cannot take within its ambit the later Defence of India Act, 1971.
The learned Judges of the High Court rejected the contention urged on behalf of the dealers that the State Government 's impugned notification dated 14.6.1974 is malafide and motivated and the result of colourable exercise of power.
There is no need to refer to this ground of attack in detail as no argument was advanced in this Court about any such ground.
The next contention urged before the learned Judges of the High Court on behalf of the dealers was that the State Government 's notification dated 14.6.1974 was discriminatory on the ground that some governmental agencies falling within the definition of "dealer" in the Fertilizer (Control) Order, 1957 were permitted to sell their stock of fertilizer carried over from 31.5.1974 at the new rate mentioned in the Central Government 's notification dated 1.6.1974.
The learned Judges rejected this contention on the ground that the impugned notification dated 14.6.1974 applies to all dealers of fertilizer equally and does not provide for any such discriminatory treatment to governmental agencies and that the executive order to that effect, if any, may be illegal and would not invalidate the impugned notification as being discriminatory.
The learned Judges of the High Court thus upheld the validity of the State Government 's impugned notification dated 14.6.1974 and held that it is only prospective in operation and would apply only to sales of fertilizer made from 14.6.1974 out of the stock which was available with the dealers at the end of 31.5.1974.
The appellants are dealers in fertilizer as defined in Clause 2(c) of the Fertilizer (Control) Order, 1957.
According to that clause "dealer" means any person carrying on the business of selling fertilizer, whether wholesale or retail.
According to Clause 2(d) of that Order, fertilizer means any substance used or intended to be used as a fertilizer of the soil and specified in column 1 of Schedule I and includes a mixture of fertilizers and a special mixture of fertilizers.
Trade and commerce in, and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in public interest fall under entry 33 of the Concurrent List III in the Seventh 371 Schedule of the Constitution.
Trade and commerce within the State subject to the provisions of Entry 33 of List III fall under entry 26 of the State List II in the same Seventh Schedule.
Fertilizer is an essential commodity under s.2(a)(xi) of the .
The Fertilizer (Control) Order, 1957, has been made in exercise of the power conferred by s.3 of the in respect of fertilizer.
Under Clause 3(1) of that Order the Central Government has power, with a view to regulating equitable distribution of fertilizers and making fertilizers available at fair prices, by a notification in the official gazette, to fix the maximum price or rates at which any fertilizer may be sold by a manufacturer or a dealer.
The Central Government had issued the notification dated 11.10.1973 fixing the maximum sale price by producers to dealers as Rs. 1005 per ton and the maximum sale price by dealers to consumers as Rs. 1050 per ton in respect of the variety of fertilizer with which we are concerned in these appeals.
There is nothing on record to show that when that notification of the Central Government was in force there was any notification of the State Government of Uttar Pradesh fixing the maximum price of fertilizer for sale by dealers.
Subsequently, the Central Government issued the notification No. G.S.R. 254E dated 1.6.1974 fixing the maximum price at which a dealer could sell that variety of fertilizer as Rs. 2000 per ton in supersession of the earlier notification dated 11.10.1973.
There is no dispute that the price fixed for sale of that variety of fertilizer by the producer to the dealer is Rs. 1960 per ton.
Under s.3(1) of the Defence of India Act, 1971 the Central Government had power, by notification in the Official Gazette, to make such rules as appear to it necessary or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community.
Section 1(3) of that Act said that the Act shall come into force at once and shall remain in force during the period of operation of the Proclamation of Emergency and for six months thereafter.
There is no dispute that the Emergency which was in force when that Act was passed was lifted on 22.3.1977.
Rule 114(2) of the Defence of India Rules, 1971 made in exercise of the power conferred by s.3(1) of the Defence of India Act, 1971 says that if the Central Government or the State Government is of opinion that it is necessary or expedient so to do for securing the defence of India and civil defence, the efficient conduct of military operations or the maintenance or increase of supplies and services essential to the life of the community or for securing the equitable distribution and availability of any article or thing at fair prices, it may, by order 372 provide for regulation or prohibiting the production, manufacture.
supply and distribution, use and consumption of articles or things and trade and commerce therein or for preventing any corrupt practice or abuse of authority in respect of any such matter.
Rule 114(3)(h) gives power to the Central Government or the State Government to fix the prices or rates at which articles or things of any description whatsoever may be sold or hired or for relaxing any maximum or minimum limits otherwise imposed on such prices or rates.
It is under that rule that the State Government issued the impugned notification No. A 490(V)/XII 1974 dated 14.6.1974 fixing the maximum price of the concerned variety of fertilizer in these terms : "No registered dealer shall charge or retain or enter into or enforce any contract for charging, in respect of any fertilizer sold to any person on or after June 1, 1974 a from out of any stock carried over by him from May 31,1974 a price exceeding the maximum price fixed under Clause 3 of the Fertilizer (Control) Order, 1957 as it prevailed on May 31, 1974".
The reference to the price as it prevailed on May 31, 1974 is to the price fixed in the Central Government 's notification dated 11.10.1973 which has been specifically superseded by the Government 's notification dated 1.6.1974.
The High Court has held that the impugned notification dated 14.6.1974 is prospective in operation and can apply only to sales made from 14.6.1974 of the fertilizer which was carried over from the stock held at the close of 31.5.1974.
It is not disputed that the notification could be only prospective in operation and would not apply to sales effected up to 14.6.1974 of the fertilizer carried over from the stock which was held at the end of 31.5.1974.
It is also not disputed that the State Government issued the impugned notification with the object of preventing dealers from profiting to the extra extent of Rs. 950 per ton in respect of the stock which had been purchased by them prior to 1.6.1974 at Rs. 1005 per ton by selling the same at Rs. 2000 per ton fixed in the notification dated 1.6.1974 while that stock could have been sold prior to 1.6.1974 only at Rs. 1050 per ton.
The question is which of these two notification is valid and should prevail in regard to the fertilizer carried over from the stock held by dealers at the close of 31.5.1974.
The Central Government 's notification dated 1.6.1974 issued under Clause 3(1) of the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by s.3(1) of the , and the State Government 's impugned notification dated 373 14.6.1974 issued under Rule 114 of the Defence of India Rules, 1971 made in exercise of the powers conferred by s.3(1) of the Defence of India Act, 1971 relate to the same commodity, fertilizer, which is declared to be an essential commodity under s.2(a)(xi) of the , and may ordinarily fall under the term "article or things of any description whatsoever" occurring in Rule 114(3)(h) of the Defence of India Rules 1971 and both of them fix the maximum price at which dealers can sell the fertilizer.
The Central Government 's notification dated 1.6.1974 applies to the whole country while the impugned notification dated 14.6.1974 of the State Government can apply only to the State of Uttar Pradesh.
The appellants ' attack on the impugned notification is two fold.
The first ground of attack forcibly urged by Mr. P. Govindan Nair, Senior Counsel appearing for one set of appellants is that the impugned notification is altogether invalid in law and non est on the ground that the State Government has no power whatsoever to issue the notification under the Defence of India Rules in respect of an essential commodity, fertilizer, covered by the Central Government 's notification issued under the Fertilizer (Control) Order, 1957, made in exercise of the power conferred by the .
The second ground of attack urged by Mr. Yogeshwar Prasad, Senior Counsel appearing for the other set of appellants is based on Article 14 of the Constitution, namely, that it is discriminatory and, therefore, bad in law.
Mr. S.C. Manchanda, Senior Counsel appearing for the respondents in all the appeals naturally submitted that there is no substance in any of these two grounds.
The second ground of attack projected by Mr. Yogeshwar Prasad may be taken up first for consideration.
This ground has been considered by the learned Judges of the High Court as the fifth ground of attack before them at pages 29 to 31 of the paper book in Civil Appeals 1568 1576 of 1974, and rejected by them.
The submission of Mr. Yogeshwar Prasad is that some governmental agencies falling within the definition of "dealer" in the Fertilizer (Control) Order, 1957 were permitted by the State Government to sell the fertilizer carried over from the stock held at the close of 31.5.1974 at the new enhanced rate of Rs. 2000 per ton fixed in the Central Government 's notification dated 1.6.1974 and that it is discriminatory against the private dealers who are required by the impugned notification to sell at the old rate of Rs. 1050 per ton fixed in the Central Government 's old notification dated 11.10.1973.
To show that such a direction was given by the State Government, Mr. Yogeshwar 374 Prasad invited attention to the first sentence in the radiogram 23.7.1974 issued by the Chief Secretary to the Government of Uttar Pradesh.
That sentence reads as follows : "All stocks of fertilizer available with ASO, AGRO Cooperatives and Cane Unions be distributed without any condition regarding purchase of fertilizers at new rates".
It is not possible to make out what exactly was intended to be conveyed by that sentence in the radiogram.
In the counter affidavit of the Accounts Officer, Fertilizers and Manures Directorate of Agriculture, Government of Uttar Pradesh, filed in C.M.P. 6773 of 1974 on the file of this Court, it is stated that the State Government has not allowed any State owned agency to sell the stocks of fertilizer carried over from 31.5.1974 at the rates fixed in the Central Government 's notification dated 1.6.1974, that the radiogram was not meant to permit Agricultural Supplies Organisation and the Agro Industrial corporation and other governmental agencies to sell the stocks carried over from 31.5.1974 at the revised rates and that it was issued to remove only the condition.
There is no other material on the record to show that any direction was given by the State Government for the governmental agencies to sell the fertilizer carried over from 31.5.1974 at the enhanced rate fixed in the Central Government 's notification dated 1.6.1974.
Therefore, the very basis of the contention of Mr. Yogeshwar Prasad that there is any discrimination against private dealers like the appellants represented by him compared with governmental agencies in the matter of the sale price of fertilizer has not been established.
Even if any such direction had been given, it would certainly be bad in law as being discriminatory.
It would not, however, invalidate the impugned notification which per se applies to all dealers of fertilizers in the entire State of Uttar Pradesh, whether private or governmental.
Consequently, the impugned notification of the State Government cannot be held to be bad in law on the ground of discrimination if it is otherwise valid.
Mr. Manchanda relied upon the aforesaid counter affidavit in support of his contention that there is no basis for the contention that there is any discrimination against private dealers.
The second ground of attack projected by Mr. Yogeshwar Prasad fails and has been rightly rejected by the learned Judges of the High Court.
The first ground is as regards the power of the State Government to issue the impugned notification dated 14.6.1974, fixing for the sale of fertilizers by dealers to consumers a price different from the one fixed in the Central Government 's notification dated 1.6.1974.
In considering this question the fact that the notification was issued by the State Government with the object of preventing dealers in the State 375 of Uttar Pradesh from driving under excessive profit from agricultural consumers in respect of the fertilizer which had been purchased by the dealers at Rs.1005 per ton under the old Central Government 's notification dated 11.10.1973 and that it applies to the fertilizer which was in stock at the end of 31.5.1974, should not weigh with the Court, for the question is of the power of the State Government to issue the notification.
The question is whether the State Government has power to fix the price of fertilizer under the Defence of India Rules, 1971, framed in exercise of the powers conferred by the Defence of India Act, 1971 after the Central Government had already fixed the price under the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by the .
If in law the State Government could fix the price in respect of the limited stock of fertilizer carried over from 31.5.1974, it can certainly fix the price of the fertilizer received by the dealers even after 1.6.1974 in respect of which the Central Government 's notification dated 1.6.1974 would undoubtedly apply.
The in an enactment passed by Parliament to provide, in the interest of the general public, for the control of the production, supply and distribution and trade and commerce in certain commodities which have been notified under that Act as essential commodities.
The very object of the is to check the inflationary trends in prices and to ensure the equitable distribution of essential commodities.
Section 1(2) of that Act makes it applicable to the whole of India.
It is a permanent enactment in the sense that its operation is not restricted to any particular period.
The Fertilizer (Control) order, 1957 has been made in exercise of the power conferred by s.3(2)(c) of the for controlling the price at which any essential commodity may be bought or sold.
Fertilizer has been declared to be an essential commodity under s.2(a)(xi) of the as mentioned above.
Therefore, the price fixed in the notification issued under the Fertilizer (Control) Order, 1957 squarely applies to fertilizer.
The Defence of India Act, 1971 also is an Act of Parliament which was intended to provide for special measures to ensure the public safety and interest, the defence of India and civil defence and for the trial of certain offences and for matters connected therewith.
That Act also extended to the whole of India, but under s.1(3), it came into force at once and remained in force during the period of operation of the Proclamation of Emergency and for a period of six months thereafter.
Sub clause (a) of Sub section (3) of section 1 saves anything duly done under the Act as if the 376 Act had not expired.
As stated earlier the Emergency which was in force when the State Government 's impugned notification dated 14.6.1974 was issued, was lifted on 22.3.1977.
The life of the Defence of India Act, 1971 thus extended upto six months after 22.3.1977.
In that way the Defence of India Act, 1971 was a temporary enactment intended to be in operation for only a limited period.
The Defence of India Rules, 1971 had been issued in exercise of the power conferred by s.3 of the Defence of India Act, 1971.
Under Rule 114(2) of those Rules, if the Central Government or the State Government is of opinion that it is necessary or expedient so to do for securing the defence of India and civil defence, the efficient conduct of military operations or the maintenance or increase of supplies and services essential to the life of the community or for securing the equitable distribution and availability of any article or thing at fair prices, it may, by order, provide for regulating or prohibiting the production, manufacture, supply and distribution, use and consumption of articles or things and trade and commerce therein or for preventing any corrupt practice or abuse of authority in respect of any such matter.
Sub rule (3)(h) of Rule 114 said that without prejudice to the generality of the powers conferred by sub rule (2) an order made thereunder may provide for controlling the prices or rates at which articles or things of any description whatsoever may be sold or hired or for relaxing any maximum or minimum limits otherwise imposed on such prices or rates.
The State Government 's impugned notification has been issued, as already stated, in exercise of the power conferred by this sub rule of Rule 114.
The Central Government had already assumed power under the to control the price of essential commodities including fertilizer as a permanent measure, and could do under the provisions of that Act in relation to that essential commodity what it may do under the Defence of India Act, 1971, a temporary measure, if fertilizer could be brought under the description of "articles or things of any description whatsoever".
But since it had already assumed the power under the to control the price of fertilizer it was not necessary for it to get itself armed once again with the power to control the price of the same essential commodity under the Defence of India Act, 1971 which came about 16 years later.
Therefore, the contention of Mr. 377 Govindan Nair that the is a special enactment relating to only essential commodities and the Defence of India Act, 1971 is a general enactment relating to all other commodities, and that the words "articles or things of any description whatsoever" occurring in Rule 114(3)(h) of the Defence of India Rules, 1971 cannot be understood to include essential commodities has force and has to be accepted.
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.
Therefore, the contention that the State Government has no power to fix the price of essential commodities covered by the and the Fertilizer (Control) Order, 1957 in exercise of the power conferred on it by Rule 114 of the Defence of India Rules, 1971 issued under the Defence of India Act, 1971 is well founded and has to be accepted.
Section 3(2)(c) of the , pursuant to which the Fertilizer (Control) Order, 1957 has been made says that without prejudice to the generality of the powers conferred by sub section (1) an order made thereunder may provide for controlling the price at which any essential commodity may be brought or sold.
This sub clause of s.3 of the has not left anything to be done under the Defence of India Act, 1971 in the matter of fixation of price of any essential commodity whether it be for securing any essential commodity for the defence of India or for the effective military operation or for securing the equitable distribution and availability of essential commodities at fair prices or distribution thereof and trade and commerce therein as envisaged in s.3(1) of that Act.
If the State Government felt that there was any special circumstance to be taken into account for fixing the price of the essential commodity fertilizer, in the State of Uttar Pradesh at a rate lower than the one fixed by the Central Government in its notification dated 1.6.1974, it could have achieved that object by getting steps to be taken under the itself.
Section 3(2) of that Act lays down that the Central Government may, having regard 378 to the local conditions of any area and other relevant circumstances, fix different prices or rates in respect of different areas 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 s.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 has proceeded to 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.
Section 6 of the saves any order made under s.3 of that Act from the impact of any other enactment.
It is not possible to accept the contention that the other Act or enactment referred to in s.6 of the would be only the Act or enactment which was in force on the date of commencement of that Act and not any future Act or Acts.
This contention has been wrongly rejected by the learned Judges of the High Court.
Section 6 of the says that an order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than that Act or any instrument having effect by virtue of any enactment other than that Act.
It is true that there is a similar saving provision in s.37 of the Defence of India Act, 1971 which says that the provisions of that Act or any Rule made thereunder or any order made under any such Rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than that Act or in any instrument having effect by virtue of any enactment other than that Act.
But as stated above, 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 governed 379 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.
The learned Advocate General of the State was perhaps fully conscious of the legal position that the State Government cannot fix the price of an essential commodity by any notification under the Defence of India Rules, 1971 in the circumstances when he took the patently unacceptable stand before the learned Judges of the High Court that the State Government did not in fact fix the price of fertilizer in its impugned notification dated 14.6.1974 but it only directed that certain stock of fertilizer which was in the possession of dealers at the end of 31.5.1974 and was carried over by them shall be sold at the rate fixed in the Central Government 's earlier notification dated 11.10.1973, which as stated above, has been specifically superseded by its subsequent notification dated 1.6.1974.
If the State Government had not fixed the price at which fertilizer can be sold be dealers by the impugned notification dated 14.6.1974 though it is no doubt in respect of the stock carried over from 31.5.1974, one fails to see what else it did or why it was considered necessary.
Therefore, the learned Judges of the High Court have rightly rejected that submission of the learned Advocate General.
As stated above, trade and commerce in and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest fall under entry 33 of the Concurrent List III, and trade and commerce within the State subject to the provisions of Entry 33 in the Concurrent List III fall under Entry 26 of List II of the Seventh Schedule to the Constitution.
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 which reads thus: "Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent 380 List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law, so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
" 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.
The learned Judges of the High Court were not right in rejecting the submission made before them that there is conflict between the two notifications of the Central Government dated 1.6.1974 and of the State Government dated 14.6.1974 and in holding that the State Government has unfettered power under the Defence of India Act, 1971 to fix the price of fertilizer and regulate its supply notwithstanding the fact that fertilizer is an essential commodity under the in observing and that what the Central Government can do under the Fertilizer (Control) Order, 1957 the State Government can do under the Defence of India Rules, 1971.
There is a clear conflict between the two notifications in 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 it 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 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.
The Two enactments have 381 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.
On the question of conflict and interpretation of statutes, we find the following passage in Craies on Statute Law (seventh edition) at page 222: "Acts of Parliament sometimes contain general enactments relating to the whole subject matter of the statute, and also specific and particular enactments relating to certain special matters; and if the general and specific enactments prove to be in any way repugnant to one another, the question will arise, which is to control the other ? In Pretty vs Solly(1) Romilly M.R. stated as follows what he considered to be the rule of construction under such circumstances.
"The general rules," said he, "which are applicable to particular and general enactments in statutes are very clear; the only difficulty is in their application.
The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would over rule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply".
The following passage found at page 187 of the twelfth edition of Maxwell on the Interpretation of Statutes may also be noticed: "If two sections of the same statute are repugnant, the known rule is that the last must prevail".
But, on the general principle that an author must be supposed not to have intended to contradict himself, the Court will endeavour to construe the language of the legislature in such a way as to avoid having to apply the rule, leges posteriors priores contrarias abrogant.
For example, the provision in order 47 of the Country Court Rules 1936 that "the scale of costs in an action for the recovery of a sum of money only shall be determined. as regards the costs of the plantiff, by the amount recovered" was not construed as peremptory, for this would have brought it out of harmony with the earlier provision in the same order that "the costs of proceedings in a Country Court shall be in the discretion of the Court.
" 382 One way in which repugnancy can be avoided is by regarding two apparently conflicting provisions as dealing with distinct matters or situations.
" There will be clear conflict between the two notifications if it is understood that the State Government also can fix the price of any essential commodity covered by the and the Fertilizer (Control) order, 1957 in exercise of the power conferred on it by the Defence of India Act, 1971 and the Defence of India Rules, 1971.
The conflict can be avoided only if it is held that the and the Fertilizer (Control) order, 1957 deal with essential commodities and the Defence of India Act, 1971 and the Defence of India Rules, 1971 deal with all other articles and things of any description whatsoever.
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 is whether Parliament would have intended such a consequence.
The answer can only be an emphatic No.
That situation has to be clearly avoided by a proper interpretation of the respective powers of the Central and State Governments under the two Acts, and by holding that the , and the Fertilizer (Control) order, 1957 deal with essential commodities and the Defence of India Act, 1971 and the Defence of India Rules, 1971 dealt with all other commodities notwithstanding that fact that Rule 114(3)(h) mentions "articles or things of any description whatsoever".
In Municipal Corporation of Delhi vs Shiv Shankar(1) it is observed: "To determine if a later statutory provision repeals by implication an earlier one it is accordingly necessary to closely scrutinize and consider the true meaning and effect both of the earlier and the later statute.
Until this is done it cannot be satisfactorily ascertained if any fatal inconsis 383 tency exists between them.
The meaning, scope and effect of the two statutes, as discovered on scrutiny, determine the legislative intent as to whether the earlier law shall cease or shall only be supplemented.
If the objects of the two statutory provisions are different and the language of each statute is restricted to its own objects or subject, then they are generally intended to run in paralleled lines without meeting and there would be no real conflict though apparently it may appear to be so on the surface.
Statutes in pari materia although in apparent conflict should also so far as reasonably possible, be construed to be in harmony with each other and it is only when there is an irreconcilable conflict between the new provision and the prior statute relating to the same subject matter, that the former, being the later expression of the legislature, may be held to prevail, the prior law yielding to the extent of the conflict".
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 notifications issued under Fertilizer (Control) order, 1957 and the Defence of India Rules, 1971.
If that is not done there will be real conflict between the two and, therefore, the two Acts must be so construed as to avoid conflict in the manner indicated above.
Mr. Manchanda invited attention to the following observation in Zaverbhai Amaidas vs The State of Bombay(1) "It is true, as already pointed out, that on a question under article 254(1) whether an Act of Parliament prevails against a law of the State, no question of repeal arises; but the principle on which the rule of implied repeal rests, namely, that if the subject matter of the later legislation is identical with that of the earlier, so that they cannot both stand together, then the earlier is repealed by the later enactment will be equally applicable to a question under article 254(2) whether the further legislation by Parliament is in 384 respect of the same matter as that of the State law. ' There is no question of placing the later law, Defence of India Act, 1971, for consideration by the President under Article 254(2) of the Constitution for both the laws, the and Defence of India Act, 1971 are laws passed by Parliament.
There does not appear to be any provision for placing any notification made by a State Government under the Defence of India Rules, 1971 for consideration by the President.
As already stated, if the impugned State Government 's notification is, however, considered to be in the nature of a State law there is nothing on the record, to show that it was placed before the President for consideration and had received his assent as already stated.
Relying upon the above decision in Zaverbhai Amaidas vs The State of Bombay (supra) Mr. Manchanda made a half hearted plea that the impugned State Government 's notification relates only to fertilizer which was carried over from the stock held at the close of 31.5.1974 and that it is intended to protect agricultural consumers from dealers making undue profit and should therefore, be held to be, valid in law.
It is not possible to accept this submission of Mr. Manchanda.
There is no basis, whatsoever, to presume, and it will, be totally uncharitable to the Central Government to presume, that the Central Government which had assumed powers under the to control the distribution of fertilizer and make it available at fair prices to consumers was ignorant of or had overlooked the fact while making the notification dated 1.6.1974 fixing a higher price for dealers to sell fertilizer to consumers with effect from that date that there may be some stock of fertilizer on 31.5.1974 purchased by dealers at lower prices which may be carried over for sale subsequently.
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.
For the reasons stated above the appeals are allowed and the impugned State Government 's notification dated 14.6.1974 is quashed.
There will be an order directing the District Agricultural officers and other District Authorities in the State of Uttar Pradesh not to ask the dealers to refund the excess in respect of the sales completed prior to the date of the impugned notification.
The District Magistrates concerned shall return the monies deposited with them by the dealers pursuant 385 to this Court 's orders dated 2.9.1974 and 30.10.1974.
The respondents shall pay the appellants ' costs.
There will be one set of advocate 's fees in the batch of appeals in which the appellants are represented by Mr. Govindan Nair and another set of advocate 's fees in the other set of appeals in which Mr. Yogeshwar Prasad appears for the appellants.
H.S.K. Appeals dismissed.
[/INST]The appellant, Gopinath Ghosh along with Bharat Ghosh @ Sadhu, and Jagannath Ghosh, was convicted and sentenced to life imprisonment under Section 302 read with Section 34 I.P.C. for having committed the murder of Rabi Ghosh, son of Kartik Ghosh on August 19, 1974.
The High Court in appeal, accepted the plea of the two other accused only and acquitted them, while confirming the conviction and sentence of the appellant.
The appellant for the first time in the Supreme Court raised the New Plea that as he was a "child" within the meaning of the expression in West Bengal Children Act, 1959, the entire trial was vitiated.
The court, by its order dated March 11,1983 directed the Session Judge Nadiar to give a finding on the age of the appellant on the date of the occurrence.
The Sessions Judge, in his report, after detailed examination of the evidence of Chief Medical officer of Health, Nadia, (PWI), Radiologist (PW2) orthopaedic Surgeon (PW3), another doctor Mr. R.B. ROY (PW4), the mother of the appellant (PW5) and the Headmaster of the School who brought records of the School, gave a finding that the appellant was aged between 16 and 17 years on the date of occurrence i.e. on August 19, 1974, which finding is not challenged by the State.
Allowing the appeal by Special leave, the Court, ^ HELD: 1.1 A combined reading of Sections 2(d), 2(h), 4 to 6, 22, 23, 24 (2) and 26 of the West Bengal Children Act, 1959 makes it clear that where a juvenile delinquent is arrested, he/she has to be produced before a juvenile court, and if no juvenile court is established for the area amongst others, the court of Session will have powers of a juvenile court; (b) such a juvenile delinquent ordinarily has to be released on bail irrespective of the nature of the offence alleged to have been committed unless it is shown that there appears reasonable grounds for believing that the release is likely to bring him under the influence of any criminal or expose him to moral danger or defeat the ends of justice; (c) Section 25 forbids any criminal or a juvenile delinquent and only an inquiry can be held in accordance with the provisions of the code of Criminal 804 Procedure for the trial of a summons case; and (d) the bar of Section 24 which had been given an over riding effect as it opens with the non obstante clause takes away the power of the court to impose a sentence of imprisonment unless the case falls under the proviso.
[808 A C 1.2 In the instant case, the entire trial of the appellant is without jurisdiction and is vitiated.
The report of the Sessions Judge unquestionably established by unassailable evidence that the appellant having been 16 to 17 years of age on the date of occurrence was a juvenile delinquent and therefore the Magistrate could not have committed his case to the court of Session.
Only an inquiry could have been held against him as provided in Section 25 of the Act unless the case of the appellant falls within the proviso to Section 24 (2).
[808 H, 809 A B] 1.3 ordinarily, the Supreme Court would be reluctant to entertain a based on factual averments for the first time before it.
However, the court is equally reluctant to ignore, overlook or nullify the beneficial provisions of a very socially progressive statute by taking shield behind the technicality of the contention being raised for the first time in court.
In view of the underlying intendment and beneficial provisions of the Act read with clause (f) of Article 39 of the Constitution which provides that the State shall direct its policy towards securing that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that child hood and youth are protected against exploitation and against moral and material abandonment, it would not be proper to allow a technical contention that the plea is being raised for the first time in the court and thereby thwart the benefit of the provisions being extended to the appellant, if he was otherwise entitled to it.
F H] Practice Directions: Whenever a case is brought before the Magistrate and the accused appears to be aged 21 years or below, before proceeding with the trial or under taking an inquiry, an inquiry must be made about the age of the accused on the date of occurrence.
This sought to be made so where special Acts dealing with juvenile delinquents are in force.
If necessary, the Magistrate may refer the accused to the medical Board or the Civil Surgeon, as the case may be, for obtaining credit worthy evidence about age.
The magistrate may as well call upon accused also to lead evidence about his age.
Thereafter, the learned Magistrate may proceed in accordance with law.
This procedure, if properly followed, would avoid, a journey upto the apex court, and the return journey to the gross root court.
[809 H; 810 A B] (The court suggested, that if necessary an found expedient, the High Court, on the administrative side may issue necessary instructions to cope with such situation).
[810 B]
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<s>[INST] Summarize the judgementiminal Appeal No. 16 of 1970.
Appeal by special leave from the judgment and order dated the 12 9 69 of the Allahabad High Court, in Criminal Appeal Nos. 1096 and 1097 of 1966.
Nuruddin Ahmed and U. P. Singh, for the appellants.
O. P. O. P. Rana, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
This is an appeal by special leave by Lalji (23), Mahabir (45), Nar Singh (30), Paras Nath (27) and Ram Naresh (30) against the judgment of the Allahabad High Court affirming on appeal the conviction and sentence of the appellants.
Lalji has been convicted under section 304 Part I and section 148 Indian Penal Code 368 and has been sentenced to undergo rigorous imprisonment for a period of ten years on the first count and rigorous imprisonment for a period of two years on the, second count.
Lalji has, in addition to that, been convicted for offences under section 324 read with section 149, section 325 read with section 149 and section 323 read with section 149 and has been sentenced to undergo rigorous imprisonment for a period of two years, 21 years and one year respectively.
Mahabir, Nar Singh, Paras Nath and Ram Naresh have been convicted under section 147, section 304 Part I read with section 149, section 324 read with section 149, section 325 read with section 149 and section 323 read with section 149 Indian Penal Code and each of them has been sentenced to undergo rigorous imprisonment for a period of 18 months, five years, 18 months, 21 years and one year respectively.
The sentences in the case of each of the appellants have been ordered to run concurrently.
Budhdhu (50) and Munni Lal (20) were tried along with the appellants.
Munni Lal was acquitted by the trial court, while Budhhu was acquitted by the High Court.
The appeal arises out of an occurrence which took place at 7 a.m. on March 29, 1965 in Nawagarh near village Shahpur Nawada at a distance, of five miles from police station Chandauli in Varanasi district.
As a result of that occurrence, Pancham (45) received fatal injuries and later died at 11 a.m. Injuries were also received by Nand Lal (PW 1), Munshi (PW 2), Jhuri (PW 3), Potan (PW 5) and Bhaggan on the side of the complainant.
On the side of the accused, Lalji, Mahabir, Paras Nath and Ram Naresh received in juries.
Both parties rushed be the police station and lodged reports.
On the side of the complainant, report was lodged by Nand Lal PW at 8.30 a.m., while on the side of the accused, report was lodged by Mahabir at 8.35 a.m.
On the basis of those reports, two cases were registered and both parties were sent up for trial.
The trial court convicted the accused appellants and Budhdhu in the present case, and Nand Lal.
Munshi, Jhuri, Bbaggan and one Sheo in the cross case.
Lalji accused is the son of Budhdhu accused.
Ram Naresh, Paras Nath and Nar Singh accused are the maternal uncle 's sons of Mahabir accused.
The prosecution case is that Nand Lal PW is the owner of plot No. 129/2.
Mahabir accused, who is a collateral of Nand Lal PW. owns the adjoining plot.
Mahabir had put up a hut on his own plot.
There is a mend (dividing ridge) between the plots of Nand Lal and Mahabir, On the morning of March 29, 1965, it is stated, Pancham deceased and Nand Lal PW saw that Budhdhu and Mahabir were digging earth and thus extending the frontage of Mahabir 's hut.
Ram Naresh armed with a gandasa, Lalji and Munni Lal armed with spears and Nar Singh and Paras Nath armed with lathis were standing close to Mahabir with a view to help him.
Pancham raised a Drotest against the act of the accused party whereupon Mahabir and Budhhu picked up lathis and those two accused along with the other accused started beating Pancham and Nand Lal with their respective weapons.
Jhuri and Munshi then came there, but they too were attacked.
Potan and Bhaggan also tried to intervene, but injuries were caused to them also by the accused party.
369 During the course of this occurrence, Lalji thrust his spear in the abdomen of Pancham who fell down on the ground.
Nana Lal, Jhuri, and others on the side of the complainant used their lathies, and in the process the accused were injured.
Bhaggan on medical examination was found to have two 'injuries caused by blunt weapon.
One of those injuries was grievous as it had resulted in the fracture of humerus bone of the left forearm.
Jhuri, Munshi and Nand Lal PWs had nine, seven and nine simple injuries respectively caused by blunt weapon.
Potan PW had four simple injuries, out of which three had been caused by blunt weapon and one with sharp edged pointed weapon.
Post mortem examination of Pan cham revealed that he had six injuries, out of which one was a stab, wound, one was an incised wound, three were contusions and one was an abrasion.
The fatal injury was the stab wound in the abdominal cavity measuring 2" x 1 Omentum and about 12" long portion of small intestines was protruding out of this wound.
Death of Pancham was due to shock and haemorrhage resulting from cutting of small intestines, mesentery and blood vessels by some sharp edged pointed weapon.
The accused were examined by Dr. K. P. Rai and subsequently by Dr. K. A. Khan in jail.
The trail court and the High Court have relied upon the medical examination of the accused by Dr. Rai.
According to Dr. Rai, he found nine injuries on Mahabir Nar Singh, Paras Nath and Ram Naresh accused had four injuries each on their persons while Lalji had one injury.
The injuries on the persons of the accused were simple and had been caused by blunt weapon.
The defence version was that there was sugar can crop in the plots of Mahabir, Ram Naresh and Nar Singh accused.
Those fields used to be irrigated from the well of the accused which was close to the hut of Mahabir.
A water channel ran over the intervening ridge between the plots of Mahabir and Mand Lal.
On the day of occurrence, it is stated, Mahabir and Ram Naresh accused had started repairing the water channel by digging earth from a portion of Mahabir 's plot.
Part of the water channel had been repaired with that earth when Pancham, Nand Lal, Munshi, Jhuri, Bhaggan, Sheo and Sotan appeared on the scene.
Pancham and others were all armed at that time.
Bhaggan then demolished the water channel which had been repaired by Mahabir and Ram Naresh.
When Mahabir protested, the party of the complainant attacked them.
Mahabir and Ram Naresh then picked up agricultural implements and wielded the same in self defence.
The other appellants too arrived at the spot and they too wielded lathis in exercise of the right of private defence Ram Naresh accused came into, the witness box and gave evidence in support of the defence version.
The trail court on scrutiny of the evidence came to the conclusion that the witnesses on both sides had stated only the half truth and resorted to exaggeration, twisting and embellishment of the true account of the occurrence.
It was further held by the trail court that the well near the hut of Mahabir was being used for irrigation pur 370 poses, that the channel through which the water from this well used to be taken was along the disputed ridge and that on the day of occurrence the party of the accused was digging and putting earth on the ridge in order to repair and reconstruct the water channel.
The trial court in this context referred to the evidence of the investigating officer, according to whom earth had been taken by the party of the accused from a pit in Mahabir 's plot.
The trail court did not accept the evidence of the prosecution witnesses that Pancham and Nand Lal first went to the spot and thereafter Jhuri and Munshi arrived there and after that Bhaggan, Potan and Sheo appeared there.
In the view of the trail court, all the members of the complainant 's party reached the place of occurrence almost simultaneously.
The prosecution allegation that the other accused Were standing nearby when Mahabir and Budhdhu were digging the earth and repairing the water channel was not accepted.
In the opinion of the trial court, these persons were present at the hut which was only 15 or 20 paces from the ridge in question.
As regards the actual assault, the trial court came to the conclusion that no attack was made immediately by either party on the arrival of the complainant 's party.
At first there was remonstrance and counter remonstrance.
A fight thereafter ensued when the complainant 's party insisted that they would not allow the earth to be put on the disputed ridge and the party of the accused claimed that they must put the earth and reconstruct the water channel.
The intransigence of the parties, in the opinion of the trial court, led to a free fight and none of them could therefore plead the right of private defence.
The accused, other than Lalji, in the opinion of the trial court, were armed with lathis only.
The High Court in appeal held that the conclusions reached by the trial court were substantially correct and were based upon reasonable appreciation of evidence.
In appeal before us Mr. Nuruddin on behalf of the appellants has :argued that the present is not a case wherein the accused party can be said to be members of the unlawful assembly or wherein the injuries caused by Lalji to Pancham can be said to have been caused in prosecution of the common object of the accused appellants.
Although Mr. Rana on behalf of the State has controverted the above contention, we find considerable force in the same.
The trial court has found that Mahabir accused had been using water from the well near his hut for irrigation purposes and that he along with Ram Naresh was repairing the old water channel on the ridge when the party of the complainant came there and stopped Mahabir and Ram Naresh from further repairing the water channel.
The other accused who were present in the hut nearly.
at a distance of 15 or 20 paces from the ridge.
then came there.
There was remonstrance and counter remon strance which resulted in a fight.
The trial court has also found that there was no premeditation on the part of Lalji or any other accused to cause Pancham 's death and that the fight was a sudden affair and was the result of heated passion.
In the circumstances, in our opinion it cannot be said that the appellants who were present in front of 371 their hut formed an unlawful assembly.
An assembly of five or more persons is designated an unlawful assembly if the common object of the persons composing that assembly is to do any of the acts mentioned in the five clauses of section 141 Indian Penal Code.
According to the explanation to that section, an assembly which was not unlawful when it assembled may subsequently become an unlawful assembly.
The, facts found by the trial court and the High Court and the circumstances of the case do not show that the appellants formed a common object to do any of the acts mentioned in the five clauses of section 141.
Reference has been made to clause (4) of section 141, according to which an assembly of five or more persons.
would be unlawful if the common object of the persons composing that assembly is to enforce any right or supposed right by means of criminal force or show of criminal force.
This clause cannot be of much avail because it cannot be said that the common object of the appellants was to enforce any right or supposed right by means of criminal force or show of criminal force.
As mentioned earlier, no party attacked the members of the opposite party at the commencement of the occurrence.
There was only at that stage remonstrance and counter, remonstrance.
Someone then started the fight and, according to, the trial court, it could not definitely be determined s to which of the two parties struck the first blow.
The circumstances of the case show that lathis were then wielded by the appellants, other than.
Lalji, not with a view to enforce any right or supposed right in respect of the water channel but because of the fact that a fight had, started and the complainant 's party was found to be armed.
As there was no premeditation and the occurrence was a sudden affair, each of the appellants, in our opinion, should be held to be liable for hi& individual act and not vicariously liable for the acts of others.
Lalji gave the spear blow in the abdomen of Pancham.
His conviction should, therefore, be maintained for the offence under section 304 Part I Indian Penal Code.
The sentence of rigorous imprisonment for a period of ten years awarded to Lalji for the injury caused to, Pancham cannot be held to be excessive.
As regards the other appellants, we find that they caused simple hurt with their lathis.
There is no doubt that one grievous injury was caused to Bhaggan with blunt weapon, but on the material on record it cannot be said as to who caused the said injury.
We would accordingly maintain the conviction of Mahabir, Nar Singh, Paras Nath and Ram Naresh for the offence under section 323 Indian Penal Code.
The conviction of Lalji for offences other than that under section 304 Part 1, and of the other four appellants for the offences other than that under section 323 ' Indian Penal Code is set aside.
Lalji is sentenced to undergo rigorous imprisonment for a period of ten years for the offence under section 304 Part 1.
As regards the other four appellants who have been convicted under section 323 Indian Penal Code, their sentence of imprisonment is reduced to the period already undergone.
V.P.S. Conviction and sentence modified.
[/INST]As a result of a fight between the members of the accused party and the party of the complainants the accused were tried and convicted for various offences.
The first.
appellant was convicted of the offence under section 304, Part 1, and of offences under Ss. 148, 323, 324 and 325 read with 14.
The appellants were convicted of the offences under Ss. 147 and 04, 323, 324 and 325 read with section 149.
The High Court, in appeal, while acquitting one of the accused, observed that the conclusion reached by the trial court were substantially correct and were based upon reasonable appreciation of the evidence.
In appeal to this Court, HELD : On the findings of the trial court neither party attacked the members of the opposite party at the commencement of the occurrence.
There was at that stage remonstrance and counter remonstrance only.
Someone then started ,a fight, and according to the trial court it could not definitely be determined as to which of the two parties struck the first blow.
There was no premeditation :and the occurrence was a sudden affair.
The circumstances of the case do not ,show that the appellants formed a common object to do any of the acts mentioned in the 5 clauses of section 141.
Section 141 (4), I.P ' C., could not be relied upon by the prosecution because, it could not be said that the common object of the accused was to enforce any right or supposed right by means of criminal force or show of criminal force.
The circumstances of the case show that the lathis were weilded by the accused not with a view to enforce any right or supposed right but because of the fact that a fight had started and the complainants ' party was found to be armed Therefore, it should be held that each accused was liable for his individual act and not vicariously liable for the acts of the others.
Hence, the first appellant could be convicted only of the offence under section 304, part 1, I.P.C. and his conviction for offences other than that should be set aside.
As regards the other appellants they caused simple hurt with their lathis and they could be convicted only of the offence under a. 323 I.P.C. One grievous injury was caused to a member of the complainants ' party but, on the material on record, it could not be said who caused that injury.
[371B H]
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<s>[INST] Summarize the judgementON: Criminal Appeal No. 383 of 1976.
(With Criminal Misc.
Petitions Nos. 62 and 380 of 1976.) (Appeal by Special Leave from the Judgment and Order dated 22 8 1975 of the Delhi High Court in Crl.
Writ Peti tion No. 135/75).
241 S.K. Sinha, for the Appellant.
V.P. Raman and Girish Chandra, for the Re spondents.
Tek Chand Chanana (In person) for the appli cant Intervener.
The Judgment of the Court was delivered by BEG J.
A petition under Article 226 of the Constitution was fled in the High Court of Delhi, seeking a writ in the nature of Mandamus "or any other appropriate Writ, direction or order", to restrain the respondents from carrying out the sentence of death passed against Amrit Bhushan Gupta, a person condemned to death for having com mitted culpable homicide amounting to murder.
The petition was flied by Smt.
Shanti Devi, purporting to act on behalf of her son Amrit Bhushan Gupta, who was alleged to be insane.
A Division Bench of the Delhi High Court passed the following order on it: "We have no doubt in our minds that if the petitioner is really insane, as stated in the petition, the appropriate authorities will take necessary action.
This petition, at this stage, we feel, does not justify invocation of the powers of this Court under Article 226 of the Constitution.
Criminal Writ is dismissed.
" Before the grant of special leave to the petitioner on 27th August, 1976 an application for intervention in the matter had been filed by Tek Chand Chanana supported by an affidavit stating the following facts which have not been controverted: "Amrit Bhushan Gupta was sentenced to death for burning alive three innocent sleep ing children aged 14, 8 and 5 years at Srini was Puri on the midnight of 21st June, 1968 by the learned Dist.
& Sessions Judge Delhi under Section 302 and 7 years R.I. section 307 for attempting to murder Tek Chand Chanana (Peti tioner) on 6th June, 1969 with the remarks 'even the extreme penalty of death may appear too mild for the gruesome murder of three children by burning them alive. ' Delhi High Court confirmed the death sentence on 23rd September, 1969.
Amrit Bhushan Gupta 's relatives made the plea of insanity to the High Court but the Hon 'ble High Court refused even to entertain this petition of the ac cused, some dates are given below: Writ petition dismissed on 20th July, 1971 . .
Petition dismissed . . 20th August, 1975.
Supreme Court had dismissed the var ious petitions of Amrit Bhuahan Gupta noted below: 17 1458SCI/76 242 Special leave petition dismissed on 3rd April, 1970.
Petition dismissed on 12th Sept. 1970.
Petition dismissed on 30th April, 1971.
Writ Petition filed on 11 May 1971 was withdrawn on 2nd August, 1976.
Petition dismissed on 8th January, 1976 Rashtrapati had also rejected several mercy petitions of the accused some dates are given below: 1.
10th August, 1970.
6th December, 1970.
8th November, 1971.
February, 1972.
Government of India had fixed various dates for execution, details given below: 1.18th December, 1970.
25th August, 1975 and 19th December, 1975.
Amrit Bhushan Gupta and his relatives have been delay ing the matter on one excuse, or the other.
Their latest plea is nothing new.
It is repetition of their modus operandi.
The petitioner and his wife have been under constant torment since the day their three innocent child ren were gruesomely murdered in 1968 and the punishment awarded to the accused in 1969 is being postponed on the making of the accused.
" This Court when granting special leave in this case was obviously not aware of the facts stated above which were concealed.
Learned Counsel for the appellant, when asked to state the question of law which called for the invocation of the jurisdiction of this Court under Article 136 of the Constitution, could only submit that the provisions of Section 30 of the Prison ers Act, 1900, should be applied to the petitioner.
This section reads as follows: "30.
Lunatic Prisoners how to be dealt with. (1) Where it appears to the State Government that any person detained or imprisoned under any order or sentence of any Court is of unsound mind, the State Government may, by a warrant setting forth the grounds of belief that the person is of unsound mind, order his removal to a lunatic asylum or other place of safe custody within the State there to be kept and treated as the State Government directs during the remainder of the term for which he has been ordered or sentenced to be detained or imprisoned, or, if on the expira tion of that term it is certified by a medical officer that it is necessary for the safety of the prisoner or others that he should be further detained under medical care or treat ment, then until he is discharged according to law.
243 (2) Where it appears to the State Gov ernment that the prisoner has become of sound mind, the State Government shall, by a warrant directed to the person having charge of the prisoner, if still liable to be kept in custody, remand him to the prison from which he was removed, or to another prison within the State, or if the prisoner is no longer liable to be kept in custody, order him to be discharged.
(3) The provisions of Section 9 of the Luna tic Asylums Act, 1858, shall apply to every person confined in a lunatic asylum under sub section (1) after the expiration of the term for which he was ordered or sentenced to be detained or imprisoned; and the time during which a prisoner is confined in a lunatic asylum under that sub section shall be reck oned as part of the term of detention of imprisonment which he may have been ordered or sentenced by the Court to undergo.
(4) In any case in which the State Government is competent under sub section (1) to order the removal of a prisoner to a lunatic asylum or other place of safe custody within the State, the State Government may order his removal to any such asylum or place within any other State or within any part of India to Which this Act does not extend by agree ment with the State Government of such other State; and the provisions of this section respecting the custody, detention, remand and discharge of a prisoner ' removed under sub section (1) shall, so far as they can be made applicable, apply to a prisoner removed under this sub section." Thus, at the very outset, the section invoked relates to the powers of the State Government.
It has nothing to do with powers of Courts.
It only regulates the place and manner of the confinement of a person, who appears to be a lunatic, when his detention or imprisonment ' is either during the trial or during the period when, after the sentence, he is undergoing imprisonment.
In the case of a person condemned to death no question of keeping him in prison would arise except for the period elapsing between the passing of the sentence of death and its execution.
A special provision for a person sentenced to death is to be found in Section 30 of the , which lays down: "30.
Prisoners under sentence of death. (1) Every prisoner under sentence of death shall, immediately on his arrival in the prison after sentence be searched by, or by order of, the Jailor and all articles shall be taken from him which the Jailor deems it dangerous or inexpediem to leave in his possession.
(2) Every such prisoner shall be con fined in a cell apart from all other pris oners, and shall be placed by day and by night under the charge of a guard.
" 244 The whole objection of the proceedings in the High Court and now before us seems to be to delay execution of the sentence of death: passed upon the appellant.
In view of the number of times the appellant has unsuccessfully ap plied, there can be little doubt that the powers of the High Court and of this Court ought not to have been invoked again.
The repeated applications constitute a gross abuse of the processes of Court of which we would have taken more serious notice if we were not disposed to make some allow ance for the lapses of those who, possibly out of misguided zeal or for some other reason, may be labouring under the belief that they were helping an unfortunate individual desperately struggling for his life which deserves to be preserved.
A bench of this Court 100 was persuaded to pass orders for observation of the convict and obtaining certificates of experts on the mental condition of the convict.
Dr. P.B. Buckshey, Medical Superintendent and Senior Psychiatrist, Hospital for Mental Diseases, Shahdata Delhi, certified as follows: "After careful consideration of the entire mental state of the accused, including his behaviour, I am of opinion that Shri Amrit Bhushan Gupta is a person of unsound mind suffering from Schizophrenia.
Schizophrenia is a basically incurable type of insanity characterised by remissions and relapses at varying intervals.
Shri Gupta was also severely and over whelmingly depressed and appeared to have lost interest in life." Dr. S.C. Malik, Assistant Professor of Psychiatry, G. B. Pant Hospital, New Delhi, gave a more detailed certificate as follows: "Amrit Bhushan Gupta remained mute throughout the ten days period of observation.
He however started communicating to me through writing on 3rd day of encounter.
He exhibits gross disturbance in thinking and his emotion al life appears to be disorganised.
He is suffering from delusion that he is the incarnation of Christ and that I come to his kingdom or 'Palace '.
He does not mutter to himself but at times keeps on staring vacantly in space.
He is unable to write coherent meaningful sentences.
He coins new words and when asked to explain he says it is 'Technologem of myself as CHRIST '.
He also had hallucinations e.g. that Russian planes are shooting his Bunkers and that I should be helping him to drive them away.
He exhibited depressive and suicidal I tendencies towards later period of my observation period and broke off all communication as I did not give him potassium Cyanide 'Poison ' so that he (Christ) may go back to his Kingdom.
In my opinion he is suffering from 'SCHIZO PHRENIA ' (Chronic) which is a serious mental derangement.
He is thus considered to be of unsound mind under the Indian Lunacy Act.
" 245 We have not even got any appeal from a conviction and sentence before us.
We assume that, at the time of the trial of the appellant, he was given proper legal aid and assistance and that he did not suffer from legal insanity either during his trial or at the time of the commission of the offence.
Insanity, to be recognised as an exception to criminal liability, must be such as to disable an accused person from knowing the character of the act he was commit ting when he commits a criminal act.
Section 84 of the Indian Penal Code contains a principle which was laid down in England in the form of Macnaughten Rules.
The section provides: "84.
Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law.
" If at the time of the commission of the offence, the appellant knew the nature of the act he was committing, as we assume he did, he could not be absolved of responsibility for the grave offence of murder.
A Constitution Bench of this Court has upheld the Constitutional validity of the death penalty in Jagmohan Singh vs The State of U.P. (1).
We have to assume that the appellant was rightly convicted because he knew the nature Of his acts when he committed the offences with which he was charged.
The legality or cor rectness of the sentence of death passed upon him cannot be questioned before us now.
So far as the prerogative power of granting a pardon or of remitting the sentence is con cerned, it lies elsewhere.
We cannot even examine the facts of the case in the proceedings now before us and make any recommendation or reduce the sentence to one of life impris onment.
The contention which has been pressed before us, with some vehemence, by learned Counsel for the appellant, is that a convicted person who becomes insane after his convic tion and sentence cannot be executed at all at least until he regains sanity.
In support of this contention learned Counsel has quoted the following passage from Hale 's Pleas of the Crown Vol.
I p. 33: "If a man in his sound memory commits a capital offence, and before his arraignment he becomes absolutely mad, he ought not by law to be arraigned during such his phrenzy, but be remitted to prison until that incapacity be removed; the reason is, because he cannot advisedly plead to the indictment; and this holds as well in cases of treason, as felony, even the delinquent in his sound mind were examined, and confessed the offence before his arraignment; and this appears by the Statute of 33 H. 8 Cap. 20 which enacted a trial in case of treason after examination in the absence of the party; but this statute stands repealed by the statute of 1 and 2 Phil & Mr. cap.
10 cv.
P.C.p. 6 And, if such person after his plea, and before his trial, become of non sane memory, he [1) ; , 0+ * 246 shall not be tried, or, if after his trial he becomes of non sane memory he shah not receive judgment; or, if after judgment he becomes of non sane memory, his execution shall be spared; for were he of sound memory, he might allege somewhat in stay of judgment or execu tion".
He also cited a passage from Coke 's Insti tutes, Vol.
III, p. 6, which runs as follows: "It was further provided by the said act of 33 H.S. that if a man attained of treason became mad, that notwithstanding he should be executed; which cruel and inhuman law lived not long, but was repelled, for in that point also it was against the common law, because by intendment of law the execution of the offender is for example, ut poena ad paucos, metus and omnes perveniat, as before is said; but so it is not when a mad man is executed, but should be a miserable spectacle, both against law and of extreme inhumanity and cruelty, and can be no example to others".
The following passage from Blackstone 's Com mentaries on the Laws England VoL IV, page 18 and 19 was also placed before us : "The second case of a deficiency in will, which excuses: from the guilt of crimes, arises also from a defective or vitiated understanding, viz., in an idiot or a lunatic.
For the rule of law as to the latter, which may easily be adapted also to the former, is that 'furiosus furore solum punitur '.
In criminal cases, therefore, idiots and lunatics are not chargeable for their own acts, if committed when under these incapacities; no, not even for ,treason itself.
Also, if a man in his sound 'mind ' commits an offence, and before arraignment for it he becomes mad, he ought not to be 'called on to plead to it, because he is unable to do so ' with that advice and caution that he ought.
And, if after he has pleaded, the prisoner becomes mad, he shall not be tried; for how can he make his defence ? If, after he be tried and found guilty, he loses his senses before judgment, judgment shall not be pronounced; and if after judgment, he becomes of non sane memory, execution shall be stayed; for parad venture, says the humanity of the English law, had the prisoner been of sound memory, he might have alleged something in stay of judg ment or execution.
Indeed, in the bloody reign of Henry the Eighth, a statute was made, which enacted that if a person, being compos roentis, should commit high treason, and after fall into madness, he might be tried in his absence, and should suffer death, as if h6 were of perfect memory.
But this savage and inhuman law was repealed by the statute 1 & 2 Ph. & M.c. 10.
For, as is observed by Sir Edward Coke 'the execution of an offender is, for example, ut poena ad paucos, metus ad omnes perveniat; but so it is not a miserable spectable, both against law, and of extreme inhumanity and cruelty. and can be of no example to others".
247 A passage from a modern work, 'An Introduction to Criminal Law", by Rupert Cross, (1959), p. 67, was also read.
It reads as follows: "In conclusion it may be observed that there are two other periods in the history of a person charged with a crime at which his sanity may be relevant.
First, although there may be no doubt 'that he was sane when he did the act charged, he may be too insane to stand a trial in which case he will be detained during the Queen 's pleasure under the Crimi nal Lunatics Act, 1800 and 1883, pending his recovery.
Secondly, if he becomes insane after sentence of death he cannot be hanged until he has recovered.
In each of these cases.
the question of sanity is entirely a medical question of fact and is in no way dependent on the principles laid down in M 'Naghten 's case.
The rule that insanity at the time of the criminal act should be a defence is attributable to the fact that the idea of punishing a man for that which was due to his misfortune is revolting to the moral sense of most of the community.
The rule that the accused must be fit to plead is based on the undesirability of trying someone who is unable to conduct his defence, or give instructions on the subject.
The basis of the rule that an insane person should not be executed is less clear.
Occasionally, the rule is said to be founded on theological grounds.
A man should not be deprived of the possibility of a sane approach to his last hours.
Sometimes, the rule is said to be based on the fact that condemned men must not be denied the opportu nity of showing cause by why they should not be reprieved".
Shri S.K. Sinha, learned Counsel for the appellant, has, industriously, collected a number of statements of the position in English law from the abovementioned and other works of several authorities such as Theobald on Lunacy (p. 254), and Kenny 's Criminal Law (p. 74).
On the other hand, learned Additional Solicitor General has relied on the following statement of a modern point of view contained in a book by Mr. Nigel Walker on "Crime and Insanity in England" (Vol.
I: The Historical Perspective) at p. 213 214: "Home Secretaries have been even more cautious in offering justifications for the practice of reprieving the certifiably insane or the mentally abnormal.
Shortt, though he cited Coke, Hale, Hawkins, Blackstone, Hawles, and Stephen to prove that he was bound by the common law, refrained from dwelling on their explanations of it.
which are, as we have seen, far from impressive.
The Atkin Committee, being lawyers, were more respectful to the institutional writers, and argued that 'many (sic) of the reasons given for the merciful view of the common law continue to have force even under modern conditions.
Everyone would revolt from dragging a gibber ing maniac to the gallows '.
If 248 they had reflected they would Surely have conceded that 'modern conditions ' greatly weakened two out of the three traditional reasons.
The abolition of public executions made Coke 's argument irrelevant as well as illogical; and Hale 's argument that if sane the condemned man might be able to produce a sound reason why he should not be hanged was greatly weakened now that the condemned man 's interests were so well looked after by his lawyerS.
As for Hawles ' argument that an insane man was spiritually unready for the next world (which not even Hawles regarded as the main objection) were the Committee such devout Christians that they set store by it ? Equally odd was their remark that 'everyone would revolt from dragging a gibbering maniac to the gallows ', which sounded as if it was meant as an endorsement of one or more of the traditional justifications, but if so could hardly have been more unfortunately phrased.
Why should it be more revolting to hang a 'maniac ' than a woman, a seventeen year old boy or a decrepit old man ? Must the maniac be 'gibbering ' before it becomes revolting ? A more logical justification was sug gested by Lord Hewart, who opposed Lord Darling 's attempt to legislate on the lines recommended by the Atkin Committee (see Chap ter 6).
Lord Hewart suggested that the medi cal inquiry should be concerned only with a single, simple question: 'If this condemned person is now hanged, is there any reason to suppose from the state of his mind that he will not understand why he is being hanged ? ' Although this Suggestion would have appealed to Covarrubias, it had little attraction either for the Home Office or for humanitar ians in general, for it was clearly intended to.
reduce the number of cases in which the inquiry led to a reprieve.
Nevertheless, given certain assumptions about the purpose of the death penalty, it was at least more logical than the traditional justifications which the Atkin Committee had so piously.
repeated.
If, as Covarrubias and Hewart no doubt believed, the primary aim of a penalty was retributive punishment, it could well be argued that the penalty would achieve its aim only if the offender understood why it was being imposed.
This argument is not open, however, to someone who believes that the primary aim of a penalty such as hanging is the protection of society by deterrence or elimination.
The Atkin Committee would have been more realistic if they had contented themselves with the obser vation that for at least four hundred years it had been accepted that common law forbade the execution of a mad man, although the institutional writers ' explanations were obviously speculative and odd: and that since 1884 certifiable insanity had been accepted as the modern equivalent of 'madness '.
Any fur ther attempt to justify the practice would have involved them in one sort of difficulty or another.
as Lord Goddard was to argue to the Gowers Commission".
249 Interesting as the statements on and origins of the Common Law rules on the subject in England, against the execution of an insane person, may be, we, in this country, are gov erned entirely by our statute law on such a matter.
The Courts have no power to prohibit the carrying out of a sentence of death legally passed upon an accused person on the ground either that there is some rule in the Common Law of England against the execution of an insane person sen tenced to death or some theological, religious, or moral objection to it.
Our statute law on the subject is based entirely on secular considerations which place the protec tion and welfare of society in the forefront.
What the statute law does not prohibit or enjoin 'cannot be enforced, by means of a writ of Mandamus under Article 226 of the Constitution, so as to set at naught a duly passed sentence of a Court of justice.
The question whether, on that facts and circumstances of a particular ease, a convict, alleged to have became insane, appears to be so dangerous that he ,must not be let loose upon society, lest he commits similar crimes against other innocent persons when released, or, because of his anteced ents and character, or, for some other reason, he deserves a different treatment, are matters for other authorities to ,consider after a Court has duly passed its sentence.
As we have already indicated, even the circumstances in which the appellant committed the murders of which he was convicted are not before us.
As the High Court rightly observed, the authorities concerned are expected to look into matters which lie within their powers.
And, as the President of India has already rejected the appellant 's mercy petitions, we presume that all relevant facts have received due consid eration in appropriate quarters.
We think that the application to the High Court and the special leave petition to this.
Court, in the circumstances mentioned above, were misconceived.
Accordingly, we dismiss this appeal.
We also dismiss Criminal Miscellaneous Petition No. 62 of 1976, an application for summoning of the original re cord, as it could be of no use, but we allow Criminal Mis cellaneous Petition No. 380 of 1976, the application for intervention, whose contents we have quoted above.
Stay of execution order is vacated.
P.B.R. Appeal dis missed.
[/INST]A petition under article 226 of the Constitution was filed in the High Court on behalf of the.
appellant, who was sen tenced to death, praying that, since the appellant was insane the State should be restrained from carrying out the sentence.
The High Court dismissed the petition holding that if the appellant were really insane, the appropriate authorities would take necessary action.
In appeal to this Court, it was contended that convicted person who became insane after conviction and sentence could not be executed until he regained sanity.
Dismissing the appeal, HELD: (1) (a) Courts have no power to prohibit the carrying out of a sentence of death legally passed upon an accused person on the ground either that there is some rule in the common law of England against the execution of an insane person sentenced to death or for some theological religions or moral objection to it.
Our statute law on the subject is based entirely on secular considerations which place the protection and welfare of society in the fore front.
[249 B] (b) What the statute law does not prohibit or enjoin cannot be enforced, by means of a writ of mandamus under article 226 of the Constitution, so as to set at naught a duly passed sentence of a court of justice.
[249 C] (2) (a) Section 30 of the Prisoners Act, 1900 has nothing to do with the powers of courts.
It only regulates the place and manner of confinement of a person, who appears to be a lunatic, when his detention or imprisonment is either during the trial or during the period when, after the sentence, he is undergoing imprisonment.
In the case of a person condemned to death, no question of keeping him in prison would arise except for the period elapsing between the passing of the sentence of death and its execution.
[243 F] (b) Insanity, to be recognised as an exception to crimi nal liability must be such as to disable an accused person from knowing the character of the act he was committing when he commits a criminal act.
If, at the time of the commis sion of the offence, the appellant knew the nature of the act he was committing, he could not be absolved of responsi bility for the grave offence of murder.
[245 B D] Jagmohan Singh vs The State of U.P. ; referred to.
In the instant case, the whole object.
of the proceed ings in the High Court and before this Court seems to be to delay execution of the sentence.
In view of the number of times the appellant had unsuccessfully applied the powers of the High Court and of this Court ought not to have been invoked again.
[244 A]
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<s>[INST] Summarize the judgementnd circumstances of the instant case, admission to medical or dental Institution by conducting examination in Hindi or other regional languages would be appropriate or desirable or not, is a matter on which debate is possible and the acceptance of one view over the other involves a policy decision.
It cannot be appropri ately dealt with by this Court, and order under Article 32 of the Constitution in those circumstances would not be an appropriate remedy.
[592H, 593A] & CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 428 of 1989.
(Under Article 32 of the Constitution of India).
Dr. L.M. Singhvi, N. Wazir and D. Bhandari for the Petition ers.
Rajiv Dutta for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an application under Article 32 of the Constitution of India for issue of a writ of mandamus 590 directing the Central Government to hold pre medical and pre dental entrance examinations in Hindi and other regional languages as, according to the petitioners, mandated by Article 29(2) of the Constitution of India.
The petition is by nine petitioners.
Petitioner No. 1 is Hindi Hitrakshak Samiti which is stated to be a society formed with the aim and object of propagating and ensuring the propagation of the national language Hindi and other regional languages; and to further the cause of the citizens of India who are educated in any one or more of the languages and who face difficulty in competitive examinations in which the medium of examination is English only.
Petitioners Nos.
3 to 10 are the students who allege that they wish to appear in the coming PMT/PDT examinations in Hindi or other regional languages and are being adversely affected and discriminated against, and will be in a disad vantageous position in the forthcoming PMT/PDT examination in comparison to those who have passed the higher secondary or equivalent examination with English as their medium of instruction.
The petition seeks issue of writ directed against the Union of India, Central Board of Secondary Education and Medical Council of India.
It is stated that in the year 1974 there was a survey by National Council for Educational Research & Training (NCERT) which, according to the petitioners, showed that out of the students passing intermediate, about 92.5% take their exami nation in Hindi and other regional languages.
The petition ers allege that Kothari Commission 's report on Civil Serv ices Examination had recommended that the examination papers be set both in English and Hindi and the examinees should have a choice of answering them in English, Hindi or any of the 15 regional languages Constitutionally recognised.
It was stated that it was also noteworthy that the Kothari Commission 's report had recommended that Hindi and other regional languages in Universities would be necessary in order to make use of the best potential available in the country.
In 1986 this Court in the case of Dr. Dinesh Kumar & Ors.
vs Motilal Nehru Medical College, Allahabad & Ors., ; dealt with certain aspects of admission to the Medical College, but not on the present aspect.
Letters and representations to the Ministry of Health & Family Welfare, by the petitioners were made on 23rd September, 1988 requesting the Government to consider conducting the PMT/PTD examinations in Hindi and other regional languages.
It is stated that a letter was issued on both December, 1988 by the Government of India to the effect that the Joint Engineering Examination (JEE) for the five I.I.Ts.
and the 591 Engineering College of Banaras be conducted in Indian lan guages from 1990 onwards.
The petitioners assert that they had received numerous letters and grievances from students with Hindi medium background to press for this instant petition.
When the application was moved before this Court on 17th April, 1989 this Court had issued notice.
We have examined the matter and have heard Mr. L.M. Singhvi.
We are of the opinion that the prayers sought for herein are not such which can be appropriately, properly and legitimately dealt with under Article 32 of the Constitution of India.
The contention of the petitioners is, as mentioned hereinbefore, that pre medical studies in medical and dental examination should be permitted in Hindi and other regional languages and not in English alone, and the admission to the Institutions should not be refused and/or examinations should not be held in English alone if the examinees or the entrants seek to appear in Hindi or other regional language.
Article 32 of the Constitution of India guarantees enforcement of fundamental rights.
It is well settled that the jurisdiction conferred on the Supreme Court under Arti cle 32 is an important and integral part of the Indian Constitution but violation of a fundamental right is the sine qua non for seeking enforcement of those rights by the Supreme Court.
In order to establish the violation of a fundamental right, the Court has to consider the direct and inevitable consequences of the action which is sought to be remedied or the guarantee of which is sought to be enforced.
Mr Singhvi, counsel for the petitioners, contends that under Article 29(2) of the Constitution no citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
He contends that by not holding the test in Hindi or other regional languages, there is breach of Article 29(2).
He also draws our attention to Article 29(1) of the Constitution which enjoins that any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of his own, shall have right to conserve the same.
It is difficult to accept that in not holding entrance examination in any particular language.
be it Hindi or regional language, amounts to denial of admis sion on the ground of language.
Every educational institu tion has right to determine or set out its method of educa tion and conditions of examination and studies provided these do not directly or indirectly have any casual connec tion with violation of the fundamental rights guaranteed by the 592 Constitution.
It may be that Hindi or other regional lan guages are more appropriate medium of imparting education to very many and it may be appropriate and proper to hold the examinations, entrance or otherwise, in any particular regional or Hindi language, or it may be that Hindi or other regional language because of development of that language, is not yet appropriate medium to transmute or test the knowledge or capacity that could be had in medical and dental disciplines.
It is a matter of formulation of policy by the State or educational authorities in charge of any particular situation.
Where the existence of a fundamental right has to be established by acceptance of a particular policy or a course of action for which there is no legal compulsion or statutory imperative, and on which there arc divergent views, the same cannot be sought to be enforced by Article 32 of the Constitution.
Article 32 of the Constitu tion cannot be a means to indicate policy preference.
It is difficult to contend that the actions following from nonacceptance of any policy perspective, amount to direct and causal violation of the fundamental right of the citizens guaranteed under the Constitution of India.
Court is not the forum to adjudicate upon the questions of policy unless such a policy is the direct mandate of the Constitu tion.
It is well settled that judicial review, in order to enforce a fundamental right, is permissible of administra tive, legislative and governmental action or non action, and that the rights of the citizens of this country are to be judged by the judiciary and judicial forums and not by the administrators or executives.
But it is equally true that citizens of India are not to be governed by the Judges or judiciary.
If the governance is illegal or violative of rights and obligations, other questions may arise out wheth er, as mentioned hereinbefore, it has to be a policy deci sion by the Government or the authority and thereafter enforcement of that policy, the Court should not be, and we hope would not be an appropriate forum for decision.
In the background of the facts and the circumstances of the case and the nature of controversy that has arisen, we are of the opinion that proper and appropriate remedy in a situation where enforcement of the right depends upon the acceptance of a policy of examination for admission in any particular language to the Institution on that basis, is a matter of policy.
Whether in particular facts and the cir cumstances of this case admission to medical or dental Institution by conducting examination in Hindi or other regional languages would be appro 593 priate or desirable or not, is a matter on which debate is possible and the acceptance of one view over the other involves a policy decision.
It cannot be appropriately dealt with by this Court, and order under Article 32 of the Con stitution in those circumstances would not be an appropriate remedy.
Counsel for the petitioners drew our attention to the facts that notice had been issued to the respondent.
That is true.
On a closer examination of this matter we are of the opinion that in view of the controversy involved herein, we should not proceed with this application on that basis any further.
Counsel for the petitioners then wanted to withdraw this writ petition.
He is permitted to do so, and the writ peti tion is dismissed as withdrawn but this will not prejudice the rights, if any, of the petitioners, legal or otherwise, to take appropriate steps, if any, as they may be advised, in accordance with law.
N.P.V. Petition dismissed.
[/INST]In August 1982 the Government of Madhya Pradesh decided to abolish the Madhya Pradesh Lift Irrigation Corporation.
It was also decided to merge the surplus staff of the Corpo ration in the equivalent posts of the Irrigation Department of the State Government.
Accordingly, with effect from 8.10.1982 the appellants, who were serving as Senior Techni cal Assistants (S.T.As.) in the Corporation, became Junior Engineers in the Irrigation Department but their seniority therein was fixed below the erstwhile Junior Engineers of the State Department.
For this purpose, an equivalent number of posts were deemed to have been created in the dying cadre of Junior Engineers.
Similarly, the Junior Technical Assist ants in the Corporation were absorbed in the lower cadre of Sub Engineers.
The Junior Engineers of the State Department on comple tion of two years ' service as Junior Engineers, were enti tled to be considered for promotion to the gazetted post of Assistant Engineers.
Sometime in 1984, the appellants who were at the bottom of the seniority list of Junior Engineers became eligible for promotion as Assistant Engineers.
Their legitimate claims in this regard were being stalled by the State, and so the appellants filed a writ petition in the High Court of Madhya Pradesh in 1986.
Later, the whole scheme of merger, as envisaged in the order dated 8.10.1982, was sought to be upset to the detri ment of the appellants, and towards that end the order issued on 8.10.
1982 was amended on 1.3.1986.
The effect of this amendment was that the Senior Technical Assistants were to be absorbed in the lower posts of Sub Engineers retro spectively with effect from 8.10.82.
The amendment however, provided that they shall be eligible for promotion to the posts of Assistant 425 Engineers from the quota of Graduate Sub Engineers.
This amendment vitally affected the interests of the appellants in so far as their status and chances of promotion were concerned.
Having failed before the High Court, the appellants have come to this Court by way of special leave.
Before this Court it was contended on behalf of the appellants that they having been given the right at the time of absorption in 1982 that they will be eligible for promo tion in the same way as the erstwhile Junior Engineers of the State Department, this right could not be done away by invoking an earlier amendment of the rules.
On behalf of the respondent State it was inter alia contended that (1) the decision of the State Government to absorb the appellants as Junior Engineers had overlooked the fact that on 8.10.1982 there was no cadre of Junior Engi neers because that cadre had been abolished in July 1979, and therefore this mistake was rectified on 1.3.1986 by absorbing the appellants in the lower cadre of Sub Engi neers;.(2) the appellants when they opted to join as Junior Engineers were aware that according to the rules prevailing on that date there was no avenue of promotion for them as Assistant Engineers; (3) after 27.7.81 the relevant recruit ment rules had been amended which made it clear that after that date there could be no promotion to the posts of As sistant Engineers from amongst Junior Engineers; and (4) the Junior Engineers belonging to the State Service had a right of promotion earlier and this was continued even after the amendment whereas the appellants became Junior Engineers at a time when there was no further promotion available to them and this made all the difference.
Allowing the appeal, this Court, HELD: (1) The assumption of the respondents that the cadre of Junior Engineers had ceased to exist long before the absorption of the appellants into the Department is incorrect.
Though the decision to abolish the cadre was taken in 1979 and the existing posts were converted into those of Assistant Engineers/sub Engineers on 27.5.1980, the cadre did not die, for the Junior Engineers of the Depart ment who were then functioning continued to function as before until they were promoted in due course as Assistant Engineers.
[438E F] (2) It is also not correct to say that this crucial fact had been overlooked at the time of passing the merger order of 8.10.82.
On the 426 contrary, the State was fully conscious of its earlier decision and the order of 8.10.82 specifically mentions that the posts of Senior Technical Assistants will be merged in the posts of Junior Engineers and an equivalent number of posts shall be deemed to have been created in the dying cadre of Junior Engineers.
[438F G] (3) Rule 6(iv) of the Non Gazetted Service Rules, read with Schedule I, clearly empowered the Government, in the exigencies of the situation, to continue the cadre for limited purposes and augment the same by the number of Senior Technical Assistants absorbed from the Corporation.
[439H; 440A] (4) On the terms of the relevant rules as on the lan guage of the order of 8.10.1982, the appellants, viz. Senior Technical Assistants absorbed from the Corporation were constituted as a part of the cadre of Junior Engineers, placed on complete par with the Junior Engineers of the department already in service and given the same promotional eligibility and opportunities as the latter.
[440A B] (5) It was open to the State, in view of rule 7(4) of the Gazetted Service Rules of 1968, to promote members of the non gazetted services also to the Gazetted Service to the extent of a prescribed quota.
The restricted language of rule 7, cannot therefore, be construed in such a way as to render redundant the specific provision in the Schedule entitling several persons from the Non Gazetted services to promotion.
[440G H] (6) In interpreting these rules and Government orders one should bear in mind that the promotional stipulations in Schedule II should be read in the light of rule 7(4) which permits a wide latitude to the Government in making recruit ments, by way of promotion, even otherwise than in the manner outlined in rule 7(1).
Reading the rules and the Government orders issued from time to time harmoniously, the effect of the cabinet order of July 1979 was that all J.Es., in position as such, should continue to be promoted until all of them became Assistant Engineers.
[442F G] (7) It is seen from the records that such of the Junior Engineers, belonging to the cadre as had been in service with the State Department have continued to get their promo tions even after the 1981 amendment.
If that be so, then, clearly the Department cannot discriminate as between offi cers belonging to the same cadre by promoting some of them and denying promotion to others.
A discrimination between them would be totally arbitrary and contrary to the scheme of absorption envisaged in 1982.
[441F G; 442B] 427 (8) The truth of the matter is that, when abolition of the cadre of Junior Engineers was thought of, the State decided that this should not affect the existing Junior Engineers and their promotional chances.
Again, when the merger of the Corporation and State services was thought of, the decision was that the Senior Technical Assistants should be placed on par with the Junior Engineers of the State Service.
This was a conscious and equitable decision and to go back upon it has resulted in arbitrary discrimination against the appellants.
By the decision of 1986, they lose their status as Junior Engineers (and are equated to Sub Engineers, which is the status also accorded to the Junior Technical Assistants, their subordinates in the erstwhile Corporation), they lose their right to promotion, they lose seniority by being placed at the bottom of the Sub Engineers of the State services, and the promotional quota now allot ted to them is illusory.
[443B D] (9) Gross injustice has been done to the appellants by the decision of 1.3.1986.
This decision is therefore quashed.
Accordingly, the appellants will be entitled to be considered for promotion as Assistant Engineers in the same manner and to the same extent as the Junior Engineers of the State service have been considered and not on the basis of the percentages prescribed for Sub Engineers under the amended rules.
[443F G]
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<s>[INST] Summarize the judgementPetitions Nos.
1854 60/81,2125, 2224, 2829, 3321, 3341, 3360, 3604, 4486, 3737, 3774, 4128, 4404, 4415, 4428, 4429, 4430, 4431, 4432, 4436, 4437, 6310, 7090 92, 7138, 7687, 9927, 8481 82, 6790 91182, 5356 64/83, 1868, 3929/81, 531 32, 533 534, 3957, 3975, 4574 4583, 8004, 8007 8008 and 8047/83, 5327, 5622 24, 7510 11, 8075/83, 7490 92/82, 2008, 2328/81, 2858, 2859, 4920 4923, 5616, 6065 73, 5818, 5193 5201/82, 8341 8343, 3149 50, 8381 8382, 9927/82, 377 378, 535/83, 8347 8348, 3560/83, 8003, 8005, 8006/83, 8787 8788/83 and 9011 13 of 1983.
Under Article 32 of the Constitution of India WITH Special Leave Petition Nos.
11243 46 of 1983.
From the Judgment and order dated the 8th July, 1983 of the Karanataka High Court in Writ Petition Nos.
11268 to 11271 of li: 1981, For The Appearing Petitioners Shanti Bhushan, Y.S. Chitale, K.K Venugopal KN.
Bhat, V.K Verma, section Ravindra Bhat, N. Ganpathy, C.S. Vaidayanathan, N. Nattar, R.B. Datar, A.V. Rangam, V.G. Gupta, T.V.S.N. Chari A.T.M. Sampath, Vineet Knmar, D.P. Singh, Miss H. Wahi, B.N. Tawakley, section Srivinasan, P.R. Ramashesh, P.N. Ramlingam, S.R. Srivastava and Rathin Das For The Appearing Respondents R.P. Bhatt, V.S. Desai, Harbans Lal, Swaraj Kaushal, M.N., Shroff, G.V. Subba Rao, N.S. Das Bahl and R.N. Poddar The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Prior to 1969 there was no concept of what may be termed as 'An All India ' permit which would be valid 627 for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India.
Section 63 (1) of the , provides that, except as may be otherwise prescribed, a permit granted by the regional transport authority of any one region shall not be valid in any other region, unless the permit has been counter signed by the regional transport authority of that other region, and a permit granted in any one state shall not be valid in any other state unless counter signed by the State Transport Authority of that other state or by the regional transport authority concerned.
The procedure prescribed for obtaining the counter signature of the transport authorities of other regions and states was cumbersome and was not conducive to the development of all India or inter state tourist traffic.
In order to remedy the situation and promote all India and inter state tourist traffic, the Parliament amended the and introduced sec.
63 (7) by amending Act 56 of 1969.
This new provision enables the State Transport Authority of every state to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that state specify in that behalf.
Preference is to be given, to applications for permits from the India Tourism Development Corporation, a State Tourism Development Corporation, a State Tourist Department and such operators and tourist cars or such travel agents as may be approved in that behalf by the Central Government.
This was but .
the first basic step towards encouraging all India or inter state tourist traffic.
There were other hurdles to be cleared before any scheme for grant of all India permits could be effectively implemented.
One of the hurdles was this: Under Entry 57 of List II of the Seventh Schedule to the Constitution, the State Legislature is empowered to levy "Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of list III".
Entry 35 of list III reads: "Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied".
A coherent reading of Entry 57 of list II and Entry 35 of list III makes it abundantly clear that the power to levy taxes on vehicles suitable for use on roads vests solely in the State Legislature though it may be open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles.
In other words the Parliament may lay down the guide lines for the levy of taxes on mechanically propelled vehicles but the right to levy such taxes vests solely in the 628 State Legislature.
Now there are twenty two States and nine Union Territories in India, specified in the first schedule to the Constitution.
Each of the States has the right, within its territory.
to levy a tax on motor vehicles.
If a tourist vehicle holding an 'All India Permit ' under sec.
63 (7) of the chooses to visit half a dozen states in the course of a round trip from, say, Delhi to .
Kanyakumari or Srinagar to Hyderabad tax will ordinarily have to be paid in all the half a dozen or so States.
The burden will surely be intolerable and the whole object of sec.
63 (7), namely promotion of all India or inter state tourist traffic will be frustrated.
The Central Government was alive to the problem and referred the matter to the Transport Development Council for its advice.
The Transport Development Council is a non statutory body constituted by the Central Government and consists of the representatives of the Governments of all the States.
The Transport Advisory Council advised the Central Government that there should be a single state taxation on tourist vehicles holding permits under sec.
63 (7), that is, tax should be paid in the 'home state ' and the vehicle should be exempted from payment of tax in states other than the home state.
This could be done by the respective State Governments issuing notifications under their taxation legislation exempting tourist vehicles registered in other states from payment of tax, if tax has already been paid in the home state.
The Government of India accepted the E suggestion and requested the State Governments and Union Administrations to issue necessary notifications.
The suggestion ran into trouble right from the start.
While the Governments of Andhra Pradesh, Bihar, Goa, Daman and Diu, Maharashtra, Nagaland and Uttar Pradesh readily agreed to issue such notifications on the basis of reciprocity, there was no such ready response from some other states.
The Government of Karnataka was in particular opposed to the grant of any such exemption.
Finally, the Government of Karnataka and the Governments of other states too were persuaded to agree to issue such notifications.
In the meanwhile the Government of India, in exercise of its power under sec.
63 (7) of the , issued notifications specifying the number and class of tourist vehicles in respect of which each of the State Transport authorities of the States could grant All India permits.
The last of the notifications specified that each State Transport authority could issue 50 permits for tourist omnibuses.
Pursuant to the request of the Central Government to which all the State Governments finally agreed, notifications were issued 629 exempting tourist vehicles holding permits under sec.
63 (7) from payment of tax, if tax had been paid in the home state.
We are particularly concerned in these cases with the notifications issued from time to time by the Government of Karnataka, since that is where the trouble started.
The first of the notifications issued by the Government of Karnataka was on September 18, 1972 and it exempted, from payment of taxes payable under the Karnataka Motor Vehicles Taxation Act 1957, tourist motor Cabs and tourist omnibuses registered in the States other than the State of Karnataka and plying in the State of Karnataka under permits which were valid without counter signature in the state of Karnataka, provided that the tax payable in respect of such vehicles had been paid to the State in which the vehicles were registered and provided further that the said State granted similar exemption to tourist motor cabs and tourist omnibuses whose permits were endorsed in the State of Karnataka under Rule 123 A of the Karnataka Motor Vehicles Rules.
On July IS, 1976, the Government of Karnataka issued a notification reducing the tax payable under the Motor Vehicles Taxation Act, 1957, in respect of tourist vehicles for which permits had been issued under sec.
63 (7) or endorsement granted under Rule 123 A of the Karnataka Motor Vehicles Rules.
On December 20, 1976, a further notification was issued in partial modification of the earlier notification dated September 18, 1972.
Exemption from payment of tax was given to tourist motor cabs and tourist omnibuses registered in States other than the State of Karnataka and plying in the State of Karnataka under the authority of a permit granted under sec.
63 (7), provided that the tax payable in respect of the vehicle to the State in which it was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles of the State of Karnataka.
This scheme for the grant of 'All India Permits ', designed as it was to promote all India and inter state tourist traffic.
soon fell into abuse at the hands of scheming transport operators.
Within the scheme itself lay the seeds for abuse.
The scheme enabled the State Transport Authority of each State, to issue fifty all India permits, uniformly, irrespective of the size of the State, its resources, its accessibility, its communications, its facilities, the availability of transport services and operators in the State with the necessary expertise, experience and finance to operate all India tourist services and a host of such other factors.
Apparently it was thought undesirable to make a distinction between State and State on what were perhaps thought to be elusive criteria and possibly the scheme 630 was expected to give a boost to the transport business in the smaller and less advanced States.
And, of course, it was necessary to obtain the agreement and cooperation of all the States.
But, the result was that transport operators from, big and comparatively prosperous and advanced States, well versed in the intricacies of the transport business very soon flocked to small and comparatively poor and less advanced States like Manipur and Nagaland to apply for and obtain all India permits from the State Transport Authorities of these States.
It is conceded before us that a large number of persons holding all India permits from some of these small States do not belong to these States at all, but are transport operators coming from far off States.
Another factor which appears to have influenced the flocking of transport operators from other States to States like Nagaland and Manipur is the nationalization of contract carriage service in States like Karnataka.
Once the permits were obtained and the vehicles were registered, these small States saw the last of the operators.
Having obtained the permits, the operators with their vehicles flocked back to the parent State of the operators (not of the vehicles) or to a State like Karnataka where all contract carriages having been nationalized no private contract carriage was available and there was therefore a great opportunity to ply the vehicles as contract carriages within the State.
States like Karnataka were swamped by tourist vehicles from all over the country, registered in other States.
These tourist vehicles practically 'colonised ' Karnataka and like States and started operating more or less as stage carriages within the particular State, never and rarely if ever, moving out of the State.
There was no thought or Question of undertaking all India or interstate tours, and out went the worthy object of sec.
63(7).
Quick and easy money with the least trouble and in the shortest time, by whatever method, was the only object.
In the counter affidavit filed on behalf of the State of Karnataka in some of the Writ Petitions, it is stated.
"Though the vehicles were registered outside the State of Karnataka, they have been permanently stationed in the State of Karnataka and particularly at Bangalore, and the vehicles were all being plied as Stage Carriages.
Though All India Tourist Permits were obtained by the residents of other states, the permits were used by taking the vehicles and keeping them in the State of Karnataka.
The operators run their tourist buses at fixed timings 631 from particular place like the Stage carriages operated by the Karnataka State Road Transport Corporation (hereinafter called the K.S.R.T.C.) and other private state carriage/ operators.
On checking of the vehicles and verification of the passengers, it was found that the passengers found in the vehicle were not genuine tourists and the drivers or the persons incharge of the vehicles were not in a position to produce the trip sheet, name list with whom they entered into contract.
It was also found that the passengers found in the vehicles had boarded the buses from one point without any contract or otherwise and without they being tourists.
The passengers found in the tourist buses are regular passengers going from one place to another for purposes other than tourism.
These vehicles were found catering to the needs of general travellers who can make use of the Stage Carriages operated by the K.S.R.T.C., or other private stage carriage operators.
The respondent produces herewith statements as ANNEXURF.S 1 to 9 showing the clandestine operation of the vehicles covered by All India Tourist Permits, the remarks and irregularities noticed by the Motor Vehicles Inspectors while checking the vehicles covered by All India Tourist permit, the frequent detection of these vehicles running as Stage Carriages by collecting individual fares and picking passengers from one point and setting down them at another point and bringing different passengers in the return journey.
From the statements enclosed, it is clear that the operators of the tourist buses covered by All India Tourist permits have misused the Tourist Buses by running them as regular stage carriages, competing with the KSRTC buses and other private stage carriages within the State.
As a result of indiscriminate misue of the Vehicles as Stage Carriages even though the permits were obtained under Section 63 (7) of the Central Act for Tourism, the State Government has suffered considerable loss in Revenue.
These buses actually made use of the passengers which would have normally gone to the KSRTC buses and other private carriages.
The very object of obtaining permits under section 63(7) of the Central Act, which intended to promote tourism has been misued by these operators of the Tourists buses by plying their vehicles regularly as stage carriages.
Most of the 632 permits obtained under Section 63 (7) of the Central Act in the States other than the State of Karnataka are made use of for the purported use of running the tourist buses but actually the permits were misused to run the tourist vehicle either as stage carriages or as contract carriages".
A survey made by the Transport Commissioner of Maharashtra revealed a similar state of affairs.
The Transport Commissioner submitted a report to the Government of Maharashtra, a copy of which has been made available to us.
It is stated in the report, "Our estimate is that out of these 1300 permits anything between 300 to 400 buses are operating in Maharashtra with Bombay as the main centre.
Most of these buses for all practical purposes operate as stage carriage services masquerading as contract carriages.
In Maharashtra the ordinary passenger transport by stage carriages and contract carriages has been completely nationalised.
The All India Tourist Buses on the other hand are exploiting the loopholes available in the law and operate point to point passenger services on routes where the volume of traffic is heavy viz. routes like Bombay Kolhapur, Bombay Mangalore (Mangalore), Bombay Panaji, Bombay Belgaum, Bombay Ahmedabad and Bombay Indore . . . . . . . . . . . . . . . ".
"On 9/10th April 1983, the Transport Commissioner had personally visited the Charoti Check Naka which is our border check post bordering Gujarat on the Bombay Ahmedabad road.
From the records of the check post he found that as many as 115 All India Tourist Buses are regularly playing on this route.
After making an analysis of these 115 All India Tourist Buses, ' he found that 41 permits had been issued by the State Transport Authority of Manipur.
17 had been issued by State Transport Authority Nagar Haveli, 8 by the State Transport Authority, Meghalaya and 5 by the State Transport Authority Nagaland.
A large number of All India Tourist Buses operating with their base in Bombay appear to have been issued by Manipur Nagaland and the Union Territory of Dadra Nagar Haveli".
633 The petitioners, who are transport operators holding all India permits, deny that any of them was guilty of any malpractice or misuse of the permits held by them.
But, notwithstanding the petitioners ' denial we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government, are generally and substantially correct.
Complaints about the abuse of the scheme appear to have been made to the Central Government and the Transport Advisory Council also.
We are also told that the question of meeting the challenge posed by these abuses is receiving the attention of the Central Government.
The Government of Karnataka, apparently the worst sufferer, reacted sharply.
The concession given to the holders of all India permits by way of exempting the all India tourist Vehicles, registered in other States, from payment of the Karnataka Tax, if tax had already been paid in the home State was withdrawn by a notification dated 31st March, 81.
It is this notification and the consequences of the notification that are in question in these several Writ Petitions.
We are informed that the State of Andhra Pradesh has also issued a notification similar to that of the State of Karnataka withdrawing the exemption which it had granted earlier to vehicles operating on permits issued under sec.
63 (7) and registered in other States.
Other states have not withdrawn the exemption previously granted by them to vehicles registered in other states and operating on permits issued under sec.
63(7).
But as the exemption granted by most of them is on a reciprocal basis, the withdrawal of exemption by the States of Karnataka and Andhra Pradesh has the effect of making vehicles registered in Karnataka and Andhra Pradesh, immediately subject to payment of tax in every one of those States through which they pass.
The collection of tax by the other States is also resisted in these writ petitions.
The power of the State Legislature to levy the particular tax, the power of the State Government to grant exemption from payment of tax under the authority delegated to it by the Legislature and the implied power of the State Government to withdraw an exemption granted by it are conceded.
Yet a number of ingenious and platitudinous submissions have been though we must confess that many of them have only to be stated to be rejected.
Some of them served no better purpose than occupy the time of the Court, time which has become dear and precious because of the mountainous arrears of cases awaiting the decision of this Court.
We do wish it is remembered that the Supreme Court is the highest Court in the land and its time is not to be frittered away in 634 listening to hopeless arguments advanced just for the sake of argument.
The time has come for judges and lawyers to make a determined effort to chop certain arguments and prone certain others judgments following suit.
In fairness to the counsel who appeared in the cases before us, we must say that everyone was brief and none over stated his case.
It was submitted that see.
63 (7) of the was designed to promote All India and inter state tourist traffic and thus to advance trade, Commerce and inter course throughout the territory of India.
It was implicit in sec.
63 (7) that the States would exercise their power of taxation in such a way as not to impose an additional burden on tourist Vehicles registered in other states and plying on permits issued under sec.
63(7), over and above the tax paid in the home State.
In other words, it was implicit that all the States would exempt from taxation tourist vehicles registered in other States and plying on permits issued under sec.
67 (7) was withdrawing the exemption, the object of sec.
63 (7) was defeated and therefore, freedom of trade, Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired.
The withdrawal of exemption was, therefore, unconstitutional and bad in law.
The transport operators of Karnataka who were not directly hit by the withdrawal of the exemption by the Government of Karnataka advanced a subtler argument and suggested that they were in fact the worst hit.
The argument was that though despite the withdrawal of the exemption, they were paying no more tax to the State of Karnataka than they were paying hitherto, the withdrawal of the exemption had created a situation which denied them the benefit of exemption granted by the Governments of all others States, since those exemptions were reciprocal in condition.
The situation indirectly created by the action of the Government of Karnataka imposed an intolerable burden on them by compelling them to pay taxes in every State other than Karnataka through which their vehicles passed and thus virtually denied to them the freedom of trade, Commerce and inter course throughout the territory of India guaranteed by article 301 of the Constitution.
We are wholly unable to see any force in these submissions, The learned counsel for the parties on either side invited our atten 635 tion to the Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors Bolani Ores Ltd. vs State of Orissa(2), G.K. Krishnan vs State of Tamil Nadu(9) International Tourist Corporation vs State of Haryana(4) and Malwa Bus Service Pvt. Ltd. vs State of Punjab(5) to explain the extent and the limits of the freedom of trade, commerce and intercourse throughout the territory of India proclaimed by article 301 of the Constitution.
We do not propose to refer to any of these cases since the law appears to us to be well settled: Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution.
Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services.
All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is "the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy".
( ') "If the object behind the levy is identifiable and if there is sufficient nexus between the subject and the object of the levy, it is not necessary that the money realised by the levy should be put into a separate fund or that the levy should be proportionate to the expenditure.
There can be no bar to an inter mingling of the revenue realised from regulatory and compensatory taxes and from the taxes of a general nature nor can there be any objection to more or less expenditure being incurred on the object behind the compensatory and regulatory levy than the realisation from the levy".(6) It should be patent that "it would ordinarily be well nigh impossible to identify and measure with any exactitude the benefits received and the expenditure incurred and levy the tax according to the benefits received and the expenditure incurred".
Nor is the court to interpose itself by assuming the role of a cost accountant and attempt to balance meticulously the cost of the services, benefits and facilities against the realisation from the levy.
And, if the levy as a whole is justified by the need generally, it does not have to be separately justified with reference to every group of persons claiming 636 to require and receive less service than others.
Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly, a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course.
By virtue of the power given to them by Entries 56 and 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State.
Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless, as we said, the tax is a mere pretext designed to injure the freedom of interstate trade, commerce and intercourse.
The nexus between the levy and the service is so patent in the case of such taxes that we need say no more about it.
The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislations outside the range of article 301 of the Constitution.
It is true that the object of enacting sec.
63 (7) by the Parliament was to promote all India and inter state tourist traffic.
But 'taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy.
True again, Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, as explained by us at the outset, it is therefore open to the Parliament to lay down the 17 principles on which taxes may be levied on mechanically propelled vehicles.
But the Parliament while enacting section 63 (7) of the refrained from indicating any such principles, either expressly or by necessary implication.
The State 's power to tax and to exempt was left uninhibited.
It may be that a a State legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec.
63 (7) of the and accelerating inter state trade, commerce and intercourse.
But merely by Parliament legislating sec.
63 (7), the State Legislatures are not obliged to fall in line and to so arrange their tax laws as to advance the object of sec.
63 (7), be it ever so desirable.
The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted.
There is no question of impairing the freedom under article 301 by refusing to 637 exempt or by withdrawing an exemption.
Not to pat on the back is not to stab in the back.
True, straw by straw, the burden of taxation on tourist vehicles increases as each State adds its bit of straw, but, then, each State is concerned with its coffers and has the right to tax vehicles using its roads; and, the contribution which a tourist carriage is required to make to its treasury is no more than what other contract carriages are required to make.
We are firmly of the view that there is no impairment of the freedom under article 301.
The special submission on behalf of the 'Karnataka operators ' that the withdrawal by the Karnataka Government of the exemption granted to 'outsiders ' has resulted in the Karnataka operators having to pay tax in every State in the country and, therefore, the withdrawal has impaired the freedom under article 301 is but the same general sub mission, seen through glasses of a different tint.
It does not even have the merit that the withdrawal of the Karnataka exemption affects them directly.
The submission is rejected.
One of the submissions made to us was that if there was a misuse of the all India permits, the remedy was to punish the wrong doers by taking appropriate action against the wrong doers by cancelling the permit, if necessary, but not to withdraw the benefit of the exemption altogether, even in the case of honest operators.
That is a matter for the Legislature and its delegate to decide but not for the court.
If the situation had become so malignant that drastic action was called for, it is not for the court to substitute its judgment to say that the object could perhaps be well achieved by adopting a less drastic procedure.
It was submitted that all India tourist vehicles do not use the roads of the State as much as the contract carriages operating in the State and therefore, the State was wrong in treating them alike.
It was said that treatment of unequals as equals had resulted in an infringement of article 14 of the Constitution.
It was also submitted that vehicles holding inter State permits under inter state agreements were still exempt from tax and this was also a violation of article 14 of the Constitution.
Another contention raised was that there was some sort of promissory estoppel which prevented the State Government from withdrawing the exemption.
Yet another argument was that the withdrawal of the exemption was arbitrary and therefore, judicial review was necessary.
These and other like submissions which were made to us in our opinion, fall in the category of arguments which.
638 we mentioned earlier, have only to be stated to be rejected.
The answers are self evident.
, The submissions are totally without merit and we see no justification for increasing the length of our judgment by further futile discussion.
All the Writ petitions are dismissed with costs and the interim orders are vacated.
H.S.K. Petitions dismissed.
[/INST]In order to promote all India and inter state tourist traffic, the Parliament amended the by introducing in it sec.
63(7) which enabled the State Transport Authority of every State to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as may be specified by the Central Government.
Later the Central Government notified that each State Transport Authority could issue 50 all India permits for tourist omnibuses.
As each State had the right, within its territory, to levy a tax on a motor vehicle, it was found that unless tourist vehicles with all India permits were exempted from tax by other States than their home state the object of sec.
63(7) would be frustrated.
Therefore, the Central Government made a request in this behalf to all the State Governments.
In pursuance of that request the Government of Karnataka exempted tourist vehicles holding permits under sec.
63(7) from payment of tax, provided the tax payable to the State in which the vehicle was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles to the State of Karnataka.
Many transport operators from big and comparatively prosperous States flocked to some small and comparatively poor and less advanced States and after getting all India permits from them started plying their vehicles in other States like Karnataka and Maharashtra more or less as regular stage carriages.
Having found that the transport operators were misusing the all India permits and indulging in certain malpractices, the Government of Karnataka withdrew the exemption from payment of tax granted earlier.
The petitioners, who were transport operators holding all India permits, challenged the withdrawal cf exemption as unconstitutional and bad in law.
The petitioners submitted that sec.
63(7) of the was designed to promote all India and inter state tourist traffic and thus to advance trade, 625 commerce and inter course throughout the territory .
Of India.
By withdrawing the exemption, the object of sec.
63(7) was defeated and therefore, freedom of trade.
Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired.
Dismissing the petitions, ^ HELD: By withdrawing the exemption there is no impairment of the freedom under article 301.
[637 B] Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution.
Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services.
All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is, the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy.
Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course.
[635 C D, 636 A] International Tourist Corporation vs State of Haryana, ; referred to.
By virtue of the power given to them by Entries 56 or 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State.
Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless the tax is a mere pretext designed to injure the freedom of inter state trade, commerce and inter course.
The nexus between the levy and the service is so patent in the case of such taxes that one need say no more about it.
The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislation outside the range of article 301 of the Constitution.
[635 B D] `Taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy.
Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, it is therefore open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles.
But the Parliament while enacting sec.
63(7) of the refrained from indicating any such principles, either expressly or by necessary implication.
The State 's power to tax and to exempt was left uninhibited.
It may be that a State Legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec.
63(71, but 626 the State Legislature are not obliged to fall in line line and to so arrange their tax laws as to advance the object of sec.
63(7), be it ever so desirable.
The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted.
There is no question of impairing the freedom under article 301 by refusing to exempt or by withdrawing an exemption.
[636 E 637 A]
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<s>[INST] Summarize the judgementAppeal No. 2348 of 1993.
From the Judgment and Order dated 13.7.1992 of the Central Administrative Tribunal, Guahati in O.A. No. 33/91.
Ms. K. Amareswari, B.P. Sarathy and C.V. Subba Rao for the Appellants.
P.K. Goswami, Kailash Vasdev, Ms. Lira Goswami and Ms. Alpana Poddar for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard counsel for the parties.
Leave granted.
Respondent is a Garden Curator in the Office of the Scientist SE, Botanical Survey of India, Eastern Circle, Shillong.
By order dated January 29, 1991 he was transferred from Shillong to Pauri (Uttar Pradesh) by the Senior Administrative Officer, office of the Director, Botanical Survey of India, (Ministry of Environment and Forests, Government of India).
As many as 19 persons were transferred under the said order including the respondent.
The respondent has been working in Shillong since the year 1979.
The respondent approached the Gauhati Bench of the Central Administrative Tribunal (Original Application No. 33 of 1991) questioning the order of his transfer.
He submitted that his wife is also employed at Shillong in and off ice of the Central Government, that his children are studying at Shillong and further that he himself had suffered back bone fracture injuries some time ago.
He submitted that the guidelines contained in Government of India O.M. dated 3.4.1986 have not been kept in mind while ordering his transfer.
tie complained that some other officials who have been serving at Shillong for a longer period, have been allowed to continue at Shillong.
He attributed 'mischief ' to his Controller Officer, Shri B.M. Wadhwa (third respondent in the O.M.).
In the counter affidavit filed by the respondents, they submitted that the transfer was ordered on administrative grounds and is unexceptionable.
The learned Single Member of the Central Administrative Tribunal quashed the order of transfer on the following reasoning: the decisions of the Courts establish that the power of transfer is not an unfettered one but is circumscribed by various circulars/guidelines contained in the administrative instructions issued 430 by the Government.
An order of transfer can be interdicted if it is discriminatory.
The said principles are applicable to the case of the respondent.
Further "in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground, if all present, deserve special consideration not to pass the order." Having said so the learned Member recorded the following finding: "In view of the above facts and circumstances and findings it is held unhesitatingly that the transfer order No. BSI.
80/5/80 Estt.
dated 29.1.1991 in respect of applicant S.L.Abbas was malafide and liable to be quashed.
" The Union of India has preferred this appeal.
An order of transfer is an incident of Government Service.
Fundamental Rule 11 says that "the whole time of a Government servant is at the disposal of the Government which pays him and he may be employed in any manner required by proper authority".
Fundemental Rule 15 says that "the President may transfer a government servant from one post to another".
That the respondent is liable to transfer anywhere in India is not in dispute.
It is not the case of the respondent that order of his transfer is vitiated by mala fides on the part of the authority making the order, though the Tribunal does say so merely because certain guidelines issued by the Central Government are not followed, with which finding we shall deal later.
The respondent attributed"mischief"to his immediate superior who had nothing to do with his transfer.
All he says is that he should not be transferred because his wife is working at shillong, his children are studying there and also because his health had suffered a set back some time ago.
He relies upon certain executive instructions issued by the Government in that behalf.
Those instructions are in the nature of guidelines.
They do not have statutory force.
Who should be transferred where, is a matter for the appropriate authority to decide.
Unless the order of transfer is vitiated by malafides or is made in violation of any statutory provisions, the Court cannot interfere with it.
While ordering the transfer, there is no doubt, the authority must keep in mind the guidelines issued by the Government on the subject.
Similarly if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration.
The guidelines say that as far as possible, husband and wife must be posted at the same place.
The said guideline however does not confer upon the government employee a legally enforceable right.
The jurisdication of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the constitution of India in service matters.
This is evident from a persual of Article 323 A of the constitution.
The constraints and norms which the High Court observes while exercising the 431 said jurisdiction apply equally to the Tribunal created under Article 323 A. (We find it all the more surprising that the learned Single Member who passed the impugned order is a former Judge of the High Court and is thus aware of the norms and constraints of the writ jurisdiction.) The Administrative Tribunal is not an Appellate Authority sitting in judgment over the orders of transfer.
It cannot substitute its own judgment for that of the authority competent to transfer.
In this case the Tribunal has clearly exceeded its jurisdiction in interfering with the order of transfer.
The order of the Tribunal reads as if it were sitting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority).
Shri Goswami, learned counsel for the respondent relies upon the decision of this Court in Bank of India vs Jagjit Singh Mehta [1992] 1 S.C.C.306 rendered by a Bench of which one of us (J.S. VermaJ.) was a member.
On a perusal of the judgment, we do not think it supports the respondent in any manner.
It is observed therein: "There can be no doubt that ordinarily and as far as practicable the husband and wife who are both employed should be posted at the same station even if their employers be different.
The desirability of such a course is obvious.
However, this does not mean that their place of posting should invariably be one of their choice, even though their preference may be taken into account while making the decision in accordance with the administrative needs.
In the case of all India services, the hardship resulting from the two being posted at different stations may be unavoidable at times particularly when they belong to different services and one of them cannot be transferred to the place of the other 's posting.
While choosing the career and a particular service, the couple have to bear in mind this factor and be prepared to face such a hardship if the administrative needs and transfer policy do not permit the posting of both at one place without sacrifice of the requirements of the administration and needs of other employees.
In such a case the couple have to make their choice at the threshold between career prospects and family life.
After giving preference to the career prospects by accepting such a promotion or any appointment in an all India service with the incident of transfer to any place in India, subordinating the need of the couple living together at one station, 'they cannot as of right claim to be relieved of the ordinary incidents of all India service and avoid transfer to a different place on the ground that the spouses thereby would be posted at different places. . . . . . . .
No doubt 432 the guidelines requires the two spouses to he posted at one pi" as far as practicable, but that does not enable any spouse to claim such a posting as of right if the departmental authorities do not consider it feasible.
The only thing required is that the departmental authorities should consider this aspect along with the exigencies of administration and enable the two spouses to live together at one station if it is possible without any detriment to the administrative needs and the claim of other employees." (emphasis added) The said observations in fact tend to negative the respondent 's contentions instead of supporting them.
The judgment also does not support the Respondents ' contention that if such an order is questioned in a Court or the Tribunal, the authority is obliged to justify the transfer by adducing the reasons therefor.
It does not also say that the Court or the Tribunal can quash the order of transfer, if any of the administrative instructions/guidelines are not followed, much less can it be charactrised as malafide for that reason.
To reiterate, the order of transfer can be questioned in a court or Tribunal only where it is passed malafide or where it is made in violation of the statutory provisions.
For the above reasons, the appeal is allowed.
The judgment under appeal is set aside.
There shall be no order as to costs.
N.P.V. Appeal Allowed.
[/INST]The respondent, a Central Government employee, who was transferred from one place to another, challenged the order of transfer on the grounds that: his wife was also employed at the same place in a Central Government office; his children were also studying there; he himself had suffered backbone fracture injuries some time ago; the guidelines contained in Government of India O.M. dated 3.4.1986 had not been kept in mind while ordering his transfer; some other officials, who had been serving at the same place for a longer period than the respondent had been allowed to continue and his transfer was due to the mischief of his Controlling Officer.
In the counter affidavit filed by the appellants, it was submitted that the transfer was ordered on administrative grounds and was unexceptionable.
, A Single Member of the Central Administrative Tribunal quashed the order of transfer on the ground that the power of transfer was not an unfettered one, but was circumscribed by various circulars/ guidelines contained in the administrative instructions issued by the Government and an order of transfer could be interdicted if it was discriminatory, that in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground,if present deserved special consideration and that in view of the facts and circumstances of the case the transfer order in question in respect of the respondent was mala fide.
428 Allowing the appeal, preferred by the Union of India and others, this Court, HELD: 1.1 An order of transfer is an incidence of Government servie.
Who should be transferred where is a matter for the appropriate authority to decide.
Unless the order of transfer is vitiated by malafides or is made in violation of statutory provisions, the Court cannot interfere with it.
There is no doubt that, while ordering the transfer the authority must keep in mind the guidelines issued by the Government on the subject.
Similarly, if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration.
The guidelines say that as far as possible, the husband and the wife must be posted at the same place.
The said guideline, however, does not confer upon the government employee a legally enforceable right.
Executive instructions issued by the Government are in the nature of guidelines.
They do not have statutory force.
[430 C E] 1.2.
There is no dispute that the respondent is liable to transfer anywhere in India.
It is not the case of the respondent that the order of his transfer was vitiated by mala fides on the part of the authority making the order, though the Tribunal says so, merely because certain guidelines issued by the Central Government were not followed.
The immediate superior of unit, against whom mischief had been attributed by the respondent, has nothing to do with his transfer.
[430 F] 2.1.
The jurisdiction of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the Constitution of India in service matters, as is evident from Article 323 A of the Constitution.
The constraints and norms which the High Court observes while exercising the said jurisdiction apply equally to the Tribunal created under Article 323A.
The Administrative Tribunal is not an Appellate Authority sitting in judgment over the order; of transfer.
It cannot substitute its own judgment for that of the authority competent to transfer.
[430 H,431 A] 2.2.
In the instant case, the Tribunal has dearly exceeded its jurisdiction in interfering with the order of transfer.
The order of the Tribunal reads as if it were sifting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority).
[431 B] Bank of India vs Jagjit Singh Mehta, ; , explained.
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<s>[INST] Summarize the judgementivil Appeal No. 4552 of 1989.
From the Judgment and Order dated 23.12.
1988 of the Rajasthan High Court in C.W.P. No. 13 of 1987.
G.L. Sanghi and Y.P. Rao for the Appellant.
C.S. Vaidyanathan, S.R. Setia and K.V. Mohan for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special leave granted.
Having heard counsel on both sides and having perused the material on record, we are of opinion that the matter requires reconsideration by the Provident Fund Commissioner.
The Food Corporation of India has depots located at various places in Rajasthan for handling storing and trans porting food grains and other articles.
It has appointed contractors for execution of such works and the contractors in turn engaged some workers.
In respect of such workers, the Provident Fund Commissioner called upon the Corporation to deposit contribution payable under the Employees, Provi dent Fund Act and the scheme framed thereunder.
When there was non compliance, the Commissioner made an order under section 7A of the said Act determining amount payable by the Corporation.
Being aggrieved by that determination, the Corporation moved the 757 High Court for relief under article 226 of the Constitution.
The High Court has dismissed the petition.
Hence the Corpo ration has appealed to this Court.
The grievance complained of by the Corporation is that it was denied of reasonable opportunity to produce material in proof of identification of the workers in respect of whom the contribution was payable.
It is urged that the contrac tors are in possession of the relevant lists and the Commis sioner has not even given notice to contractors nor made them parties to the proceedings in spite of repeated re quests made by the Corporation.
Counsel for the Union of Workmen, however, contended that under the provisions of the the Corporation being the principal employer has to maintain list of workers; that it has failed to produce such list and, therefore, it cannot throw the burden on the contrac tors to prove the case.
We have carefully perused the Commissioner 's order and also the order of the High Court.
The total amount ordered to be payable comes to about Rs.22,48,000 in respect of the employees of depots namely: Udaipur, Jaipur, Ajmer, Badmer and Sawai Madhopur.
The Commissioner has also directed the Divisional Officer, Jaipur to deposit the Provident Fund Contribution i.e. Rs. 18,72,194 to the Fund being maintained by the trustees of the establishment.
It is indeed a large amount for the determination of which the Commissioner has only depended upon the lists furnished by the workers, Union.
It is no doubt true that the employer and contractors are both liable to maintain registers in respect of the workers employed.
But the Corporation seems to have some problems in collating the lists of all workers engaged in depots scattered at different places.
It has requested the Commissioner to summon the contractors to produce the re spective lists of workers engaged by them.
The Commissioner did not summon the Contractors nor the lists maintained by them.
He has stated that the Corporation has failed to produce the evidence.
The question, in our opinion, is not whether one has failed to produce evidence.
The question is whether the Commissioner who is the statutory authority has exercised powers vested in him to collect the relevant evidence before determining the amount payable under the said Act.
It is of importance to remember that the Commissioner while conducting an inquiry under section (7A) has the same powers as are 758 vested in a Court under the Code of Civil Procedure for trying a suit.
The section reads as follows: "section 7(A) Determination of Moneys due from Employer (1) The Central Provident Fund Commissioner, any Deputy Provident Commissioner or any Regional Provident Fund Commissioner may, by order determine the amount due from any em ployer under any provision of this Act (the scheme or the Family Pension Scheme or the Insurance Scheme as the case may be) and for this purpose may conduct such inquiry as he may deem necessary.
(2) The Officer conducting the inquiry under sub section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908, for trying a suit in respect of the following matters, namely: (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses.
and any such inquiry shall be deemed to be a judicial pro ceeding within the meaning of Sections 193 and 228, and for the purpose of Section 196 of the Indian Penal Code.
" It will be seen from the above provisions that the Commissioner is authorised to 'enforce attendance in person and also to examine any person on oath.
He has the power requiring the discovery and production of documents.
This power was given to the Commissioner to decide not abstract questions of law, but only to determine actual concrete differences in payment of contribution and other dues by identifying the workmen.
The Commissioner should exercise all his powers to collect all evidence and collate all material before coming to proper conclusion.
That is the legal duty of the Commissioner.
It would be failure to exercise the jurisdiction particularly when a party to the proceedings requests for summoning evidence from a particu lar person.
759 We, therefore, allow the appeal and reverse the order of the Commissioner and that of the High Court.
The matter stands remitted to the Commissioner to dispose it of afresh and in accordance with law and in the light of the observa tion made.
The parties shall appear before the Commissioner to receive further orders on December 12, 1989.
The Commission er, shall dispose of the matter within three months thereaf ter.
N .P.V.
Appeal allowed.
[/INST]The petitioner, Madan Lal Anand, was detained alongwith two other persons, under section 3(1) of the , 1974 COFEPOSA ACT.
In the grounds of detention it was inter alia alleged that the detenu had imported polyester filament yarn and polyester fibre in the names of M/s Jasmine and M/s Expo International on the basis of "Actual User" advance licences obtained under the Duty Exemption Entitlement Certificate Scheme on the condition that they would manufac ture ready made garments out of the imported polyester filament and export the same; that they had no intention to manufacture or export the manufactured goods, as there was neither any machinery at their so called factory nor any power connection; that investigations had revealed that both the firms had sold the imported polyester filament yarn in contravention of the orders and conditions of the advance licences; and that the said firms were benami firms and Madan Lal Anand had played a very active and major role for obtaining advance licences in the names of the said firms, importing the yarn and selling it in the local market.
The three detenu, including Madan Lal Anand, filed a petition in the High Court of Punjab and Haryana praying for the issuance of a writ of habeas corpus and challenging the validity of the order of detention.
The High Court dismissed the petition.
Before this Court it was contended on behalf of the detenu that: 734 (i) as the detenu was prevented from complying with the condition of the advance licence within six months of the first clearance by the issuance of an abeyance order by the by.
Chief Controller of Imports & Exports, the provision of section 111(0) of the Customs Act was not violated, for the goods could not be confiscated and, accordingly, there was no question of smuggling within the meaning of section 2(e) of the COFEPOSA ACT read with section 2(39) of the Customs Act, 1962; (ii) certain documents/orders, including the abeyance order, which could influence the subjective satis faction of the detaining authority in favour of the detenu were not placed before him; (iii) while the detaining au thority had relied upon and referred to the confessional statement of the detenu, the retraction made by the detenu was not placed before the detaining authority; (iv) the counter affidavit not having been sworn by the detaining authority himself, the averments made therein should not be taken notice of; (v) there was delay in considering the representation of the detenu; and (vi) the life of each of the advance licences having expired, there was no chance of the detenu now involving himself in smuggling activities.
Dismissing the appeal as well as the writ petition this Court, HELD: (1) In view of clause (0) of section 111 of the if any goods exempted from payment of duty is imported without observing the condition, subject to which the exemption has been made, it will be a case of smuggling within the meaning of section 2(e) of the COFEPOSA ACT, [740D] (2) It was more than certain that the imported goods would not and could not be utilised in accordance with the condition of the advance licence, the provision of section 111(0) of the was violated on the very importa tion of the goods.
There was, therefore, no substance in the contention that there was no smuggling in this case.
[741D] (3) Even if certain documents/orders had not been placed before the detaining authority that could not, in the least, affect the subjective satisfaction of the detaining authori ty.
[742D] Kirpal Mohan Virmani vs Tarun Roy, ; Vakil Singh vs State of Jammu & Kashmir, and Kirit Kumar Chaman Lal Kundaliya vs Union of India, , referred tO. (4) The detenu was not prejudiced for non supply to him of the 735 copies of certain documents and accordingly there was no substance in the contention that there was non application of mind by the detaining authority.
[745C] (5) Even assuming that the ground relating to the con fessional statement made by the detenu under section 108 of the was an inadmissible ground as the subsequent retraction of the confessional statement was not considered by the detaining authority, still then that would not make the detention order bad, for, in the view of this Court, such order of detention shall be deemed to have been made separately on each of such grounds.
Therefore, even exclud ing the inadmissible ground, the order of detention can be justified.
[746A B] Prakash Chandra Mehta vs Commissioner & Secretary, Government of Kerala, ; , referred to.
(6) There can be no doubt that a deponent who has no personal knowledge about any fact may, on the basis of some other facts, make his submission in court.
[746G] (7) Merely because the detaining authority has not sworn an affidavit, it will not in all circumstances be fatal to the sustenance of the order of detention.
[747H] P.L. Lakhanpal vs Union of India & Ors.
, ; Asgar Ali vs District Magistrate Burdwan & Ors., and Suru Mallick vs State of West Bengal, , referred to.
(8) There was no laches or negligence on the part of the detaining authority or the other authorities concerned in dealing with the representation of the detenu.
The observa tions made by this Court that each day 's delay in dealing with the representation must be adequately explained are meant to emphasize the expedition with which the representa tion must be considered and not that it is a magical formu la, the slightest breach of which must result in the release of the detenu.
[749C D] Mst.
L.M.S. Ummu Saleema vs Shri B.B. Gujaral, ; , explained.
(9) The said two firms had really no existence and were the benami concerns of the detenu, and the detenu if re leased, may indulge in such economic offences in setting up fictitious firms and taking out 736 advance licences in the name of such firms.
[750B] Achla Kakkar vs Administrator, Union Territory of Delhi
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<s>[INST] Summarize the judgementCivil Appeal No. 848 of 1991 etc etc.
From the Judgment and Order dated 14.12.1990 of Madhya Pradesh High Court in M.A. No. 227 of 1990.
Kapil Sibal, H.N. Salve, J.B. Dadachanji, Mrs A.K. Verma and section K. Mehta for the Appellants.
K.K. Venugopal, P. Chidambaram, S.S. Ray and P.P. Tripathi for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, CJ.
The Olympic games are ancient in origin.
According to the Encyclopaedia Britannica they commenced some 3,500 years ago and the name came from its association with the place known as Olympia in Greece.
These games were played once in every four years and were abolished in 393 AD by the Roman Emperor Theodosius I.
In recent times, they were revived in 1896 and have until now been held at the turn of every four years excepting during the first and the second world wars.
The Olympic games are one of the biggest international events and provide great opportunities to amateur sportsmen in the different classifications.
Indian participation in the Olympic games dates back to 1900 when a single representative had joined the Olympics at Paris.
Gradually, such participation became more systematic and broad based.
While the Ministry of Youth Affairs and Sports of the Union Government looks after development of sports within the country, the management of the Olympic participation has been entrusted to a society registered under the Societies Registration Act (21 of 1860) known by the name 'Indian Olympic Association ' (for short IOA ') The Memorandum of Association of this society indicates that the principal objects of the society, inter alia, are: (i) to develop and promote the Olympic movement and amateur sport, (2) to promote and encourage the physical, moral and cultural education of the youth of the nation for the development of character, good heath and good 662 citizenship, (3) to enforce all rules and regulations of the International Olympic Committee (hereinafter referred to as 'IOC ') and the IOA; (4) to be the official organisation in complete and sole charge of all Olympic matters in the country, (5) to educate the public of the country as to the value of amateurism in sports; (6) to maintain the highest ideals of amateurism and to promote interest therein, particularly in connection with the Olympic games and other games under the patronage of the IOC as well as the IOA, (7) to have full and complete jurisdiction over all matters pertaining to the participation of India in the Olympic games and other games under the patronage of the IOC as well as the IOA, (8) to assist in cooperation with National Sports Federations/Associations the selection, training and coaching of the teams that will represent Indian in the Asian, Commonwealth, Olympic and other international competitions and tournaments, under the patronage of the teams in the said competitions and tournaments after selection, (9) to undertake with the assistance of National Sports Federations/Associations the financing, management, transportation, maintenance and welfare of teams from India taking part in the Olympic games and other games under the patronage of the IOC as well as the IOA; and (10) to timulate the interest of the people of the country in the promotion of sports and games in the Olympic programme, and to that end the formation of State Olympic Association for the development of sports and games within a State and National Sports Federations for games and sports in the Olympic programme.
We have quoted most of the important objectives to bring it to the forefront that the I.O.A. has been brought into existence to sponsor, supervise, finance, regulate and control all aspects of sports activity in relation to the Asian, Commonwealth, Olympic and international competitions and tournaments under the patronage of the IOC.
While its funding is partially out of membership fee, bulk of it comes from Government contribution.
The society has a set of rules and regulations.
There are five categories of members as described in rule 3.
The management of the affairs of the Association is entrusted to an Executive Council defined in rule 1(v).
Rule 8 provides that the Executive Council shall have (i) a President (ii) 9 Vice Presidents (iii) a Secretary General (iv) 6 Joint Secretaries (v) a Treasurer (vi) 7 Members elected from among representatives of State Olympic Associations and (vii) 12 members elected from among the representatives of National Sports Federation/Association/ SSCB.
Rule 8 provides the manner of elections to be held 663 for the Executive Council.
The term of the Executive Council is 4 years.
Rule 11 provides the voting procedure.
Clause (b) of that rule requires that voting if necessary in the IOA Executive Council, IOA Emergency Executive Council and/or at the annual general or special general meetings of the IOA shall be by show of hand.
However, if in a particular case the procedure has to be changed, the same will be done by a resolution of the concerned body passed by majority vote.
The very rule provides as to the voting power of the different units composing the IOA.
Rule 12 deals with the office bearers like the President, the Vice President, the Secretary General, the Joint Secretaries, the Treasurer etc.
For the resolution of the dispute before us perhaps reference to the other rules is not necessary.
The IOA was reconstituted with effect from 28th of October, 1984, with appellant Shri V.C. Shukla as the President.
K. Murugan, appellant in C.A. No. 848 of 1991 (arising out of SLP 1064/91) was one of the 6 Joint Secretaries.
In November, 1988, Shri B.S. Adityan, one of the vice President of the 1984 Executive Council was elected as President for a term of four years.
On 16th of May, 1990, there was a requisition of 17 Members for a special general meeting for considering the move of a no confidence motion against Shri Adityan and his Executive Council.
With this started a period of confrontation between the two groups in the Association.
In May, 1990, the Executive Council overruled the requisition as invalid and President Adityan called a meeting of the General assembly at Madras for 15th of June, 1990.
For the same day the other group summoned a meeting of the general assembly at New Delhi.
This led to Court proceeding and the Delhi High Court restrained the requisitionists from holding their meeting at New Delhi and appointed a retired Judge of the Delhi High Court as an observer for the meeting to be held at Madras.
In the convened meeting of 15th of June, minutes of the proceedings whereof have been seriously disputed Shri Shukla claimed to have been elected.
A little before the meeting of the 15th of June at Madras, further proceedings were taken in Court which have been labelled as collusive and manipulations for obtaining an order for the manner of voting.
The warring factions lost sight of the laudable goals of the IOA and the purpose for which the Association had been set up and put their entire attention on winning control over the affairs of the IOA in their grip through litigation.
664 A Single Judge of the Madras High Court having decided in favour of Shri Adityan, the matter ultimately came before a Full Bench which by its order dated 3rd of January, 1991, remitted the matter to the learned Single Judge and appointed Justice Natarajan, a retired Judge of this Court, to discharge the functions of the President of the IOA as an interim measure.
This order is challenged in the appeal by Shri Murguan and Shri V.C. Shukla by two different appeals being Civil Appeals Nos. 852.853 of 1991 (arising SLPs 1599 and 1787/91).
Not content with the litigation in the Delhi and Madras High Courts, the Fencing Association of India filed a civil suit at Jabalpur asking for declaration that Shri Shukla had been duly elected as President.
An application for injunction in support of Shri Shukla having been rejected by the trial Judge an appeal had been taken before the High Court where a learned Single Judge made a status quo order.
The other two appeals arise out of proceedings including contempt taken therein.
Long arguments have been advanced before us by Mr. Venugopal for Shri Adityan and by Mr. Sibal for Shri Shukla.
The main contention of Mr. Venugopal is that under the rules the terms of the President and the Executive Council is four years and in the absence of a clear provision for a vote of No. confidence, which would curtail the period, there could be no reduction of the period of office.
It has also been contended that the entire Executive Council could not be voted out of office by a motion of no confidence and, therefore, Shri Adityan had rightly overruled the requisition.
Serious challenge has been advanced by Mr. Sibal against the proceedings taken before the Madras High Court and particularly, the learned Judge making an order changing the manner of voting from show of hands to one by ballot in what is stated to be a collusive proceeding.
This does not appear to us to be a matter where individual rights in terms of the rules and regulations of the Society should engage our attention.
Sports in modern times has been considered to be a matter of great importance to the community.
International sports has assumed greater importance and has been in the focus for over a few decades.
In some of the recent Olympic games the performance of small States has indeed been excellent and laudable while the performance of a great country like India with world 's second highest populations has been miserable.
It is unfortunate that the highest body in charge of monitoring all aspects of such sports has got involved in group fight leading to litigation and the objectives of the Society have been lost sight of.
The representation of India in the IOA has been in jeopardy.
665 The grooming of amateurs has been thrown to the winds and the responsibility placed on the Society has not been responded.
This, therefore, does not appear to us to be a situation where rights to office will have to be worked out by referring to the provisions of the law relating to meetings, injunction and rights appurtenant to elective office.
What seems to be of paramount importance is the healthy conditions must be restored as early as possible into the working of the Society and a fresh election has to be held as that seems to be the only way to get out of the malady.
The entire nation is looking up to the results of the competitions at the international games when they are held.
As we have already pointed out, IOA has great responsibities to discharge in organising and streamlining the national sport activities intended for international events.
The monitoring has to be a continuous one and unless the scheme is ongoing and is made result oriented, the international performance cannot be up to any appreciable level.
The question for consideration, therefore, is not as to which of the two factions should succeed.
On the other hand, it is appropriate that all the litigations now pending should abate.
In the interest of the appropriate functioning of the Society the litigation outside the headquarters of the Society should not be permitted.
We accordingly direct that any litigation, if at all, should only be within the jurisdiction of the Delhi High Court and no Court in India would entertain litigations relating to the functioning of IOA in any aspect.
A fresh Executive Council should be set up and for that purpose elections should be held within two months hence.
The general assembly should be convened to meet at Calcutta on 28th of April, 1991.
We appoint Mr. Justice A.D. Koshal, a retired Judge of this Court to conduct the elections keeping the provisions of the rules and regulations of the IOA in view.
Voting shall be by secret ballot.
The list of voters should be finally settled within four weeks from now and if it is necessary to have any hearing in the matter we authorise such hearing to be undertaken by Mr. Justice Koshal.
Until then, Mr. Justice Natarajan will continue to exercise his powers as conferred by the order of the Madras High Court.
Once the results of the elections are announced, Mr. Justice Natarajan would cease to be in office and the Association would take over.
To enable Mr. Justice Koshal to discharge the obligations cast upon him by this decision, the Ministry of Youth Affairs and Sports is directed to place at his disposal a sum of Rs.25,000 (Twenty five thousand) within two weeks and a small group of assistants as he may need.
Payment of remuneration for the work done shall be fixed by the Court later.
666 All the proceedings in the different High Courts abate; the suit in the Jabalpur High Court shall stand dismissed.
The contempt proceedings now pending shall not be proceeded with.
In the course of arguments some criticism was advanced against the order of the High Court providing monthly remuneration to Mr. Justice Natarajan.
We leave this aspect to be considered by Mr. Justice Natarajan himself and do not propose to deal with it in our order.
Before we leave this matter we would like to point that the Union of India should take greater interest in organising sports both for national and international purposes.
Sports have a role to play in building up good citizens.
That aspect should be kept in view.
We have a feeling that while a lot of money is allotted for the purpose of improvement of sports, the result has been considerably poor and deceptive.
We hope and trust that this aspect of the criticism heard from everywhere in this country shall also be given due consideration.
V.P.R. Appeals disposed of.
[/INST]The Indian Olympic Association was a society registered under the Societies Registration Act, with the principal object to sponsor, supervise, finance, regulate and control all aspects of sports activity in relation to the Asian, Commonwealth, Olympic and International competitions.
The Society had a set of rules and regulations.
There are five categories of members described in Rule 3.
The management of the affairs of the Association is entrusted to an Executive Council defined in Rule 1(v).
Rule 8 provided that the Executive Council shall have (i) a President, (ii) 9 Vice Presidents, (iii) a Secretary General, (iv) 6 Joint Secretaries, (v) a Treasurer and (vi) 19 Members.
The terms of the Executive Council was to be 4 years, while Rule 11 provides the voting procedure.
The Indian Olympic Association was reconstituted with effect from 28 of October, 1984, with the appellant in C.A. No. 852 of 1991, Shri V. C. Shukla as the President, K. Murugan, the appellant in C.A. No. 848 of 1991 as one of the 6 Joint Secretaries.
In November, 1988, one of the Vice President of the 1984 Executive Council, Shri B.S. Adityan, the appellant in C.A. No. 849/91 was elected as President for a term of four years.
On 16th of May, 1990, there was a requisition of 17 Members for a special general meeting for considering the move of a no confidence 659 motion against the aforesaid Shri B.S. Adityan and his Executive Council.
This initiated a period of confrontation between the two groups in the Association.
In May 1990, the Executive Council overruled the aforesaid requisition as invalid and President Adityan called a metting of the General Assembly at Madras for 15th of June, 1990.
For the same day the other group summoned a meeting at New Delhi.
This aforesaid situation led to Court proceedings, and the Delhi High Court restrained the requisitionists from holding their meeting at New Delhi and appointed a retired Judge of the Delhi High Court as an observer for the meeting to be held at Madras.
At this meeting Shri V.C. Shukla, the appellant in C.A. No. 852/91 claimed to have been elected.
The matter was taken to Court and a Single Judge decided in favour of Shri B.S. Adityan, the appellant C.A.No. 8549/91, but when the matter came up before the Full Bench of the High Court, it remitted the matter to a Single Judge who appointed a retired Judge of this Court to discharge the function of the President of the Association as an interim measure.
This Order has been challenged by the appellants in Civil Appeals Nos.
852 853/91.
The Fencing Association of India filed a civil suit at Jabalpur for the declaration that Shri V. C. Shukla had been duly elected.
The application for injunction from having been rejected by the Trial Judge, an appeal had been taken to the High Court where the Single Judge ordered status quo.
Two Civil Appeals were also filed against this order.
It was contended on behalf of the appellants that under the rules the term of the President and the Executive Council was four years and in the absence of a clear provision for a vote of no confidence which would curtail the period, there could be no reduction of the period of office, and that the entire Executive Council could not be voted out of office by a motion of no confidence.
Disposing of the appeals, this Court, HELD: 1. Sports in modern times has been considered to be a matter of great importance to the community.
International sports has assumed greater importance and has been in the focus for over a few decades.
[664D E] 660 2.
It is unfortunate that the highest body incharge of monitoring all aspects of such sports has got involved in group fight leading to litigation and the objectives of the I.O.A. have been lost sight of.
The representation of India in the I.O.A. has been in jeopardy.
[664E F] 3.
The grooming of amateurs has been thrown to the winds and the responsibility placed on the Society has not been responded.
This, therefore, does not appear to be a situation where rights to office will have to be worked out by referring to the provisions of the law relating to meetings, injunction and rights appurtenant to elective offices.
[664F G] 4.
What seems to be of paramount importance is that healthy conditions must be restored as early as possible into the working of the Society and a fresh election has to be held as that seems to be the only way to get out of the malady.
[644G H] 5.
The entire nation is looking up to the results of the competitions at the international games when they are held.
I.O.A. has great responsibilities to discharge in organising and streamlining the national sport activities intended for international events.
The monitoring has to be a continuous one and unless the scheme is ongoing and is made result oriented, the international performance cannot be up to any appreciable level.
[664G 665B] 6.
This does not appear to be a matter where individual rights in terms of the rules and regulations of the Society should engage attention.
[664D E] 7.
It is appropriate that all the litigations now pending should abate, and for appropriate functioning of the Society the litigation outside the headquarters of the Society should not be permitted.
[665B C] 8.
A fresh Executive Council should be set up and for that purpose, elections should be held within two months hence; a retired Judge of this Court is appointed to conduct the elections keeping the provisions of the rules and regulations of the I.O.A. in view.
All the proceedings in the different High Courts abate.
[665C D, G] 9.
It is directed that the Union of India should take greater interest in organising sports both for national and international purposes.
Sports have a role to play in building up good citizens.
That 661 aspect should be kept in view, while a lot of money is allotted for the purpose of improvement of sports, the result has been considerably poor and deceptive.
This aspect of the criticism hear from everywhere in this country shall also be given due consideration.
[666A B]
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<s>[INST] Summarize the judgementition No. 3727 of 1985 Under Article 32 of the Constitution of India.
M.C. Mehta (Petitioner in person).
B. Datta, Additional Solicitor General, R.P. Kapur, P.P Singh and Ms. A Subhashini for Respondent Nos. 2 and 3 R.A. Gupta for Respondent No. 87.
S.K. Dholakia, Deepak K. Thakur, Mukul Mudgal and P. Narasimhan for Respondent No. 89.
Miss Bina Gupta, B.P. Singh, S.R. Srivastava, Krishan Kumar, Vineet Kumar, R. Mohan, Mrs. Shobha Dikshit, A. Sharan, D. Goburdhan, Mrs. G.S. Mishra, Parijat Sinha, R.C. Verma, R.P. Singh, Ranjit Kumar, R.B. Mehrotra, Manoj Swarup & Co. Raj Birbal, J.B.D. & Co. S.S. Khanduja, B.P Singh, E.C. Aggrawala, Khaitan & Co., A.K. Srivastava, Swarup John & Co., Mehta Dave, R.S. Sodhi, Subodh Markandey, T.V.S.N. Chari, Ashok Grover, Narain and P.C. Kapur for the Respondents.
B.R.L. Iyenger and Surya Kant for the Intervener.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This is a public interest litigation The 284 petitioner who is an active social worker has filed this petition inter alia for the issue of a writ/order/direction in the nature of mandamus to the respondents other than Respondents 1, and 7 to 9 restraining them from letting out the trade effluents into the river Ganga till such time they put up necessary treatment plants for treating the trade effluents in order to arrest the pollution of water in the said river.
Respondent 1 is the Union of India, Respondent 7 is the Chairman of the Central Board for Prevention and Control of Pollution, Respondent 8 is the Chairman, Uttar Pradesh Pollution Control Board and Respondent 9 is the Indian Standards Institute.
Water is the most important of the elements of nature.
River valleys are the credles of civilization from beginning of the world.
Aryan civilization grew around the towns and villages on the banks of the river Ganga.
Varanasi which is one of the cities on the banks of the river Ganga is considered to be one of the oldest human settlements in the world.
It is the popular belief that the river Ganga is the purifier of all but we are now led to the situation that action has to be taken to prevent the pollution of the water of the river Ganga since we have reached a stage that any further pollution of the river water is likely to lead to a catastrophe.
There are today large towns inhabited by millions of people on the banks of the river Ganga.
There are also large industries on its banks.
Sewage of the towns and cities on the banks of the river and the trade effluents of the factories and other industries are continuously being discharged into the river.
It is the complaint of the petitioner that neither the Government nor the people are giving adequate attention to stop the pollution of the river Ganga.
Steps have, therefore, to be taken for the purpose of protecting the cleanliness of the stream in the river Ganga, which is in fact the life sustainer of a large part of the northern India.
When this petition came up for preliminary hearing, the Court directed the issue of notice under order 1 rule 8 of the Code of Civil Procedure treating this case as a representative action by publishing the gist of the petition in the newspapers in circulation in northern India and calling upon all the industrialists and the municipal corporations and the town municipal councils having jurisdiction over the areas through which the river Ganga flows to appear before the Court and to show cause as to why directions should not be issued to them as prayed by the petitioner asking them not to allow the trade effluents and the sewage into the river Ganga without appropriately treating them before discharging them into the river.
Pursuant to the said notice a large number of industrialists and local bodies have entered 285 appearance before the Court.
Some of them have filed counteraffidavits explaining the steps taken by them for treating the trade effluents before discharging t hem into the river.
When the above case came up for consideration before the Court on the last date of hearing we directed that the case against the tanneries at Jajmau area near Kanpur would be taken up for hearing first.
Respondents 14 to 87 and 89 are the tanneries near Kanpur.
Of them respondents 16 to 32, 34 to 36, 43, 47, 51, 52, 54, 55, 57, 58, 60 to 62, 64, 67 to 69, 72, 74, 75, 77 to 82, 85, 87 and 89 are represented by counsel.
The remaining tanneries did not appear before the Court at the time of the hearing nor were they represented by any counsel.
Before proceeding to consider the facts of this case it is necessary to state a few words about the importance of and need for protecting our environment.
Article 48 A of the Constitution provides that the State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.
Article 51 A of the Constitution imposes as one of the fundamental duties on every citizen the duty to protect and improve the natural environment including forests, lakes, rivers and wild life and to have compassion for living creatures.
The proclamation adopted by the United Nations Conference on the Human Environment which took place at Stockholm from 5th to 16th of June, 1972 and in which the Indian delegation led by the Prime Minister of India took a leading role runs thus: "1.
Man is both creature and moulder of his environment which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth.
In the long and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology, man has acquired the power to transform his environment in countless ways and on an unprecedented scale.
Both aspects of man 's environment, the natural and the man made, are essential to his well being and to the enjoyment of basic human rights even the right to life itself.
The protection and improvement of the human environment is a major issue which affects the well being of peoples and economic development throughout the world; it is the urgent desire of the peoples of the whole world and the duty of all Governments.
286 3.
Man has constantly to sum up experience and go on discovering, inventing, creating and advancing.
In our time man 's capability to transform his surroundings, if used wisely, can bring to all peoples the benefits of development and the opportunity to enhance the quality of life.
Wrongly or heedlessly applied, the same power can do incalculable harm to human beings and the human environment.
We see around us growing evidence of man made harm in many regions of the earth; dangerous levels of pollution in water, air, earth and living beings; major and undesirable disturbances to the ecological balance of the biosphere; destruction and depletion of irreplaceable resources; and gross deficiencies harmful to the physical, mental and social health of man, in the man made environment; particularly in the living and working environment.
A point has been reached in history when we must shape our actions throughout the world with a more prudent care for their environmental consequences.
Through ignorance or indifference we can do massive and irreversible harm to the earthly environment on which our life and well being depend.
Conversely, through fuller knowledge and wiser action, we can achieve for ourselves and our posterity a better life in an environment more in keeping with human needs and hopes.
There are broad vistas for the enhancement of environmental quality and the creation of a good life.
What is needed is an enthusiastic but calm state of mind and intense but orderly work.
For the purpose of attaining freedom in the world of nature, man must use knowledge to build in collaboration with nature a better environment.
To defend and improve the human environment for present and future generations has become an imperative goal for mankind a goal to be pursued together with, and in harmony with, the established and fundamental goals of peace and of world wide economic and social development.
To achieve this environmental goal will demand the acceptance of responsibility by citizens and communities and by enterprises and institutions at every level, all sharing equitably in common efforts.
Individuals in all walks of life as well as organizations in many fields, by their values and the sum of their actions, will shape the world environ 287 ment of the future.
Local and National Governments will bear the greatest burden for large scale environmental policy and action within their jurisdictions.
International co operation is also needed in order to raise resources to support the developing countries carrying out their responsibilities in this field.
A growing class of environmental problems, because they are regional or global in extent or because they affect the common international realm, will require extensive co operation among nations and action by international organizations in the common interest.
The Conference calls upon the Governments and peoples to exert common efforts for the preservation and improvement of the human environment, for the benefit of all the people and for their posterity.
" The proclamation also contained certain common convictions of the participant nations and made certain recommendations on development and environment.
The common convictions stated include the conviction that the discharge of toxic substances or of other substances and the release of heat in such quantities or concentrations as to exceed the capacity of environment to render them harmless must be halted in order to ensure that serious or irreversible damage is not inflicted upon eco systems, that States shall take all possible steps to prevent pollution of the seas so that hazards to human health, harm to living resources and marine life, damage to the amenities or interference with other legitimate uses of seas is avoided that the environmental policies would enhance and not adversely affect the present and future development potential of development countries, that science and technology as part of their contributions to economic and social development must be applied with identification, avoidance and control of environmental risks and the solution of environmental problems and for the common good of mankind, that States have the responsibility to ensure that activities of exploitation of their own resources within their jurisdiction are controlled and do not cause damage to the environment of other States or areas beyond the limit of national jurisdiction, that it will be essential in all cases to consider the systems of values prevailing in each country and the extent of the applicability of standards which are valid for the most advanced countries but which may be inappropriate 288 and of unwarranted social cost and that man and his environment must be spared the effects of nuclear weapons and all other means of mass destruction.
These are only some of the statements of principles proclaimed by the Stockholm Conference.
(Vide Lal 's Commentaries on Water and Air Pollution Laws (2nd Edn. ) pages 6 7 Realising the importance of the prevention and control of pollution of water for human existence Parliament has passed the (Act 6 of 1974) (hereinafter referred to as 'the Act ') to provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment, with a view to carrying out the purposes aforesaid, of Boards for the prevention and control of water pollution, for conferring on and assigning to such Boards powers and functions relating thereto and for matters connected therewith.
The Act was passed pursuant to resolutions passed by all the Houses of Legislatures of the States of Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Tripura and West Bengal under clause (1) of Article 252 of the Constitution to the effect that the prevention and control of water pollution should be regulated in those States by Parliamentary legislation.
The Act has been since adopted by the State of Uttar Pradesh also by resolutions passed in that behalf by the Houses of Legislature of the said State in the year 1975 (vide notification No. 897/ix 3 l00 74 dated 3.2.1975).
Section 24 of the Act prohibits the use of any stream or well for disposal of polluting matter etc.
It provides that subject to the provisions of the said section no person shall knowingly cause or permit any poisonous, noxious or polluting matter determined in accordance with such standards as may be laid down by the State Board to enter whether directly or indirectly into any stream or well or no person shall knowingly cause or permit to enter into any stream any other matter which may tend either directly or in combination with similar matters to impede the proper flow of the water of the stream in a manner leading or likely to lead to a substantial aggravation of pollution due to other causes or of its consequences.
The expression stream is defined by section 2(j) of the Act as including river, water course whether flowing or for the time being dry, inland water whether natural or artificial, sub terranean waters, sea or tidal waters to such extent or as the case may be to such point as the State Government may by notification in the official Gazette, 289 specify in that behalf.
Under the Act it is permissible to establish a Central Board and the State Boards.
The functions of the Central Board and the State Boards are described in section 16 and 17 respectively.
One of the functions of the State Board is to inspect sewage or trade effluents, works and plants for the treatment of sewage and trade effluents, and to review plans, specifications or other data relating to plants set up for the treatment of water, works for the purification and the system for the disposal of sewage or trade effluents. 'Trade effluent ' includes any liquid, gaseous or solid substance which is discharged from any premises used for carrying on any trade or industry, other than domestic sewage.
The State Board is also entrusted with the work of laying down standards of treatment of sewage and trade effluents to be discharged into any particular stream taking into account the minimum fair weather dilution available in that stream and the tolerance limits of pollution permissible in the water of the stream, after the discharge of such effluents.
The State Board is also entrusted with the power of making application to courts for restraining apprehended pollution of water in streams or wells.
Notwithstanding the comprehensive provisions contained in the Act no effective steps appear to have been taken by the State Board so far to prevent the discharge of effluents of the Jajmau near Kanpur to the river Ganga.
The fact that such effluents are being first discharged into the municipal sewerage does not absolve the tanneries from being proceeded against under the provisions of the law in force since ultimately the effluents reach the river Ganga from the sewerage system of the municipality.
In addition to the above Act, Parliament has also passed the Environment (Protection) Act, 1986 (29 of 1986) which has been brought into force throughout India with effect from November 19, 1986.
Section 3 of this Act confers power on the Central Government to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution. 'Environment ' includes water, air and land and the inter relationship which exists among and between water, air and land and human beings, other living creatures, plants, micro organism and property.
(Vide section 2(a) of the Environment (Protection) Act, 1986).
Under Section 3(2)(iv) of the said Act the Central Government may lay down standards for emission or discharge of environmental pollutants from various sources whatsoever.
Notwithstanding anything contained in any other law but subject to the provisions of the Environment (Protection) Act, 1986, the Central Government may under section S of the 290 Act, in the exercise of its powers and performance of its functions under that Act issue directions in writing to any person, officer or authority and such authority is bound to comply with such directions.
The power to issue directions under the said section includes the power to direct the closure, prohibition or regulation of any industry, operation or process or stoppage or regulation of the supply of electricity or water or any other service.
Section 9 of the said Act imposes a duty on every person to take steps to prevent or mitigate the environmental pollution.
Section 15 of the said Act contains provisions relating to penalties that may be imposed for the contravention of any of the provisions of the said Act or directions issued thereunder.
It is to be noticed that not much has been done even under this Act by the Central Government to stop the grave public nuisance caused by the tanneries at Jajmau, Kanpur.
All the tanneries at Jajmau, Kanpur which were represented by counsel, except respondent Nos. 87 and 89 have relied upon a common counter affidavit filed by them and their case is argued by Shri S.K. Dholakia and Shri Mukul Mudgal.
Respondent No. 87 is represented by Shri R.P. Gupta and respondent No. 89 is represented by Shri P. Narasimhan.
There is not much dispute on the question that the discharge of the trade effluents from these tanneries into the river Ganga has been causing considerable damage to the life of the people who use the water of the river Ganga and also to the aquatic life in the river.
The tanneries at Jajmau in Kanpur have themselves formed an association called Jajmau Tanners Pollution Control Association with the objects among others: (1) To establish, equip and maintain laboratories, workshop, institutes, organisations and factories for conducting and carrying on p experiments and to provide funds for the main objects of the Company.
(2) To procure and import wherever necessary the chemicals etc.
for the purpose of pollution control in tanning industries.
(3) To set up and maintain common effluent treatment plant for member tanners in and around Jajmau.
(4) To make periodical charges on members for the effluent treatment based on the benefit he/it derives from time to time to meet the common expenses for maintenance, replacement incurred towards effluent treatment.
291 In the Fiscal Plan for setting up common Effluent Treatment Plants for Indian Tanning Industry (March, 1986) prepared by the committee constituted by the Directorate General of Technical Development (Government of India) it is observed thus: "Leather industry is one of the three major industries besides paper and textiles consuming large quantities of water for processing of hides and skins into leather Naturally most of the water used is discharged as wastewater.
The wastewater contains putrescible organic and toxic inorganic materials which when discharged as such will deplete dissolved oxygen content of the receiving water courses resulting in the death of all acquatic life and emanating foul odour.
Disposal of these untreated effluents on to land will pollute the ground water resources.
Discharging of these effluents without treatment into public sewers results in the choking of sewers.
Realising the importance of keeping the environment clean, the Government of India has enacted the Water Pollution Control Act (Central Act 6 of 1974) and almost all the State Government have adopted the Act and implementing the Act by forming the Pollution Control Boards in their respective states.
The Pollution Control Boards have been insisting that all industries have to treat their effluents to the prescribed standards and leather industry is no exception to this rule.
Tanneries situated all over the country have been faced with the problem of treating their effluents.
Seized with the problem of finding out a solution, the Central Leather Research Institute, Madras has brought out a Management Investment Report (CLRI Core Committee Report) as early as 1976 which contains 14 flow sheets indicating the treatment technologies for various types of leather processing techniques, quantity of effluents etc.
including the cost of treatment.
" A monograph entitled 'Treatment Technology of Tannery Effluents ' prepared by section Rajamani, W. Madavakrishna and G. Thyagarajan of the Central Leather Research Institute, Adyar, Madras states that generally the wastewater from beam house process namely soaking, liming, deliming etc. are highly alkaline containing decomposing organic matter, hair, lime sulphide etc. and is nearly ten times as strong as domestic sewage and refers to the various methods 292 by which the effluents of the tanneries could be treated before their discharge into any river.
They recommend four types of wastewater treatment technology so far as the tanneries are concerned 1) segregation or mixing of suitable sectional waste water from different processes; (2) primary treatment; (3) secondary biological treatment; and (4) disposal of solid wastes from the treatment system.
The said monograph explains the work at the primary treatment unit thus: "The primary treatment units principally comprise of coarse screens, two numbers of settling tanks and sludge drying beds.
The settling tank, each of about 1 2 days capacity acts as an equalisation cum setting tank as well.
As an alternative, clarifier can be provided in place of settling tank for treating higher capacity effluents.
Depending on the quality of composite effluent, addition of neutralising chemicals like lime, alum, ferric chloride etc. would be required for effective precipitation of chromium and removal of suspended solids in the sedimentation process.
The sludge from the settling tanks and clarifier is removed and dried on sludge drying beds made up of filtering media gravel, sand and supporting masonary structure.
For operational reasons, sludge drying beds are divided into four or more compartments.
The dried sludge from the sludge drying beds can be used as manure or for landfill if it is vegetable tannery waste.
In case of chrome tannery waste, the dried sludge should be buried or disposed off suitably as per the directions of regulatory agencies and local bodies.
" The secondary treatment units are explained in the said monograph thus: "The pre treated effluent needs suitable secondary biological treatment to meet the pollution control standards.
The general biological treatment units which can be adopted under Indian conditions are anaerobic lagoon, aerated lagoon, extended aeration systems like oxidation ditch, activated sludge process etc.
Anaerobic lagoon is a simple anaerobic treatment unit suitable for effluents with high BOD like vegetable tannery (Raw to E. 1) wastewater.
In depth of the lagoon varies from 3 5 metres and detention time from l0 20 days 293 depending upon the pollutional load and atmospheric conditions.
This is an open type digester with no provision for gas collection.
No power is required for this system and its performance is proved to be efficient in South Indian conditions.
Anaerobic contract filter is also an anaerobic treatment unit.
This is a closed tank type unit made up of R.C.C. Or masonry structure filled up with media like broken granite stones etc.
This unit occupies less land area since the detention time is about 1 2 days only.
This system is reported to be efficient for treating high organic load, but the capital cost would be comparatively high.
Aerated lagoon is a shallow water tight pond of about 2 3 metres depth with a detention time of about 4 6 days.
Fixed or floating type surface aerators are provided to transfer oxygen from atmospheric air to the effluent for biological treatment using micro organisms under aerobic conditions.
The system is suitable for treating low organic load.
Extended aeration systems like 'activated sludge process ' and 'oxidation ditch ' are the improved aerobic biological treatment systems occupying less land area since the detention time/capacity would be only about 1 2 days.
These units require secondary settling tank and sludge recirculation arrangements.
Extended aeration systems are proved to be efficient.
The operational and maintenance cost is comparatively high for smaller installations, but economical for treatment capacity of 150 M3 and above per day.
" A study of the conditions prevailing at Jajmau, Kanpur was made by the Sub Committee on Effluent Disposal constituted by the Development Council for Leather and Leather Goods Industries along with the various tanneries situated in some other parts of India and in its report submitted in April, 1984, the Sub Committee has observed in the case of the tanneries at Jajmau, Kanpur thus: "In the case of Jajmau, Kanpur, the committee visited few tanneries where the effort has been made to have primary treatment of the effluent before it is dis 294 charged to the common drain/the river Ganges.
There are 60 tanneries in Jajmau which will be covered under joint effluent disposal.
The total production is to the tune of 12000 hides with a total discharge of 5 million litres per day.
The State Government has taken appropriate steps in preparation of the feasibility report under the guidance of U.P. Pollution Control Board.
This proposal was also supported by Central Pollution Board, Delhi by sharing the total fee of Rs.80,000 to be paid to the Public Health Engineering Consultancy, Bombay which has prepared the report with the help of IIT, Bombay.
The report suggests that each tannery should make arrangement for the primary treatment of their effluent and then it will be discharged into common treatment plant.
" There is a reference to the Jajmau tanneries in 'an Action Plan for Prevention of Pollution of the Ganga ' prepared by the Department of Environment, Government of India in the year 1985, which is as under: "1.1 The Ganga drains eight States Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar, West Bengal and the Union Territory of Delhi.
It is also the most important river of India and has served as the cradle of Indian Civilization.
Several major pilgrim centres have existed on its banks for centuries and millions of people come to bathe in the river during religious festivals, especially the Kumbhs of Haridwar and Allahabad.
Many towns on the Ganga, e.g., Kanpur.
Allahabad, Patna and Calcutta have very large populations and the river also serves as the source of water supply for these towns.
The Ganga is, however, being grossly polluted especially near the towns situated on its banks.
Urgent steps need to be taken to prevent this pollution and restore the purity of river water.
Sources of Pollution 2.1 The main sources of pollution of the Ganga are the following: Urban liquid waste (Sewage, storm drainage mixed with sewage, human, cattle and kitchen wastes carried by drains etc. ) 295 Industrial liquid waste A Surface run off of cultivated land where cultivators use chemical fertilisers, pesticides, insecticides and such manures the mixing of which may make the river water unsafe for drinking and bathing.
Surface run off from areas on which urban solid wastes are dumped Surface run off from areas on which industrial solid wastes are dumped . . . . . . . . 4.4.12 Effluent from industries: Under the laws of the land the responsibilty for treatment of the industrial effluents is that of the industry.
While the concept of 'Strict Liability ' should be adhered to in some cases, circumstances may require that plans for sewerage and treatment systems should consider industrial effluents as well.
Clusters of small industries located in a contiguous area near the river bank and causing direct pollution to the river such as the tanneries in Jajmau in Kanpur is a case in point.
In some cases, waste waters from some industrial units may have already been connected to the city sewer and, therefore, merit treatment along with the sewage in the sewage treatment plant.
It may also be necessary in some crowded areas to accept wastewaters of industries in a city sewer to be fed to the treatment plant, provided the industrial waste is free from heavy metals, toxic chemicals and is not abnormally acidic or alkaline.
In such circumstances, scheme proposals have to carefully examine the case of integrating or segregating industrial wastes for purposes of conveyance and treatment as also the possibilities for appointment of capital and operating costs between the city authorities and the industries concerned." (emphasis added) Appearing on behalf of the Department of Environment, (Government of India, Shri B. Dutta the learned Ist Additional H 296 Solicitor General of India placed before us a memorandum explaining the existing situation at Jajmau area of Kanpur.
It reads thus: "Status regarding construction of treatment facilities for treatment of wastes from Tanneries in Jajmau area of Kanpur.
About 70 small, medium and large tanneries are located in Jajmau area of Kanpur.
On an average they generate 4.5 MLD of waste water.
Under the existing laws, tanneries like other industries are expected to provide treatment of their effluents to different standards depending on whether these are discharged into stream or land.
It is the responsibility of the industry concerned to ensure that the quality of the wastewater conforms to the standards laid down 3.
From time to time, tanneries of Kanpur have re presented that due to lack of physical facilities, technical knowhow and funds, it has not been possible to install adequate treatment facilities.
Jajmau is an environmentally degraded area of Kanpur.
The location of numerous tanneries in the area is a major cause of the degradation.
Civic facilities for water supply, sanitation, solid waste removal etc. are also highly inadequate.
Because the area abuts the Ganga river, its pollution affects the river quality as well.
Accordingly, under the Ganga Action Plan an integrated sanitation project is being taken up for the Jajmau area.
Some aspects of the Plan relate to tannery wastes as follows: (i) The medium and large units will have to up pre treatment facilities to ensure that the standard of sewage discharged into the municipal sewer also conform to the standards laid down.
Scientific institutions such as Central Leather Research Institute are looking into the possibility of pretreatment including recovery of materials such as chromium.
The setting up of pre treatment facility in the respective units will be the responsibility of the individual units concerned.
The Ganga Project Directorate as part of the Ganga Action Plan, will play a facilitative role to 297 demonstrate application of modern technologies for cost A effective pre treatment which the small tanners can afford.
(ii) Since the wastes will be ultimately discharged into the river, the waste will have to further conform to the standards laid down for discharge into the stream.
For this purpose, it will be necessary to treat the waste further and as part of the Ganga Action Plan a treatment plant will be constructed for this purpose utilising some advanced processes.
It is also proposed to combine the domestic waste with the industrial waste conveyed through the industrial sewer which will then be treated in a treatment plant (iii) It is estimated that cost of this proposed sewage treatment facility which will treat the waste from the domestic sources and the pretreated wastes from tanneries will be about Rs.2.5 crores.
It will have a capacity of 25 MLD and the first demonstration module of about 5 MLD is expected to be installed in early 1988 89.
Necessary work for designing of the plant has already been initiated and the infrastructure facilities such as availability of land, soil testing etc.
have also been ensured.
Tender specifications are being provided and it is expected that the tenders will be floated sometime in October 87.
It is expected that in the combined treatment facility of 25 MLD, about 20 MLD will be from the domestic sources and 5 MLD will be from the tanneries after pretreatment in the region.
" In the counter affidavit filed on behalf of the Hindustan Chambers of Commerce, of which 43 respondents are members it is admitted that the tanneries discharge their trade effluents into the sewage nullah which leads to the municipal sewage plant before they are thrown into the river Ganga.
It is not disputed by any of the respondents that the water in the river Ganga is being polluted grossly by the effluent discharged by the tanneries.
We are informed that six of the tanneries have already set up the primary treatment plants for carrying out the pre treatment of the effluent before it is discharged into the municipal Sewerage which ultimately leads to the river Ganga.
About 14 of the tanneries are stated to be engaged in the construction of the primary treatment plants.
It is pleaded on behalf of the rest of the tanneries who are the members of the Hindustan Chambers of Commerce and three other tanneries represented by Shir Mukul Mudgal that if some time is given to them to establish the pre treatment plants they would H 298 do so.
lt is, however, submitted by all of them that it would not be possible for them to have the secondary system for treating wastewater as that would involve enormous expenditure which the tanneries themselves would not be able to meet.
It is true that it may not be possible for the tanneries to establish immediately the secondary system plant in view of the large expenditure involved but having regard to the adverse effect the effluents are having on the river water, the tanneries at Jajmau, Kanpur should, at least set up of the primary treatment plants and that is the minimum which the tanneries should do in the circumstances of the case.
In the counter affidavit filed on behalf of the Hindustan Chamber of Commerce it is seen that the cost of pretreatment plant for a 'A ' class tannery is Rs.3,68,000, the cost of the plant for a 'B ' class tannery is Rs.2,30,000 and the cost of the plant for 'C ' class tannery is Rs.50,000 This cost does not appear to be excessive.
The financial capacity of the tanneries should be considered as irrelevant while requiring them to establish primary treatment plants.
Just like an industry which cannot pay minimum wages to its workers cannot be allowed to exist a tannery which cannot set up a primary treatment plant cannot be permitted to continue to be in existence for the adverse effect on the public at large which is likely to ensue by the discharging of the trade effluents from the tannery to the river Ganga would be immense and it will outweigh any inconvenience that may be caused to the management and the labour employed by it on account of its closure.
Moreover, the tanneries involved in these cases are not taken by surprise.
For several years they are being asked to take necessary steps to prevent the flow of untreated wastewater from their factories into the river.
Some of them have already complied with the demand.
It should be remembered that the effluent discharged from a tannery is ten times noxious when compared with the domestic sewage water which flows into the river from any urban areas on its banks.
We feel that the tanneries at Jajmau, Kanpur cannot be allowed to continue to carry on the industrial activity unless they take steps to establish primary treatment plants.
In cases of this nature this Court may issue appropriate directions if it finds that the public nuisance or other wrongful act affecting or likely to affect the public is being committed and the statutory authorities who are charged with the duty to prevent it are not taking adequate steps to rectify the grievance.
For every breach of a right there should be a remedy.
It is unfortunate that a number of tanneries at Jajmau even though they are aware of these proceedings have not cared even to enter appearance in this Court to express their willingness to take appropriate steps to establish the pretreatment plants.
So far as they are concerned an order directing them to stop working their tanneries should be passed.
299 We accordingly direct M/s. Delight Tannery (respondent 14), M/s. Hindustan Tannery (respondent 15), M/s. Primer Allarmin Tannery (respondent 33), M/s. Mahaboob Tannery (respondent 37), M/s. Popular Tannery (respondent 38), M/s. Standard Tannery (respondent 39), M/s. Vikash Tarmery (respondent 40), M/s. New Golden Tannery (respondent 41), M/s. D.D. Tannery (respondent 42), M/s. Himalaya Tannery (respondent 44), M/s. Commercial Industry (respondent 45), M/s. Madina Tannery (respondent 46), M/s. Kanpur Tannery (respondent 48), M/s. New Jab Tannery (respondent 49), M/s. Famous Tannery (respondent 50), M/s. Glaxy Tannery (respondent 53), M/s. Bengal Tannery (respondent 56), M/s. Chhangal Tannery (respondent 59), M/s.
Nadari Tannery (respondent 63), M/s. Jajmau Tanners (respondent 65), M/s. International Tanning Industry (respondent 66), M/s. Poorwanchal Tanning Industry (respondent 70), M/s. Navratan Tanning (respondent 71), M/s. Haroou Tannery (respondent 73), M/s. Himalaya Tanners (respondent 76), M/s. R.A. Traders (respondent 79, M/s. Alam Tannery (respondent 83), M/s. G.T. Tannery (respondent 84), and M/s. Awadh Tannery (respondent 86) to stop the running of their tanneries and also not to let out trade effluents from their tanneries either directly or indirectly into the river Ganga without subjecting the trade effluents to a pretreatment process by setting up primary treatment plants as approved by the State Board (respondent 8) with effect from 1. l0.1987.
M/s. Indian Tanning Industry (respondent 30), the U.P. Tannery (respondent 19), M/s. Zaz Tannery (respondent 28), M/s. Super Tannery India Ltd. (respondent 21), M/s. Shewan Tannery (respondent 20), M/s. Pioneer Tannery (respondent 23), and M/s. M.K.J. Corporation (respondent 89) who have already put up the primary treatment plants may continue to carry on production in their factories subject to the condition that they should continue to keep the primary treatment plants established by them in sound working order.
Shri S.K. Dholakia, learned counsel for the other tanneries who are members of the Hindustan Chambers of Commerce and the other tanneries who have entered appearance through Shri Mukul Mudgal submits that they will establish primary treatment plants within six months and he further submits that in the event of their not completing the construction of the primary treatment plants as approved by the State Board (respondent 8) and bringing them into operation within the period of six months the said tanneries will stop carrying on their business.
We record the statement made by the learned counsel and grant them time till 31.3.1988 to set up the primary treatment plants.
If 300 any of these tanneries does not set up a primary treatment plant within 31.3.1988 it is directed to stop its business with effect from 1.4.1988.
We issue a direction to the Central Government, the Uttar Pradesh Board, established under the provisions of the and the District Magistrate, Kanpur to enforce our order faithfully.
Copies of this order shall be cent to them for information The case is adjourned to 27th October, 1987 to consider the case against the municipal bodies in the State of Uttar Pradesh having jurisdiction over the areas through which the river Ganga is passing.
SINGH, J.
I respectfully agree with every word what my learned brother Venkataramiah, J. has stated in the proposed order and the directions issued by that order.
However, I wish to add few words.
The river Ganga is one of the greatest rivers of the world, although its entire course is only 1560 miles from its source in Himalaya to the sea.
There are many rivers larger in shape and longer in size but no river in the world has been so great as the Ganga.
It is great because to millions of people since centuries it is the most sacred river.
It is called "Sursari" river of the Gods, 'Patitpawani ' purifier of all sins and 'Ganga Ma ' Mother Ganges.
To millions of Hindus, it is the most sacred, most venerated river on earth.
According the Hindu belief and mythology to bathe in it, is to wash away guilt, to drink the water, having bathed in it, and to carry it away in containers for those who may have not had the good fortune to make the pilgrimage, to it, is meritorious.
To be cremated on its banks, or to die there, and to have one 's ashes cast on its waters, is the wish of every Hindu.
Many P saints and sages have persued their quest for knowledge and enlightenment on the banks of the river Ganga.
Its water has not only purified the body and soul of the millions but it has given fertile land to the country in Uttar Pradesh and Bihar.
Ganga has been used as means of water transport for trade and commerce.
The Indian civilization of the Northern India thrived in the plains of Ganga and most of the important towns and places of pilgrimage are situated on its banks.
The river Ganga has been part of Hindu civilization.
Jawahar Lal Nehru who did not consider himself a devout Hindu gave expression to his feelings for the Ganga that is to be found in his Will and Testament, a short extract from which is as under: "My desire to have a handful of my ashes thrown into the 301 Ganga at Allahabad has no religious significance, so far as I am concerned.
I have no religious sentiment in the matter.
I have been attached to the Ganga and the Jamuna rivers in Allahabad ever since my childhood and, as I have grown older, this attachment has also grown.
I have watched their varying moods as the seasons changed, and have often thought of the history and myth and tradition and song and story that have become attached to them through the long ages and become part of their flowing waters.
The Ganga, especially, as the river of India, beloved of her people, round which are intertwined her racial memories, her hopes and fears, her songs of triumph, her victories and her defeats.
She has been a symbol of India 's age long culture and civilization, ever changing, ever flowing, and yet ever the same Ganga.
She reminds me of the snow covered peaks and the deep valleys of the Himalayas, which I have loved so much, and of the rich and vast plains below, where my life and work have been cast.
" The river Ganga is the life line of millions of people of India, Indian culture and civilization has grown around it.
This great river drains of eight States of India, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar and West Bengal.
The Ganga has always been an integral part of the nation 's history, culture and environment.
It has been the source of sustenance of the millions of people who have lived on its banks from time immemorial.
Millions of our people bathe in the Ganga drink its water under an abiding faith and belief to purify themselves and to achieve moksha release from the cycle of birth and death.
It is tragic that the Ganga, which has since time immemorial, purified the people is being polluted by man in numerous ways, by dumping of garbage, throwing carcass of dead animals and discharge of effluents.
Scientific investigations and survey reports have shown that the Ganga which serves one third of the India 's population is polluted by the discharge of municipal sewage and the industrial effluents in the river.
The pollution of the river Ganga is affecting the life, health, and ecology of the Indo Gangetic Plain.
The Government as well as Parliament both have taken a number of steps to control the water pollution, but nothing substantial has been achieved.
I need not refer to those steps as my learned brother has referred to them in detail.
No law or authority can succeed in removing the pollution unless the people cooperate.
To my mind, it is the sacred duty of all those who reside or carry on business around 302 the river Ganga to ensure the purity of Ganga.
Tanneries at Jajmau area near Kanpur have been polluting the Ganga in a big way.
This Court issued notices to them but in spite of notice many industrialists have not bothered either to respond to the notice or to take elementary steps for the treatment of industrial effluent before discharging the same into the river.
We are therefore issuing the directions for the closure of those tanneries which have failed to take minimum steps required for the primary treatment of industrial effluent.
We are conscious that closure of tanneries may bring unemployment, loss of revenue, but life, health and ecology have greater importance to the people.
[/INST]A suit was filed by the appellants in the Court of the Assistant Collector seeking ejectment of the respondent tenant from his lands, under section 77(3) proviso 2(e) of the Punjab Tenancy Act, 1887 on the ground that he had defaulted in the payment of rent, and it was decreed.
In execution of the decree, the respondent was ejected from the suit land.
No appeal was filed from the said decree but the respondent filed a suit in the Civil Court against the appellants alleging that he was in fact a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment passed by the Revenue Court was without jurisdiction and, therefore, a nullity, and claimed restoration of the possession of the suit land from which he had been wrongly ousted by the Revenue Court.
The suit was dismissed by the Subordinate Judge holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and within that court 's jurisdictional competence and that it was of a binding nature on the respondent and was not open to challenge in subsequent proceedings.
The appellant asserted that the claim by the respondent in the subsequent suit was barred by the principles of res judicata.
The suit was dismissed.
In appeal, the Additional District Judge reversed the findings of the trial court and decreed the suit of the respondent.
The appellants filed regular second appeals before the High Court.
94 A Single Judge of the High Court was of the view that, in view of the conflicting judgments on the points for determination in the case, the matter required to be referred to a larger bench.
The Full Bench, by a majority view, held that the decision of the Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or in other collateral proceedings between the parties, and remitted the matter back to the Single Judge for disposal in accordance with the above decision.
The question for consideration in the appeals by Special Leave before this Court was: as to how far an order of eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 operated as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord.
Dismissing the appeals by special leave, this Court, ^ HELD: 1.
The High Court was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned.
[105C D] 2.1 The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship came to an end.
Sections 98 and 99 do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases.
The limits of the jurisdiction would be apparent by the fact that all suits by a landlord to eject a tenant do not encompass suits to decide whether a person was a tenant or not or whether the plaintiff was a landlord or not.
[98C; 99 F G] 2.2 ouster of jurisdiction of Civil Courts should not be inferred easily.
It must be clearly provided for and established.
If the dispute was as to the nature of the relationship of landlord and tenant between the parties, the Revenue Court under the Punjab Tenancy Act had no jurisdiction; when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act.
[103C D] 2.3 A salutory and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto was to find out whether the first court could go into the question 95 whether the respondent was a tenant in possession or mortgagee in A possession.
In view of the language of section 77 it is clear that it could not and, therefore, there was no res judicata.
The subsequent civil suit was.
therefore, not barred by res judicata.
[105B C] Raj Lakshmi Dasi and others vs Banamali Sen and others, ; Om Prakash Gupta vs Rattan Singh and another, ; Shri Raja Durga Singh of Solan vs Tholu; , ; Magiti Sasamal vs Pandab Bissoi, ; Lal Chand (dead) by Lrs.
and others vs Radha Kishan, [1977] 2 SCR 522 and State of Tamil Nadu vs Ramalinga Samigal Madam; , , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 132 of 1951.
Appeal by Special Leave from the Judgment and Decree dated 17th May, 1950, of the High Court of Judicature at Calcutta (Harries C.J. and Sinha J.) in Appeal No. 41 of 1950 arising out of the Order of 766 Banerjee J. dated 19th December, 1949, in Suit No. 132 of 1948.
M.C. Setalvad, Attorney General for India (B. Sen, with him) for the appellant.
Naziruddin Ahmad (Nuruddin Ahmad, with him) or respond ent No. 1.
S.N. Mukherjee for respondent No.2 1952.
May 21.
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J.
This Court granted special leave to appeal in this case on the Government agreeing to pay the costs of the respondents in respect of the appeal in any event.
The decree holder was a lady named Hira Devi.
The judg ment debtor was one Ram Grahit Singh, who retired on 31st January, "1 '947, as a Head Clerk in the Dead Letter Office, Calcutta.
A money decree was obtained against him on 30th July, 1948.
On 1st February, 1949, a receiver was appointed for collecting the moneys standing to the credit of the judgment debtor in a Provident Fund with the Postal authori ties.
The Union of India intervened with an application dated 20th September, 1949, for setting aside the order appointing the receiver.
Mr. Justice Banerjee dismissed the application of the Union of India, holding that a receiver could be appointed for collecting the Fund.
On appeal, Trevor Harries C.J. and Sinha J. upheld his view.
From the facts stated in the petition filed by the Union of India before the High Court, it appears that a sum of Rs. 1,394 13 1 represents arrears of pay and allowances .due to the judgment debtor and a sum Of Rs. 1,563, is the compulso ry deposit in his Provident Fund account.
Different consid erations will apply to the two sums, though in the lower court the parties seem to have proceeded on the footing that the entire sum was a "compulsory deposit" within the meaning of the provident Funds Act, 1925.
The main question to be decided.
is whether a receiver can be appointed in execution in respect of provident Fund money due to the judgment debtor.
767 Compulsory deposit and other sums in or derived from any fund to which the Provident Funds Act XIX of 1925 applies are exempt from attachment and sale under section 60 (k), Civil Procedure Code.
"Compulsory deposit" is thus defined in section 2 (a) of the Provident Funds Act XIX of 1925: Compulsory deposit means a subscription to, or deposit in a Provident Fund which under the rules of the Fund, is not, until the happening of some specified contingency repayable on demand otherwise than for the purpose of the payment of premia in respect of a policy of life insurance (or the Payment Of subscriptions or premia in respect of a family pension fund), and includes any contribution and any interest or increment which has accrued under the rules of the fund on any such subscription, deposit, contribution, and also any such subscription, deposit, contribution, interest or increment remaining to the credit of the sub scriber or depositor after the happening of any such contin gency.
" Such a deposit cannot be assigned or charged and is not liable to any attachment.
Section 3 (1)of the said Act provides : 3.
(1)" A compulsory deposit in any Government or Rail way Provident Fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Civil, Revenue or Criminal Court in respect of any debt or liability incurred by the subscriber or depositor, and neither the Official Assignee nor any receiver appointed under the shall be entitled to, or have any claim on any such compulsory deposit.
" It is obvious that the prohibition against the assign ment or the attachment of such compulsory deposits is based on grounds of public policy.
Where the interdiction is absolute, to allow a judgment creditor to get at the fund indirectly by means of the appointment of a receiver would be to circumvent the statute.
That such a frustration of the very object of 768 the legislation should not be permitted was laid down by the Court of Appeal as early as 1886 in the case of Lucas vs Harris (1), where the question arose with reference to a pension payable to two officers of Her Majesty 's Indian Army.
Section 141 of the Army Act, 1881 provided: "Every assignment of, and every charge on, and every agreement to assign or charge any . . pension pay able to any officer or soldier of Her Majesty 's forces, or any pension payable to any such officer . . or to any person in respect of any military service, shall except so far as the same is made in pursuance of a royal warrant for the benefit of the family of the person entitled thereto, or as may be authorised by any Act lot the time being in force, be void.
In that case, the appointment of a receiver to collect the pension was in question.
Lindley, L.J., observed: In considering whether a receiver of a retired officer 's pension ought to be appointed, not only the language but the object of section 141 of the Army Act.
1881 must be looked to; and the object of the section would, in my opinion, be defeated, and not advanced, if a receiver were appointed." Lord Justice Lopes reiterated the same thing in these words : "It is beyond dispute that the object of the legislature was to secure for officers who had served their country, a provision which would keep them from want and would enable them to retain a respectable social position.
i do not see how this object could be effected unless those pensions were made absolutely inalienable.
preventing not only the person himself assigning his interest in the pension.
but also preventing the pension being seized or attached under a garnishee order, or by an execution or other process of law.
Unless protection is given to this extent the object which the legislature had in view is frustrated, and a strange anomaly would exist.
A person with a (1) 18 (Q.B D. 127.
769 pension would not be able to utilise his pension to pay a debt beforehand, but immediately his creditor had obtained judgment might be deprived of his pension by attachment, equitable execution, or some other legal process.
It is impossible to suppose that the legislature could have in tended such an anomaly.
" Section 51 of the Civil Procedure Code no doubt recognises five modes of execution of a decree and one of them is the appointment of a receiver.
Instead of executing the decree by attachment and sale, the Court may appoint a receiver but this can only be in a case where a receiver can be appointed.
The Provident Fund money is exempt from at tachment and is inalienable.
Normally, no execution can lie against such a sum.
The learned Judges in the Court below rested their view on the authority of the decision of the Privy Council in Rajindra Narain Singh vs Sundara Bibi(1).
This decision has caused all the difficulty and has created a current of thought that even though the property may not itself be liable to attachment, a receiver can be appointed to take possession of the same and to apply the income or proceeds in a particular manner including the payment of the debts of the judgment debtor.
It is necessary.
therefore, to examine the facts of the case carefully and find out whether the proposition sought to be deduced from it can be justified as a principle of general application apart from the particular circumstances.
The original decision of the Allahabad High Court from which the appeal was taken before the Judicial Committee is reported in Sundar Bibi vs Raj Indranarain Singh(2).
In a suit between two brothers, there was a com promise to the effect that the Judgment debtor shall possess and enjoy the immoveable properties mentioned in the list and estimated to yield a net profit of Rs. 8,000 a year without power of transfer during the lifetime of his broth er, Lal Bahadur Singh, he undertaking to pay certain public exactions and other dues (1)1925) 52 I.A. 262.
(2) (1921)43 All.
617 770 to his brother, Lal Bahadur Singh, amounting in all to Rs. 7,870 11 6, in four equal instalments per annum, each to be paid a month before the Government revenue falls due.
The arrangement was stated to be "in lieu of his mainte nance".
When the judgment debtor 's interest in the proper ties was sought to be attached and sold, he raised the objection that they were exempt from attachment and sale by reason of clause (n) of Section 60 of the Code which speaks of "a right to future maintenance".
The High Court held that the words employed in sub clause (n) contemplated R bare right of maintenance and nothing more a right enforce able by law and payable in the future and that inasmuch as in the case before them the properties had been assigned to the judgment debtor in lieu of his maintenance, it was not such a right, which alone was exempt from attachment and sate.
They thought that it was a fit case for the appoint ment of a receiver and remitted the execution petition to the subordinate judge for the appointment of a receiver after determining the allowance payable to the judgment debtor for his maintenance.
With this conclusion of the High Court the Judicial Committee concurred.
But they also expressed the view that they did not agree with the High Court on the subject of the actual legal position of the right of maintenance conferred upon the judgment debtor.
Taking the prayer of the judgment creditor to be that the right of maintenance be proceeded against, their Lordships observed that the right was in point of law not attachable and not saleable.
If it was an assignment of properties for maintenance, the amount of which was not fixed, it was open to the judgment creditor to get a receiver appointed subject to the condition that whatever may remain after making provision for the maintenance of the judgment debtor should be made available for the satisfaction of the decree debt.
The right to main tenance could not be attached or sold.
In so far as the decree holder sought to attach this right and deprive the judgment debtor of, his maintenance, he was not entitled to do 771 so, but where his application for the appointment of a receiver was more comprehensive and sought to get at any remaining income after satisfying the maintenance claim, the appointment of a receiver for the purpose was justified.
The decision of the Privy Council does not appear to lay down anything beyond this.
In our opinion, it is not an authority for the general proposition that even though there is a statutory prohibition against attachment and alienation of a particular species of property, it can be reached by another mode of execution, viz., the appointment of a re ceiver.
On the other hand, it was pointed out in the case of Nawab Bahadur of Murshidabad vs Karnani Industrial Bank Limited(1) that as the Nawab had a disposing power over the rents and profits assigned to him for the maintenance of his title and dignity without any power of alienation of the properties, no question of public policy arose and that a receiver of the rents and profits was rightly appointed.
This line of reasoning indicates clearly that in cases where there is no disposing power and the statute imposes an absolute bar on alienation or attachment on grounds of public policy, execution should not be levied.
Understood as mentioned above, Rajindra Narain Singh 's case creates no difficulty.
We shall now refer to the decisions that followed or distinguished the same.
In The Secretary of State for India in Council vs Bai Somi and Another(2), the maintenance of Rs. 96 per annum was made under a compromise decree a charge on the house which was to belong to the defendant. 'the court fee due to Government was sought to be recovered by attachment of the house.
The right to attach was negatived; the house could not be at tached as it belonged to the defendant; and the plaintiff 's right to maintenance could not be attached under section 60, clause (1).
In dealing with a prayer made by the Govern ment for the first time in the High Court for an order appointing a receiver of the plaintiff 's maintenance, Beaumont C.J. and (1) (1931) 58 I.A. 215.
(2) 100 772 another learned Judge held that even this could not be done.
The Chief Justice said , 'If these exempted payments can be reached in execution by the appointment of a receiver by way of equitable execution, the protection afforded by the section is to a great extent lost." They steered clear of Rajindra Narain Singh 's case by stating that there was in the judgment of the Board no clear expression of opinion and there was doubt whether the allowance then in question was maintenance or not.
The Madras High Court in The Secre tary of State for India in Council vs Sarvepalli Venkata Lakshmamma(1) has dealt with a question similar to the one in The Secretary of State for India in Council vs Bai Somi and Another(2) but it merely referred to the ruling in Rajindra Narain Singh 's case without dealing with the facts or the reasoning.
It throws no light.
The case in Janaki nath vs Pramatha Nath (3) was a decision by a single Judge and stands on the same footing as the Madras case.
There is nothing else on this subject in the judgment than the short observation, "the Provident Funds Act does not in my opinion prohibit the appointment of a receiver of the sum lying to the credit of the deceased in the Provident Fund.
" Possibly the view was taken that on the death of the employee and in the absence of any dependent or nominee becoming entitled to the fund under the rules, it became money payable to the heirs of the deceased and lost its original nature of being a compulsory deposit.
The case of Dominion of India, repre senting E. 1.
Administration and Another vs Ashutosh Das and Others(4) refers no doubt to Rajindra Narain Singh 's case but does not discuss it in any detail.
Roxburgh J. merely states "surely it is an improper use of that equita ble remedy to employ it to avoid a very definite bar created by statute law to achieving the very object for which the receiver is appointed.
" The decision in Ramprasad vs Moti ram(5) related to the attachment and sale in execution of a (1) (4) (2) (5) (1946) 25 Pat. 705.
(3) 773 money decree of the interest of a khoposhdar in a khorposh grant which was heritable and transferable.
It affords us no assistance.
The learned counsel for the respondents relied on three decisions of the Privy Council as lending him support.
One is Nawab Bahadur of Murshidabad 's case(1) already referred to.
Vibhudapriya Thirtha Swamiar vs Lakshmindra Thirtha Swamiar(2) and Niladri Sahu vs Mahant Chaturbhuj Das and Others(3) are the other two eases and they relate to maths and alienations by way of mortgage of endowed properties by the respective mahants for alleged necessity of the institu tions.
They bear no analogy to the present ease.
The mahants had a beneficial interest in the properties after being provided with maintenance.
A receiver could be ap pointed in respect of such beneficial interest so that the decrees obtained may be satisfied.
With great respect to the learned Judges of the Court below, we are of the opinion that execution cannot be sought against the Provident Fund money by way of appointment of a receiver.
This conclusion does not, however, apply to the arrears of salary and allowance due to the judgment debtor as they stand upon a different legal footing.
Salary is not attach able to the extent provided in Section 60, clause (1), Civil Procedure Code, but there is no such exemption as regards arrears of salary.
The learned Attorney General conceded that this portion of the amount can be proceeded against in execution.
The Provident Fund amount was not paid to the subscriber after the date of his retirement in January 1947.
This, however, does not make it any the less a compulsory deposit within the meaning of the Act.
Whatever doubt may have existed under the earlier Act of 1897 the decisions cited for the respondent, Miller vs B.B. & C.I. Railway(4) and Raj (1) (1931) 58 I.A. 215.
(3) (1926) 53 I.A. 253.
(2) (1927) 54 I.A. 228.
(4) 774 Kumar Mukharjee vs W.G. Godfrey(1) are under that Act, the meaning has now been made clear by the definition in section 2 of the present Act; any deposit "remaining to the credit of the subscriber or depositor after the happening of any such contingency" is also a compulsory deposit; and the contingency may be retirement from service.
In the result, the appeal is allowed and the order of the lower court dated 1st February, 1949, appointing a receiver is set aside as regards the Provident Fund amount of Rs. 1,563 lying to the credit of the judgment debtor.
Under the condition granting special leave, the Government will pay the 1st respondent 's costs of this appeal.
Appeal allowed.
Agent for the respondent No. 1: Naunit Lal.
Agent for the respondent No. 2: P.K. Chatterjee.
[/INST]With a view to give protection to Thika tenants against eviction and in certain other matters, the West Bengal Legislature enacted the Calcutta Thika Tenancy Act, 1949.
That Act was amended by the Calcutta Thika Tenancy Amendment Act, 1953, which omitted section 28 of the Act.
The question for decision in the appeal was whether the appellant against whom proceedings for execution of a decree for ejectment was pending, who had applied for relief under section 28 when that section was in force, was entitled to have his application disposed of in accordance with the provisions of section 28, which had ceased to exist retrospectively though it remained undisposed of on the date the Amendment Act came into force: Held, that section 1, sub section
(2) of the Calcutta Thika Tenancy Act 1953, clearly intended that no relief under section 28 of the original 579 Act should be given in cases pending for disposal on the date the amendment became effective and section 28 ceased to exist retrospectively.
The principles applicable to interpretation of statutes are four fold in nature, (1)such statutory provisions as create or take away substantive rights are ordinarily prospective ; they can be retrospective if made so expressly or by necessary implication and the retrospective operation must be limited only to the extent to which it has been so made either expressly or by necessary implication, (2)the intention of the legislature has to be gathered from the words used by it, giving them their plain, normal, grammatical meaning, (3)if any provision of a legislation the purpose of which is to benefit a particular class of persons is ambiguous so that it is capable of two meanings the meaning which preserves the benefit should be adopted.
, (4)If the strict grammatical interpretation gives rise to an absurdity or inconsistency, such interpretation should be discarded and an interpretation which will give effect to the purpose will be put on the words, if necessary, even by modification of the language used: Held, also, that judicial decorum ought never to be ignored.
Where one Division Bench or a judge of a High Court is unable to distinguish a previous decision of another Division Bench or another Single judge and holds the view that the earlier decision was wrong, the matter should be referred to a larger Bench to avoid utter confusion.
Deorajan Devi vs Satyadhan Ghosal, , overruled.
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<s>[INST] Summarize the judgementAppeal Nos.
1616 1621 69 Appeals from the Judgment and Order dated 16th/l9th of Jun& 1967 of the Bombay High Court in S.C.A. Nos.
1971/64, 115:, 216, 343, 345 and 579/65 and CIVIL APPEAL NOS.
1411 1413/69 Appeals from the Judgment and Order dated 16 6 67 of the Bombay High Court in S.C.A. Nos.
1971/64, 115 and 345/65.
M. Natesan, A.K. Sen (In CA 1412/69), Nannit Lal and Lalita Kohli In CAs.
1616 1621/69 and Respondents in CAs.
1411 1413/ 69.
M.H. Phadke, M.N. Shroff for Respondents In CAs.
16161621/69 and for Appellants in CAs.
1411 1413/69.
The Judgment of the Court was delivered by BEG, J.
There are nine appeals before us, after certifi cation of fitness of the cases for appeals to this Court, directed against orders governed by the same judgment of a Division Bench of the High Court of Maharashtra disposing of Writ Petitions relating to four groups of lands, which were sought to be acquired under the provisions of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ').
A notification dated 11th October, 1963, under ' Section 4 of Act, was published in the Maharashtra Government Gazette with regard to the first group.
The public purpose recited in the notification was "development and utilisation of said land as a residential and industrial area".
The noti fication goes on to state: "AND WHEREAS the Commissioner, Bombay Division, is of the opinion that the said lands were waste or arable lands and their acquisition is urgently necessary, he is further pleased to direct under sub section (4) of Section 17 of the said Act, that the provisions 01; Section 5 A of the said ' Act shall not apply in respect of the said land".
Thereafter, a notification was issued under section 6 of the Act on 19th December, 1963, followed by notices under Sec tion 9(3) and (4) the Act.
With regard to the second group of lands, identically similar notifications under Section 4 together with identi cally worded.
declarationcure direction, under section 17(4) of the Act, were issued on 13th June, 1965.
As proceedings with regard to land comprised in this group were not fol lowed up by notification under section 6 of the Act.
it was conceded by Counsel, in the course of arguments on behalf of the State in the High Court, that the proceedings had: become invalid.
769 We arc, therefore, not concerned with lands in this. ' group in the appeals now before us: Nevertheless, it is not devoid of significance that the terms of the notification under section 4(1) and the declaration cure directions, under section 17(4) of the Act, in this group are also identical with those in the first two groups.
This cer tainly suggests that directions under section 17(4) could have been.
mechanically issued in all the groups in identi cal terms without due application of mind t0 the factual requirements prescribed by law.
The third group of land was also the subject matter of identically similar notifications under section 4 of the.
Act dated 13th June, 1964, together with identically worded declarations cum directions under section 17(4) of the Act.
This land was notified under section 6 of the Act on 28th September, 1964, followed by the notice under section 9; sub sections (3) and (4) of the Act on 28th October, 1964.
With regard to the land= in the fourth group, a notifi cation under Section 4 01 ' the Act took place on 13th Novem ber, 1963, in substantially the same terms as those in the other three groups; but, there was no direction under sec tion 17(4) of the Act.
Consequently, the appellant filed his objection ' on 9th January, 1964.
Later, a notification under section 6 of the Act on 13th July, 1964, was accompa nied by identically worded vague declaration of urgency under section 17(4) of the Act.
This strange course of action suggests that notification under section 17(4) was probably made only to save the botheration of the inquiry begun under section 5A of the Act which should and could have been concluded quite easily before 13th July, 1964.
In Writ Petitions before the High Court, the submission that no public purpose existed was not pressed in view of the decision of this Court in Smt.
Somavanti & Ors.
vs The State of Punjab & Ors.
U ') In Shri Ramtanu Co operative Housing Society Ltd. & Anr.
vs State Maharashtra.
& Ors.(2) acquisition of land for development of industrial areas and residential tenements for persons to live on industrial estates was held to be legally valid for a genuinely public purpose.
This ground, therefore, need not detain us, although file appellants, who are owners of the properties acquired, have formally raised it also by means of the six appeals filed by them (Civil Appeals Nos.
161 '6 1621 of 1969).
In agreement with the High Court, we hold that notification under section 4(1) of the Act were valid in all these cases.
The real question which has been argued before us is raised by the State of Maharashtra in its three appeals Nos. 1411 to 1413 of 1969, against the view taken by a Division Bench of the Bombay High Court in its judgment dated 16th June, 1967.
It had held that, although notifications under section 4( 1 ) of the Act were valid, yet, the Government of Maharashtra had not discharged its burden of showing facts constituting the urgency which impelled it to give declara tionscum directions under section 17(4) of the Act dispens ing with the (1)[1963] 2 SCR 774 (2) ; at 723 770 enquiries under section 5A of the Act, Therefore, actions taken pursuant to those declarations under section 17(4) of the Act were held to be invalid and quashed.
The result was that parties were relegated to the position they could take up in the absence of declarations under section 17(4) of the Act in the cases decided by the High Court.
The correctness of this view is assailed before us.
The case of the State of Maharashtra is stated as fol lows in the affidavit filed by the Special Land Acquisition officer: "I deny, the allegation that the urgency clause has been applied without any valid reason.
I respectfully submit that whether an urgency exists or not for exercising the powers under section 17(1) of the Act is a matter solely for the determination of the State Government or the Com missioner.
Without prejudice to this, respect fully submit that as mentioned in the impugned Notifications, the 3rd Respondent formed the opin ion that the said lands were urgently acquired for the public purposes mentioned therein, and, accord ingly, he was pleased to so direct under the provi sions of Section 17(4) of the Act.
" The respondent No. 3 referred to in the affidavit is the Commissioner of Bombay Division.
It is significant that, in the affidavit filed in reply to the assertions of peti tioners, denying the existence of such urgency as to attract the provisions of section 17(4) of the Act.
the position primarily taken up, on behalf of the State of Maharashtra, was that the existence of the urgency is not a justiciable matter at all left for determination by Courts.
After that, there is a bare submission stating the alternative case that the 3rd respondent had formed the opinion that the said lands were urgently required for the public purpose mentioned therein.
But, no facts or particulars are stated to which the mind of the Commissioner could have been ap plied in forming the opinion that the situation called for declarations cum directions, under section 17(4) of the Act, to dispense with inquiries under section 5A of the Act in these cases.
It is important to.
remember that the mind of the officer or authority concerned has really to be directed towards formation of an opinion on the need to dispense with the inquiry under Section 5A of the Act.
It is true that, in such cases, the formation of an opinion is a subjective matter, as held by this Court re peatedly with regard to situations in which administrative authorities have to form certain opinions before taking actions they are empowered to take.
They are expected to know better the difference between a right or wrong opinion than Courts could ordinarily on such matters.
Neverthe less, that opinion has to be based upon some relevant mate rials in order to pass the test which Courts do impose.
That test basically is: was the authority concerned acting within the scope of its powers or in the sphere where its opinion and discretion must be permitted to have full play? Once the Court comes to the conclusion that the authority concerned was acting within the scope of its powers and had some materiaL, however 771 meagre, on which it could reasonably base its opinion, the Courts should not and will not interfere.
There might, however, be cases in which the power is exercised in such an obviously arbitrary or perverse fashion, without regard to the actual and undeniable facts, or, in other words, so unreasonably as to leave no doubt whatsoever in the mind of a Court that there has been an excess of power.
There may also be cases where the mind of the authority concerned has not been applied at all, due to misunderstanding of the law or some other reason, what was legally imperative for it to consider.
The High Court had put its point of view in the following words: "When the formation of an opinion or the satisfaction of an authority is subjective but is a condition precedent to the exercise of a power, the challenge 'to the formation of such opinion or to such satisfaction is limited, in law, to three points only.
It can be challenged, firstly, on the ground of malafides; secondly, on the ground that the authority which formed that opinion or which 'arrived at such satisfaction did not apply its mind to the material on which it formed the opinion or arrived at the satisfaction; and, third ly, that the material on which it formed its opin ion or reached the satisfaction was so insuffi cient that no man could reasonably reach that conclusion.
So far as the third point is con cerned, no Court of law can, as in an appeal, consider that, on the material placed before the authority, the authority was justified in reaching its conclusion.
The Court can interfere only in such cases where there was no material at all or the material was so insufficient that no man could have reasonably reached that conclusion.
It is not necessary to refer to the authorities which lay down these propositions because they have by now been well established in numerous judgments and they are not in dispute before us at the Bar.
In this case, however, there is no challenge on any of these three grounds.
The dispute in this case therefore narrows down to the point as to the burden of proof.
In other words, the dispute is whether it is the petitioner who has to bring the material before the Court to support his contention that no urgency existed or whether, once the peti tioner denied that any urgency existed, it was incumbent upon the respondent to satisfy the Court that there was material upon which the respondents could reach the opinion as mentioned in section 17(4).
" On the evidence before it, the High Court recorded its conclusions as follows: "In the case before us the petitioner has stated in the petition more than once that the urgency clause had been applied without any valid reason.
The urgency clause in respect of each of the said two notifications concerning the lands m groups Nos. 1 and 2 is contained in the relative section 4 772 notification itself.
The public purpose stated in the notification is 'for development and utiliza tion of the said lands as an industrial and resi dential area '.
To start with, this statement itself vague, in the sense that it is not clear whether the development and utilization of the lands referred to in that statement was confined to the lands mentioned in the schedule to the Notification or it applied to a. wider area of which such lands formed only a part.
So far as the affidavit in reply is concerned, no facts whatever are stated.
The affidavit only states that the authority, i.e., the Commissioner of the Bombay Division, was satisfied t,hat the possession of the said lands was urgently required for the purpose of carrying out the said development.
Even Mr. Setal vad conceded that the affidavit does not contain a statement of facts on which the authority was satisfied or on which it formed its opinion.
It is, therefore, quite clear that the respondents have failed to bring on record any material what ever on which the respondents formed the opinion mentioned in the two notifications.
The notifica tions themselves show that they concern many lands other than those failing in the said first and third groups.
It is not possible to know what was the development for which the lands were being acquired, much less is it possible to know what were the circumstances which caused urgency in the taking of possession of such lands.
We have held that the burden of proving such circumstances, at least prima facie is on the respondents.
As the respondents have brought no relevant material on the record, the respondents have failed to dis charge that burden.
We must, in conclusion, hold that the urgency provision under section 17(4) was not validly resorted to".
It has been submitted on behalf of the State that we need decide nothing more than a simple question of burden of proof in the cases before us.
We do not think that a question relating to burden of proof is always free from difficulty or is quite so simple as it is sought to be made out here.
Indeed, 'the apparent simplicity of a question relating to presumptions and burdens of proof, which have to always viewed together, is often deceptive.
Over simplification of such questions leads to erroneous statements and misapplications of the law.
Our Evidence Act is largely a codification, with certain variations, of the English law of evidence, as it stood when Sir James Fits James Stephens drafted it.
Therefore, in order to fully grasp the significance of its provisions we have to sometimes turn to its sources in English ' law which attained something resembling clarity only by stages.
In Woolmington vs Director of Public Prosecu tions(1), Lord Sankey pointed out that rules of evidence contained in early English cases are quite confusing.
He observed: "It was only later that Courts began to discuss such things as presumption and onus".
He also said that "the word onus is used indifferently throughout the books.
(1) ; 773 sometimes meaning the next move or step in the process of proving and sometimes the conclusion".
In Phipson on Evidence (11th Edn.) (at page 40, paragraph 92), we find the principles stated in a manner which sheds considerable light on the meanings of the relevant provisions of our Evidence Act: "As applied to judicial proceedings the phrase 'burden of proof ' has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law and pleading the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of adducing evi dence.
" It is then explained: "The burden of proof, in this sense, rests upon the party, whether plaintiff or defendant, who substantially asserts the affirmative of the issue. 'It is an ancient ' rule rounded on considerations of good sense, and it should not be departed from without strong reasons '.
It is fixed at the begin ning of the trial by the state of the pleadings, and it is settled as a question of law, remaining unchanged throughout the trial exactly where the pleadings place it, and never 'shifting in any circumstances whatever.
If, when all the evidence, by whomsoever introduced, is in, the party who has this burden not discharged it, the decision must be against him".
The application of rules relating to burden of proof in various types of cases is thus elaborat ed and illustrated in Phipson by reference to decided cases (see p. 40, para 93): "In deciding which party asserts the affiramative, regard must of course be had to the substance of the issue and not merely to its grammatical form, which latter the pleader can frequently vary at will, moreover a negative alle gation must not be confounded with the mere tra verse of an affirmative one.
The true meaning of the rule is that where a given allegation, whether affirmative or negative, forms an essential part of a party 's case, the proof of such allegation rests on him; e.g. in an action against a tenant for not repairing according to covenant, or against a horse dealer that a horse sold with a warranty is unsound, proof of these allegations is on the plaintiff, so in actions of malicious prosecution, it is upon him to show not only that the defendant prosecuted him unsuccessfully, but also the absence of reasonable and probable cause: while in actions or false imprisonment, proof of the existence of reasonable cause is upon the defendant, since arrest unlike prosecution, in prima facie a tort and demands justification.
In bailment cases, the bailee must prove that the goods were lost without his fault.
Under the Courts (Emergency Powers) Act 1939, the burden of proving that the defendant was unable immediately to satisfy the judgment and that inability arose from circumstances attributa ble to the 774 war rested on the defendant.
But it would seem that in an election petition alleging breaches of rules made under the Representation of the People Act, 1949, the Court will look at the evidence as a whole, and that even if breaches are proved by the petitioner, the burden of showing that the elec tion was conducted substantially in accordance with the. law does not rest upon the respondent.
Where a corporation does an act under 'statutory powers which do not prescribe the method, and that act invades the rights of others, the burden is on the corporation to show that there was no other practi cal way of carrying out the power which would have that effect".
Turning now to the provisions of our own Evi dence Act, we find the general or stable burden of proving a case stated in section 101 as follows: "101.
Whoever desires any Court to give judgment as to any legal right or liability depend ent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person".
The principle is stated in section 102 from the point of view of what has been sometimes called the burden of leading or introducing evidence which is placed on the party initiating a proceeding.
It says: "102.
The burden of proof in a suit or pro ceeding lies on that person who would fail if no evidence at all were given on either side".
In practice, this lesser burden is discharged by merely showing that there is evidence in the case which supports the case set up by the party which comes to Court first, irrespective of the side which has led that evidence.
An outright dismissal in limine of a suit or proceeding for want of evidence is thus often avoided.
But, the burden of establishing or general burden of proof is heavier.
Sometimes, evidence coming from the side of the respondents, in the form of either their admissions or conduct or failure to controvert, may strengthen or tend to support a petitioner 's or plaintiff 's case so much that the heavier burden of proving or establishing a case, as distinguished from the mere duty of introducing or showing the existence of some evidence on record stated in section 102, is itself discharged.
Sufficiency of evidence to discharge the onus probandi is not, apart from instances of blatant perversity in assessing evi dence, examined by this Court as a rule in appeals by special leave granted under Article 136 of the Constitution.
It has been held that the question whether an onus probandi has been discharged is one of fact (see: AIR 1930 P.C. p. 90).
It is gener ally so.
"Proof", which is the effect of evidence led, is defined by the provisions of section 3 of the Evidence Act.
The effect of evidence has to be distinguished from the duty Or burden of showing to the Court 775 what conclusions it should reach.
This duty is called the "onus probandi", which is placed upon one of the parties, in accordance with appropriate provisions of law applicable to various situations, but, the effect of the evidence led is a matter of inference or a conclusion to be arrived at by the Court.
The total effect of evidence is determined at the end of a proceeding not merely by considering the general duties imposed by sections 101 and 102 of the Evidence Act but also the special or particular ones imposed by other provisions such as sections 103 and 106 of the Evidence Act.
Section 103 enacts: "103.
The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person".
And, section 106 lays down: "106.
When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him".
In judging whether a general or a particular or special onus has been discharged, the Court will not only consider the direct effect of the oral and documentary evidence led but also what may be indirectly inferred because.
certain facts have been proved or not proved though easily capable of proof if they existed at all which raise either a pre sumption of law or of fact.
Section 114 of the Evidence Act covers a wide range of presumptions of fact which can be used by Courts inthe course of.
administration of justice to remove lacunae in the chain of direct evidence before iL It is, therefore, said that the function of a presumption often is to "fill a gap" in evidence.
True presumptions, whether of law or of fact, are always rebuttable.
In other words, the party against which a presumption may operate can and must lead evidence to show why the presumption should not be given effect to.
If, for example, the. party which initiates a proceeding or comes with a case to Court offers no evidence to support it, the presumption is that such evidence does not exist.
And, if some evidence is shewn to exist on a question in issue, but the party which has it within its power to produce it, does not, despite notice to it to do so,.
produce it, the natural presumption is that it would, if produced, have gone against it.
Similarly, a presumption arises from failure to discharge a special or particular onus.
The result of a trial or proceeding is determined by a weighing of the totality of facts and circumstances and presumptions operating in favour of one party as against those which may tilt the, balance in favour of another.
Such weighment always takes place at the end of a trial or proceeding which cannot, for purposes of this final weighment, be split up into disjointed and disconnected parts simply because the requirements of procedural regularity and logic, embodied in procedural law, prescribe a sequence, a stage, and a mode of proof for each party tendering its evidence.
What is weighed at the end is one 776 totality against another and not selected bits or scraps of evidence against each other.
Coming back to the cases before us, we find that the High Court had correctly stated the grounds on which even a subjective opinion as to the existence of the need to take action under section 17(4) of the Act can be challenged on certain limited grounds.
But, as soon as we speak of a challenge we have to bear in mind the general burdens laid down by sections 101 and 102 of the Evidence Act.
It is for the petitioner to substantiate the grounds of his challenge.
This means that the petitioner has to either lead evidence or show that some evidence has come from the side of the respondents to indicate that his challenge to a notification or order is made good.
If he does not succeed in discharging that duty his petition will fail.
But, is that the position in the cases before us ? We find that, although the High Court had stated the ques tion before it to be one which "narrows down to the point as to the burden of proof", yet, it had analysed the evi dence sufficiently before it to reach the conclusion that the urgency provision under section 17(4) had not been validly resorted to.
The High Court had remarked that the public purpose itself was vaguely stated, although it could not, in its opinion, be challenged on that ground.
As we have already indicated, the purpose was sufficiently specified to be, prima facie, a legally valid purpose.
We do not think that the vagueness of the purpose, as stated in the notification under section 4 (1 ), really affected the judgment of t, he High Court so much as the absence of facts and circumstances which could possibly indicate that this purpose had neces sarily to be carried out in such a way as to exclude the application of section 5A of the Act.
The High Court had rightly referred to the absence of any statement of circum stances which could have resulted in such urgency that no enquiry under section 5A of the Act could reasonably be held.
The High Court had relied on the following passage from Barium Chemicals Ltd. vs Company Law Board(1): " .
An action, not based on circumstances suggesting an inference of the; enumerated kind will not be valid.
In other words, the enumeration of the inferences which may be drawn from the circumstances, postulates the absence of a general discretion to go on a fishing expedi tion to find evidence.
No doubt the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demon strable.
If the action is questioned on the ground that no circumstances leading to an inference of the kind contem plated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out .
Since the existence of circumstances ' is a condition funda mental to the making of an opinion, the existence of the circumstances, if questioned, has to be proved at least prima facie.
It is not sufficient to assert that the circumstances (1) ; to 309. 777 exist and give no clue to what they are because the circum stances must be such as lead to conclusions of certain definiteness".
The High Court also cited the following passage from the judgment of Spens, CJ., in King Emperor vs Sibnath Banerjee(1), which was relied upon on behalf of the State to contend that it was the duty of the petitioners to remove the effect of a recital in an order showing that conditions precedent to the exercise of a power had been fulfilled: "It is quite a different thing to question the accuracy of a recital contained in a duly authenticated order, particularly where that recit al purports to state as a fact the carrying out of what I regard as a condition necessary to the valid making of that order.
In the normal case, the existence of such a recital in a duly authenticated order will, in the absence of any evidence as to.
its inaccuracy be accepted by a Court as establish ing that the necessary condition was fulfilled.
The presence of the recital in the order will place a difficult burden on the detenu to produce admissi ble evidence sufficient to establish even a prima facie case that the recital is not accurate.
If, however, in any case, a detenu can produce admis sible evidence to that effect, in my judgment the mere existence of the recital in the order cannot prevent the court considering such evidence and, if it thinks fit, coming to a conclusion that the recital is inaccurate".
The High Court opined that the presumption of regularity, attached to an order containing a technically correct recit al, did not operate in cases in which section 106 Evidence Act was applicable as it was to the cases before us.
We do not think that we can lay down such a broad general propo sition.
An order or notification, containing a recital, technically correct on the face of it, raises a presumption of fact under section 114 illustration (e) of the Evidence Act.
The well known maxim of law on which the presumption, found is illustration (e) to section 114 of Evidence Act is: "Omain prae sumunt ur rite esse acta" (i.e. all acts are presumed to have been rightly and regularly done).
This presumption, however, is one of fact.
It is an optional presumption.
It can be displaced by circumstances indicat ing that the power lodged in an authority or official has not been exercised in accordance with the law.
We think that the original or stable onus land down by section 101 and section 102 of the Evidence Act can not be shifted by the use of section 106 of the Evidence Act, although the particular onus of proving facts and circumstances lying especially within the knowledge of the official who formed the opinion which resulted in the notification under sec tion 17(4) of the Act rests upon that official.
The recit al, if it is not defective, may obviate the need to look further.
But, there may be circumstances in the case which impel the Court to look beyond it.
And, at that stage, section 106 Evidence Act can be invoked by the party assail ing an order or notification.
It is most unsafe in such cases for the official or authority concerned to rest content with non disclosure of facts especially with (1)[1944] E.C.R 1 at 42.
778 in his or its knowledge by relying on the sufficiency of a recital.
Such an attitude may itself,justify Further judi cial scrutiny.
In Sibnath Banerjee 's case (supra) also, facts which led an authority to pass a detention order could be said to lie especially within its knowledge.
If there could be certain facts, in Sibnath Banerjee 's ease (supra), winch Sibnath Banerjee as well as the official making the order kneW, it could, similarly, be urged that, in the cases before us some facts could be known to both sides.
We do not think that the principle laid down in Sibnath Banerjee 's case (supra) can be circumvented by merely citing section 106 of the Evidence Act as the High Court did.
We think that the total ity of circumstances has to be examined, including the recitals, to determine whether and to what extent each side had discharged its general or particular onus.
It has been repeatedly laid down that the doctrine of onus of proof becomes unimportant when there is sufficient evidence before the Court to enable it to reach a particular conclusion.
The principle of onus of proof ' becomes important in cases of either paucity of evidence or in cases where evidence given by two sides is so equivalanced that the Court is unable to hold where the truth lay.
In the cases before us, if the total evidence, from whichever side any of it may have come, was insufficient to enable the petitioners to discharge their general or stable onus, their petitions could not succeed.
On the other hand, if, in addition to the bare assertions made by the petition ers, that the urgency contemplated by section 17(4) did not exist, there were other facts and circumstances, including the failure of the State to indicate facts and ' circum stances which it could have easily disclosed if they exist ed, the petitioners could be held to have discharged their general onus.
We think that the ,matter, is not so simple as to capa ble of decision on an examination of a mere recital in the order or notification as was, urged on behalf of the State of Maharashtra.
Indeed, even if a recital in a notifica tion is defective or does not contain the necessary state ment that the required conditions have been fulfilled, evidence can be led to show that conditions precedent to the exercise of a power ' have been actually fulfilled.
This was clearly laid down by this Court in Swadeshi Cotton Mill 's case (supra), where Wanchoo, J. speaking for the Constitution Bench of this Court said: "The difference between a case where a gener al order contains a recital on the face of it and one where it does not contain such a recital is that in the latter case the burden is thrown on the authority making the order to satisfy the Court by other means that the conditions precedent were fulfilled, but in the former case the Court will presume the regularity of the order including the fulfilment of the conditions precedent and then it will be for the party challenging the legality of the order to show that the recital was not correct and that the conditions precedent were not in fact 779 complied with by the authority: (see the observa tions of Spens C.J. in King Emperor vs Sibnath Banerjee(1) which were approved by the Privy Coun cil in King Emperor vs Sibnath Banerjee"(2).
This Court also said there: "Our conclusion therefore is that where certain conditions precedent have to be satisfied before a subordinate authority can pass an order, (be it executive or of the character of subordi nate legislation), it is not necessary that the satisfaction of those conditions must be recited in the order itself, unless the statute requires it, though, as we have already remarked, it is most desirable that it should be so, for in that case the presumption that the conditions were satisfied would immediately ' arise and burden would be thrown on the person challenging the fact of satis faction to show that what is recited: is not cor rect.
But even where the recital is not there on the face of the order, the order will not become illegal ab initio and only a further burden is thrown on the: authority passing the order to satisfy the Court by other means that the condi tions precedent were complied with.
In the present case this has been done by the filing of an affidavit before us.
" It is also clear that, even a technically correct recit al in an order or notification stating that the conditions precedent to the exercise of a power have been fulfilled may not debar the Court in a given case from considering the question whether, in fact, those conditions have been ful filled.
And, a fortiori, the Court may consider ,red decide whether the authority concerned has applied its mind to really relevant facts.
of a case with a view to determining that a condition precedent to the exercise of a power has been fulfilled.
If it appears, upon an examination of the totality of facts in the case, that the power conferred has been exercised for an extraneous or irrelevant purpose or that the mind has not been applied at all to the real object or purpose of a power, so that the result is that the exer cise of power could only serve some other or collateral object, the Court will interfere.
In Raja Anand Brahma Shah vs State of U.P. & Ors.
,(3) a Constitution bench of this Court held: "It is true that the opinion of the State Government which is a condition for the exercise of the power under section l 7(4) of the Act, is subjec tive and a Court cannot normally enquire whether there were sufficient grounds or justification for the opinion formed by the State Government under section 17(4).
The legal position has been explained by the Judicial Committee in King Emperor vs Shibnath Banerjee (72 [1944]F.C.R. 1,42.
(2)[1945]F.C.R, 195,216 17.
[1967]1 S.C.R. 373 at .381.
234SC1/76 780 I.A. 241) and by this Court in a recent case Jaichand Lal Sethia vs State of West Bengal & Ors.
(Criminal Appeal No. 110 of 1968 decided on July, 1966 [1966] Suppl.
S.C.R.)But even though the power of the State Government has been formulated under section 17(4) of the Act in subjective terms the expression of opinion of the State Government can be challenged as ultra vires in a Court of Law if it, could be shown that the State Government never applied its mind to the.
matter or that the action of the State Government is malafide If therefore in a case the land under acquisition is not actual ly waste or arable land but the State Government has formed the opinion that the provisions of sub s.(1) of section 17 are applicable the Court may legiti mately draw an inference that the State Government did not honestly form that opinion or that in forming that opinion the State Government did not apply its mind to the relevant facts bearing on the question at issue.
It follows therefore that the notification, of the State Government under section 17(4) of the Act directing that the provisions of section 5A shall not apply to the land is ultra vires".
In Brahma Shah 's case (supra), a condition precedent to the application of section 17(4) was held to be unsatisfied inasmuch as the land in respect of which the proceeding was taken was found to be forest land which could not be classified as "arable or waste land".
Learned counsel for the State relied strongly on the judgment of this Court in I. G. joshi Etc.
vs State of Gujarat & Anr.
(1) where this Court had pointed out how, in Sibnath Banerjee 's case (supra), the initial burden of the petitioner, arising from a prima facie correct order had been repelled by an affidavit filed by Mr. Porter, Additional Home Secretary on behalf of the State, showing that the mind 'of the authority concerned had not been independently applied to the require ments of law but a routine order had apparently been passed on materials supplied by the Police.
We have carefully considered the following observa tions made by this Court in I. G. Joshi 's case (supra) after noticing facts of Sibnath Baner jee 's case (supra) (at p. 278): "The High Court, having before it allega tions, counter allegations, and denials, dealt first with the legal side of the matter.
Then it readily accepted the affidavits on the side of Government.
If it had reversed its approach it need not have embarked upon (what was perhaps unnecessary) an analysis of the many principles on which onus is distributed between rival parties and the tests on which subjective opinion as distin guished from an opinion as to the existence of a fact, is held open to review in a court of law.
As stated already there is a strong presumption of regularity of official acts and added thereto is the (l) [1968]2 S.C.R. 267.
781 prohibition contained in article 166(2).
was not called upon to answer the kind of affidavit which was filed with the petition because bare denial that Govt.
had not formed an opinion could not raise an issue.
Even if Govt.
under advice offered to disclose how the matter was dealt with, the issue did not change and it was only this.
Whether any one at all formed an opinion and if he.did whether he had the necessary authority to do so.
The High Court having accepted the affidavits that Raval and Jayaraman had formed the necessary opinion, was only required to see if they had the competence.
The High Court after dealing with many matters held that they had".
In I. G. Joshi 's case (supra), it appears to us that the principal round of attack on a notification, was that it was not duly authenticated in accordance with the require ments of Article 166 and the Rules ' of Business.
The notification was held not to have been vitiated on the grounds on which it had been assailed.
It was observed that the High Court, after considering the evidence, was satisfied, on the evidence produced before it, that the required opinion had been formed even though it was not necessary for the Government in view of the presumption of regularity attached to official acts.
to produce anything more than the notification.
We do not find that any of the matters placed before us ' now was in issue there.
On the other hand, this.
Court held, on that occasion, that the mere assertion of the petitioner that the Government had not formed an opinion about the need for action under section 17(4) of the Act "could not raise an issue".
We do not think that we need express any opinion here on the question whether such an assertion can or cannot even raise a triable issue.
All we need say is that a triable issue did arise and was decided by the High Court in the cases now before us.
This issue was whether the conditions precedent to exercise of power under section 17(4) had been fulfilled or not.
We think that such a question can only be decided rightly after determining what was the nature of compliance with the conditions of section 17(4) required by the Act.
We think that section 17(4) cannot be read in isolation from sections 4(1) and 5A of the Act.
The immediate purpose of a notification under section 4(1 ) of the Act is to enable those who may have any objections to make to lodge them for purposes of an enquiry under section 5A of the Act.
It is true that, although only 30 days from the notification under section 4(1) are given for the filing of these objec tions under section 5A of the Act, yet, sometimes the pro ceedings under section 5A are unduly prolonged.
But, considering the nature of the objections which are capable of being successfully taken under section 5A, it is diffi cult to see why the summary enquiry should not be concluded quite expeditiously.
In View of the authorities of this Court, the existence of what are prima facie public pur poses, such as the one present in the cases before us, cannot be successfully challenged at all by objectors.
It is rare to find a case in which.
objections to 782 the validity of a public purpose of an acquisition can even be stated in a form in which the challenge could succeed.
Indeed, questions relating to validity of the notification on the ground of malafides do not seem to US to be ordinari ly open in a summary enquiry under section 5A of the Act.
Hence, there seems to us to be little difficulty in completing enquiries contemplated by section 5A of the Act very expeditiously.
Now, the purpose of section 17(4) of the Act is, obvi ously, not merely to confine action under it to.
waste and arable land but ,also to situations in which an inquiry under section 5A will serve no useful purpose, or, for some overriding reason, it should be dispensed with.
The mind of the Officer or authority concerned has to be applied to the question whether there is fan urgency of such a nature that even the summary proceedings under section 5A of the Act should be eliminated.
It is not just the existence of an urgency but the need to dispense with an inquiry under section 5A which has to be considered.
Section 17(2) deals with a case in which an enquiry under section 5A of 'the Act could not possibly serve any useful purpose.
Sudden change of the course of a river would leave no option if essential communications have to be maintained.
It results in more or less indicating, by an operation of natural physical forces beyond human control, what land should be urgently taken possession of.
Hence, it offers no difficulty in applying section 17(4) in public interest.
And, the particulars of '.
what is .obviously to be done in public interest need not be concealed when its validity is questioned in a Court of justice.
Other cases may raise questions involving consideration of facts which are especially within the knowledge of the authorities concerned.
And, if they do not discharge their special burden, imposed by section 106 Evidence Act, without even disclosing a sufficient reason for their abstention from disclosure, they have to take the consequences which flow from the non production of the best evidence which could be produced on behalf of the State if its stand was correct.
In the case before us, the public purpose indicated is the development of an area for industrial and residential pur poses.
.This in itself, on the face of it, does not call for any such action, barring exceptional circumstances, as to make immediate possession, without holding even a summary enquiry under section 5A of the Act, imperative.
On the other hand, such schemes generally take sufficient period of time to enable at least summary inquiries under section 5A of the Act to be completed without any impediment whatso ever to the execution of the scheme.
Therefore, the very statement of the public purpose for which .the land was to be 'acquired indicated the absence of such urgency, on the apparent facts of the case, as to require the elimination of an enquiry under 'section 5A of the Act.
Again, the uniform and set recital of a formula, like a ritual or mantara, apparently applied mechanically to every case, itself indicated that the mind of the Commissioner concerned was only applied 783 to the question whether the land was waste or arable and whether its acquisition is urgently needed.
Nothing beyond that seems to have been considered.
The recital itself shows that the mind of the Commissioner was not applied at all to the question whether the urgency is of such a nature as to require elimination of the enquiry under section 5A.of the Act.
If it was, at least the notifications gave no inkling of it at all.
On the other hand, its literal mean ing was that nothing beyond matters stated there were con sidered.
All schemes relating to development of industrial and residential areas must be urgent in the context of the country 's need for increased production and more residential accommodation.
Yet, the very nature of such schemes of development does not appear to demand such emergent action as to eliminate summary enquires under section 5A of the Act.
There is no indication whatsoever in the affidavit filed on behalf of the State that the mind of the Commis sioner was applied.
at all to the question whether it was a case necessitating the elimination of the enquiry under section 5A of the Act.
The recitals in the notifications, on the other hand, indicate that elimination of the enquiry under section 5A of the Act was treated as an automatic consequence of the opinion formed on other matters.
The recital does not say at all that any opinion was formed on the need to dispense with the enquiry under section 5A of the Act.
It is certainly a case in which ' the recital was atleast defective.
The burden, therefore, rested upon the State to remove the defect, if possible, by evidence to show that some exceptional circumstances which necessitated the elimination of an enquiry under section 5A of the Act and that the mind of the Commissioner was applied to this essen tial question.
It seems to us that the High Court correctly applied the provisions of section '106 of the Evidence Act to place the burden upon the State to prove those special circumstances.
although it also; appears to us.
that the High Court was not quite correct in stating its view in such a manner as to make it appear that some part of the initial burden of the petitioners under sections 101 and 102 of the Evidence Act had been displaced by the failure of the State, to discharge its duty under ' section 106 of the Act.
The correct way of putting it would have been to say that the failure of the State to produce the evidence of facts espe cially ' within the knowledge of its officials, which rested upon it under section 106 of the Evidence Act, taken together with the attendant facts gnu circumstances, includ ing the contents of recitals, had enabled the petitioners to discharge their burdens under sections 101 and 102 of the Evidence Act.
We may also observe that if, instead of prolonging litigation by appealing to this Court, the State Government had ordered expeditious enquiries under section 5A of the Act or even afforded the petitioners some opportunity of being heard before acting under section 17(4) of the Act, asking them to show cause why no enquiry under section 5A of the Act should take place at all, the acquisition proceed ings need not have been held up so long.
In fact, we hope that the acquisition proceedings have not actually been held up.
784 On the view we take of the cases before us, we find no force in either the appeals by the owners of land or in those preferred by the State of Maharashtra.
Consequently, we dismiss all the nine appeals before us.
The parties will bear their own costs.
P.B.R. Appeals dismissed.
[/INST]The City of Bangalore Municipal Corporation Services (General) Cadre and Recruitment Regulations, 1971, framed under the City of Bangalore Municipal Corporation Act, 1949, came into force on 3rd March,1971.
In accordance with the ' practice of the Corporation prevailing before that date to have one half of the cadre of Senior Health Inspec tors manned by deputation of Senior Health Inspectors from the Karnataka State Civil Service, the appellants were taken on deputation by the Corporation from the Karnataka State Civil Service.
In 1974, the Corporation passed a resolution that the appellants would be absorbed by the Corporation if they were willing to accept their ranking as juniors to the Senior Health Inspectors of the Corporation, and the State Government accorded its sanction to the resolution of the Corporation as required by the Act.
But coming to know that the chances of promotion of the permanent officials of the Corporation would be prejudicially affected by such absorp tion, the State Government withdrew its sanction accorded earlier.
The appellants preferred writ petitions for quashing the withdrawn but the High Court dismissed the petitions.
In appeal to this Court, it was contended that the appellants became permanent employees of the Corporation and ceased to be Government servants as soon as the State Gov ernment accorded sanction to the Resolution of the Corpora tion and that therefore, the State Government could not, thereafter, by its unilateral action, reverse the process and annihilate the relationship of employer and employee between the Corporation and the.
appellants and restore their status as Government servants.
Dismissing the appeals, HELD : (1) The Resolution read with the Government sanction did not operate to put an end to the status of the appellants as government servant and to create the rela tionship of master and servant between the Corporation and the appellants, and therefore, it was competent to the State Government to withdraw the sanction accorded earlier; and this would be so irrespective of whether the appellants expressed their willingness to be absorbed as SeniOr Health Inspectors by the Corporation or not.
[797 BC] (a) Regulation 3 of the Regulations which were in force when the Resolution was passed by the Corporation recognised only two modes of recruitment to the post of Senior Health Inspectors namely, by promotion from the cadre of Junior Health Inspectors and by deputation.
Therefore, to absorb Senior Health Inspectors from the State Directorate of Health Services as permanent employees of the Corporation would be plainly contrary to the express mandate of this statutory provision.
[796 C & F] (b) It could not be urged that because they were already on deputation in the cadre of Senior Health Inspectors under the Corporation, their absorption as permanent Senior Health Inspectors did not constitute fresh entry into the cadre so as to require compliance with the Regulations.
Not only 792 their entry but also their continuance in the cadre of Senior Health Inspectors on the Corporation establishment depended on their being on deputation, because, it is only by way of deputation that Senior Health Inspectors from the State Directorate of Health Services can find place in the cadre of Senior Health Inspectors on the establishment of the Corporation Since absorption is appointment, without amendment of the Regulations permitting appointment of Senior Health Inspectors drawn from the State Directorate of Health Services as permanent Senior Health Inspectors under the Corporation, the appellants could not be absorbed on the Corporation Establishment.
[796 G H]
</s>
|
<s>[INST] Summarize the judgementCriminal Appeal No. 322 of 1987.
From the Judgment and Order dated 19.1.1987 of the Bombay High Court in Criminal Writ Petition No. 103 of 1986.
672 Hardev Singh and Ms. Madhu Moolchandani for the Appellant.
B.A. Masodkar, A.S. Bhasme and A.M. Khanwilkarforthe Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave is directed against the judgment and order of the High Court of Bombay dated January 19, 1987 rejecting the petition under article 226 of the Constitution filed by the appellant in the High Court for grant of a writ of habeas corpus.
The appellant has been placed under detention by the impugned order dated September 7, 1986 passed by the District Magistrate, Beed under section 3(2) of the on his being satis fied that it was necessary to do so 'with a view to prevent ing him from acting in any manner prejudicial to the mainte nance of public order '.
The appellant challenged the im pugned order of detention on grounds inter alia that there was infraction of the constitutional safeguards enshrined in article 22(5) read with section 8 of the Act inasmuch as there was inordinate, unexplained delay on the part of the detaining authority to consider and dispose of his representation.
On the view that we take, it is not necessary to deal with the facts elaborately.
The material facts are these.
The appellant was taken into custody on September 8, 1986 and was lodged at the Aurangabad Central Prison, Aurangabad where he is now detained.
He was served with the grounds of detention along with the copies of the relevant documents on September 14, 1986.
It appears that a week thereafter i.e. on September 22, 1986 he addressed a representation to the Chief Minister through the Superintendent, Aurangabad Cen tral Prison, Aurangabad which the Superintendent forwarded to the Home Department on September 24, 1986.
The State Government, in the meanwhile, under section 3 (4) of the Act accorded its approval to the impugned order of detention on September 18, 1986.
On October 6, 1986 the appellant made another representation to the Advisory Board which met and considered the same on October 8, 1986.
On October 13, 1986 the Advisory Board after considering the representation made by the appellant together with the materials placed before it forwarded its report to the State Government recommending confirmation of the impugned order of detention as there was, in its opinion, sufficient cause for the detention of the appellant.
Acting upon the report of the Advisory Board, the State Government by its order dated November 19, 1986 confirmed the order of detention.
In the mean 673 time, the appellant moved the High Court on November 13, 1986.
The main ground on which the legality of the impugned order of detention was assailed in the High Court was that although the appellant had addressed a representation to the Chief Minister on September 22.
1986, it was not considered and disposed of by the Chief Minister till November 17, 1986 i.e. there was unexplained, unreasonable delay in disposal of the same.
It was said that such unreasonable delay in disposal of the representation was sufficient to render the continued detention of the appellant illegal.
The High Court did not think it necessary to call upon the respondents and by an oral judgment dismissed the writ petition mainly on the ground of imperfect pleadings.
It observed that the appellant had not specifically pleaded that there was unrea sonable delay in the office of the Chief Minister which had not been explained and therefore the detention was illegal, but his grievance was that his representation had not been considered.
It referred to paragraph 4 of the writ petition where it is submitted: "It is submitted that in law, the State Gov ernment is bound to consider the representa tion before the decision of the Advisory Board, but in the instant case neither the State Government has considered the represen tation of the petitioner nor the Government has communicated its decision.
" It referred to the underlined portion of the averments in paragraph 4 of the writ petition, namely: "Eight weeks have elapsed since the date of detention of the petitioner but still neither the State Government has taken any decision on the representation forwarded through the Home Department nor the petitioner is communicated any decision pursuant to the report . . " The High Court distinguished the decision of this Court in Harish Pahwa vs State of Uttar Pradesh & Ors., ; on the ground that in that case the Court had before it the affidavit of the Government showing that it had no explanation to offer except that it had referred the matter to the Law Department and also there was sufficient material to show that there was unreasonable delay in dealing with the representation whereas in the present case there was no such ground raised.
The High Court disallowed the prayer for grant of a writ of habeas corpus mainly on the ground of defective pleadings, and 674 added that the appellant "had not even asked for time to amend the petition" and "put the respondents to notice".
It observed: "While the State undoubtedly has the duty to process the representation of the detenu promptly, it is also the duty of the petition er to make specific adverments of facts and their effect, if necessary, by amendment.
This is necessary to put the respondents to notice, that the effect of these facts have to be answered and explained.
The respondents may have an explanation as to why the Chief Minis ter took so much time.
On such submission we cannot hold that the respondents have failed to explain delay or that the time taken by the Chief Minister was wholly necessary.
We should not be understood to have held that the time taken by the Government was justified.
Far from it.
But we cannot allow the petitioner to take the respondents by surprise by such a style of pleading.
" It was an improper exercise of power on the part of the High Court in disallowing the writ petition on the ground of imperfect pleadings.
Normally, writ petitions are decided on the basis of affidavits and the petitioner cannot be permit ted to raise grounds not taken in the petition at the hear ing.
The same rule cannot be applied to a petition for grant of a writ of habseas corpus.
It is enough for the detenu to say that he is under wrongful detention, and the burden lies on the detaining authority to satisfy the Court that the detention is not illegal or wrongful and that the petitioner is not entitled to the relief claimed.
This Court on more occasions than one has dealt with the question and it is now well settled that it is incumbent on the State to satisfy the Court that the detention of the petitioner/detenu was legal and in conformity not only with the mandatory provi sions of the Act but also strictly in accord with the con stitutional safeguards embodied in article 22(5).
In return to a rule nisi issued by this Court or the High Court in a habeas corpus petition, the proper person to file the same is the District Magistrate who had passed the impugned order of detention and he must explain his subjective satisfaction and the grounds therefore; and if for some good reason the District Magistrate is not available, the affidavit must be sworn by some responsible officer like the Secretary or the Deputy Secretary to the Government in the Home Department who personally dealt with or processed the case in the Secretariat or submitted it to the Minister or other Officer duly authorised under the Rules of Business framed by the Governor under article 166 of the Constitution to pass orders on behalf of the Govern 675 ment in such matters: Niranjan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar & Anr., ; and Mohd. Alam vs State of West Bengal, ; In the present case, in answer to the notice issued by this Court under article 136, the affidavit in reply has been filed by Shri S.V. Joshi, District Magistrate, Beed who passed the impugned order of detention.
There is a general denial in paragraph 2 of the counter affidavit that there was unreasonable delay in the disposal of the representation made by the appellant.
However, the delay in disposal of the representation was in the Secretariat and therefore it is averred in paragraph 11: "I say that the affidavit filed by Shri Vish wasrao, Desk Officer, Home Department (Special), Mantralaya, Bombay on behalf of State of Maharashtra in the High Court Bench at Aurangabad will reveal that different steps, as required by the provisions of Na tional Security Act, 1980 are taken immediate ly, within stipulated period." and it is then averred in paragraph 12 that the contentions raised by the appellant with regard to delay have been dealt with by the High Court while deciding the writ petition.
It is said that the appellant has raised the contention about unreasonable delay in disposal of his representation, for the first time in this Court presumably on the reasoning of the High Court.
There is on record an affidavit sworn by I.S. Vishwasrao, Desk Officer, Home Department (Special), Mantralaya, Bombay in answer to the grounds 16(A) and 16(E).
As regards the grounds 16(A) and 16(E) formulated in the petition for grant of special leave regarding unreasonbale delay, it is averred in paragraph 3 of the affidavit: "I say that the representation dated 22nd September, 1986 addressed to the Chief Minis ter by the detenu was forwarded by the Super intendent, Aurangabad Central Prison, Auranga bad on 24th September, 1986.
I further say that the said representation was received in the Department on 26th September, 1986.
I further say that the parawise remarks on the said representation were called for from the detaining authority, i.e. District Magistrate, Beed on 26th September, 1986 and remarks of the District Magistrate dated 3rd October, 1986 were received by the 676 Government on 6th October, 1986.
I further say that thereafter, the said representation was processed together with report of the Advisory Board and as stated in the earlier paragraphs, the said representation was rejected and the detention of the detenu was confirmed by the Chief Minister on 17th November, 1986.
" In the same paragraph, there is the following averment made with regard to delay in disposal of the representation in the Chief Minister 's Secretariat: "I further say that the Chief Minister was pre occupied in connection with very important matters of the State which involved tours as well as meetings outside Bombay.
I further say that during the period from 23.10.1986 to 17.11.
1986, two Cabinet meetings were held at Pune and Aurangabad, each meeting lasting for two days i.e. 28th and 29th October, 1986 at Pune and 11th and 12th November, 1986 at Aurangabad.
I further say that such meetings in Pune and Aurangabad are generally held once a year to focus the attention on regional problems.
I further say that the preparations for these meetings as well as other meetings held with the concerned Ministers and offi cials demanded a lot of time of the Chief Minister and this naturally resulted in some delay in disposing of several cases submitted to the Chief Minister including this case.
I further say that the cases where such repre sentations are made in the detention matters, they required a close scrutiny of all the relevant record and careful application of mind.
I therefore, respectfully submit that the time taken for passing the Government order in this case should be viewed in the light of the averments made in this affidavit and therefore, if properly considered, it cannot be said that the delay in disposing of the representation is unreasonable and unex plained.
" It is somewhat strange that the State Government should have acted in such a cavalier fashion in dealing with the appellant 's representation addressed to the Chief Minister.
We are satisfied that there was failure on the part of the Government to discharge its obligations under article 22(5).
The affidavit reveals that there were two representations made by the appellant, one to the Chief Minister dated September 22, 1986 and the other to the Advisory Board dated 677 October 6, 1986.
While the Advisory Board acted with com mendable despatch in considering the same at its meeting held on October 8, 1986 and forwarded its report together with the materials on October 13, 1986, there was utter callousness on the part of the State Government to deal with the other representation addressed to the Chief Minister.
It was not till November 17, 1986 that the Chief Minister condescended to have a look at the representation.
When the life and liberty of a citizen is involved, it is expected that the Government will ensure that the constitutional safeguards embodied in article 22(5) are strictly observed.
We say and we think it necessary to repeat that the gravity of the evil to the community resulting from anti social activi ties can never furnish an adequate reason for invading the personal liberty of a citizen, except in accordance with the procedure established by the Constitution and the laws.
The history of personal liberty is largely the history of in sistence on observance of the procedural safeguards.
Apart from the admitted inordinate delay, there is a fundamental defect which renders the continued detention of the appellant constitutionally invalid.
As observed by one of us (Sen, J.) in Narendra Purshotam Umrao vs B.B. Gujral & Ors., ; there was a duty cast on the Govern ment to consider the representation made by the detenu without waiting for the opinion of the Advisory Board.
The constitution of.an Advisory Board under section 9 of the Act does not relieve the State Government from the legal obligation to consider the representation of the detenu as soon as it is received by it.
It goes without saying that the constitu tional right to make a representation guaranteed by article 22(5) must be taken to include by necessary implication the constitutional right to a proper consideration of the repre sentation by the authority to whom it is made.
The right of representation under article 22(5) is a valuable constitutional right and is not a mere formality.
The representation made by the appellant addressed to the Chief Minister could not lie unattended to in the portals of the Secretariat while the Chief Minister was attending to other political affairs.
Nor could the Government keep the representation in the archives of the Secretariat till the Advisory Board submit ted its report.
In Narendra 'Purshotam Umrao 's case it was observed: "Thus, the two obligations of the Government to refer the case of the detenu to the Advisory Board and to obtain its report on the one hand, and to give an earliest opportunity to him to make a representation and consider the representation on the other, are two distinct obligations, independent of each other.
" After referring to the decisions of this Court in Abdul Karim vs State of West Bengal, ; ; Pankaj Kumar Chakrabarty vs State of West Bengal, ; 678 and Khairul Haque vs State of West Bengal, W.P. No. 246 of 1969, decided on September 10, 1969 the nature and dual obligation of the Government and the corresponding dual right in favour of the detenu under article 22(5) was reiterat ed.
The following observations of the Court in Khairul Haque 's case were quoted with approval: "It is implicit in the language of article 22 that the appropriate Government, while dis charging its duty to consider the representa tion, cannot depend upon the view of the Board on such representation.
It has to consider the representation on its own without being influ enced by any such view of the Board.
There was, therefore, no reason for the Government to wait for considering the petitioner 's representation until it had received the report of the Advisory Board.
As laid down in Abdul Karim vs State of West Bengal, the obli gation of the appropriate Government under article 22(5) is to consider the representation made by the detenu as expeditiously as possi ble.
The consideration by the Government of such representation has to be, as aforesaid, independent of any opinion which may be ex pressed by the Advisory Board.
The fact that article 22(5) enjoins upon the detaining authority to afford to the detenu the earliest opportunity to make a representation must implicitly mean that such representation must, when made, be considered and disposed of as expeditiously as possible, otherwise, it is obvious that the obligation to furnish the earliest opportunity to make a representation loses both its purpose and meaning." In the circumstances, there being a failure on the part of the State Government to consider the representation made by the appellant addressed to the Chief Minister without wait ing for the opinion of the Advisory Board, renders the continued detention of the appellant invalid and constitu tionally impermissible.
We have no manner of doubt that there is no explanation whatever much less any reasonable explanation for the inor dinate delay in consideration of the representation made by the appellant addressed to the Chief Minister and that by itself is sufficient to invalidate the impugned order of detention.
In fact, no one has filed any affidavit to ex plain the cause for the delay in Chief Minister 's Secretari at.
The counter affidavit filed by Shri S.V. Joshi, District Magistrate contains 679 a bare denial in paragraph 2 that there was any unreasonable delay in the disposal of the representation.
As regards the delay in disposal of the representation in the Secretariat, he adverts in paragraph 11 to the affidavit filed by Vish wasrao, Desk Officer, Home Department on behalf of the State Government and asserts that it reveals the different steps that were taken and in paragraph 12 he submits that the contention about unreasonable delay in disposal of the representation by the State Government was not raised in the High Court and it has been taken for the first time in this Court.
Even so, the appellant having raised the ground in appeal it was the duty of the State Government to have placed all the material along with the counter affidavit.
There is in fact no explanation offered as regards the delay in disposal of the representation in the Secretariat.
We have already extracted the relevant portion from the affida vit of Vishwasrao, Desk Officer.
It is accepted that the representation made by the appellant to the Chief Minister on September 22, 1986, forwarded by the Superintendent, Aurangabad Central Prison on the 24th, was received in the Home Department on the 26th which in its turn forwarded the same to the detaining authority i.e. the District Magistrate on the same day i.e. 26th for his comments.
The District Magistrate returned the representation along with his com ments dated October 3, 1986 which was received by the Gov ernment on the 6th.
It is said that thereafter the represen tation was processed together with the report of the Adviso ry Board and was forwarded to the Chief Minister 's Secre tariat where the same was received on October 23, 1986.
It is enough to say that the explanation that the Chief Minis ter was "pre occupied with very important matters of the State which involved tours as well as two Cabinet meetings at Pune on October 28 and 29, 1986 and at Aurangabad on November 11 and 12, 1986" was no explanation at all why the Chief Minister did not attend to the representation made by the appellant till November 17, 1986 i.e. for a period of 25 days.
There was no reason why the representation submitted by the appellant could not be dealt with by the Chief Minis ter with all reasonable promptitude and diligence and the explanation that he remained away from Bombay is certainly not a reasonable explanation.
In view of the wholly unex plained and unduly long delay in the disposal of the repre sentation by the State Government, the further detention of the appellant must be held illegal and he must be set at liberty forthwith.
For these reasons, the appeal must succeed and is allowed.
The judgment and order passed by the High Court are set aside and the appellant is directed to be set at liberty forthwith.
P.S.S. Appeal allowed.
[/INST]All the surplus lands in the compensation pool of the Central Government as well as the excess area in the occupa tion of allottees were transferred under a package deal to the Punjab Government with effect from April 1, 1961.
In October 1961 the Managing Officer, Rehabilitation Department detected that there was excess allotment of land to the appellant in lieu of land left by him in Pakistan.
By an order dated February 21, 1962 he allowed the petitioner to purchase the said excess area.
The petitioner deposited the required amount in the Treasury on March 6, 1962.
On reference, the Chief Settlement Commissioner held that the excess land which was found in October 1961 could not be sold by the Managing Officer under the as under the package deal this land had been transferred to the Punjab Government.
The petitioner then made an application under section 33 of the said Act to the Central Government which was dismissed.
Thereupon he moved a petition under Articles 226 and 227 of the Constitution before the High Court, and contended that he is entitled to get the same land as he had already depos ited the price in accordance with the order of the Managing Officer, and that the said purchase could not be can 625 celled on the plea that the land had already been trans ferred to the Punjab Government by the Central Government under the package deal.
The petition was opposed by the respondent, who contended that the transfer of the land in dispute to the petitioner was void ab initio as under the package deal it vested in the State Government.
The High Court held that the Chief Settlement Commissioner (Lands), had jurisdiction to cancel the allotment even after confer ment of the proprietary right, that in view of the package deal the title to the land had already passed to the Punjab Government in 1961 and no authority under the Displaced Persons Act could make any order in regard to the sale of the land to the appellant at a concessional rate, and that only the Punjab Government could deal with the said land.
Dismissing the appeal by special leave, HELD: 1.
The Chief Settlement Commissioner had duly and properly made the order.
He was competent under section 24 of the to cancel the allotment of land in excess of the area the petitioner was entitled to get under the provisions of the Act.
[630F, 629E] Smt.
Balwant Kaur vs Chief Settlement Commissioner (Lands), Punjab, [1963] Punjab Law Reporter (Vol. 65) 1141 at 1187, approved.
The excess land allotted to the appellant was package deal property vested in the State of Punjab.
As such the same could not be sold nor could it be allowed to be sold to the petitioner appellant by the Managing Officer under the provisions of the Displaced Persons Act.
The order of the Managing Officer, was, therefore, wholly without jurisdic tion inasmuch as the said property was no longer in the compensation pool of the Central Government.
[629CD] Ram Chander vs State of Punjab, [1968] Current Law Journal (Punjab & Haryana) 668 approved.
It is for the Government of Punjab to consider and decide whether the legal representatives of the deceased appellant are entitled to purchase the said excess land under the provisions of the Punjab Package Deal Properties (Disposal) Act, 1976.
The Punjab Package Deal Properties (Disposal) Rules, 1976 prescribe procedure as to how the lands in excess of the entitlement, which have been can celled, may be transferred to the allottees or their succes sors in interest.
Rule 4 lays down that the allottee or his legal representatives will not be entitled to 626 have the excess land which was cancelled on the ground of fraud, concealment or mis representation of material facts.
It is also provided in clause 8 of the said rules that the price of the land that will be transferred shall be the current market price to be determined by the Tehsildar (Sales).
[630G, 63lAB]
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<s>[INST] Summarize the judgementAppeal No. 1192 and 1193 of 1967.
Appeal by special leave from the order dated January 13, 1969 of the Punjab and Haryana High Court, at Chandigarh, in L.P.A. No. 6 of 1969.
699 B. Sen and G. D. Gupta, for the appellant.
V. C. Mahajan and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by GROVER, J.
These two appeals by certificate from a judgment of the Allahabad High Court must succeed on the short ground that the provisions of section 4(1) of the Land Acquisition Act, 1894, were not complied with.
In C.A. 1192/67 a notification was issued under section 4 of the Act on October 15, 1960 for acquisition of the land in dispute.
Under section 17 (4) of the Act the provisions of section 5A were dispensed with.
On October 28, 1960 the notification under section 6 was issued.
The appellant was directed to be present before the Collector in pursuance of a notice under section 9 on December 4, 1960.
On December 5, 1960 the appellant filed a petition under article 226 of the Constitution challenging the acqui sition proceedings.
The petition, was dismissed by a single judge of the High Court whose judgment was affirmed in Special Appeal by the Division Bench.
Section 4(1) of the Act is in the following terms "Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be, needed for any public purpose, a notification to that effect shall be published in the Official Gazette, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality"; It is common ground that the Collector did not cause public notice of the substance of the notification to be given at convenient places in the locality where the land sought to be acquired was situated.
In other words there was no compliance whatsoever with the second part of sub section
( 1 ) of section 4.
The law as settled by this Court is that.
such a notice under second part of section 4(1) is mandatory and unless that notice is given in accordance with the provisions contained therein the entire acquisition proceedings are vitiated.
We may refer in this connection to Khub Chand & Others vs The State of Rajasthan, & Ors.
In that case this Court pointed out that the object is to give intimation to a person whose land is sought to be acquired of the intention of the officer to enter the land.
Under section 4(2) such a notice is a necessary condition for the exercise of the power of entry noncompliance with that condition makes the entry unlawful.
In State of Mysore vs Abdul Razak Sahib(2) no notices as required by section 4(1)of the Act were published in the locality till after the lapse of about 10 weeks.
The question for consideration ' (1) ; (2) C. A. 2361 of 1968 dt.
August 11.
700 was whether the notification issued under section 4 was a valid one.
This Court held that in the case of a notification under section 4 the law has prescribed that in addition to publication of a notice in the official gazette the Collector must also give publicity: of the substance of the notification in the concerned locality.
Unless both these conditions are satisfied section 4 of the Act cannot be said to have been complied with.
The purpose behind such a notice was that interested persons should know that the land is being acquired so.
as to prefer any objections under section 5 A which confers a valuable right.
Learned counsel for the State has, however, contended that according to these decisions it is only when the persons interested can file objections under section 5 A that the, public notice of the substance of the notification under section 4(1) by the Collector would be necessary whereas in the present case the, applicability of the provisions of section 5 A have been dispensed with under section 17(4) of the Act at the same time the notification under section 4(1) was issued.
It is wholly unnecessary that the interested parties should have the requisite information of the acquisition proceedings as they are not entitled to file objections under section 5A.
We are unable to accept such a contention.
In our judgment the provisions of section 4(1) cannot be held to be mandatory in one situation and directory in another.
Section 4(1) does not contemplate any distinction between those proceedings in which in exercise of the power under section 17 (4) the appropriate government directs that the provisions of section 5 A shall not apply and where such a direction has not been made dispensing with the applicability of section 5A.
It lays down in unequivocal and clear terms that both things have to be simultaneously done under section 4(1), i.e., a notification has to be published in the official gazette that the land is likely to be needed for any public purpose and the Collector has to cause notice to be given of the substance of such notification at convenient places in the locality in which the land is situated.
The scheme of section 4 is that after the steps contemplated under sub section
(1) have been taken the officer authorized by the Government can do the various acts set out in sub section
It is not required under section 17(4) of the principal Act that when a notification under section 4(1) is issued the direction should be made simultaneously if the State Government so desires.
Such an order or direction can be made even at a later stage.
The effect of the direction made under section 17(4) is that a declaration can be made under section 6 in respect of the land at any time after the Publication of the notification under section 4(1) and thereafter the Collector can take possession.
But as mentioned before in a given case the appropriate government may not consider it necessary to take action under section 17(4) simultaneously with the notification under section 4(1) and it may choose to invoke its provisions only at a later stage in view of any urgency that may crop 701 up.
Thus the construction of section 4(1) cannot be made to depend upon any action or direction which the State Government may choose to make under section 17 (4) of the principal Act.
In our opinion section 4 (1) has to be read as an integrated provision which contains two conditions; the first is that the notification in the official gazette must be published and the second is that the Collector has to cause public notice of the substance of such notification to be given.
These two conditions must be satisfied for the purpose of compliance with the provisions of section 4(1).
In the above view of the matter the appeals which involve the same point must succeed.
They are consequently allowed and the acquisition proceedings in question in both the appeals shall stand quashed.
The appellants will be entitled to costs in this Court One hearing fee.
S.B.W Appeals allowed.
[/INST]A notification was issued under section 4 of the Land Acquisition Act on October 15, 1960 for acquisition of the land in dispute.
The Collector did 'not.
cause Public notice of the substance of the notification to be announced at convenient places in the locality where the land sought to be acquired was situate, as required by the second part of section 4(1).
Under section 17(4) of the Act the provisions of section 5A were dispensed with.
On October 28, 1960 the notification under section 6 was issued.
The appellant was directed to be present before the Collector in pursuance of a notice under Sec. 9 on December 4, 1960.
On December 5, 1960 the appellant filed a petition under article 226 of the Constitution challenging the acquisition proceed ings.
The petition was dismissed by a single Judge of the High Court whose judgment was affirmed in Special Appeal by the Division Bench.
Allowing the appeals, HELD : (i) The law as settled by this Court is that such a notice under second part of section 4(1) is mandatory and unless that notice is given in accordance with the provisions contained therein the entire acquisition proceedings are vitiated.
Under section 4(2) such a notice is necessary condition for the exercise of the power of entry.
Non compliance with that condition makes the entry unlawful.
The purpose behind such a notice is that interested persons should know that the land is being acquired so as to prefer any objections under section 5 A which confers a valuable right., [699G] Khub Chand and Others vs The State of Rajasthan and Ors. ; and State of Mysore vs Abdul Razak Sahib, C.A. 2361 of 1968 dt.
August 11, 1972 referred to.
(ii)The construction of S.4(1) cannot be made to depend upon any action or direction which the State Govt.
may choose to make under section 17(4) of the principal Act.
section 4(1) has to be read as an integrated provision which contains two conditions both being mandatory.
, Requirement of public notice in the locality cannot be rendered directly by a notification under section 17(4) dispensing with hearing under Sec.
5A. [700H]
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<s>[INST] Summarize the judgementiminal Appeal No. 64 of 1955.
26 of 1952.
V. N. Sethi, for the appellant.
R. Ganapathy Iyer and R. H. Dhebar, for the respondent.
December 22.
BOSE J.
The only question in this appeal is whether the High Court bad in mind the principles 1287 we have enunciated about interference under section 417 of the Criminal Procedure Code when it allowed the appeal filed by the State against the acquittal of the appellant.
It is, in our opinion, well settled that it is not enough for the High Court to take a different view of the evidence; there must also be substantial and compelling reasons for holding that the trial Court was wrong: Amar Singh vs State of Punjab(1) and if the trial Court takes a reasonable view of the facts of the case, interference under section 417 is not justifiable unless there are really strong reasons for reversing that view: Surajpal Singh vs State(2).
The appellant was prosecuted under sections 302 and 447 of the Indian Penal Code for the murder of Aher Jetha Sida.
It is not necessary at the moment to set out the facts.
It is enough to say that the High Court based its conviction on a retracted confession plus certain circumstances which the learned Judges regarded as corroborative.
The learned Sessions Judge excluded the confession on the ground that it was neither voluntary nor true.
The learned Judge 's reasoning about its falsity is weak.
We do not think there is material on which a positive finding about its falsity can be reached but *hen he says that he is not satisfied that it was made voluntarily we find it impossible to hold that is a view which a judicial mind acting fairly could not reasonably reach.
The facts about that are as follows.
The offence was committed during the night of the 18th/19th May 1952.
The police were informed on the 19th morning at 9 30.
The police station was only 4 miles distant and they started investigation immediately.
The appellant was arrested on the 20th.
They are Bhura, Dewayat and Kana.
The investigating officer was not examined, so he could not be asked about this and the point could not be developed further.
But the appellant did cross examine some of the prosecution witnesses (1) ; , 423.
(2) ; , 201, 1288 about this and elicited contradictory replies.
Kana, P.W. 4, said "I was not arrested.
Dewayat, Barat Lakhmansingh was arrested first. .
All the three of us were released the same evening.
Dewayat, P.W. 5, denied that either he or any of the others were arrested and Maya, P.W. 15, said the same thing but Meraman, P.W. 11, insisted that Dewayat was arrested.
In the absence of the SubInspector it is difficult to say definitely that the appellant is wrong.
It is evident that the others were at least suspected, especially as one of the points made against the appellant is that he was seen sharpening an axe on the evening of the murder and Meraman, P.W. II, says that not only was the appellant sharpening an axe but so was Dewayat.
If this was a matter of suspicion against the appellant it must equally have been so against Dewayat and accordingly there is nothing improbable in the appellant 's statement about these other arrests; and as the SubInspector was not there to clear up the matter it is only fair to accept what the appellant says.
The appellant was sent to a Magistrate at 8 p.m. on the 21st for the recording of a confession but the Magistrate did not record it till the 3rd of June.
He was examined as P.W. 21 and explained that be gave the appellant ten days for reflection.
The length of time is unusual but no objection about its fairness to the accused could reasonably have been raised bad it not been for the fact that the judicial lock up is in charge of a police guard which is under the direct control, orders and supervision of the very SubInspector who had conducted the investigation and had earlier suspected and, according to the accused, actually arrested three other persons; and two of them are now called as prosecution witnesses to depose against the appellant about a matter on which the prosecution lay great importance, namely the sharpening of an axe.
The danger that they might exaggerate their stories or give false evidence in their anxiety to avert further suspicion from themselves is 1289 one that cannot be overlooked.
But apart from that.
This is the description of the judicial look up which the Magistrate who recorded the confession (P.W. 21) gives us: "A police guard is on 24 hours duty at the Bhanwad Judicial lock UP.
The prisoner is so placed within the compound wall that he can see the police all the 24 hours through the bars and can talk.
These police officers are under the police Sub Inspector.
A peon is working as warder.
He stays there on duty by day.
At night he is not there.
Clerk Jailor does not remain present there.
The police lock up is within the ail itself.
Inside the jail gate is the police lock up.
The police can go into the police lock up when they choose".
Now the appellant repudiated his confession at the earliest opportunity.
He told the Committing Court on 12 12 1952 in a written statement that "After my arrest by the police I was sent to jail.
At night time the police, having arrived at the jail, threatened me to make confession before Court as they directed.
The police frightened me with beating if I did not confess.
As a result of which, through fright, I have made a false confession as directed by the police and which I now deny".
And in his examination under section 342, Criminal Procedure Code, he said "I have made the confession because the police were threatening to beat me in the jail.
He repeated these statements in the Sessions Court.
He said he was beaten at the time of his arrest and then after he had been sent to the jail he said "I was daily threatened.
They said 'confess the offence of murder.
We shall get you on remand.
You will live as an impotent man '.
On the morning of the 3rd date, they took me to a big police officer after administering extraordinary threats.
Only now I come to know that he is the Magistrate". , Now it may be possible to take two views of this statement but there are two important factors in every criminal trial that weigh heavily in favour of an accused person,: I one is that the accused is entitled 1290 to the benefit of every reasonable doubt and the other.
, an off shoot of the same principle, that when an accused person offers a reasonable explanation of his conduct, then, even though be cannot prove his assertions, they should ordinarily be accepted unless the circumstances indicate that they are false.
What the appellant said in this case is not impossible; such things do happen and it is understandable that the police, frustrated in their endeavour to find the culprit among three other persons, should make an all out endeavour to make sure of the fourth.
We do not say that happened here.
But that it might have happened is obvious, and when the police absent themselves from the witness box and forestall attempts at cross examination, we find it impossible to hold that a judge acting judicially, and hearing in mind the important principles that we have outlined above, can be said to have reached an unreasonable or an unfair conclusion when he deduces from these circumstances that there is a reasonable probability that the appellant 's story is true and that therefore the confession was not voluntary.
The only reason that the learned High Court Judges give for displacing this conclusion is that "in Saurashtra. . though judicial and police lock ups are placed under a common guard the judicial lock ups are in charge of Magistrates and are looked after by their clerks and peons, who are assigned the duties of jailors and warders respectively" and they conclude "It is therefore difficult to say that the police could have effectively threatened him".
But what the learned Judges overlook is the fact that this control is only effective during the day and that at night neither the peon nor the clerk is there; and even during the day the "clerk cum jailor does not remain present there".
The appellant said in his written statement that "at night time the police, having arrived at the jail, threatened me, etc".
There is nothing on the record to displace this statement.
Had the Sub Inspector or some policeman been examined as a witness and had the appellant omitted to 1291 cross examine him about this, that might have raised an inference that what the accused said was only an afterthought.
But here we find that this defence about the involuntary nature of the confession due to threats by the police was raised at the outset, even in the Committing Magistrate 's Court, and was persisted in throughout and the appellant did what he could to build up this part of his case by cross examining the only official witness who did appear, namely the Magistrate who recorded the confession; and he succeeded in establishing that there was ample opportunity for coercion and threat.
The fact that this defence was raised in the Committal Court should have put the prosecution on its guard and the absence of refutation in the Sessions Court is a matter that can legitimately be used in the appellant 's favour.
In the circumstances, we do not think the High Court has squarely met the learned Sessions Judge 's reasoning and shown that there are compel ling reasons for holding that he was wrong; on the contrary, the learned Sessions Judge 's hesitation is grounded on well established judicial principles.
Now the law is clear that a confession cannot be used against an accused person unless the Court is satisfied that it was voluntary and at that stage the question whether it is true or false does not arise.
It is abhorrent to our notions of justice and fair play, and is also dangerous, to allow a man to be convicted on the strength of a confession unless it is made voluntarily and unless he realises that anything he says may be used against him; and any attempt by a person in authority to bully a person into making a confession or any threat or coercion would it once invalidate it if the fear was still operating on his mind at the time he makes the confession and if it "would appear to him reasonable for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him": section 24 of the Indian Evidence Act.
That is why the recording of a confession is hedged around with so many safeguards and is the 163 1292 reason why magistrates ordinarily allow a period for reflection and why an accused person is remanded to jail custody and is put out of the reach of the investigating police before he is asked to make his confession.
But the force of these precautions is destroyed when, instead of isolating the accused from the investigating police, he is for all practical purposes sent back to them for a period of ten days.
It can be accepted that this was done in good faith and we also think that the police acted properly in sending the appellant up for the recording of his confession on the 21st; they could not have anticipated this long remand to so called "jail custody".
But that is hardly the point.
The fact remains that the remand was made and that opened up the very kind of opportunities which the rules and prudence say should be guarded against; and, as the police are as human as others, a reasonable apprehension can be entertained that they would be less than human if they did not avail themselves of such a chance.
It will now be necessary to set out the facts.
The murdered man is one Jetha.
He married Sunder, P.W. 3, about three years before he was killed, but we gather that she had not gone to live with her husband; anyway, she was living in the appellant 's village Shiva with her people at the time of the occurrence and this afforded the pair opportunities for a long continued course of illicit amours, chances which it seems they were not slow to seize.
The husband lived in a village Kalawad which is three miles distant.
At the time of the murder arrangements were being made for Sunder to go to her husband and preparations for the ceremonial appropriate to such occasions were in the course of progress.
Both Courts hold that the motive is proved; and that can be accepted.
Next comes the evidence about the sharpening of the axe on the evening of the 18th at Kana 's house in the village Shiva.
The axe was produced in Court and Dewayat (P.W. 5) tells us that it was blunt.
Now there is nothing suspicious or unusual in a villager sharpening a blunt axe and, as we have pointed out, Meraman (P.W. 11) says that Dewayat was also sharpening an axe at the same time and place; and Dewayat is one of the other three against whom suspicion was directed; also, the fact that the axe was sharpened in this open way in the presence of a number of persons, including two strangers to the village, (the two Satwara witnesses, P.Ws. 9 and 10), points to innocence rather than guilt.
But the prosecution do not rely on this alone.
Their witnesses say that when the appellant was asked why he was sharpening his axe (Dewayat does not seem to have been put a similar question though he was doing the same thing) he replied that he wanted to offer a green coconut to Lord Shanker.
All the witnesses are agreed that this has no special significance and that they attributed no sinister meaning to it at the time.
It has acquired significance only in the light of after events.
Even here, there seems to us to be some danger that what the appellant really said has got mixed up, with what these witnesses say and, no doubt, honestly believe he said.
We say this because Sunder, P.W. 3, and her mother Vali, P.W. 2 tell us that the appellant came to the mother that evening and offered her eight annas in lieu of a coconut.
It seems that this is a customary offering given by relatives when a daughter leaves her parents ' home for her father in law 's place.
A reasonable doubt arises and the appellant is entitled to its benefit.
Next comes the evidence of Samant, P.W. 16, who says that be saw the appellant that night on the outskirts of Kalawad where the murder was committed.
He was wearing a false beard and a mask.
But that is the very question that the Court has to decide.
The only fact that this witness can be said to prove is that be saw a man that night wearing a false beard and mask who looked like the appellant.
Then we come to the recoveries.
The false beard and mask were found buried in the grounds of Dewayat 's house and the appellant is said to have recovered them in the presence of panchas.
But those discoveries are inadmissible in evidence because the police already knew where they were hidden.
Their information was not derived from the appellant but from Dewayat (one of the other suspects).
The way the police came to find this out was this.
Dewayat says that the appellant confessed the murder to him and told him that he had gone there wearing a false beard and a mask and that he had buried these articles 1295 under the Shami tree in the grounds of Dewayat 's bada.
Dewayat says "Next the police called me to go to Kalawad.
At that time Raja had been arrested. .
I was interrogated.
I spoke about the beard at that time.
Then the police came to my field with Raja".
If Meraman (P. W. 11), read with the Confused statement of Kana (P.W. 4), is to be believed, Dewayat was also under arrest either at the time or on the day before.
As the Sub Inspector was not examined, we are unable to clear this up and so are bound to give weight to the criticism of the Sessions Judge where he says "However, Dewayat confesses that his statement was not recorded on the 19th of May 1952 but was recorded on 20 5 1952 only after he was questioned by the police".
In our opinion, not only is this evidence about recovery not admissible but the danger that Samant (P.W. 16) mistook Dewayat, who was also under strong suspicion, or someone else who looked like the appellant, for the appellant, has not been excluded.
Lastly, there is the recovery of the axe.
But this was not hidden.
It was kept behind an earthen jar in the appellant 's house just as an axe might be normally kept in any average household.
The only point of suspicion is that the axe had stains of human blood on it.
But the difficulty we are faced with there is that the extent of the stains and their position is not disclosed.
We have had occasion to comment before on the very slovenly and ineffective way in which some Chemical Analysers do their duty.
This is another case in which what might otherwise have been a valuable piece of evidence has to be disregarded.
The axe was not recovered till the 21st and was standing where it could have been handled by other members of the household.
In any case, villagers frequently have slight cuts or scratches or a prick from a thorn on their persons and a few drops of blood could easily be transferred to an article like an axe without anybody noticing or knowing.
The important thing in a case like this, where everything 1296 is now seen to hang on this one fact, would be the extent of the blood and its position.
The postmortem reveals that the injuries were incised and that the bleeding was profuse.
When everything hangs on this one point, we cannot assume without proof that stains which might be compatible with either guilt or innocence must have been of what we might term the guilty kind.
On a careful examination of the evidence in this case, we are not satisfied that the circumstances disclose "strong and compelling reasons" to set aside the acquittal.
The appeal is allowed.
The conviction and sentence are set aside and the appellant is acquitted.
VENKATARAMA AYYAR J.
I regret I am unable to agree with the judgment just delivered.
The appellant belonged to the village of Katkora, and developed intimacy with an unmarried woman called Sunder in the neighboring village of Shiva.
Subsequently, Sunder was married to one Jetha of Kalawad, a village about 3 miles distant from Shiva.
It had been arranged to take Sunder to her husband 's house on the 19th May 1952, and for that purpose, Sida, the father of Jetha, had come to Shiva on the 18th.
The case of the prosecution was that the appellant was determined to prevent Sunder from joining her husband, and with that object he went to Kalawad on the night of the 18th, and killed Jetha with his axe, when be was asleep.
The murder came to light next morning, and the matter was reported to the police.
The appellant was arrested on 20 5 1952.
On his information the police recovered from his house at Katkora an axe, and the panchnama discloses that it then bad stains of blood which was subsequently found by the Chemical Analyst to be human.
The appellant next showed to the police 1297 a false beard, which was buried under a tree in the village of Shiva.
It is alleged that this was worn by the appellant at the time of the murder.
The Magistrate, however, decided to give him time "to cool down", and put him in judicial lock up.
He then went on duty to another place, and on his return, recorded the confession of the appellant, which is as follows: " I, having gone to his Wadi, have killed him.
I have killed him with axe.
I have killed him for the sake of Sunderbai.
Sunderbai is the wife of Jetha.
I had illicit connection with her.
I have murdered Jetha Sida with the idea of marrying Sunderbai.
I gave him an axe blow on the neck.
At that time I had put on a tunic and a pair of trousers.
I bad a turban on my head.
I had worn artificial beard.
After the murder, the artificial beard buried in the field of Dewanand Mope.
I took the axe to my house".
The appellant retracted this confession before the Committing Magistrate, as made under police beatings and threats.
He was then sent up to the Sessions Court, Halar, to take his trial, which took place with the aid of four assessors.
There was no direct evidence that the appellant had committed the murder.
The circumstantial evidence on which the prosecution sought to establish his guilt consisted of a confession made by him to the Magistrate, the recovery of the axe and the false beard, and the existence of strong motive.
There was, besides, a considerable body of evidence that on the 18th May the appellant was haunting the village of Shiva where Sunder was residing, with an axe in his hand and threats in his tongue.
The assessors were unanimously of the opinion that the appellant was guilty, but the Sessions Judge disagreed with them, and held that the confession was neither true nor voluntary, and that though there were strong grounds for suspecting him, the evidence was not sufficient to convict him, and so acquitted him.
There was an appeal against this judgment by the 1298 State to the High Court of Saurashtra.
The learned Judges, differing from the Sessions Judge, held that the confession was true and voluntary, that there was ample corroboration thereof in the evidence, and that even apart from it, the other facts proved by 'the prosecution were sufficient to establish the guilt of the appellant.
They accordingly set aside the order of acquittal passed by the Sessions Judge, convicted the appellant under section 302 and sentenced him to transportation for life.
It is against this judgment that the present appeal by special leave has been brought.
The question is whether having regard to the principles on which this Court exercises its jurisdiction under article 136, there are grounds for interference in this appeal.
Those principles are well settled and may briefly be recapitulated.
Prior to the abolition of the jurisdiction of the Privy Council, the law of this country did not in general provide for appeals against judgments of the High Courts in criminal matters.
Indeed, the policy of the legislature as expressed in sections 404 and 430 of the Code of Criminal Procedure and departing in this respect from that adopted in the Civil Procedure Code, has been that decisions of courts passed in criminal appeals should be final and subject to specified exceptions, not open to a further appeal on facts.
So far as judgments of the High Courts are concerned, the limitation on further appeal imposed by the Indian statutes could not affect the jurisdiction of the Privy Council to entertain appeals against them in the exercise of the prerogative of the Crown.
That was a power which the Privy Council possessed in respect of orders passed by the courts all over the Dominions, and the limits within which the Judicial Committee exercised that power were thus stated by Lord Watson in In re Abraham Mallory Dillett(1): "The rule has been repeatedly laid down, and has been invariably followed, that Her Majesty will not review or interfere with the course of criminal proceedings, unless it is shown that, by a disregard of (1) [1887] 12 A.G. 459, 467. 1299 the forms of legal process, or by some violation of the principles of natural justice, or otherwise,substantial and grave injustice has been done".
These principles were followed in quite a number of appeals against judgments of Indian courts in criminal matters.
In Dal Singh vs King Emperor(1), the Privy Council, stating the practice of the Judicial Committee in dealing with an appeal in a criminal case., observed: "The general principle is established that the Sovereign in Council does not act, in the exercise of the prerogative right to review the course of justice in criminal cases, in the free fashion of a fully constituted Court of criminal appeal.
A mere mistake on the part of the Court below.
Such questions are, as a general rule, treated as being for the final decision of the Courts below".
In Taba Singh vs Emperor(2) , Lord Buckmaster observed that the responsibility for the administration of criminal justice rested with the courts in India, and that the Board would not interfere "unless there has been some violation of the principles of justice or some disregard of legal principles".
In George Gfeller vs The King(3), which was an appeal from the Supreme Court of Nigeria, Sir George Rankin observed: "Their Lordships have repeated ad nauseam the statement that they do not sit as a Court of Criminal Appeal.
For them to interfere with a criminal sentence there must be something so irregular or so outrageous as to shock the very basis of justice: per Lord Dunedin in Mohindar Singh vs Emperor(4).
Muhammad Nawaz vs Emperor(5) (1) [1917] L.R. 44 I.A. 187, 140.
(2) [1924] I.L.R. (3) A.I.R. 1943 P.C. 211.
(4) [1932] L.R. 59 I.A. 233, 235.
(5) [1941] L.R. 68 I.A. 126, 129.
164 1300 On these principles, the Privy council refused in Macrea, Ex parts(1) leave to appeal on the ground of misdirection to the jury and in Mohindar Singh vs Emperor '(2)on the ground that a wrong view had been taken of the law.
Thus, the law was well settled that the Privy Council would not entertain appeals against judgments in criminal cases, unless there was an error of .
procedure or disregard of legal principles amounting to a denial of fair trial and resulting in grave injustice.
Under the Constitution, the position of the Supreme Court which has taken t he place of the Privy Council is this.
Its jurisdiction as that of the Privy Council in respect of criminal appeals may be classed under two categories, cases where a right of appeal is expressly granted by the Constitution or by the statutes, as for example, articles 132(1) and 134 (1) of the Constitution or section 411 A(4) of the Code of Criminal Procedure, in which the scope of the appeal would depend upon the terms of the enactments which confer the right; and cases ' where it is called upon to exercise its powers under article 136, which corresponds substantially to the prerogative jurisdiction exercised by the Privy Council with reference to which the practice of the Judicial Committee might usefully be referred to for indicating the area of interference.
The question was considered by this Court in Pritam Singh vs The State(3), where the law was thus laid down: "On a careful examination of article 136 along with the preceding article, it seems clear that the wide discretionary power with which this Court is invested under it is to be exercised sparingly and in exceptional cases only .
The Privy Council have tried to lay down from time to time certain principles for granting special leave in criminal cases, which were reviewed by the Federal Court in Kapildeo vs The King(4).
It is sufficient for our purpose to say that though we are not bound to follow them too (1) [1893] L.R. 20 I.A. 90.
(2) [1932] L.R. 59 I.A. 233, 235.
(3) , 458.
(4) A.I R. 1301 rigidly since the reasons constitutional and administrative, which sometimes weighed with the Privy Council, need not Weigh with us, yet some of those principles are useful as furnishing in many cases a sound basis for invoking the discretion of this Court in granting special.
Generally speaking, this Court will not grant special leave, unless it is shown that exceptional and special circumstances exist, that substantial and grave injustice has been done and that the case in question presents features of sufficient gravity to warrant a review of the decision appealed against".
The preceding article referred to in the opening passage is clearly article 134.
Article 134(1) confers a right of appeal to this Court in certain cases, in terms unqualified, on questions both of fact and of law, and if the scope of an appeal under article 136 is to be extended likewise to questions of fact, then article 134(1) would become superfluous.
It is obvious, that the intention of the Constitution in providing for an appeal on facts under articles 134(1) (a) and (b) was to exclude it under article 136, and it strongly supports the conclusion reached in Pritam Singh vs The State(1) that like the Privy Council this, Court would not function as a further court of appeal on facts in criminal cases.
Having regard to the principles enunciated in this decision.
, the question is whether there are sufficient grounds for interfering with the judgment of the High Court in the present appeal.
The point which the learned Judges had to decide in the appeal was whether it was the appellant who had murdered Jetha.
That is a pure question of fact turning on appreciation of evidence.
The High Court has gone into the matter fully, examined the entire evidence ex haustively, and in a judgment which is as closely reasoned as it is elaborate, has come to the conclusion that the guilt of the appellant has been established beyond all reasonable doubt.
Does that decision call for our interference in special appeal?.No, unless this Court is to 'function as a court of appeal on facts.
1302 But then, it is argued that the appeal before the High Court was one against acquittal, that such an appeal was subject to the limitation that there should be compelling reasons for reversing an order of acquittal, and that it would be open to this Court in special appeal to consider whether that limitation bad been duly observed.
Nevertheless, the view was taken at one time in some of the decisions that appeals against acquittals were in a less favoured position than appeals against convictions, and that an order of acquittal should not be interfered with in appeal except "where through the incompetence, stupidity or perversity of certain tribunal such unreasonable or distorted conclusions have been drawn from the evidence so as to produce a positive miscarriage of justice", or were "the lower court has so obstinately blundered or gone wrong as to produce a result mischievous at once to the admi nistration of justice and the interests of the public".
In Sheo Swarup vs King Emperor(5), the question was raised for determination by the Privy Council whether there was any legal basis for the limitation which the above decisions had placed on the right of the State to appeal under section 417.
Answering it in t e negative, Lord Russell observed that there was "no indication in the Code of any limitation or restriction on the High Court in the exercise of its powers as an appellate tribunal", that no distinction was drawn (1) All. 148.(2) All. 212.(3) (4) Rang.312, (5)[1934] L.R. 61 I.A. 398, 403, 404. 1303 "between an appeal from an order of 'acquittal and an appeal from a conviction", and that "no limitation should be placed upon that power unless it be found expressly stated in the Code".
He went on to remark at page 404 that, "the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witness, (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 doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who bad the advantage of seeing the witnesses".
These observations, however, do not mean that the scope of appeals against acquittals is different from that of other appeals.
They merely embody the principles applicable to all appeals, civil and criminal, to appeals alike against conviction and acquittal.
If the trial Judge does not accept the evidence adduced by him and dismisses his suit and he appeals, he has the burden still on him to prove on the evidence adduced that the promissory note is genuine, and in discharging that burden he has to show that the judgment appealed against is clearly wrong.
If all he can show is nicely balanced calculations which lead to the equal possibility of the judgment on either the one side or the other being right, he has not succeeded".
1304 has to establish on the evidence that the accused is guilty, and to establish it, it has to satisfy the court that the judgment of the trial court is erroneous.
The oft repeated observation that on acquittal the presumption of innocence becomes reinforced is merely this principle stated in terms of criminal law.
Likewise, the weight to be attached by an appellate court to a finding of the trial court based upon appreciation of oral evidence is the same whether it is given in a civil litigation or a criminal trial.
But generally speaking, it is undesirable to interfere with the findings of fact of the Trial Judge who sees and hears the witnesses and has an opportunity of noting their demeanour, especially in cases where the issue is simple and depends on the credit which attached to one or other of conflicting witnesses. .
In making these observations their Lordships have no desire to restrict the discretion of the Appellate Courts in India in the consideration of evidence".
It is clearly these principles that Lord Russell had in mind when he made the observations at page 404 in Sheo Swarup vs King Emperor2 ') quoted above, and that will be clear from the observation next following: "To state this, however, is only to say that the High Court in its conduct of the appeal should and will act in accordance with rules and principles well known and recognized in the administration of justice".
The scope of the decision in Sheo Swarup vs King Emperor(2) with special reference to the observations discussed above was thus explained by the Privy .Council in Nur Mohammad vs Emperor(3): "Their Lordships were referred, rightly enough to the decision of this Board in the case in Sheo
(1) [1915] L.R. 42 I.A. 110; 118.
(2) [1934] L.R. 61 I.A. 398.
Their Lordships do not think it necessary to read it all again, but would like to observe that there really is only one principle, in the strict use of the word, laid down there; that is that the High Court has full power to review at large all the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed".
These authorities establish beyond all controversy that an appeal against acquittal under section 417 stands, as regards the powers of an appellate court, on the same footing as appeals against conviction.
If that is the true scope of an appeal under section 417, where then does the doctrine of "compelling reasons" come in? And how do we fit it among the powers of a court under that section? The words compelling reasons" are not a legislative expression.
They are not found in section 417.
As far as I have been able to discover, it was first used in Surajpal Singh and others vs The State(2), wherein it was observed: "It is well established that in an appeal under section 417 of the Criminal Procedure Code, the High Court has full power to review the evidence upon which the order of acquittal was founded, but it is equally well settled that the presumption of innocence of the accused is further reinforced by his acquittal by the trial court, and the findings of the trial court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very substantial and compelling reasons".
Do the words "compelling reasons" in the above passage import a limitation on the powers of a court hearing an appeal under section 417 not applicable to a court hearing appeals against conviction?
If they do, then it is merely the old doctrine that appeals against acquittal are in a less favoured position, dressed in a new garb, and the reasons for rejecting it as unsound are as powerful as those which found favour with the Privy Council in Sheo Swarup vs King Em (1) [1934] L.R. 61 I.A. 398.(2) ; , 201.1306 peror(1) and Nur Mohammad vs Emperor(2).
But it is probable that these words were intended to express, as were the similar words of Lord Russell in Sheo Swarup vs King Emperor(1), that the court hearing an appeal under section 417 should observe the rules which all appellate courts should, before coming to a conclusion different from that of the trial court.
If so understood, the expression "compelling reason s" would be open to no comment.
But the expression has been quoted in later judgments, especially of the courts below, as if it laid down that in appeals against acquittal, the standard of proof required of the appellant was far higher than what the law casts on appellants in other appeals, and as the words "compelling reasons" are vague and indefinite to a degree, the result has not seldom been that even when Judges hearing appeals under section 417 were convinced of the guilt of the accused, they refrained from setting aside the order of acquittal owing to the dark and unknown prohibition contained in the expression.
That is the impression which I have formed in the appeals which have come before me.
in this Court.
There is always a danger in taking a phrase, attractive and telling in its context, out of it, and erecting it into a judicial formula as if it laid down a principle universal in its application.
And this danger is all the greater when the phrase is of undefined import, and relates to appreciation of evidence.
It is in the interests of the public that crimes should be punished, and it is with this object that section 417 confers on the State a right to appeal against acquittal.
To fetter this right through such expressions as "compelling reasons" would not merely be to legislate but to defeat the plain intention of the legislature that an accused in an appeal against acquittal should.
have only those rights which the State in an appeal against conviction or a respondent in a civil appeal has, and that he is to enjoy no special protection.
(1) [1934] L.R. 61 I.A. 398.
(2) A.I.R. 1945 P.C. 151.
1307 The fundamental objection to regarding the expression "compelling reasons" as a rigid formula governing the decision of an appeal under section 417 is that it puts a judgment of acquittal, however rendered, in a position of vantage which the law did not accord to it, and throws around the accused who gets an order of acquittal in the trial court a protection which the law did not intend to give him.
In my judgment, this is a situation in which great mischief must result, and the interests of the public must suffer ' If the expression "compelling reasons" does not impose a restriction on the powers of a court hearing an appeal under section 417, and if its true scope is to guide it in arriving at a decision, the question whether this Court can interfere with that decision on the ground that it is erroneous presents no difficulty.
The decision would then be one on a question of fact depending upon the appreciation of evidence, and this court cannot, on the principles enunciated in Pritam Singh vs The State(1) interfere with it.
This position is, in fact, concluded by the decisions in Sheo Swarup vs King Emperor(2) and Nur Mohammad vs Emperor(3).
In Sheo Swarup vs King Emperor(2), the Sessions Judge bad characterised the prosecution witnesses as liars, and disbelieving their evidence had acquitted the accused.
On appeal, the High Court reviewed the evidence, and differing from the trial court as to the weight to be attached to it, convicted the accused.
Declining to interfere with this judgment, the Privy Council observed that even though there was no express mention in the judgment of the High Court that it had considered all the particulars which an appellate court should consider in deciding an appeal, there was "no reason to think that the High Court had failed to take all proper matters into consideration in arriving at their conclusions of fact".
In Nur Mohammad vs Emperor(3), the judgment of the High Court did not disclose that it had considered the matters mentioned by Lord Russell at page 404 (1) ; (2) [1934] L R. 61 I.A. 398, (3) A.I.R 1945 P.C. 151.165 1308 in Sheo Swarup vs King Emperor(1).
Nevertheless, the Privy Council dismissed the appeal observing: "In the present case the High Court judgment shows that they have been at pains to deal in detail with the reasons given by the Sessions Judge for disbelieving the group of witnesses, the Patwari and the other three alleged eye witnesses.
They have dealt in detail with them, showing on the face of their judgment that there is no necessity to presume in this case that they have not done their duty. "
These decisions are authorities for the position that when in an appeal under section 417 the court considers the evidence and comes to its own conclusion the findings recorded by it are not, even when they result in a reversal of the order of acquittal, open to interference in special appeal.
Different considerations would have arisen if the law bad provided a further appeal on facts against those orders of reversal, in which case the appreciation of the evidence by the appellate court would be a matter open to review in the superior court.
That, as already stated, would be the position in an appeal under articles 132 (1) and 134(1) (a) and (b), but where, as in the present, no appeal on facts is provided, the decision of the High Court is not open to review by this Court under article 136 on the ground that there were no compelling reasons for the learned Judges to reverse an order of acquittal.
This is sufficient to entail the dismissal of this appeal.
But, having gone through the evidence, I am of opinion that even on the merits the decision of the High Court is correct.
The evidence against the appellant is wholly circumstantial, and consists mainly of (1) the existence of a strong motive, (2) the conduct of the appellant on the day when the murder was committed, (3) the recovery of a blood stained axe and a false beard at the instance of the appellant, and (4) a confession made by him 'before the Magistrate, P.W. 21, on 3 6 1952.
1309 macy with Sunder, and as she was to be taken on the 19th May 1952 to Kalawad to join her husband, he wanted to do away with him.
The appellant admitted that he had illicit connection with Sunder for some years, and the Sessions Judge also found, basing himself on the prosecution evidence, that the appellant was very much agitated on the night of the 18th.
A number of witnesses deposed that they saw him on 18 5 1952 at Shiva sharpening his axe, and that when questioned, he stated that be was going to offer a green coconut to Mahadevji, "can expression " say the learned Judges "which in common parlance means sacrifice of a head".
The appellant denied that he went to Shiva on the 18th, but his statement was, disbelieved by the Sessions Judge who was impressed by the quality and number of the prosecution witnesses, and both the courts have concurred in accepting their evidence on this point.
As for the recovery of the axe, the appellant admitted it, but he stated in his examination under section 342 that there was no blood on it when he showed it to the police.
The Sessions Judge, was not prepared to accept this statement and observed: "Accused admits that this is his axe.
In light of chemical analysis, there is no doubt that there were stains of human blood on the axe.
It is also mentioned in the Pancbnama, exhibit 21 itself that the Panch had suspected that there were marks of human blood on this axe".
But all the same, he discounted the value of this evi dence, because according to him, in view of certain circumstances "the presence of human blood on the axe is by no means conclusive", and that "at best it raises a suspicion against the accused".
Those circumstances are three: Firstly, the panch who witnessed the recovery at Katkora belonged to Kalawad, and the criticism is that a local panch ought to have been got to witness the same.
The learned Judges of the High Court did not think much of this criticism, as the recovery at Katkora had to be made in pursuance of the statement given by the appellant at Kalawad, 1310 and the police might have reasonably thought that the same panch should be present at both the places.
As the Sessions Judge has accepted the evidence of the panch that there were blood stains at the time of the recovery of the axe, his criticism on this point lacks substance.
Secondly, though the recovery was made on 21 5 1952, it was sent to the medical officer for report only on 27 5 1952, and the delay is suspicious.
It is difficult to follow this criticism.
When once the conclusion is reached that there was blood on the axe when it was recovered, this criticism has no meaning unless it is intended to suggest that the police required some time to wash the blood which was on the axe at the, time of its recovery and to substitute human blood therefore.
There is nothing in the evidence to support a suggestion so grotesque, and as observed by the learned Judges, if the police wanted to substitute blood, they would not have taken so much time over it.
Thirdly, in despatching the blood to the Chemical Analyst, the medical officer sent the parcel containing the blood scrapings to the railway station, not through his own peon or the compounder in the hospital but through the local police, and that, according to the Sessions Judge, is a suspicious circumstance.
As the parcel was received intact by the Chemical Analyst at Bombay, it is difficult to see what the point of the criticism is.
The Sessions Judge himself observes: "I do not believe that the police have intercepted this parcel and they deliberately sent an axe with human blood.
However, there is no doubt that the procedure adopted by the doctor is wrong, and is capable of mischief".
It has not been explained and it is not possible to divine what that mischief could have been in this case.
And who could have been the mischief maker unless it be the police? The Sessions Judge stated that be did not believe the suggestion made against the police, but that nevertheless is the assumption underlying his comment.
"Anxious to wound, afraid to strike" would appropriately describe the situation.
The learned Judges disagreed with the reasoning of 1311 the Sessions Judge, and held that as the appellant had admitted the recovery of the axe and as there was human blood on it at that time, it was clear and cogent evidence pointing to his guilt.
I am unable to find any answer to this reasoning.
Pausing here, it will be seen that in discussing the question of the recovery of the blood stained axe, as indeed throughout the judgment, the learned Sessions Judge has taken up an, attitude of distrust towards the police for which it is difficult to find any justification in the evidence an attitude which, I regret to say, is becoming a growing feature of judgments of subordinate Magistrates.
When at the trial, it appears to the court that a police officer has, in the discharge of his duty, abused his position and acted oppressively, it is no doubt its clear duty to express its stern disapproval of his conduct.
But it is equally its duty not to assume such conduct on the part of the officer gratuitously and as a matter of course, when there is, as in this case, no reasonable basis for it in the evidence or in the circumstances.
The presumption that a person acts honestly applies as much in favour of a police officer as of other persons, and it is not a judicial approach to distrust and suspect him without good grounds therefore.
Such an attitude could do neither credit to the magistracy nor good to the public.
It can only run down the prestige of the police administration.
It is the case of the prosecution that the appellant unearthed a false beard, which he had buried underneath a shami tree in Shiva, and that he had worn it at the time of the murder.
The appellant did not deny the recovery, but stated that it was not he that had uncovered it but the jamadar.
Both the courts below have accepted the version of the prosecution as true, but while the Sessions Judge held that it was not sufficient to implicate the appellant, the learned Judges held otherwise.
P.W. 16 deposed that he saw the appellant at midnight on the 18th May on the outskirts of Kalawad wearing a false beard, and the comment of the Sessions Judge on this evidence is: " I do not see bow this evidence will prove the 1312 prosecution case beyond reasonable doubt.
At best, it will suffice to raise suspicion against the accused".
But if the beard was discovered by the appellant, then surely it is a valuable link in the chain of evidence against him.
Then we come to the confession made by the appellant to P.W. 21.
The Magistrate has deposed that he had satisfied himself that it was voluntary, before he recorded it.
Now, the facts relating to this matter are these, The appellant was, as already stated, arrested on the 20th May and discoveries of the axe and the false beard were made through him, and on the 21st he was sent to the Magistrate with a letter that he desired to make a confession.
The Magistrate has given evidence that he did not record the confession at once, as he wanted the appellant "to cool down", and accordingly gave him ten days to reflect, and committed him to judicial lock up.
There is nothing improper in this, and indeed ' it is a commendable precaution for ensuring that the confession was made voluntary.
From 21 5 1952 to 3 6 1952 the appellant continued in judicial lock up, and this is a circumstance which normally should negative the possibility of there having been a threat or inducement.
But the Sessions Judge declined to attach any weight to it, because both the police lock up and the judicial lock up were situated in the same compound, separated by a distance of 20 feet, and were guarded by the same police officers, and though the judicial lockup had its own warder and clerk jailor, they kept watch only during daytime, and therefore even though the police could have had no access inside the lock up, they had "every opportunity to threaten and bully the accused".
The Sessions Judge accordingly held that the confession was not voluntary.
On appeal, the learned Judges came to a different conclusion.
They considered that the possibility of threats having been uttered through the bars was too remote and unsubstantial to form the 'basis for any 1313 conclusion, and that all the circumstances indicated that the confession was voluntary.
These are the salient points that emerge out of the evidence.
The position may be thus summed up: (1) No special weight attaches to the findings of the Sessions Judge on the around that they are based on the evidence of witnesses whom he had the advantage of seeing in the box, and believed.
The oral evidence was all on the side of the prosecution, and that was substantially accepted by the Sessions Judge.
His judgment is based on the probabilities of the case, and of them, the learned Judges were at least as competent to judge, as he.
(2) The finding of the Sessions Judge in so far as it related to the recovery of bloodstained axe was clearly erroneous, as it did not follow on his reasoning.
(3) As regards the confession, the conclusion of the Sessions Judge rests on nothing tangible, and is largely coloured by a general distrust of the police, not based on evidence or justified by the circumstances.
(4) The learned Judges were of the opinion that even excluding the confession, the other evidence in the case was sufficient to establish the guilt of the appellant.
(5) All the four assessors were of the opinion that the appellant was guilty.
Now, returning to the two questions which have formed the basis of the preceding discussion, (1) what is it that the High Court has to do in exercise of its powers under section 417, having regard to the findings reached by it and set out above, and how does the doctrine of "compelling reasons" bear upon it? (2) What are the grounds on which we can interfere with its decision? A court hearing an appeal under section 417 might be confronted with three possibilities: (i) It might come to the same conclusion as the trial court on the questions in issue, in which case, of course, it should dismiss the appeal; (ii) It might consider that the evidence was not clear and conclusive one way or the other, in which case its duty 1314 as an appellate court would be not to interfere with the judgment appealed against; and (iii) it might come to a conclusion on an appreciation of the evidence opposite to that reached by the court of first instance, in which case it would clearly be its duty in exercise of its powers under section 417 to set aside the order of acquittal.
Wherein does the theory of "compelling reasons" come in the scheme? There is no need for it in the second category, because even apart from it, the same result must, as already stated, follow on the principles applicable to all courts of appeal.
Then, there remains the third category of cases.
If the High Court comes to the conclusion on an appreciation of the evidence that the appellant is guilty, has it, nevertheless, to confirm the order of acquittal on the basis of this theory? Surely not, as that would render the right conferred by section 417 illusory.
It has no independent value as bearing on its powers under section 417.
If that is the true position, it follows on the principles laid down in Sheo Swarup vs King Emperor(1) and Nur Mohammad vs Emperor(2) and in Pritam Singh vs The State(3) that this Court cannot interfere with the orders passed under section 417 merely on the ground that the findings of fact were not justified, having regard to the doctrine of "compelling reasons".
In my opinion, this appeal ought to be dismissed.
ORDER.
BY THE COURT.
In accordance with the Judgment of the majority this Appeal is allowed.
The conviction and sentence are set aside and the Appellant is acquitted.
(1) [1934] L.R. 61 I.A.398.
(2) A.I.R. 1945 P.C. 151.
[/INST]Per BOSE, and CHANDRASEKHARA AIYAR JJ.
(VENKATKRAMA AYYAR J. dissenting).
It is well settled that the High Court should not set aside an order of acquittal under section 417 of the Code of Criminal Procedure simply because it differs from the trial Court as to the appreciation of the evidence; there must be substantial and compelling reasons for doing so.
Where the trial Court takes a reason.
able view of the facts of the case, interference is not justifiable unless there are really strong reasons for holding otherwise.
Amar Singh vs State of Punjab ([1953] S.C.R. 418) and Surajpal Singh vs State ([1952] S.C.R. 193), referred to.
The accused in a criminal case must be given the benefit of every reasonable doubt and, therefore, when he offers a reasonable explanation of his conduct, although he cannot prove it, that explanation should ordinarily be accepted unless the circumstances indicate that it is false.
Consequently, in a case where an accused person, charged under SS. 302 and 447 of the Indian Penal Code, repudiated his confession at the earliest opportunity as having been made under Police threats administered to him at night while in jail custody and there was evidence to show that the Police had access to him there, and there was nothing to displace his statement that he was threatened by them, the finding of the Sessions Judge that the confession was not voluntary in character was fair and reasonable and in the absence of any compelling reason the High Court should not have set aside the order of acquittal.
1286 As the evidence otherwise was insufficient to warrant a conviction the accused was acquitted.
Per VENKATARAMA AYYAR J.
This is not a case in which the Supreme Court should interfere under article 136 of the Constitution.
The Constitution by specifically providing for an appeal on facts under article 134(1) intended to exclude it under article 136 and like the Privy Council this Court will not function as a further Court of appeal on facts in criminal cases.
The fact that the appeal in the High Court was one against an order of acquittal makes no difference as the powers of an appellate Court are the same in all appeals, whether against acquittal or against conviction.
Pritam Singh vs The State ([1950] S.C.R. 453), Sheo Swarup vs King Emperor ([1934] L.R. 61 I.A. 398) and Nur Mohammad vs Emperor (A.I.R. , relied on.
The expression "compelling reasons" used in Surajpal Singh 's case should be read only in the context of that case and should not be treated as a rigid formula so as to restrict the powers of the Court, or the right of appeal conferred on the State by section 417 of the Code or to place a judgment of acquittal in a position of vantage and give the accused a protection which the law does not afford to them.
Such a formula can be of use only as guiding principle for the appellate Courts in deter mining questions of fact.
Surajpal Singh vs The State ([1952] S.C.R. 193), considered.
Consequently, the findings arrived at by the High Court were not open to review by this Court under article 136 of the Constitution and as there was evidence apart from the retracted confession to support the view, it had taken on merits, the appeal must be dismissed.
</s>
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<s>[INST] Summarize the judgementAppeals Nos.
23 5 and 236 of 1967.
Appeals from the judgment and order dated March 21, 1966 of the Mysore High Court in Income tax Referred Case No. 19 of 1964.
Jagadish Swarup, Solicitor General, G. C. Sharma and B. D. Sharma, for the appellant (in both the appeals).
R. Gopalakrishnan, for the respondent (in both the appeals).
353 The Judgment of the court was delivered by Grover, J.
These appeals by certificate arise out of a common judgment of the Mysore High Court in references made with regard to the assessments relating to the assessment years 1953 54 and 1954 55.
For the assessment year 1953 54 the assessee was served with a notice under section 22(2) of the Income tax Act 1922, hereinafter called the "Act", on March 5, 1954.
A similar notice was served in respect of the assessment year 1954 55 on June 5,.1954.
The assessee failed to file any return in compliance with the notices.
Thereupon he was served with notices under section 22(4) for both the assessment years and was required to produce accounts on specified dates.
None appeared on any one of those dates but applications were submitted praying for adjournment on certain grounds.
The Income tax Officer was not satisfied with the reasons given for seeking adjournments and he proceeded to make the assessment under section 23 (4) of the Act.
The assessee moved the Income Tax Officer under section 27 to reopen the assessments on the grounds given in the applications filed in that behalf.
The Income Tax ' Officer appeared to be satisfied that there was sufficient cause for noncompliance with the notices issued under section 22(4) of the Act but he was of the view that the assessee had been a habitual defaulter inasmuch as he had not submitted the return under section 22 (2) even for several preceding years for which the assessments had to be completed under section 23(4) of the Act.
He declined to reopen the assessment under section 27.
Appeals to the Appellate Assistant Commissioner were filed.
According to the Appellate Assistant Commissioner sufficient cause for non compliance with one of the statutory notices i.e. the notice under section 22(4) could not constitute 'sufficient cause for non compliance with any other statutory notice (in this case the notice under section 22(2)).
The appellate tribunal dismissed the appeals filed by the assessee upholding the view of the departmental authorities.
On the tribunal having declined to refer the questions of law which were sought to be referred the High Court directed the Tribunal to state a case and refer the following questions of law "Whether the Income Tax Officer having recorded a finding that there was sufficient cause for non compliance with the notice issued under Section 22(4), was not bound to cancel the assessment made under Sec.
23(4) and to proceed to make a fresh assessment even though there was no sufficient cause for non compliance with the notice under Sec.
22(2) ?" 354 The High Court answered the question in favour of the assessee.
Section 27 of the Act is in the following terms : section 27.
"Cancellation of assessment when cause is shown.
Where an assessee within one month from the service of a notice of demand issued as hereinafter provided, satisfies the Income Tax Officer that he was prevented by sufficient cause from making the return re quired by section 22, or that he did not receive the notice issued under sub section (4) of section 22, or sub section (2) of section 23, or that he had not a reasonable opportunity to comply, or was prevented by sufficient cause from complying with the terms of the last mentioned notices, the Income Tax Officer shall cancel the assessment and proceed to make a fresh assessment in accor dance with the provisions of section 23.
" Section 22 provides for return of income.
Sub section ( 1 ) relates to a general notice to be given each year by the Income Tax Officer by publication in the press or in the prescribed manner.
Subsection (2) relates to an individual notice.
According to sub section
(4) the Income Tax Officer may serve on any person who has made a return under sub section
(1) or upon whom a notice has been served under sub section
(2) a notice requiring him on a date to be specified to produce or cause to be produced such account or documents as the Income Tax Officer may require or to furnish in writing and verified in the prescribed manner in such form and on such points or matters as may be required for the purpose of the section including, with the previous approval of the Commissioner, a statement of assets and liabilities not included in the accounts.
Under section 23 if the Income tax Officer is satisfied without requiring the presence of the assessee or the production by him of any evidence that a return made under section 22 is correct and complete he has to assess the total income of the assessee on the basis of the return filed by him [sub. section (1)].
If he is not so satisfied he must serve a notice requiring the person who has made the return to attend at his office or to produce or cause to be produced any evidence on which such person may rely in support of his return [sub. section (2)].
Under sub section
(3) the Income tax Officer after hearing such evidence as may be produced by the person making the return in response to the notice issued under sub section
(2) or such other evidence as the Income tax Officer may require to be produced on specified points has to assess the total income of the assessee.
It is provided by sub section
(4) "If any person fails to make the return required by any notice given under sub section (2) of section 22 and 355 has not made a return or a revised return under subsection (3) of the same Election or falls to comply with all the terms of a notice issued under sub section (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under sub section (2) of this section, the Income Tax Officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. .
The High Court considered that the provisions of section 27 were not cumulative but disjunctive and so the assessee could claim cancellation of the assessment on one of the grounds on which such cancellation could be sought under the section.
According to the High Court it followed that even if there was no sufficient cause for noncompliance with a notice issued under section 22(2) so long as there was sufficient reason for non compliance with the notice issued under section 22(4) the assessee could ask for the cancellation of the assessment.
In our judgment the view of the High Court cannot be sustained.
The clear import of section 23(4) is that on committing any one of the defaults mentioned therein the Income tax Officer is bound to make the assessment to the best of his judgment.
In other words if a person fails to make the return, required by a notice under section 22(2) and he has further not made return or a revised return under sub 5.
(3) of the same section the Income tax Officer must make an assessment under section, 23(4).
Similarly if that person fails to comply with all the terms of the notice issued under section 22(4) or if he fails to comply with all the terms of the notice issued under section 23(3) the Income tax Officer must proceed to make an assessment to the best of his judgment.
Section 27 empowers the Income tax Officer to cancel the assessment when sufficient cause is shown but such causer has to be shown for each default.
For the sake of illustration, if an assessee makes a default under section 22(2) by not filing a return, pursuant to a notice received under that section and he also does not comply with the notice under section 22(4) he must show sufficient cause for non compliance with both the provisions and he cannot get the assessment cancelled merely by showing good cause for one of the two defaults.
Although the word "or" which is disjunc tive is used in section 27 it has to be read in a reasonable and harmonious way and in conjunction with section 23(4).
It is inconceivable that the legislature could ever intended that in case of ' multiple defaults for each one of which an ex parte best judgment.
assessment has to be made the assessee can ask for cancellation of ' the assessment by merely showing cause for one of such defaults.
In our opinion the Bombay High Court in Chiranjilal Tibrewala vs 356 The Commissioner of Income tax, Bombay City II(1) was right in holding that in circumstances similar to the present case the assessee cannot ask for cancellation under section 27 of an assessment made under section 23 (4).
In this view of the matter the judgment of the High Court has to be set aside, and the question has to be answered against the assessee and in favour of the appellant.
The appeals are accordingly allowed with costs One hearing fee.
V.P.S. Appeals allowed.
[/INST]Notices under section 22(2) of the Income tax Act, 1922, were not complied with by the respondent (assessee) and the Income tax Officer issued notices under section 22(4).
Since they were also not complied with the Income tax Officer made a best judgment assessment under section 23(4).
Thereupon, the assessee applied under section 27 for reopening the assessment.
The Income tax Officer found that there was sufficient cause for noncompliance with the notices under section 22(4), but, as there was no sufficient cause for non compliance with the notices under section 22(2), he declined to reopen the assessment.
The order was confirmed in ' appeal and by the Tribunal.
But the High Court held in favour of the assessee.
In appeal to this Court, HELD : Under section 23(4) on the assessee committing any of the defaults mentioned therein, namely, failure to make a return as required by a notice under section 22(2) or a revised return under section 22(3) or noncompliance with the terms of a notice under section 22(4) or failure to comply with the terms of a notice under section 23(2), the Income tax Officer is bound to make a best judgment assessment.
Section 27 empowers, the Income tax OfFicer to cancel the assessment when sufficient cause is shown; but, such cause has to be shown for each default.
Therefore, if the assessee makes default by not filing a return pursuant to a notice under section 22(2) and also does not comply with a notice under section 22(4) he must show sufficient cause for non compliance with both the provisions.
The Legislature could not have intended that in case of multiple defaults, for each one of which an ex parts best judgment assessment has to be made, the assessee can ask for cancellation of the assessment by merely showing cause for one of such defaults.
[355 D H] Chiranjilal Tibrewala vs Commissioner of Income tax, Bombay City H, , approved.
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<s>[INST] Summarize the judgementCivil Appeal No. 916 of 1992.
From the Judgment and Order dated 18.6.1991 of the Bombay High Court in W.P.N. 1914 of 1991.
Harish N. Salve, Rajiv K. Garg and N.D. Garg for the Appellant.
K.T.S. Tulsi, Addl.
Solicitor General, A. Subba Rao, P. Parmeswaran and A.D.N. Rao for the Respondents.
The Judgment of the Court was delivered by 999 KASLIWAL, J.
Special leave granted.
This appeal has been filed against the judgment of the Bombay High Court dated 18.6.1991.
The short controversy raised in the present case is whether the cloves imported by the appellant fall within Item 169 in List 8 of appendix 6 or fall within Paragraph 167 of Chapter XIII of the Import and Export Policy April 1990 March 1993.
Brief facts of the case are that the appellant obtained by transfer an Import Lincence No. 3412179 dated 29th November, 1990 for Rs. 16,10,700 for the import of admissible Items as per Para 220 (2) (3) (4) & (6) of the Import Policy 1990 93 Vol.
After acquisition of the aforesaid additional licence, the appellant placed an order for the supply of about 200 bags of Madagascar cloves No. 1 quality to a firm of Singapore.
The appellant opened a letter of credit dated 6.5.1991 in favour of the foreign supplier.
On receipt of the letter of credit the foreign supplier shipped the above mentioned goods in favour of the appellant.
On arrival of the goods at Bombay Port, (e) appellant filed Bill of Entry for the clearance of the goods for home consumption on 30th May, 1991.
The appellant claimed clearance of the goods against the additional licence on the ground that the cloves were covered under Item 169 of Appendix 6, List 8, Part I of the Import and Export Policy being "Drugs/Drug intermediate not elsewhere specified.
" The Department relied on Para 167 which dealt with the import of spices and took the stand that the cloves could be imported only against specific licence relating to cloves.
The appellant in the above circumstances filed a Writ Petition in the High Court of Bombay seeking a mandamus against the respondent to clear the goods against the Bill of Entry filed by the appellant.
The High Court held that th cloves cannot fall within the expression "Drugs/Drug intermediate not elsewhere specified" and the import of the cloves without specific licence was not permissible.
It was thus held that the action of the Customs Authorities in not permitting clearance cannot be faulted and the licence relied upon by the appellant was not valid for the import of cloves.
It was contended by Mr. Harish Salve, Learned Counsel for the appellant that though the use of clove as a spice is not in much dispute, but at the same time it cannot be disputed that clove is a Drug/Drug intermediate.
It was submitted that in popular sense and trade parlance, clove is also used as drug intermediate and that being so the appellant was 1000 entitled to import the cloves against the additional licence under para 220 of the Policy.
It was also submitted that in the Import Policies of 1982 83 to 1985 86 cloves were specified as crude drugs.
It was thus submitted that when clove was considered as crude drugs, there was no justification now to hold that it did not fall within Item 169 which provided for Drug/Drug intermediates.
It was further argued that cloves are used for treatment of dyspepsia and flatulence.
It is also used to relieve nausea and vomiting.
Clove oil is famous for medicinal use and specially for tooth problems.
It was also argued that in the Indian Materia Medica by A.K. Nadkarni the use of the cloves has been stated as follows : "Uses Cloves(unopened flower buds) are generally used as spice in curry foods and condiments.
Medicinally they are used to correct griping caused by purgatives, relieve flatulence, various forms of gastric irritability, colic, dyspepsia, and to increase the flow of saliva.
Combined with other spices and rock salt clove is given to relieve colic, indigestion and vomiting and to many other uses.
" It was submitted that in the Indian Pharmaceutical Codex issued by the Counsel of Scientific & Industrial Research, New Delhi the Action and Uses of cloves have been stated as under : "Action and Uses Clove is one of the most stimulant of aromatics.
It is carminative and is used in treatment of flatulence and dyspepsia.
It is sometimes administered in the form of powder or an infusion to relieve nausea and vomiting, correct flatulence and excite languid digestion.
" It was thus argued that the High Court committed an error in holding that clove was not a Drug/Drug intermediate.
On the other hand, it was submitted by Mr. Tulsi, Learned Additional Solicitor General that Para 167 of the Policy clearly provided that import of cloves could be allowed only against licences and there was no question of applying Item 169 of List 8 Appendix 6 which provided for Drugs/Drug intermediate not elsewhere specified.
It was also submitted that in the common parlance as well as in trade and commerce, the cloves are always considered as spice and not as a drug or drug intermediate.
It was submitted that the cloves are sold as spice in a `Kirana ' shop and not as drug in a chemist shop.
1001 In order to appreciate the controversy raised before us it would be necessary to reproduce Para 167 contained in Chapter XIII and Item 169 appearing in Part I of List 8, Appendix 6 of the Import & Export Policy, 1991 93 Vol.
I: "Import of Spices: 167.
(1) Import of (1) Cloves (2) Cinnamon/Cassia (3) Nutmeg and (4) Mace will be allowed against licences.
Such licences may be granted to those who imported these items during any of the financial years from 1983 84 to the preceding licensing year.
Import licences will be issued on the basis of the best year 's imports of an item from 1983 84 to the proceding licensing year.
The percentage entitlement as well as minimum value of licence will be as notified by the Chief Controller of Imports & Exports.
From the licensing year 1991 92, applicants will be required to furnish evidence of exports of Indian spices, during the preceding licensing year, for a value equal to the value of the import licence granted during the preceding licensing year.
Only exports of (1) Cardamom (small), (2) all Spices/spice products in approved consumer packs of 450 gms.
or less except spice oils and oleoresins and saffron (3) Herbal spices such as rosemary, thyme, terragon, sage, etc.
(4) Vanila (5) Black cumin, (6) Star anise, (7) Kokum, (8) Garlic, (9) Cardamom (large), (10) Bishopsweed, (11) Caraway and (12) Cumin seed, will be taken into account for the above purpose.
Items may be added or deleted by the Chief Controller of Imports & Exports as and when considered necessary in public interest.
(2) Exports referred to in sub paragraph (1) above should be direct exports by the applicant in his own name with the export proceeds i.e. the foreign exchange realisation in his own name, or exports through the Consortium of Spices Exporters, membership of which is to be confined only to dealers of spices who want to avail of the facility for exports through the Consortium.
Documents required to be furnished alongwith the application for grant of licences for spices shall be as provided in sub paragraph 166(6) above.
(3) Actual users who have no past imports will also be eligible 1002 for licence on the recommendation of the sponsoring authority and approval by the Headquarters Supplementary Licensing Committee.
(4) Applications for import of spices are to be made to the licensing authority concerned.
" Item 169 in Part I of List 8, Appendix 6 : "Drugs/Drug intermediates not elsewhere specified.
" In the present case we are concerned with the Import Policy of 1990 93 and not any earlier Policy.
The appellant had obtained the licence on 29th November, 1990 and has imported the cloves in May, 1991 and as such the import of cloves in question shall be governed by the provisions contained in the Import Policy of April 1990 93, and not by any meaning given to cloves in any earlier Policy.
It cannot be disputed that the Government has power to modify or change its Import and Export Policy.
Para 167 under Chapter XIII of the present Policy clearly provides the heading Import of Spices and under this heading of spices it further makes a mention that import of cloves, Cinnamon/Cassia, Nutmeg and Mace will be allowed against licences.
Thus, it is clear beyond any doubt that cloves have been included under the heading spices and the import of cloves is only permissible against specific licences obtained in the manner provided in Para 167.
In face of the above provision dealing with the import of spices which specifically includes cloves, the general provision of Item 169 mentioning Drugs/Drug intermediates cannot be applied.
When Para 167 provides for obtaining specific licence for cloves, there is no necessity of finding its meaning from Policies or its use as medicine.
As regards import of spices, there is a clear provision under Para 167 and it would govern the import of cloves.
That part we are in agreement with the view taken by the High Court that in the common parlance as well as in trade and commerce, clove is treated as spice and not drug.
It is a matter of common knowledge that the cloves are sold in a `Kirana ' shop and not in the shop of a chemist or druggist.
Thus, we find no error in the view taken by the High Court and this appeal having no force is dismissed with no order as to costs.
N.P.V. Appeal dismissed.
[/INST]The appellant obtained, by transfer, an Import Licence for the import of admissible Items as per Para 220 (2), (3), (4) and (6) of the Import Policy 1990 93 Vol.
I and placed an order on a foreign firm for the supply of cloves No. 1 quality.
On arrival of the goods in the Indian Port, the appellant filed Bill of Entry for the clearance of the goods for home consumption, and claimed clearance of the goods against the additional licence on the ground that the cloves were covered under Item 169 of Appendix 6, List 8, Part I of the Import and Export Policy, being Drugs/Drug intermediate not elsewhere specified.
" The Department relying on Para 167, which dealt with the import of spices, took the view that the cloves could be imported only against specific licence relating to cloves.
Hence the appellant filed a writ petition in the High Court for a direction to the respondent to clear the goods against the Bill of Entry filed by the appellant.
The High Court held that cloves could not fall within the expression "Drugs/Drug intermediate not elsewhere specified" and the import of the cloves without specific licence was not permissible, and that the licence relied upon by the appellant was not valid for the import of cloves.
In the appeal before this Court, it was contended on behalf of the appellant importer that in popular sense and trade parlance, clove was also used as drug intermediate, and that in the Import Policies of 1982 83 to 1985 86 cloves were specified as crude drug and the cloves and clove oil were used for treatment of dyspepsia, flatulence, etc., and tooth problems and, therefore, the High Court committed an error in holding that clove 998 was not a Drug/Drug intermediate, and that it did not fall within Item 169.
Dismissing the appeal of the Importer, this Court, HELD : 1.1 Para 167 under Chapter XIII of the Import Policy of April 1990 93 clearly provides the heading Import of Spices and under this heading of spices it further makes a mention that import of Cloves, Cinnamon/Cassia, Nutmeg and Mace will be allowed against licences.
Thus, it is clear beyond any doubt that cloves have been included under the heading Spices and the import of cloves is only permissible against specific licences obtained in the manner provided in Para 167.
In the face of this provision, dealing with the import of spices, which specifically includes cloves, the general provision of Item 169 mentioning Drugs/Drug intermediates cannot be applied.
[1002D E] 1.2 In the instant case the appellant had obtained the licence in November, 1990 and has imported the cloves in May, 1991 and as such the import of cloves in question, shall be governed by the provisions contained in the Import Policy of April, 1990 93, and not by any meaning given to cloves in any earlier Policy.
Therefore, when para 167 provides of obtaining specific licence for cloves, there is no necessity of finding its meaning from earlier Policies or its use as medicine.
There is a clear provision under Para 167 as regards import of spices and it would govern the import of cloves.
That apart, the High Court was right in holding that in the common parlance as well as in trade and commerce, clove is treated as spice and not drug.
It is a matter of common knowledge that the cloves are sold in a `Kirana ' shop and not in the shop of a chemist or druggist.
[1002C, F G]
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<s>[INST] Summarize the judgementCivil Appeal No. 1784 of 1966.
Appeal from the judgment and decree dated March 17, 1952 of the Bombay High Court in Appeal No. 385 of 1948 from original decree.
276 D. Narsaraju, .4.
K. Sen, Balkrishan Acharya and S.S. Shukla, for respondents Nos. 3 and 4.
K. K, Jain, M.K. Garg and H.K. Puri, for respondents Nos.
13(a) to 13(f).
The judgment of the Court was delivered by Hegde J.
The main question for decision in this appeal is whether the Haveli at Nadiad in which the idol of Shree Gokulnathji is installed as well as the other properties detailed in plaint schedules A & B are the properties of a public religious trust created by the followers of Vallabh cult, residing at Nadiad.
The history of the suit institution and its management as also the various pleas taken by the parties have been elaborately set out by the High Court in a well considered judgment.
Hence we shall refer only to such pleas as are necessary to decide the contentions advanced before us.
The plaintiffs are the residents of Nadiad.
They are Vaishnavites.
They belong to the Vallabh Sampradaya.
They sued for a declaration that the properties mentioned in S.chs.
A & B of the plaint are properties oF the ownership of the trust ,mentioned earlier.
They are suing on behalf of the Vallabha Sampradayees residing at Nadiad.
According to their case as finally evolved that even during the last quarter of the 18th century, the Mandir of the Gokulnathji existed at Nagarwad in Nadiad Prant but in about 1821 a new Mandir was constructed by the followers of the Vallabha School at Santh Pipli, Nadiad and the idol of Gokulnathji which was previously worshiped at Nagarwad was taken and consecrated there.
In about 1831 they invited Goswami Mathuranathji, a direct descendant of Shree Vallabhacharya to come over to Nadiad and take up the management of the Mandir as its Maha Prabhu.
According to the plaintiffs the Mandir in question was constructed by the Vallabha Sampradayees and the expenses of the sevas as well as the utsavas performed in the Mandir were contributed by them.
They ,further say that the properties belonging to the trust were purchased from the contributions made by the devotees of that temple.
They assert that the persons belonging to the Vallabha Sampradaya have a right to have darshan of the deities in the Mandir, according to usage, as of right.
In short their case is that the Mandir in question is a place of public religious worship by the persons belonging to Vallabh Sampradaya and the Maha 'Prabhuji is ' only a trustee.
He has a right to reside in the upstair portion of the Mandir and further he can utilise a reasonable portion of the income of the trust, after meeting the requirements of the trust for his maintenance as well as the maintenance of the members of his family.
They contend that the suit properties were dedicated to Shri Gokulgathji 277 and the Maha Prabhu has no independent right of his own in those properties.
It is further said that the management of the temple was carried on efficiently by Mathuranathji and his descendants till about the time Annirudhalalji became the Maha Prabhu in Samy 1955.
Annirudhalalji under evil advice sought to.
secure the Jamnagar Gadi and for that purpose spent enormous sums of money from out of the funds belonging to the suit temple.
He also incurred considerable debts in that connection.
He died in Samy.
Thereafter defendant No. 1, his widow took over the management of the suit temple and its properties.
During her management she began to.
assert that she was the absolute owner of the suit properties including the suit temple.
She alienated several items out of the suit properties.
Hence they were constrained to bring the suit under appeal for the declaration mentioned earlier and also for a further declaration that the alienations effected by her are illegal, improper and unauthorised and not binding on the deity.
They also sought a mandatory injunction against defendants Nos. 2, 7 to 14 to restore lot No. 2 property in Sch.
A to defendant No. 1 for the benefit of the deity Shree Gokulnathji after declaring that the sale deed dated 19th April 1953 passed by defendant No. 1 to defendant No. 2 in respect of it is illegal, improper, unauthorised and without consideration and the same is not binding on the deity.
They have also asked for a permanent injunction against defendants 3, 4, 5 and 6 restraining them from enforcing the mortgages dated 4 3 1939, 27 1 1942, 12 1 1942 and 17 12 1941 passed by defendant No. 1 in their favour.
The suit was mainly contested by defendant No. 1 According to her Goswami Mathuranathji Maharaj was the owner of the idol Shri Gokulnathji.
It is he who established the Haveli at Nadiad and rounded his Gadi there; he was not only the owner of the Haveli but he.
was also the owner of the deities that were being worshiped in that Haveli.
She further pleaded that as per the tenets ,and usages of the Vallabha school, it is not possible for the members of that cult to found a temple.
They can only worship through the Acharya (Maha Prabhu) in his house known as Haveli.
According to.
their cult the Goswami Maharaj otherwise known as Maha Prabhu is the emblem of God head and the living representative of divinity.
She went further and took up the plea that according to the.
Vallabha Sampradaya no deity can own any property.
She further averred that Mathuranathji Maharaj and his descendants received from time to time presents and gifts made by his followers.
Those presents were made to them as a mark of reverence and respect to them and with a view to receive their grace.
They were the absolute owners of the idols they worshiped, the presents and gifts made to them and of the properties acquired by them.
She denied that the Haveli in which Shree Gokulnathji is worshiped is a public temple.
She also denied that the Vallabh Sampradayees were entitled L2Sup.
CI/70 6 278 to have the Darshana of that deity in that Haveli as of right.
She denied the plaint averments that all or any portion of the suit properties were acquired from the funds raised by the devotees or that the sevas or festivals were conducted from out of the contributions made by them.
She justified the impugned alienations mainly on the ground that she had absolute right to deal with the suit properties as she pleased.
The other defendants supported the defence taken by the Ist defendant.
They further pleaded that the alienations effected in their favour were supported by consideration and they were bona fide alienees and therefore those alienations they are not open to challenge.
The trial court dismissed the plaintiffs ' suit principally on the ground that as per the tenets and usages of Vallabha School it is impermissible for Vallabh Sampradayees to found a public temple and therefore, it is not possible to uphold the pleas advanced on behalf of the plaintiffs.
In appeal the High Court reversed the judgment and decree of the trial court.
It accepted the plaintiffs case that suit properties were the properties of a public religious trust and the alienations impeached were not valid and binding on the trust.
This appeal has been brought by the I st defendant.
The alienees have not appealed against the decree of the High Court.
In this Court they merely supported the pleas taken by the Ist defendant.
In this case voluminous evidence both oral and documentary has been led by the parties.
Fiftyone witnesses were examined in court and two on commission.
The oral evidence mainly relates to the tenets and beliefs of the devotees of the Vallabh Cult and the usages that prevail in their places of worship.
Before proceeding to examine the issues arising for decision in the case it is necessary to mention certain circumstances which have a bearing on those issues.
At the stage of pleadings it was common ground between the parties that Mathuranathji was the first person to be recognised as their Mahraj by the Vallabh Sampradayees of Nadiad.
The plaintiffs ' case as mentioned earlier, was that there was a temple of Shree Gokulnathji at Nagarwad in Nadiad even before Mathuranathji arrived ,at that place and according to them Mathuranathji had in fact been invited by the Vallabh Sampradayees of Nadiad to take over the manage ment of the temple that was already existing.
In her written statement defendant No.1 admitted that Mathuranathji was the first descendant of Vallabha to settle down in Nadiad.
According to her he brought with him the idol of Shree Gokulnathji and started worshiping that idol in his Haveli.
At a later stage the 1st defendant changed her version and put forward the theory that the ancestors of Mathuranathji had brought the idol of Shree 279 Gokulnathji to Nadiad and installed the same there long before Mathuranathji came to that place.
This significant deviation in the Ist defendant 's case has evidently been introduced to meet the evidence led on behalf of the plaintiffs about the existence of Gokulnathji temple even before Mathuranathji was born in 1806.
Yet another circumstance that has to be borne in mind in appreciating the evidence adduced by the parties is about the manner in which Mathuranathji and his descendants were managing the Haveli.
They had maintained regular and systematic accounts.
It is obvious they were maintaining two sets of accounts, one relating to.
the income and expenses of the deity and another relating to the personal income 'and expenses of the Maharaj.
But when the I st defendant was summoned to produce those accounts, the accounts relating to certain important periods were not produced and no satisfactory explanation is forthcoming for their non production.
From this omission the High Court has drawn the inference that those account books have been kept back as the evidence which those books would have afforded was not favorable to the 1st defendant 's case.
We agree with that conclusion.
Similarly certain important documents have been kept back by the 1st defendant.
Some of those documents were available at the time of the inventory but when the I st defendant was summoned to produce them she failed to do so.
This circumstance has again led the High Court to infer that those documents were deliberately kept back in order to suppress material evidence supporting the plaintiffs ' case.
Two of the important documents produced into court namely Exhs.
501 and 503 were found to have been tampered with.
501 appears to be a register of the temple properties but the title page of that book has been mutilated.
The top portion of that page had been clearly cut and removed.
It is reasonable to assume that the portion that has been removed contained the title of the register.
Possibly it mentioned that it is the property register of Shree Gokulnathji 's temple.
It is reasonable to draw this inference from the surrounding circumstances.
503 is the register relating to the expenses incurred for repairs of Shree Gokulnathji 's temple.
That register was also tampered with.
The original book was not made available to us for examination but the High Court which had the opportunity of examining that book has made the following remarks.
in its judgment: "a new slip was affixed to this document, and the heading which showed that the properties belonged to Shree Gokulnathji 's temple was torn out.
" The High Court has also held that Exh. 633, which evidences the sale of section No. 1840, was torn in such a way as to justify the plaintiffs complaint that in the torn portion was the description 280 of the Maharaj as the Vahiwatdar of the temple.
The High Court observed: "We have looked at all these three documents (Exhs. 501,503 and 633) and we are satisfied that the complaint made by the plaintiffs against the advisers of defendant No. 1 cannot be said to be without substance.
It seems to us clear, on examining these documents that the advisers of defendant No. 1 have unscrupulously tampered with the documents.
This conduct naturally raises suspicion against the defence, and we would be justified in drawing an inference against defendant No. 1 by holding that, if the books of account which have been kept back by her had been produced they would have supported the plaintiffs ' case.
We agree with these observations.
We may now proceed to examine the material on record for finding out 'the true character of the suit properties viz. whether they are properties of a public trust arising from their dedication of those properties in favour of the deity Shree Gokulnathji or whether the deity as well as the suit properties are the private properties of Goswami Maharaj.
In her written statement as noticed, earlier, the Ist defendant took up the specific plea that the idol of Shree Gokulnathji is the private property of the Maharaj the Vallabh Cult does not permit any dedication in favour of an idol and in fact there was no dedication in favour of that idol.
She emphatically denied that the suit properties were the properties of the deity Gokulnathji but in this Court evidently because of the enormity of evidence adduced by the plaintiffs, a totally new plea was taken namely that several items of the suit properties had been dedicated to Gokulnathii but the deity being the family deity of the Maharaj, the resulting trust is only a private trust.
In other words the plea taken in the written statement is that the suit properties were the private properties of the Maharaj and that there was no trust, private or public.
But the case argued before this Court is a wholly different one viz. the suit properties were partly the properties of a private trust and partly the private properties of the Maharaj.
The Ist defendant cannot be permitted to take up a case which is wholly inconsistent with that pleaded.
This belated attempt to bypass the evidence adduced appears to be more a manor than a genuine explanation of the documentary evidence adduced.
It is amply proved that ever since Mathuranathji took over the management of the shrine, two sets of account books have been maintained, one relating to the income and expenses of the shrine and the other relating to that of the Maharaj.
These account books and other documents show that 281 presents and gifts used to.
be made to the deity as well as to the Maharaj.
The two were quite separate and distinct.
Maharaj himself has been making gifts to the deity.
He has been, at times utilising the funds belonging to.
the deity and thereafter reimbursing the same.
The account books which have been produced clearly go.
to show that the deity and the Maharaj were treated as two different and distinct legal entities.
The evidence afforded "by the account books is tell tale.
In the trial court it was contended on behalf of the I st defendant that none of the account books produced relate exclusively to the affairs of the temple.
They all record the transactions of the Maharaj, whether pertaining to.
his personal dealings or dealings in connection with the deity.
This is an obviously untenable contention.
That contention was given up in the High Court.
In the High Court it was urged that two sets of account books were kept, one relating to the income and expenditure of the deity and the other of the Maharai, so.
that the Maharai could easily find out his financial commitments relating to the affairs of the deity.
But in this Court Mr. Narasaraju, learned Counsel for the appellant realising the untenability of the contention advanced in the courts below presented for our consideration a totally new case and that is that Gokulnathji undoubtly is a legal personality; in the past the properties had been dedicated in favour of that deity; those properties are the properties of a private trust of which the Maharaj was the trustee.
On the basis of this newly evolved theory he wanted to explain away the effect of the evidence afforded by the account books and the documents.
We are unable to accept this new plea.
It runs counter to the case pleaded in the written statement.
This is not a purely legal contention.
The I st defendant must have known whether there was any dedication in favour of Shri Gokulnathji and whether any portion of the suit properties were the properties of a private trust.
She and her adviser 's must have known at all relevant times the true nature of the accounts maintained.
Mr. Narasaraju is not right in his contention that the plea taken by him in this Court is a purely legal plea.
It essentially relates to questions of fact.
Hence we informed Mr. Narasaraju that we will not entertain the plea in question.
We shall now proceed to assess the evidence adduced in this case to find whether the plaintiffs have succeeded in establishing that the suit temple and the properties annexed thereto constitute a public trust.
Before doing so, it is necessary to examine certain basic contentions advanced on behalf of the appellant.
It is the case of the appellant that Vallabh Sampardaees cannot worship in a public temple; according to their cult they can have the Darshan of one or the other swaroops of Lord Krishna in the house of their Maharaj.
In Other words their cult prohibits public 282 worship.
They can only worship through their Maharaj and that too in his Haveli.
In support of this contention great deal of reliance was placed in the High Court and the trial court on the views expressed by Dr. Bhandarkar in his Works on 'Vaishnavism, S 'aivism and Minor Religous systems '.
The views expressed by Dr. Bhandarkar had greatly weighed with the trial court and it is mainly o.n the basis of those views, the trial court rejected the plaintiff 's suit.
The High Court after examining the doctrines of Vallabha School, its tenants and usages as well as the views expressed by eminent writers like Dr. Radhakrishanan and Dasgupta came to.
the conclusion that it would not be correct to.
say that worship.
in public temple is prohibited by the Vallabh cult though in the absence of any positive evidence it may be taken that the place where the Vallabha Sampardaees worship is a private temple.
It is not necessary for us to go into that controversy in view of the decision of this Court in Tilkavat Shri Govindlalji Maharaj vs The State of Rajasthan and ors.(1) In that case this Court was.
called upon to consider whether Nathdwara Temple in Udaipur, a temple rounded by the Vallabha Sampardaees is a public temple or not.
After examining the various treatises on the subject including Dr. Bhandarkar 's book on 'Vaishnavism, S 'aivism and Minor Religious Systems ', this Court observed (at p.585): "Therefore, we are satisfied that neither the tenets nor the religious practices of the Vallabha school necessarily postulate that the followers of the school must worship in a private temple.
Some temples of this cult may have been private even today.
Whether or not a particular temple is a public temple must necessarily be considered in the light of the relevant facts relating to it.
There can be No. general rule that a public temple is prohibited in Vallabha School.
" In view of this decision Mr. Narasaraju, learned Counsel for the appellant did not press forward the contention that the Vallabha School prohibits worship in public temple.
Yet another contention taken on behalf of the appellant is that the architecture of the building in which Gokulnathji is housed and the nature of that building is such as to show that it is not a public temple.
It was urged that building does not possess any of the characteristics of a Hindu temple.
It has not even a dome.
This contention again has lost much of its force in view of the decision of this Court referred to earlier.
Evidence establishes that Ballabha 's son and his immediate successor Vithaleshwar had laid down a plan for the construction of temples (1) [1964] 1 S.C.R. 561.
283 by the Vallabha Sampardaees.
He did not approve the idea of constructing rich and costly buildings.
for temples.
Evidently he realised that religious temple buildings were not safe under the Mohommedan rule.
For this reason he advised his followers to construct temples of extremely simple type.
The external view of those temples gave the appearance of dwelling houses.
It appears to be a common feature of the temples belonging to the Vallabha Sampardaees that the ground floor is used as the place of worship and the first floor as the residence of Goswami Maharaj, therefore the fact that Gokulnathji temple at Nadiad had the appearance of a residential house does not in 'any manner militate against the contention that the temple in question is a public temple.
It was said that according to the usage prevailing in that temple, the public are asked to enter the temple only after the Maharaj had finished his worship.
This circumstance again is of no consequence.
Each sect nay each temple has its own customs.
The usage pleaded by the appellant is not inconsistent with that temple being a public temple.
The appellant attempted to prove that on two occasions certain individuals were forbidden from entering the temple.
In the first place this plea has not been satisfactorily established.
Further according to the evidence adduced on behalf of the appellant those individuals were kept out of the temple because of some act of indiscipline on their part.
The power to manage a temple includes within itself the power to maintain discipline within the precincts of that temple.
The only other circumstance relied on by the appellant to establish that the temple in question is not a public temple is that the sale proceeds of Nagarwad Haveli were credited to the account of the Maharaj.
The learned judges of the High Court have carefully looked into that aspect.
After examining the relevant evidence on record they arrived at the conclusion that though initially the amount in question was credited to the account of the Maharaj, at a subsequent stage it was transferred to the account of the temple by means of adjustment entries.
The learned Counsel for the appellant was unable to satisfy us that this conclusion of the High Court was incorrect.
We shall now see how far the plaintiffs have succeeded in establishing that Gokulnathji Mandir is a public Mandir.
The burden of establishing that fact is undoubtedly on them.
Though most of the present day Hindu public temples have been found as public temples, there are instances of private temples becoming public temples in course of time.
Some of the private temples have acquired great deal of religious reputation 284 either because of the eminence of its founder or because of other circumstances.
They have attracted large number of devotees.
Gradually in course of time they have become public temples.
Public temples are generally built or raised by the public and the deity installed to enable the members of the public or a section thereof to.
offer Worship.
In such a case the temple would clearly be a public temple.
If a temple is proved to have originated as a .public temple, nothing more is necessary to be proved to show that it is a public temple but if a temple is proved to have originated as a private temple or its origin is unknown or lost in antiquity then there must be proof to show that it is being used as a public temple.
In such cases the true character of the particular temple is decided on the basis of various circumstances.
In those cases the courts have to.
address themselves to various questions such as : (1 ) Is the temple built in such imposing manner that it may prima facie appear to be a public temple? (2) Are the members of the public entitled to worship in that temple as of right ? (3 ) Are the temple expenses met from the contributions made by the public ? (4) Whether the sevas and utsavas conducted in the temple are those usually conducted in public temples ? (5) Have the management as well as the devotees been treating that temple as a public temple ? Though the appearance of a temple is a relevant circum stance, it is by no means.
a decisive one.
The architecture of temples differs from place to place.
The circumstance that the public or a section thereof have been regularly worshiping in the temple as a matter of course and they can take part in the festivals and ceremonies conducted in that temple apparently as a matter of fight is a strong piece of evidence to establish the public character of the temple.
If votive offerings are being made by the public in the usual course and if the expenses of the temple are met by public contribution, it is safe to presume that the temple in question is a public temple.
In brief the origin of the temple, the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors that go to establish whether a temple is a public temple or a private temple.
In 285 Lakshmana vs Subramania(1) the Judicial Committee was dealing with a temple which was initially a private temple.
The Mahant of this, temple opened it on certain days in each week to the Hindu public free to worship in the greater part of the temple, and on payment of fees in one part only.
The income thus received by the Mahant was utilised by him primarily to meet the expenses of the temple and the balance went to support the Mahant and his family.
The Privy Council held that the conduct of the Mahant showed that he had held out and represented to the Hindu public that the temple was a public temple at which all Hindus might worship and the inference was, therefore, that he had dedicated it to the public.
In Mundancheri Koman vs Achutan Nair,(2) the Judicial Committee again observed that the decision of the case would depend on the inferences to be derived from the evidence as to the way in which the temple endowments had been dealt with and from the evidence as to the public user of the temples.
Their Lordships were satisfied that the documentary evidence in the case conclusively showed that the properties standing in the name of the temples belonged to the temples and that the position of the manager of the temples was that of a trustee.
Their Lordships further, added that if it had been shown that the temples had originally been private temples they would have been slow to hold that the admission of the public in later times possibly owing to altered conditions would affect the private character of the trusts.
In Deoki Nandan vs Murlidar(3), this Court observed that the issue whether a religious endowment is a public.
or a private one is a mixed question of law and fact, the decision of which must depend on the application of legal concepts of a public and private endowment to the facts found.
Therein it was further observed that the distinction between a public and private endowment is that whereas in the former the beneficiaries, which means the worshipers are specific individuals and in the later the general public or class thereof.
In that case the plaintiff sought to establish the true scope of the dedication from the user of the temple by the public.
In Narayan Bhagwant Rao Gosavi Balajiwale vs Gopal Vinayak Gosavi and Ors.(4), this Court held that the vastness of the temple, the mode of its construction, the long user of the public as of right, grant of land and cash by the Rulers taken along with other relevant factors in that case were consistent only with the public nature of the temple.
In examining the evidence adduced by the plaintiffs in proof of the fact that the temple in question is a public.
temple we have to bear in mind the tests laid down by the courts for determining whether a given temple is a public temple or not.
(1) [1923] A.I.R. 1924 PC.
44 (2) (3) ; (4) ; 286 The case for the plaintiffs is that this temple originated as a public temple.
According to them it was rounded long before Mathuranathji was born; the idol of Gokulnathji was originally worshiped at Nagarwad and later on the suit temple was built and that idol installed therein.
We have earlier seen that the case of the I st defendant on this point was that the idol of Gokulnathji was the private property of Mathuranathiji.
Mathuranathji brought that idol alongwith him when he came to Nadiad and worshiped the same as his private deity.
This part of her case was given up at a later stage, and she put forward a new case to the effect that the idol Gokulnathji was brought by the ancestors of Mathuranathii to: Nadiad and it is they who started worshiping that idol at Nadiad.
From this it is clear that the appellant has no consistent case as to the origin of the worship of Gokulnathji at Nadiad.
The new plea put forward by her was evidently intended to meet the evidence adduced to show that the idol of Gokulnathji was being worshiped at Nadiad even before Mathuranathji was born.
In order to show that the idol of Gokulnathji was being worshiped in Nadiad even in the 18th century, oral evidence of local repute has been adduced by the plaintiffs.
In the very nature of things that evidence cannot, but be inconclusive.
In this connection the plaintiffs have also placed reliance on Exh.791, an extract showing the list of Devasthans in the Pargana of Nadiad to.
which the former Baroda State was making contributions, one of such Devasthan is the "Shree Gokulnathji".
This extract relates to Fasli Samvat 1833 (i.e. 1781 82 A.D.).
On the basis of this exhibit, we are asked to conclude that the suit temple was in existence even before 1781 82 A.D. The. evidence afforded by this document undoubtedly probabilises the version of the plaintiffs but it cannot be said with any definiteness that the entry in question relates to the suit temple.
Therefore it is not possible to come to a positive conclusion that the suit temple originated as a public temple nor there is any conclusive evidence before us to determine the date of its origin.
All that we can say is that the origin of this temple is lost in antiquity.
Therefore for determining whether it is a public temple or not we must depend on other circumstances.
It is established by the evidence on record that Gokulnathji is neither the Nidhi Swaroop nor Seva Swaroop of Mathuranathji 's branch.
Therefore it is unlikely that Mathuranathji branch would have installed the idol of Shree Gokulnathji for their private worship though the idol of Shree Gokulnathji is one of the Swaroops of Lord Krishna.
The plea taken by the appellant that Gokulnathji was one of the Nidhi Swaroop given to the branch of Mamuranathji by Vallabha is opposed to the documentary evidence produced by herself.
That plea has not been pressed before us for our acceptance.
287 From the account books produced in this case, it is clear that ever since 1965 two sets of accounts had been maintained by the Maharai, one relating to the temple and another relating to him.
The temple accounts are referred to as "Nichena Khata" and Maharaj 's accounts as "Uparna Khata".
At this stage we may emphasize that the evidence discloses that the entire ground floor is being used as the place of worship of Gokulnathji and upstairs portion as the residence of the Maharaj.
For the years 187 '7 to 1892, no books of account have been produced.
The appellant has stated that these books are not with her.
But this is not a satisfactory explanation for their disappearance.
The temple accounts for the years 1892 to 1894 have been produced but the personal accounts of the Maharaj for those years have not been produced.
Again for the years 1900 to 1907, only the temple accounts have been produced but for the period from 1908 and 1934 both the sets have been produced.
Again for the period 1935 to 1943, only the temple account books have been produced and not the personal account books of the Maharaj.
This pick and choose method adopted in the matter of producing account books unmistakably indicate that the appellant was deliberately keeping back unfavorable evidence.
Evidence on record establishes that some of the documents.
which were there at the time of the inventory were not produced when summoned.
Under those circumstances the High Court was justified in drawing an adverse inference against the appellant.
The existence of two sets of accounts ' clearly goes to indicate that the Maharajas had always considered the temple as an entity different from themselves.
That circumstance goes to negative the contention of the appellant that the deity was owned by the Maharaj and therefore the deity as well as the suit properties are his private properties.
Right back in 1861 under a gift deed executed by a devotee by name Bai Jasubai, two fields and a house were gifted in favour of the temple of Gokulnathji Maharaj at Nadiad.
The properties gifted by Jasubai were sold in 1865 and the sale proceeds credited in the 'Nichen Khata '.
In 1865 when Sri Vrairatna Maharaj left Nadiad he made a present of Rs. 5 to the idol of Shree Gokulnathii.
This was also.
credited in the 'Nichen Khata '.
Then we come to Exh.
593, an application made by several merchants and other residents of Nadiad to the Collector of Kaira in the year 1866.
That application recites that the ancestors of the applicants had voluntarily levied a cess known as Laga on several articles four the benefit of the suit temple.
Originally this Laga was separately recovered from the devotees by the Maharaj but later on at the request of the merchants the same 288 used to be recovered by the Government alongwith the custom duty and made over to Maharaj for the benefit of the temple.
Therein it was prayed that the newly established municipality should be directed to collect the Laga alongwith its dues and make up over to the Maharaj.
That application was signed by a large number of persons.
That application inter alia states : "There is a temple of Shree Gokulnathji at Nadiad.
A son of our preceptor, Shree Goswami Mathuranathji performs the seva in the said temple.
Our ancestors have granted for his expenses from the town a laga on several articles which may be received, a list whereof is enclosed herewith.
" The signatories to that application must have been familiar with the history of the suit temple.
We can reasonably assume that the facts stated therein are correct.
Those facts support the case ,of the plaintiffs.
We next go to the entries in the account books.
In the temple accounts for the year 1870, there is a credit entry of Rs. 27/4/It is in respect of the fine imposed by the Mahajan on three persons who appear to have played mischief at the time of darshan.
This entry clearly shows that the supervision of the 'temple, in a general sense, vested in the Mahajan of the place.
It appears from the accounts that in 1874, the Mahajan examined the account books of the temple see Exh.
This conduct on the part of the Mahajan would be inconsistent with the appellant 's claim that Gokulnath 's shrine is her private property.
In 1881 one Bai Harkore under her will made certain bequests in the name of the Gokulnathji Maharaj at Nadiad for providing Samagri for Shree Gokulnathii.
This is a bequest to.
the idol. 'Therein the.there is no refere.nce to the Maharaj.
Then we come to Exh.
534, under which a substantial portion of lot No. 1 of the :suit properties wherein the temple is situated was purchased on April 4, 1885.
The sale deed was taken in the name of Pari Pranvallabh Vrajlal and others on behalf of Shree Gokulnathji of Nadiad.
This is a clear indication that the deity of Gokulnathji was treated by the devotees as an independent legal entity.
Further the importance of this document is that it is taken in the name of the representatives of the public and not in the name of the Maharaj.
Under Exh. 691, a gift was made in 1888 in the name of Vrajratnalalji for and on behalf of Shree Gokulnathji temple.
The donor paid Rs. 1,200 and desired that a meal of six breads every day should be given till the temple exists to the person whom the Mabaraj would name and if the person named by the Maharai does not come to take the meal the same should be given to any visitor to the temple.
Still more significant is the bequest contained in Exh.
512, the will executed by one Bai 289 Vasant.
Under this will two bequests were made, one in favour of the temple of Shree Gokulnathji and the other in favour of the Maharani Vahuji who was then the Maharani of .the temple.
This will was executed on September 20, 1897.
Under a prior will executed by the same devotee (Exh. 189), the same distinction between the Maharaj and the temple is to.
be found.
That document was executed in 1888.
Similarly when bhets (presents) were made by .the devotees to the idol as well as to the Maharaj, they were separately credited in the respective account books.
As an illustration, we may refer to entries in the accounts books for the year 1896.
Therein Rs. 22 was credited to the temple accounts and Rs. 5 to the Maharaj 's personal account.
The account books clearly show the various presents made to the temple as well as to the Maharaj.
It is established by evidence that in 1896 when the question of taxing the income of the Maharaj came up for consideration, the Maharaj pleaded that the income of the temple cannot be treated as his income.
The balance sheets prepared in that connection showed the income of the temple separately from that of the Maharaj.
The correspondence that passed between the Maharaj and the authorities in that connection establishes beyond doubt that the Maharaj did not treat the income of the temple as his income.
The contention that the admission in question was made under wrong advice receives No. support from the evidence on record.
Similarly with regard to the payment of the municipal tax, the properties of the Maharaj had been treated separately from that of the temple.
In 1907 one Shah Chaganlal made a gift of some property to the temple.
That property was subject to a mortgage.
The donor directed that the Maharaj of the temple should divide the annual income of the mortgaged property into nine shares, out of which one share should be given for the samagri of Shree Gokulnathji Maharaj on posh vad 3rd of every year and eight shares of the income should be given for the samagri of the said Gokulnathji every year on Vaishakh Sud 8th.
In that document the Maharai was shown as the agent of the temple.
property was subsequently sold and the sale proceeds were credited to.
the temple accounts.
The: accounts show numerous other instances of receipts and expenses relating to the temple as distinguished from that of the Maharaj.
The High Court has enumerated those receipts and expenses with elaborate fullness.
It would be superfluous to.
refer to them.
The above mentioned instances go to falsify the contension of the appellant that the idol of Shree Gokulnathji was the private property of the.
Maharaj.
On the other hand they establish that the temple in question was treated by all concerned as a public temple.
290 In proof of her case that the suit temple and the properties are individual properties of the Maharaj, the appellant relied on the wills executed by Vrajratanlalji in 1882 and Maharani Vahuji in 1898.
Under the former the testator provided for the management of the properties mentioned therein after Iris death.
Therein he asserted his right to make vahivat according to his pleasure of movable and immovable properties shown in the will during his.
life time.
One of the stipulations in the will was that if he dies leaving no son, natural or adopted, those properties should go to his wife, as owner subject to the condition that the expenses of worship of "his Shree Thakorji" according to usage should come out of its income.
There are similar assertion in the will executed by Maharani Vahuji .in 1898.
These statements are at best self serving statements.
They have little evidentiary value.
They are likely to. have been made by the executants of those wills under a misconception as to their rights.
If the account books for the years 1877 to 1892 had been produced we would have been able to find out how Vrajratanlalji himself dealt with the properties of the temple.
There is clear, consistent and reliable evidence to show that Vallabha Sampardaees have been worshiping in the suit temple as of right.
There is also evidence to show that the temple has all along been primarily maintained from the contributions made by the devotees belonging to the Vallabha School.
The suit temple appears to be an important temple attracting a large number of devotees.
Utsavas and other festivals are performed in that temple in a reasonably grand scale.
The devotees as well as the Maharaj were treating that temple as a public temple.
From the facts proved we have no hesitation in agreeing with the High Court that the temple in question is a public.
temple.
This takes us to the question whether all or any of the properties detailed in the plaint schedule are proved to.
be that of the temple.
We have earlier come to the conclusion that the temple has been getting substantial contributions from its devotees in diverse ways.
It was also.
the recipient of several gifts.
It had adequate resources to make the acquisitions with which we are concerned in this case.
The temple is exclusively managed by the Goswamiji Maharaj.
It maintains regular accounts.
Maharaj also maintains his separate accounts.
Therefore it was easy for the appellant to.
prove the source from which the acquisitions in question were made and how their income was treated.
The appellant has led no evidence to show that they were her own properties.
She has failed to produce some of the accounts relating to the relevant periods.
In this background let us proceed to examine the title to the suit properties.
291 Lot No. 1 is.
the site in which the suit temple is situate.
It was conceded on behalf of the appellant that if we come to the conclusion that the suit temple is a public temple that item of property will have to. be considered as the property of the temple.
Lot No. 2 is.
the garden land in Survey No. 2031.
It is used for raising flowers for worship in the temple.
That land appears to have been granted to Mathuranathji but the appellant admitted in her deposition that that item of property was at all time managed by the Haveli and whoever is the owner of the Haveli is the owner of the garden.
This admission is corroborated by considerable other evidence.
Vaishnav merchants of Nadiad contributed for the expenses of installation of an electric pump in that garden and for its subsequent repairs.
All expenses incurred for that garden have always been debited and all income received therefrom credited to the temple accounts.
That garden is included in the Patriks of the temple property, prepared long before the present dispute arose.
When a part of that property was compulsorily acquired on three different occasions, the compensation received was credited to.
the temple account.
These circumstances.
conclusively establish that lot No. 2 is temple property.
Lot No. 3 is the building known as Goshala.
Its Survay survey No. is 994.
It is used for the purpose of tethering the cows reared for supplying milk and butter for the worship of Balkrishnalalji, one of the deities installed in the temple.
This property is included in Exh. 500 and 501.
It is shown in the property register as the property belonging to the Devasthan Charity.
The balance sheet prepared in 1896 treats the rent of the shops and houses in that site as the income from temple properties see Exh.
We think the High Court was right in concluding on the basis of this evidence that that item belongs to the temple.
Lot No. 4 is a shop bearing city survey No. 720.
This property was gifted by Kuber Jetha Vashram as per his will Exh. 673 for the samagri of the temple.
The bequest is made in favour of Shree Gokulnathji Maharai.
Hence this is clearly an item of property belonging to the suit temple.
Lot No. 5 is survey No. 121.
It is gifted under Exh.
610 dated June 29, 1868.
The gift is purported to have been made in favour of the Maharaj but the income from this property has always been credited to the temple accounts, the earliest entry being that of the year 1870.
In the property register, this property is shown as temple property and the rent note Exh.
535 is taken in the name of the Vahivatdar of Shree Gokulnathji.
Hence this item of the property should also be held to be that of the temple.
292 Lot No. 6 consists of 14 small items.
of property.
They are all agricultural fields.
They have been shown in the property register as the properties of the temple.
Out of 14 items in this lot, items No.s. 6, 9, 11, 12 and 14 originally belonged to the Maharaj but they have been all along dealt with by the Maharaj as temple property.
Item No. 1 in lot No. 6 belongs to the temple.
The mortgage Exh. 608 relates to this item and the same was executed in favour of the, temple on May 17, 1897.
A rent note in respect of this property was taken on April 22, 1915 in the name of the Vahivatdar of the temple.
Items 2, 3 and 4 of that lot are shown in the record of rights in the name of the Maharaj but the income from those properties and the expenses incurred for the same have always been entered in the temple accounts.
Item 5 of this lot had been gifted to the temple under Exh.
Item 8 of this lot had bee.n purchased in the name of the Maharani Vahuji on June; 2, 1897 for Rs. 1150.
The income of this property has been shown in the temple accounts.
far as item 10 is.
concerned though the record of rights stands in the name of the.
Maharaj personally, its sale p.rice (Rs. 800 0 6) has been credited to the temple accounts.
From all this it is clear that the temple is the owner of lot No. 6.
Now coming to.
lot No. 7, the entries in the account books clearly show that this is temple property.
The consideration for the purchase of a portion of it was paid from the temple funds.
A portion of that property had been gifted to the temple under Exh.
Lot No. 8 was purchased in 1877 from the temple funds and lot No. 13 was gifted to the temple.
Lo.t No. 9 was received by the temple under will Exh. 512 and lot No. 10 was always treated as temple property in the account books.
So also lot Nos. 11 and 12.
Similarly lots Nos. 13 and 14 were always being treated as temple properties.
We are in agreement with the learned judges of the High Court that the properties detailed in the plaint schedule are all temple properties.
For the reasons mentioned above this appeal must fail.
But before we conclude we should like to clarify one aspect which undoubtedly is implicit in the judgment of the High Court.
The Goswami Maharais o.r Maharanis are not mere managers.
In the temples belonging to the Vallabha School they have an important place.
The Maharaj is the Maha Prabhu.
The Vallabh devotees worship their deity through him.
It is true that the income from temple properties.
has to be primarily used for the expenses of the sevas and utsavas in the temple, the upkeep renovation and improvements of the temple premises but subject to these demands, the Maharaj has a right to utilise the temple income in 293 maintaining himself and his family in a reasonably comfortable manner.
The learned Counsel for the plaintiffs conceded this position.
This suit has been brought by the plaintiffs with the sole purpose of preserving the temples assets and maintaining its dignity.
They do not want to undermine the position or prestige of their Maha Prabhu.
In the circumstances of the case we see no useful purpose in directing the: appellant to pay the costs of the plaintiffs in this appeal.
She can only pay the same from temple funds.
The alienees have not appealed against the judgment of the High Court.
When we mentioned this aspect to Mr. S.T. Desai, learned Counsel for the plaintiffs he indicated that the parties may be left to bear their own costs in this appeal.
For the reasons mentioned above this appeal is dismissed but we make no order as to costs.
[/INST]In deciding whether a temple is private or public, Courts have to address themselves to various questions such as: (1) Is the temple built in such imposing manner that it may prima facie appear to be a public temple ? (2) Are the members of the public entitled to worship in that temple as of right ? (3) Are the temple expenses met from the. contributions made by the public ? (4) Whether the sevas and utsavas conducted in the temple are those usually conducted in public temples ? (5) Have the management as well as the devotees been treating the temple as a public temple.
Though the appearance of a temple is a relevant circumstance, it is by no means 'a decisive one.
The architecture of temples differs from place to place.
The circumstance that the public or a section thereof have been regularly worshiping in the. temple as a matter of course and they can take part in the festivals 'and ceremonies conducted in that temple apparently as a matter of right is a strong piece of evidence to establish the public character of the temple.
If votive offerings are being made by the public in the usual course and if the expenses of the temple are met by public contribution, it is safe to presume that the temple question is a public temple.
In brief the origin of the temple.
, the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors that go to establish whether a temple is public temple or a private temple.
[286 H H] Tilkayat Shri Govindlalji Mahraj vs The State of Rajasthan and Ors.
,[1964] 1 S.C.R. 561; Lakshmana vs Subramania, (1923) A.I.R. 1924 P.C. 44; Mundancheri Koman vs Achutan Nair (1934) 61 I.A. 405; Deoki Nandan vs Murlidar, ; ; Narayan Bhagwant Rao Gosavi Balajiwle vs Gopal Vinayak Gosavi and Ors.
[1960] I S.C.R. 773; referred to.
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<s>[INST] Summarize the judgementSpecial leave Petition (Civil) No. 10330 of 1991.
From the Judgement and Order dated 3.5.1991 of the Bomaby High ourt in writ Petition No. 186 of 1991.
Kapil Sibal, Makrand D. Adkar and Ejaz Maqbool for the Petitioner.
R.D. Tulpule, D.M. Nargolkar, Ms. Kiran Bhagalia, Ms. V.D.Khanna and A.M. Khanwilkar for the respondents.
Caveator in person.
The following Order of the Court was delivered.
The petitioner, Bhushan Uttam Khare, appeared for the Third Year M.B.B.S. Examination held by University of Poona in the months of October November, 1990.
The results of the said examination were declared on 12.12.1990.
As per University of Poona Ordinance 134A, the petitioner applied for revaluation of his answer papers.
167 students including the petitioner had applied for revaluation.
When the revaluation results were declared, certain students made representation to the University authorities for their answer papers being revaluate from the same set of examiners.
388 On receipt of the representation, the Executive Council of University appointed a Committee to make an enquiry.
On the report of the Committee, the University of Poona decided to cancel the revaluation results and to conduct further revaluation.
This decision of the Executive Council cancelling the earlier revaluation and directing a second revaluation was challenged by the petitioner and others in writ petitions filed before the High Court at Bomaby.
By the impugned judgement dated May 3, 1991 the High Court dismissed the writ petitions.
Aggrieved by the decisions, the petitioners have moved this petition for special leave.
The Poona University Act, 1974 defines the powers and duties of the Executive Council.
The Executive Council may make Ordinances to provide for the conduct of the examinations.
Under Ordinance 134A, the Vice Chancellor shall use his discretionery powers to decide as to whether all the applications received from the candidates, be considered for revaluation or not.
If as a result of revaluation of answer books, the marks obtained by the candidate increase over the original marks by 10% or more of the marks carried by the paper then only the result of revaluation will be accepted by the University.
Application for vertification of answer books will be entertained within a period of two weeks from the date of declaration of the results.
Ordinance 146 reads: "146.
In any case where it is found that the result of an examination has been affected by error, malpractice, fraud, improper conduct or other course of whatsoever nature, the Executive Council shall have power to amend such result in such manner as shall be in accord with the true position and to make such declaration as the Executive Council shall consider necessary in that behalf.
Provided that, but subject to 0.147, no result shall be amended after the expiration of six months from the date of publication of the said result".
In the Third Year M.B.B.S. Examination, 402 students appeared for the examination and 167 students for revaluation of the answer books.
When the representation of students opting for revaluation was placed before the Executive Council as glaring difference was indicated, a Committee was appointed for scrutiny and to reassess theory papers of the students acquiring more than 20% marks after revaluation, from senior teachers of the Faculty.
After scrutiny, it was found out that the marks are closer to the original marks in Medicine, Surgery and Preventive and Social Medicine.
Therefore, the Committee recommended that the entire revaluation of the papers should be cancelled.
This report of the 389 Committee was placed before the Executive Council in its meeting held on March 27, 1991 and the Council by the resolution cancelled the result of the revaluation and directed fresh revaluation.
The second revaluation was done through the examiners outside the State.
The results on revaluation intimated to the Medical College thus stood cancelled and the final results were delcared in pursuance to the second revaluation.
The action of the Executive Council was attacked on the grounds that it was an arbitrary action; that the choice of the examiners was that of the Vice Chancellor as enjoined under the Ordinance and there was no glaring instance of any malpractice, fraud or other course of whatsoever nature to cancel the revaluation and in the absence of any provision in the statute or the Ordinance for a second revaluation, the decision taken by the Executive Council is unwarranted and, therefore, illegal.
In repelling these contentions, the High Court has taken the view that educational institutions set up Enquiry Committee to deal with problem posed by the adoption of unfair means and it is normally within their domestic jurisdiction to decide all questions in the light of the material adduced.
Unless there is an absolute and compelling justification, the Writ Court is slow to interfere with the autonomous activity of the Executive Councils.
The High Court said that the material on record indicated that this is not a case for exercise of jurisdiction under Article 226 of the Constitution and since the Court has found that there is material to reach the decision as regards cancellation of the impugned result of revaluation, the contentions taken up by the petitioner are untenable.
The petitioners have reiterated the submissions that there had been no improper conduct come to light and the absence of any provision for a second revaluation vitiates the whole action.
We have been taken through a comparative chart containing the marks awarded in the original examination, the first revaluation and the second revaluation.
The attempt of the learned counsel for the petitioners had been to make out that the disparity was not such as to indicate any improper practice and that the Committee constituted consisted of four members of whom two were original examiners and the report submitted by that Committee should not have been made the basis for the decision which affected the prospects and career of a large number of medical students.
The learned counsel for the University as also the standing counsel for the State drew our attention to the fact that Executive Council had only cautiously proceeded in the matter and before ordering cancellation a probe was made and the mem 390 bers of the Enquiry Committee were competent persons and that there is no illegality which warrants interference of the Court.
We have considered all the materials placed before us in the light of arguments advanced keeping in mind the well accepted principle that in deciding the matters relating to orders passed by authorities of educational institutions, the Court should normally be very slow to pass orders in its jurisdiction because matters falling within the jurisdiction of educational authorities should normally be left to their decision and the Court should interfere with them only when it thinks it must do so in the interest of justice.
We are satisfied that there had been sufficient material before the Executive Council to proceed in the manner in which it has done.
It is not correct to say that the University had acted on non existing rule for ordering revaluation.
Ordinance 146 is comprehensive enough to include revaluation also for further action.
The fact that two examiners were also the members of the Committee which recommended for revaluation cannot result in any bias even if they had been directly concerned with the original evaluation.
It is true that in the second revaluation also there had been some changes between the original valuation and the revaluation results.
However, it is not so glaring or demonstrably unconscionable as seen in the first revaluation.
We cannot, therefore, accept the contention of the petitioner that the High Court had erred in not granting the relief sought for.
We can only observe that the case of the petitioner, who alone has come before this Court and who had secured higher marks in the first revaluation and is, therefore, aggrieved by the cancellation of the same, would by duly considered in the selection for Post Graduate Course.
The special leave petition is dismissed.
Y.L. SLP dismissed.
[/INST]Consequent upon the announcement of his M.B.B.S. Examination result on 12.12.1990, the petitioner alongwith other 166 students, applied for revaluation of answer books under University of Poona Ordinance 134A.
When the revaluation results were declared, certain students made representation to the University Authorities for their answer papers being revalued from the same set of examiners.
The University on consideration of that representation appointed a Committee for scrutiny and to reasses theory papers of the students acquiring more than 20% marks after revaluation, from senior teachers of the Faculty.
After scrutiny, it was found out that the marks are closer to the original marks in Medicine, Surgery and Preventive and Social Medicine.
The Committee therefore recommended that the entire revaluation of the papers should be cancelled.
The Executive Council by a resolution cancelled the result of the revaluation and directed fresh revaluation and the second revaluation was done through the examiners outside the State and the result declared on the basis thereof.
The peritioner and others challenged the aforesaid decision of the Executive Council cancelling the earlier revaluation and directing a second revaluation by means of writ petitions.
It was contended before the High Court on behalf of the petitioners that the action of the Executive Council was arbitrary in as much as there was no malpractice, fraud or anything objectionable to the revaluation as the examiners were chosen by the Vice Chancellor as enjoined under the Ordinance.
Hence the cancellation of revaluation was not proper.
The High Court repelled the two contentions advanced before it and dismissed the writ petitions.
Hence this Petition for Special Leave to appeal.
Dismissing the Petition for special leave to appeal, this Court, HELD: In deciding the matters relating to orders passed by authorities of educational institutions, the Court should normally be 387 very slow to pass orders in its jurisdiction because matters falling within the jurisdiction of educational authorities should normally be left to their decision and the Court should interfere with them only when it thinks it must do so in the interest of justice.
[390 B] Under Ordinance 134A, the Vice Chancellor shall use his discretionary power to decide as to whether all the applications received from the candidates, considered for revaluation or not.
If as a result of revaluation of answer books, the marks obtained by the candidate increase over the original marks by 10% or more then only the result of revaluation will be accepted by the University.
[388 C D] Ordinance 146 is comprehensive enough to include revaluation also for further action.
The fact that two examiners were also the members of the Committee which recommended for revaluation cannot result in any bias even if they had been directly concerned with the original evaluation.
It is true that in the second revaluation also there had been some changes between the original valuation and the revaluation results.
However, it is not so glaring or demonstrably unconscionable as seen in the first revaluation.
[390 D]
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<s>[INST] Summarize the judgementit Petition (Civil) No. 623 of 1989.
(Under Article 32 of the Constitution of India).
Rangarajan and San jay Parokh for the Petitioner.
G.B. Pai, V.K. Sharma and R.K. Maheshwari for the Respondents.
The Judgment of the Court was delivered by 755 OJHA, J.
The gravamen of the grievance of the petitioner is that even though she retired on 3 ist October 1977 on reaching the age of superannuation and even though she was entitled to pension, gratuity and other retirement benefits, the respondents have kept her deprived therefrom without any justification for all these long years.
She has made a prayer that the respondents may be directed to make the requisite payments to her at least now when she was almost at the fag end of her life.
Brief facts necessary for the decision of this petition are that the petitioner joined R.M. Arya Girls Patshala, New Delhi, which was an aided recognised school, as a primary teacher in the year 1952 and had been making contribution towards compulsory Provident Fund.
On 17th October, 1975, the Administrator of the Delhi Administration in consultation with the Accountant General, Central Revenues, issued a notification in exercise of the power conferred on him by Rule 126 of the Delhi School Education Rules, 1973 (hereinafter referred to as the Rules) laying down detailed procedure for disbursement of pension and gratuity and accounting of General Provident Fund to the employees of the aided schools under the Delhi Education Act 1973 (for short the Act) and the Rules flamed thereunder.
The sad notification, inter alia, provided: "Further rule 126 of the Delhi School Education Rules 1973 lays down that the Administrator shall, in consultation with the A.G.C.R. specify the detailed procedure for accounting of provident fund and payment of pension and gratuity to the employees of the aided schools.
In order to implement the provision referred to above the detailed procedure is prescribed hereafter.
In regard to matters not specified in the procedure the provi sions of the Central Civil Services (Pension) Rules, 1972 as amended from time to time and other general provisions of the Act/ Rules shall apply.
The employees of the aided schools shall be enti tled to pension and/or gratuity in accordance with the provisions and procedure applicable to the employees of the similar categories of Delhi Administration under the exist ing pension rules as contained in the Central Civil Services (Pension) Rules, 1972 as amended from time to time.
These rules shall be applicable to these employees of the aided schools who were appointed on or after the commencement of the Act/Rules and also to the existing 756 employees who opt for the pension and gratuity within the stipulated period in the prescribed proforma.
" The school in which the petitioner was working being an aided school under the Act and the notification aforesaid being applicable to its employees the petitioner made the requisite option in the prescribed proforma on 29th January 1976 which was duly countersigned by the Education Officer on 2nd April 1976.
After her retirement, the petitioner made several representations for payment of pension and gratuity etc.
to the authorities concerned but each time the peti tioner did not get any better response than an information that her case was under active consideration.
By his letter dated 27th February, 1987, i.e. after nearly 10 years of the petitioner 's retirement, the Joint Director of Education (FIN.) Old Secretariat, Delhi, conveyed to her an additional information apart from the usual one namely that her case was under active consideration, that further action in the matter will be taken by the Department soon after the pro posal is approved by the Government of India.
By a subse quent letter dated September 29, 1987, the petitioner was informed by the Education Officer that the Directorate of Education had referred the case to Government of India on 26th March, 1987 for policy decision.
Ultimately the Direc torate Of Education, Delhi Administration, promulgated the decision of pension scheme in the primary aided schools on 6th December 1988.
This decision, inter alia, provided for payment of grant in aid to the local authorities concerned for the implementation of the pension scheme already noti fied vide notification dated 17th October, 1975.
The last paragraph of the decision provides that "pensionary benefits under these orders would apply with immediate effect, i.e. from the date of issue of these orders".
The prayer made in this petition has been opposed by the New Delhi Municipal Committee by filing a counter affidavit.
The objection raised by the said Committee is that since the pension scheme was finally promulgated in 1988 and has provided therein that the pensionary benefits were to apply from the date of issue of the requisite order in this behalf namely 6th December, 1988, the petitioner who retired on 31st October, 1977 that is more than 11 years before the final promulgation of the scheme was not entitled to any of the benefits claimed by her simply on the ground that she had opted for pension before her retirement in pursuance of the scheme notified on 17th October 1975 which was in the process of finalisation at the time of her retirement.
It has also been contended on behalf of the said Committee that since modalities for grant in aid to the local authorities con 757 cerned for the implementation of the pension scheme were provided for by order dated 6th December 1988 the petitioner was not entitled to any pension before this date in any view of the matter.
Having heard learned counsel for the parties, we are of the opinion that the pleas raised on behalf of the Municipal Committee have no substance.
As seen above, the requirement under the notification dated 17th October, 1975 with regard to the school, the employees of which were entitled to the benefits of the said notification was that it should be an aided school under the Act.
The term "aided school" as defined in Section 2(d) of the Act means a recognised pri vate school which is receiving raid in the form of mainte nance grant from the Central Government, Administrator or local authority or any other authority assigned by the Central Government, Administrator or a 1ocal authority.
In paragraph 1 of the petition under the caption "Facts" it has been specifically stated that R.M. Arya Girls Patshala was granted permanent recognition on 1.4.1936 and was also given grant in aid.
The averments made in this behalf in sub paragraphs (b) and (c) ot paragraph III of the counter affidavit do not seem to seriously challenge what has been stated in paragraph 1 of the petition.
It is, therefore, apparent that the school in which the petitioner was working was such, the employees of which were entitled to the bene fits/ conferred by the notification dated 17th October, 1975.
The said notification as already pointed out above, inter alia, provided that in regard to matters not specified in the procedure the provisions of the Central Civil Serv ices (Pension), Rules, 1972 as amended from time to time shall apply.
Rule 35 of these Rules provides that a superan nuation pension shall be granted to a Government servant who is retired on his attaining the age of compulsory retire ment.
Rule 83 of these Rules, on the other hand, inter alia, lays down that the pension shall become payable from the date on which a government servant ceases to be borne on the establishment.
Since these Rules will apply to the petition er as contemplated by notification dated 17th October 1975, she is obviously entitled to get pension with effect from the date on which she/ceased to be borne on the establish ment of the school in which she was working consequent upon reaching the age of superannuation.
Rule 126 of the Rules under which the notification dated 17th October, 1975 had been issued gives the power to specify procedure for payment of pay and allowances, pension and gratuity etc.
to the Administrator in consultation with the Accountant General, Central Revenues.
The very opening words of the said notifi cation make it abundantly clear that the said notification had been issued in exercise of the powers conferred by Rule 126 of the Rules by the Administrator 758 in consultation with the Accountant General, Central Reve nues.
The notification having thus been issued by the compe tent authority and the petitioner who was an existing em ployee of an aided school on the date of the issue of the said notification having opted for the pension and gratuity within the stipulated period in the prescribed proforma which was duly counter signed by the Education Officer, she obviously became entitled to the benefits conferred by the said notification.
This is so all the more in view of the fact that the notification dated 17th October, 1975 did not contemplate finalisation of the modalities about contribu tion towards pension fund as a condition precedent to the entitlement of the benefits under the said notification.
The finalisation of the said modalities was a matter of details among the authorities concerned and could have no bearing on the entitlement to the benefits of the notification dated 17th October, 1975.
Such finalisation could not even defer the date of the entitlement: Likewise the said notification did not contemplate any approval by the Government of India as a condition precedent to its enforceability.
In this connection, it is also of significance that no statutory provision has been brought to our notice which made approval by the Government of India of the notification dated 17th October, 1975 issued by the competent authority as a condition precedent to the enforce ability of the said notification.
As seen above, for nearly 10 years after her retirement the petitioner was being informed in reply to her various representations that her case was under active consideration.
It is only in 1987 that the plea that further action in the matter will be taken by the Department soon after the proposal is approved by the Government of India was raised and the case was referred by the Directorate of Education to the Government of India on 26th March 1987 for policy decision.
Why it became necessary to do so in 1987 is a matter of anybody 's guess.
If, at all, it only indicates the callous attitude of the authorities concerned towards the fate of retired employees of aided schools in the matter of grant of pension and other retire ment benefits to them.
For ought we know, but for the sin cere effort made by the Indian Council for Legal Aid and Advice in this case, which apparently deserves commendation, the agony which the petitioner must have suffered during the long years after her retirement may have remained unnoticed and unmitigated.
No acceptable justification having been given for denying the pension to the petitioner from the date of her retirement as also the other retirement benefits the petitioner is obviously entitled to these benefits.
In the result, this petition succeeds and is allowed.
The respon 759 dents are directed to pay to the petitioner pension admissi ble to her in pursuance of the notification dated 17th October, 1975 with effect from the date of her retirement and also to pay to her the other retirement benefits.
They are further directed to finalise the requisite formalities in this behalf within three months and to issue payment orders immediately thereafter.
The petitioner shall be entitled to her costs from respondents 1 and 2 which is assessed at Rs.2,000.
G.N. Petition allowed.
[/INST]M/s Dabur India Limited, petitioner in one set of peti tions, is a public limited company engaged in the manufac ture of Ayurvedic as well as Allopathic medicaments, along with cosmetics.
It used to manufacture for and on behalf of M/s Sharda Boiren Laboratories The petitioner in the second set of petitions a Homeopathic tooth paste called 'Homeo dent ' out of the raw materials supplied by M/s Sharda, on job basis.
It accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeodent under the Central Excises & Salt Act, 1944.
The Superintendent of State Excise visited the factory of M/s Dabur on 18th January, 1988 and enquired about the excisability of Homeodent under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955.
He was told that Homeodent had been classified under the 1944 Act in view of the orders passed by the Central Excise authorities.
Howev er, when it was revealed that the Homeodent tooth paste was toilet preparation containing alcohol, within the meaning of section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, the District Excise Officer caused a common notice dated 17.3.1988 to be served on M/s Dabur requiring it to pay duty aggregating to Rs.68,13,334.20 under the provisions of the 1955 Act on such 295 goods manufactured and cleared between January 1985 and January 1988.
This order was passed without issuing any notice to show cause, and without affording any opportunity of hearing, to the petitioner.
The Petitioner sent a representation requesting for compliance with the principles of natural justice and also disputing the amount claimed as duty.
On 18th March, 1988 the Superintendent of State Excise modified the earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs, on provisional basis.
On that day the petitioner deposited a sum of Rs. 11.66 lakhs and further executed a bank guarantee for the balance.
Simultaneously, the peti tioner appealed against the order dated 18th March, 1988.
The Excise Commissioner dismissed the appeal.
No appeal was filed by M/s Sharda against the demand notice of excise duty under the 1955 Act.
The petitioner moved the High Court.
On 13th May, 1988 the High Court directed the petitioner to file a revision petition with the Central Government.
Both the petitioners then approached the Central Government in revision.
On 22nd September, 1988 the Additional Secretary to the Government of India in exercise of his revisional powers allowed the revision filed by M/s Dabur and declared the orders of the District Excise Officer and the Excise Commissioner as null and void having been passed in violation of the principles of natural justice.
The revision filed by M/s Sharda was not entertained by the Central Government on the ground that a right of appeal was vested in Sharda, which was not availed of.
The High Court dismissed Sharda 's petition challenging the order of the Central Government declining to entertain its review.
Against the order of the High Court M/s Sharda have filed the special leave petition in this Court.
On the basis of the revision order, the petitioners called upon the District Excise Officer to refund the amount of Rs.46.67 lakhs recovered from it by way of cash payment and encashment of bank guarantee.
The State Excise authori ties however failed to grant the refund, and instead issued a fresh show cause notice to the petitioners jointly on 2nd November, 1988.
In December 1988, M/s Dabur moved the High Court under Article 226 of the Constitution for quashing and setting aside the showcase notice dated 2.11.1988 and for refund of duty amounting to Rs.46.67.
The High Court dismissed the writ petition.
The High Court was 296 of the opinion that the question whether Homeodent tooth paste was sans alcohol could not be adjudicated upon under the extraordinary writ jurisdiction.
The High Court however came to the conclusion that both the 1944 and 1955 Acts operated in different fields and there was no overlapping between the two.
The High Court further observed that where the parties fully acquiesced with the matter and subjected themselves to the statutory procedure, no action should be allowed to be taken under Article 226 of the Constitution unless the case was patently without jurisdiction.
In this connection, it was emphasised by the High Court that once the parties chose the statutory procedure they must go to the logical end.
It was inter alia urged before this Court on behalf of the petitioner that it was not seeking to circumvent the alternative remedy provided under the Act but in view of the conflicting claims of the Central and State Excise authori ties seeking to classify Homeodent tooth paste under the respective Acts of 1944 and 1955, the petitioner was left with no other alternative but to challenge the actions by way of writ petition under Article 226 of the Constitution.
It was further contended that Homeodent did not contain alcohol but contained ingredient "mother tincture" contain ing alcohol, which had a tendency to evaporate during the process of manufacture of Homeodent; that no test result as required under the 1955 Act was obtained to establish wheth er Homeodent contained alcohol or not; and that on 31st August, 1987 the Assistant Collector of Central Excise had already passed an order classifying Homeodent under the Act of 1944 which order had been upheld by the Collector of Central Excise (Appeals).
The main point that the petitioner sought to emphasis was that the High Court ought to have appreciated that Homeodent tooth paste having been subjected to duty under the provisions of the 1944 Act, the question of levying and recovering duty under the 1955 Act did not and could not arise.
Dismissing the petitions, this Court, HELD: (1) Homeodent is a homeopathic preparation but it is also a tooth paste.
Therefore, it is a toilet prepara tion.
Whether or not such Homeodent would not be dutiable under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955 would depend upon whether it contained alcohol or not.
[315E] (2) It is undisputed that mother tincture was one of the components that was used in the preparation of Homeodent and it has been found that alcohol was there and mother tincture was added in the 297 medicinal preparation as its component.
[315G] M/s Baidyanath Aryurved Bhawan (Pvt.) Ltd. Jhansi vs The Excise Commissioner U.P., , referred to.
(3) The authorities charged with the duties of enforcing a particular Act are enjoined with the task of determining the question whether alcohol is contained therein or not.
[310D] (4) It has been determined by the authorities enjoined to enforce the 1955 Act that Homeodent was a medicinal and toilet preparation and liable to excise duty, and such finding has not been assailed on any cogent ground in any proper manner.
If that is the position, then it must be upheld that Homeodent was dutiable.
[317D] Union of India vs Bombay Tyre International Ltd., ; ; Mohanlal Magan Lal Bhavsar vs Union of India, and N.B. Sanjana, Assistant Collector of Central Excise, Bombay vs The Elphinston Spinning and Weav ing Mills Co. Ltd.; , , referred to.
(5) Provisions for rebate of duty on alcohol contained in section 4 of the 1955 Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation, otherwise there was no purpose in incorporat ing section 4 into the Act.
[316B] (6) Justice requires that provisions for claiming refund of this duty should be made more clear.
However, in the view of the facts and the circumstances that have happened, it is directed that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be entertained and considered in accordance with law.
[316E F] (7) In a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just and proper and in consonance with justice infiscal administration that the Central Gov ernment should consider in the light of the facts found, if an application is made under section 11B of the 1944 Act, and circumstances of this case, the limitation period under section 11B of the 1944 Act should not apply.
This direction must be confined in the facts and the circumstances of this case only.
[316G H; 317A] 298 Citadel Fine Pharmaceuticals Pvt. Ltd. vs D.R.O., [1973] Mad.
Law Journal 99; Union of India vs Bombay Tyre Interna tional Ltd.; , and Assistant Collector of Central Excise vs Madras Rubber Factory Ltd., [1986] supp.
SCC 751, referred to.
(8) Government should consider feasibility of a machin ery under a Council to be formed under Article 263 of the Constitution to adjudicate and adjust the dues of the re spective Governments.
[318D] (9) This Court would not like to hear from a litigant in this country that the Government is coercing citizens of this country to make payment which the litigant is contend ing not leviable.
Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the Government, Central or State, cannot be permitted to play dirty games with the citizens to coerce them in making payments which the citizens were not legally obliged to make.
If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeu vre.
Therefore, the right of renewal of the petitioner of licence must be judged and attended to in accordance with law and the occasion not utilised to coerce the petitioners to a course of action not warranted by law and procedure.
[318A C]
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<s>[INST] Summarize the judgemento. 189 of 1971.
Appeal under Section 116 A of the Representation of the People Act, 1951 from the judgment and order dated January 8, 1971 of the Madras High Court in Election Petition No. 1 of 1970.
V. P. Raman and Vineet Kumar, for the appellant.
Jagdish Swarup, Socilitor General of India, B. D. Sharma and section P. Nayar, for the Election Commission of India.
B. Sen and Sobhag Mal Jain, for the Supreme Court Bar Association.
The Judgment of the Court was delivered by Beg, J.
This is an appeal under Section 116 A of the Repre sentation of People Act, 1951.
The appellant 's election, held on 11 4 1970, to the Madras Legislative Council from the Madras District Graduates ' Constituency was set aside by a learned Judge of the Madras High Court who decided all the issues except one in favour of the appellant.
The only issue decided against the appellant, which is now before us, was framed as follows : "Whether the first Respondent was not qualified to stand for election to the Graduates Constituency on all or any of the grounds set out by the petitioner in paragraph 7 to 9 of the election Petition" ? Paragraphs 7 to 9 of the election petition against the appellant are lengthy, prolix, and argumentative.
The case and the contentions of the Respondent G. Panneerselvam, the petitioner before the High Court, which were accepted by the High Court, may be summarised as follows Firstly, the whole purpose of Article 171 of the Constitution was to confer a right of "functional representation" upon persons possessing certain educational or other qualifications so that the Appellant Narayanaswami, who had only passed the High School Leaving Examination and was not a Graduate, could not be elected 175 at all to the Legislative Council from the Graduates ' Constituency; secondly, it would be absurd and destructive of the very concept of representation of especially qualified persons that an individual who does not possess the essential or basic qualification of the electors should be a representative of those who are to be represented because of this special qualification of theirs; and, thirdly, the Constitution, being an organic instrument for the governance of the land, must be interpreted in a particularly broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be set up by it and not in such a way as to defeat them.
Hence, the educational qualification of the electors should be read into the system of represen tation set up by the Constitution for Legislative, Councils as a necessary qualification of candidates in such constituencies.
Authorities are certainly not wanting which indicate that Courts should interpret in a broad and generous spirit the document which contains the fundamental law of the land or the basic principles of its Government.
Nevertheless, the rule of "plain meaning or "literal" interpretation, described in Maxwell 's Interpretation of Statutes as "the primary rule", could not be altogether abandoned today in interpreting any document.
Indeed, we find Lord Evershed, M.R., saying: "The length and detail of modern legislation, has undoubtedly reinforced the claim of literal construction as the only safe rule".
(See : Maxwell on "Interpretation of Statutes" 12th Edition p. 28).
It may be that the great mass of modem legislation, a large part of which consists of statutory rules, makes some departure from the literal rule of interpretation more easily justifiable today than it was in the past, But, the object of interpretation and of "construction" (which may be broader than "interpretation") is to discover the intention of the law makers in every case (See: Crawford on "Statutory Construction" 1940 Ed. para 157, p. 240 242).
This object can, obviously, be best achieved by first looking at the language used in the relevant provisions.
Other methods of extracting the meaning can be resorted to only if the language used is contradictory, ambiguous, or leads really to absurd results.
This is an elementary and basic rule of interpretation as well as of construction processes which, from the point of view of principles applied, coalesce and converge towards the common purpose of both which is to get at the real sense and meaning, so far as it may be reasonably possible to do this, of what is found laid down.
The provisions whose meaning is under consideration have, therefore, to he examined before applying any method of construction at all.
To these provisions we may now turn.
Article 168 of our Constitution shows that the State Legis latures in nine States in India, including Madras, were to consist of two Houses : the Legislative Assembly and the Legislative, Coun 176 cil.
Article 170 lays down that the Legislative Assembly of each State "shall consist of members chosen by direct election from territorial constituencies in the State, in such a manner as the Parliament may by law determine".
After that, comes Article 171 which may be reproduced in toto here: "1.71(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed one third of the total number of members in the Legislative Assembly of that State,: Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.
(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).
(3) of the total number of members of the Legislative Council of a State (a) as nearly as may be, one third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify; (b) as nearly as may be, one twelfth shalt be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university; (c) as nearly as may be.
one twelfth shall be, elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament; (d) as nearly as may be, one third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly.
(e) the remainder shall be nominated by the Governor in accordance with the provisions of clause (5).
(4) The members to be elected under sub clauses(a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament,, and the elections under 177 the said sub clauses and under sub clause (d) of the said clause shall be held in accordance with the system of pro portional representation by means of the single transferable vote.
(5) The members to be nominated by the Governor under sub clause (2) of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following namely: Literature, Science, article cooperative movement and social service.
" The term "electorate", used in Article 171(3) (a)(b) & (c) has neither been defined by the Constitution nor in any enactment by Parliament.
2(1)(e) of the Representation of People Act 43 of 1951, however, says : " 'elector, ' in relation to a constituency means a person whose name is entered in the electoral roll of that constituency for the time being in force and who is not subject to any of the disqualifications mentioned in Sec.
16 of the Representation of the People Act, 1950".
The plain and ordinary meaning of the term " electorate" is confined to the body of persons who elect.
It does not contain, within its ambit, the extended notion of a body of persons electing representatives "from amongst themselves".
Thus, the use of the term "electorale" in Article 171(3) of our Constitution, could not, by itself, impose a limit upon the field of choice of members of the electorate by requiring that the person to be chosen must also be a member of the electorate.
The qualifications of the electors constituting the "electorate" and of those who can represent each " electorate", contemplated by the constitution and then supplemented by Parliament, are separately set out for each house.
We may glance at the provisions relating to Legislative Assemblies first.
Section 16 of the Representation of People Act 43 of 1950 lays down the qualifications of an elector negatively by prescribing who shall be disqualified for registration in an electoral roll.
A disqualified person is one who : (a) is not a citizen of India; or (b) is of unsound mind and stands so declared by a competent court; _or (c) is for the time being disqualified from voting under the provisions of any law relating to corrupt practices and other offences in connection with elections".
Section 19 lays down the two conditions for registration on the electoral roll of a constituency.
The person to be registered must not be less than 21 years of age on the qualifying date and must 178 be ordinarily resident in the constituency.
The persons so registered, whose names appear on the electoral roll, constitute the electorato for the legislative Assembly of each State.
Section 5 of the Representation of People Act, 43 of 1.951 enacts : "5.
Qualifications for membership of a Legislative Assembly: A person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless (a) in the case of a seat reserved for the Scheduled Castes or for the Scheduled Tribes of that State, he is a member of any of those castes or of those tribes, as the case may be, and is an elector for any Assembly consti tuency in that State; (b) in the case of a seat reserved for an autonomous district of Assam, other than a seat the constituency for which comprises the cantonment and municipality of Shillong, he is a member of a Scheduled Tribe of any autonomous district and is an elector for the Assembly constituency in which such seat or any other seat is reserved for that district; and (c) in the case of any other seat, he is an elector for any Assembly constituency in that State"; Coming to the Legislative Council, we find that the qualifications for the four "electorates" are indicated by article 171(3)(a)(b)(c) & (d).
And, the qualifications of candidates for seats in a Legislative Council are given in Section 6 of the Representation of People Act 43 of 1951 which lays down: "6.
Qualifications for membership of a Legislative Council. (1) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by election unless he is an elector for any Assembly con stituency in that State.
(2) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by nomination by the Governor unless he is ordinarily resident in the State".
A look at Article 171(2), set out above, indicates that the composition of the Legislative Council of a State was a matter to be also provided for by law made by Parliament.
It is evident that the constitution makers had directed their attention specifically towards the methods of election and composition of the legislature 179 of each State.
They themselves prescribed same qualifications to be possessed by members of each House of the Legislature.
Article 173 lays down : "173.
A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule; (b) is, in the case of a seat in the Legislative Assembly, not less than twenty five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament".
An important and very noticeable difference between, quali fications prescribed by Parliament for the membership of a Legislative Assembly by Section 5 of the Representation of People Act of 1951 and those for the membership of a Legislative Council by Section 6 of that Act is that, so far as a member of the Legislative Assembly is concerned, he or she has to be an Elector in the Constituency from which he or she stands, but a member of a Legislative Council in a State is not, similarly, required to be a member of the electorate.
All that Parliament says, in Section 6 of the Representation of People Act, 1951, is that the, person to be chosen as a member of the Legislative Council has to be "an elector for any Assembly constituency" in the State to whose legislative Council he was to be chosen.
He has to be "ordinarily resident" in the State to qualify for nomination.
No other qualifications, apart from those found in Article 173 of the Constitution and Section 6 of the Representation of People Act of 1951, are to be found laid down anywhere.
But, an additional qualification was found, by the judgment under appeal before us, to exist by resort ' ing to a presumed legislative intent and then.
practically adding it to those expressly laid down.
It may be possible to look for legislative intention in materials outside the four corners of a statute where its language is really ambiguous or conflicting.
But, where no such difficulty arises, the mere fact that the intentions of the law makers, sought to be demonstrated by what was said by some of them or by those advising them when the Constitution was on the anvil, were really different from the result which clearly follows from language used in the Legislative provisions under consideration, could not authorise the use of such an exceptional mode of construction.
"It is well accepted", said Lord Morris (See: Davies Jankins & 180 Co. vs Davies) ', "that the beliefs and assumptions of those who frame Acts of Parliament cannot make the law".
The judgment under appeal, after discussing the manner in which Article 171 of the Constitution was framed and the different views expressed about the nature of the Second Chambers to be set up by it in our States, says : "The system of functional, which is also called occupational representation, as distinguished from territorial representation, was borrowed from the Irish Constitution and that is the underlying principle in Article 171.
The opinion of political thinkers and statement on the wisdom of such representation may not be unanimous.
Whatever be the divergent views, the accomplished fact in the Constitution is that such a representation has been given recognition and it has to be implemented.
In making the Legislative Council as a representative body, the framers of the Constitution have not made it exclusively one of elected representatives according to their occupations.
It is intended to be a hetergenous and more broad based body consisting of persons of different walks of life, some elected and some nominated, each with the experience in his own field of activity".
The learned Judge concluded; "It is with these objects that clauses (a),, (b), and (c) of Article 171(3) have been conceived so that persons in those walks of life could make their contribution to the Legislative functions of the State.
Article 1.71 in fixing the composition of the Legislative Council as a functional chamber.
has also indirectly laid down certain qualifications and also disqualifications of members to be elected thereunder".
Whatever may have been the opinions of Constitution makers or of their advisers, whose views are cited in the judgment under appeal, it is not possible to.
say, on a perusal of Article 171 of the Constitution, that the Second Chambers set up in nine States in India were meant to incorporate the principle of what is known as "functional" or "vocational" representation which has been advocated by Guild Socialist and Syndicalist Schools of political thought.
, Some of the observations quoted above, in the judgment under appeal itself, militate with the conclusions reached there.
All that we can infer from our Constitutional provisions is that additional representation or weightage was given to persons possessing special type of knowledge and experience by enabling them to elect their special representatives also for Legislative Councils.
The concept of such representation does not carry with it, as a necessary consequence, the further notion that the representative must also possess the very qualifications of those he represents.
In the case of the Graduates ' constituency, it is provided in Article 171(3)(b) that the electors must have held their degrees (1) 1967 2 W.L.R. p. 11 39 @ 11 56.
181 for at least three years before they become qualified an electors.
Thus,. in laying down the test of competence of voters of such a constituency, more possession of degrees by them was not considered sufficient.
Moreover, graduates are not an occupational or vocational group but merely a body of persons with an educational qualification.
It would, therefore, not be correct to describe the additional representation sought to be given to them as an attempt to introduce the "functional" or "vocational" principle.
On the face of it, Article 171 appears to be designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative in there, as we think that there must be, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge, experience, and wisdom which satisfy certain standards.
It may well be that the constitution makers, acting upon such a presumption, had intentionally left the educational qualifications of a candidate for election from the graduates constituency unspecified.
A test laid down by Blackburn J. in R. vs Cleworth(1), to determine what the correct presumption, arising from an omission in a statute should be, was whether what was omitted but sought to be brought within the legislative intention was "known" to the law makers, and could, therefore, be "supposed to have been omitted intentionally".
"It makes no difference", says Craies 'in "Statute Law"(2) "that the omission on the part of the legislature was a mere oversight, and that without doubt the Act would have been drawn otherwise had the attention of the legislature been directed to the oversight at the time the Act was under discussion".
In the case before us, it could not possibly be said that the question to be dealt with was not "known" to the, legislators.
It could not even be said that qualifications of the electors/ as well as of those to be elected were not matters to which the attention of the law makers, both in the Constituent Assembly and in Parliament, was not specially directed at all or that the omission must be by mere oversight.
The provisions discussed above demonstrate amply how legislative attention was paid to the qualifications, of the electors 'as well as of the elected in every case.
Hence, the correct presumption, in such a case, would be that the omission was deliberate.
A glance at the legislative history lying behind Article 171 also enables us to reach the conclusion that the omission by the Constitution makers or by Parliament to prescribe graduation as (1) [1864] 4 BSS 927, 934 (2) Crains on Statute Law 5th En.
182 must be deliberate.
Sections 60 and 61 of the Government of India Act, 1935, deal with composition of Provincial legislatures and of the two Chambers of such legislatures.
The Upper Chambers in the Provincial Legislatures were to be composed of members retiring every third year in accordance with provisions of the Fifth Schedule to the Act.
Rule 10 of this Schedule lays down: "In a Province in which any seats are to be filled by representatives of backward areas or backward tribes, representatives of commerce, industry, mining and planting, representatives of landholders, representatives of universities or representatives of labour, persons to fill those seats. . . shall be chosen in such manner as may be prescribed".
On 30th April, 1936, the Government of India (Provincial Legislative Assemblies) Order of 1936 was issued by His Majesty in Council.
It prescribed the qualifications of persons to be chosen from the "special constituencies" set up for representation in the Legislative Councils, A glance at the provisions relating to these qualifications, including those for the University seats, indicates that it was invariably expressly provided, where it was so intended, that a necessary qualification of a candidate for a seat was that he or she should be "entitled to vote for the choice of a member to fill it".
Hence, legislative history on the subject would also indicate.
that, whenever any qualification of the candidate was intended to be imposed, this was expressly done and not left to mere implications.
We think that the view contained in the Judgment under appeal, necessarily results in writing some words into or adding them to the relevant statutory provisions to the effect that the candidates from graduates ' constituencies of Legislative Councils must also possess the qualification of having graduated.
This contravenes the rule of "Plain meaning" or "literal" construction which must ordinarily prevail.
A logical corollary of that rule is that "a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made" (See: Craies on Statute Law 6th Edn.
p. 70).
An application of the rule necessarily involves that addition to or modification of words used in statutory provisions is not generally permissible (see e.g. Sri Ram Narain Medhi & Ors.
vs The State of Bombay(1), British India General Insurance Co. Ltd. vs Captain Itbar Singh & Ors.
(2), R. G. Jacob vs Union of India(3).
Courts may deppart from this rule only to avoid a patent absurdity (see e.g. State 'of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.(4).
In Hira Devi vs District Board, Shahiahanpur(5), this Court observed (1) ; (2) (3) ; (4) A.T.R. (5) A.T.R. 365.
183 "No doubt it is the duty of the Court to try and harmonise the various provisions of an Act passed by the Legislature.
But it is certainly not the duty of the Court to stretch the words used by the Legislature to fill in gaps or omissions in the provisions of an Act".
Cases in, which defects in statutory provisions may or may not be supplied by Courts have been indicated in well known works such as Sutherland 's "Statutory Construction" (3rd Edn.(Vol. 2) (Paragraph 4924 at pages 455 558) and in Crawford 's "Construction of statutes" (1940 Edn.).
Only one passage from the last mentioned work need be cited here: (p. 269) : "Where the statutes meaning is clear and explicit, words cannot be interpolated.
In the first place, in such a case, they are not needed.
If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words.
They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur.
Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute".
We think that the language as well as the legislative history of Articles 171 and 173 of the Constitution and Section 6 of the Representation of People Act, 1951, enable us to presume a deliberate omission of the qualification that the representative of the Graduates should also be a graduate.
In our opinion, no absurdity results if we presume such an intention.
We cannot infer, as the learned Judge of the Madras High Court had done, from the mere fact of such an omission and opinions about a supposed scheme "functional representation" underlying Article 171 of our Constitution, that the omission was either unintentional or that it led to absurd results.
We think that, by adding a deemed to be necessary or implied qualification of a representative of the Graduates which the Constitution makers, or, in any event, the Parliament, could have easily imposed, the learned Judge had really invaded the Legislative sphere.
The defect, if.
any, in the law could be removed only by law made by Parliament.
We conclude, after considering all the relevant constitutional and statutory provisions relating to the qualifications of a candidate for election from the Graduates ' constituency of the Legislative Council of the Madras State, that the appellant possesses all the qualifications laid down for such a candidate.
184 Therefore, we allow this appeal, set aside the Judgment and order of the Madras High Court, and dismiss the, Respondent 's election petition.
The appellant is entitled to his costs throughout.
V.P.S. Appeal allowed.
[/INST]Under the Punjab Rent Restriction Act, 1949 a landlord can evict a tenant only on the grounds and according to the procedure provided in section 13 of the Act.
Section 3 of the Act provides for exemption to be granted by Government from the operation of section 13.
By notification dated July 30, 1965 the Government of Punjab granted such ex emption in respect of building constructed during the year 1959 to 1963 for a period of 5 years from the date of their completion, on the .condition that during the aforsaid period of exemption suits for ejectment of tenants in respect of those, buildings "were or are" institutes in civil courts and decrees of ejectment "were or are" passed.
The respondent had let out to the appellant a building which was completed in 1960.
A suit for ejectment of the appellant was filed in 1963 and decree was obtained in 1969.
In proceeding for execution the question was whether the .decree, having been obtained more than 5 years after completion of the building, was exempt from operation of section 13.
The High Court in second appeal held in favour of the respondent.
In appeal to this Court by special leave, the appellant contended that the decree in the suit having been passed after 1 period of 5 years from the date of construction, exemption from restrictions placed by section 13 will not be available because not only the suit should be filed but the decree for eviction should be obtained within the said period of 5 years.
HELD : The filing of the suit within the period of exemption is the only condition that is necessary to satisfy one of the requirements of the exemption, the other requirement being the passing of the decree in respect of which no time has been prescribed.
If the degree, as contended by the appointment has to be obtained within the period of 5 years, there was no need to specify the at the suit had to be filed within that period because the exemption from the requirements of section 13 is only in respect of the decree and not the suit.
[928 F] The use of the words 'were or are ' in respect of decree ,is A will as suits supports the above interpretation.
The suit should have been filed or are her , after, to filed and likewise decrees of ejectment bid been passed or are hereafter to be passed.
Further, a suit may conceivably be filed on the last day of the expiry of the 5 years exemption.
If so it will be absurd to postulate that a decree would be given immediately thereafter, as that would be the result, if the contention that both the suit.and the decree should be passed within the period of exemption.
is accepted.
[927 H 928 E] 923 A statue must be interpreted in the light of its object.
The very purpose of the exemption of buildings ' from 'the operation of section 13 was to give landlords the light which as owners of buildings they had under the ordinary law, namely, to give them on lease at rents which they thought remunerative and to evict tenant 's during that period without any fetters imposed by the Act.
If no provision was made for exempting such decrees in respect of the exempted buildings the exemption granted will be illusory.[1926 H 927 E] Accordingly the appeal must fail.
</s>
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<s>[INST] Summarize the judgementAppeals Nos. 272 to 280 of 1962.
Appeals by special leave from the Award dated June 3, 1960, in reference (IT) Nos. 84 and 251 of 1959, June 15, 1960, in References (IT) Nos. 112 and 252 of 1959, June 16, 1960, in References (IT) Nos. 121 of 1959, and 7 of 1960, June 15, 1960, in References (IT) Nos. 123, 180 and 236 of 1959 of the Industrial Tribunal, Maharashtra at Bombay.
S.V. Gupte, Additional Solicitor General N. V. Phadke, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellants (in all the appeals).
M.C. Setalvad, K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C.A. No. 272/1962).
K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C. As.
273 280/62).
November 14, 1963.
The Judgment of the Court was delivered by WANCHOO J.
These nine appeals by special leave arise out of the awards of the Industrial Tribunal, Bombay and will be dealt with together.
There were disputes between the four appellants companies and the respondents, their workmen, which were referred for adjudication to the Industrial Tribunal by nine reference orders on various dates between April to December 1959.
The main dispute which gave rise to the references was with respect to wages, dearness allowance and gratuity.
The references included other items also but we are not concerned in the present appeals with those items.
Of the four companies who are the appellants before 364 us, Greaves Cotton and Co., is the first company and its main activity is to invest money in manufacturing concerns.
The second company is Greaves Cotton and Crompton Parkinson Private Limited and its main business is distribution of the products of a manufacturing concern known as Crompton Parkinson (Works) India Limited and service and repair to the said products at its workshop.
The third company is Konyon Greaves Private Limited and its main business is to manufacture high grade interstranded ropes for the textile industry.
The last company is Ruston and Hornsby (India) Private Limited and its main business is to manufacture oil engines and pumps.
The last three companies are controlled by the first company, namely Greaves Cotton and Co., in one way or the other and that is how the main dispute relating to wages and dearness allowance was dealt with together by the tribunal.
There were two references each with respect to the first three companies and three references with respect to Ruston and Hornsby Private Limited; and that is how there are nine appeals before us.
There were nine awards, though the main award dealing with the main dispute relating to wages and dearness allowance was common.
It appears that wages and dearness allowance prevalent in the four companies had been continuing since 1950 when the last award was made between the parties.
It may also be stated that there was no .serious dispute before the Tribunal as to the financial capacity of the companies and further, as the first company controls the other three companies, the wages and dearness allowance are the same so far as the clerical and subordinate staff are concerned.
The same appears to be the case with respect to factory workmen.
The Tribunal dealt with clerical and subordinate staff separately from the factory workmen.
So far as the clerical and subordinate staff are concerned, the Tribunal, after a comparison of wages and dearness allowance prevalent in the four companies with wages 365 and dearness allowance prevalent in comparable concerns revised them.
Further it provided bow the clerical and subordinate staff would be fitted in the new scales after making certain adjustments and in that connection it gave one to three extra increments depending upon length of service between 1950 to 1959.
Finally, it ordered that the award would have effect from April 1, 1959, which was a week before the first reference was made with respect to the first company.
The Tribunal then dealt with the case of the factory workmen and prescribed certain rates of wages.
Further it gave the same dearness allowance to the factory workmen as to the clerical and subordinate staff and directed adjustments also on the same basis.
Finally it considered the question of gratuity and the main provision in that respect was that the maximum gratuity allowable would be upto 20 months and a provision.
was also made to the effect that if an employee was dismissed or discharged for misconduct which caused financial loss to the employer, gratuity to the extent of that loss only will not be paid to the employee concerned.
The main attack of the appellants is on the award as regards wages and dearness allowance.
It is urged that the industry cum region formula, which is the basis for fixation of wages and dearness allowance has not been properly applied by the Tribunal and it had been carried away by the recommendations of the tripartite conference which suggested need based minimum wages.
It is also urged that whatever comparison was made was with concerns which were not comparable and the wages awarded were even higher than those prevalent in any comparable concern.
It is also urged that the Tribunal did not consider the total effect of the increase it was granting in basic wage and dearness allowance together as it should have done, for the purpose of finding out whether the total pay packet in the appellants ' concerns can bear comparison with the total pay packet of the concerns with which the Tribunal had compared the appellants ' concerns.
In this connection it is urged that in flying 366 scales of wages the Tribunal increased the maximum and the minimum and the annual rate of increment and decreased the span of years in which the maximum would be reached.
Adjustments made by the Tribunal are also attacked and so is the order making the award enforceable from April 1, 1959.
As to the factory workmen it is urged that the Tribunal made no attempt to make a comparison with wages prevalent even in what it considered to be comparable concerns.
Lastly it is urged that the Tribunal created a new category of factory workmen called higher unskilled which was not demanded and which in any case did not exist in any comparable concern.
The first question therefore which falls for decision is whether the Tribunal went wrong in not following the industry cum region principle and in leaning on the recommendations of the Tripartite Conference.
It is true that the Tribunal begins its award with a reference to the recommendations of the Tripartite Conference wherein the need based minimum wage was evolved.
It is urged that this disposed the Tribunal to pitch wage scales too high.
It is however clear from the award that though the Tribunal discussed the recommendations of the Tripartite Conference at some length, when it actually came to make the award it did not follow those recommendations.
The reason why it referred to those recommendations was that the respondents workmen based their claim on them and wanted that the Tribunal should fix wagescales accordingly.
But the Tribunal 's conclusion was that it was not feasible to do so, though looking at the financial stability of the appellants, emoluments needed upgrading.
It then went on to consider the wages prevalent in comparable concerns and finally fixed wages for the appellants on the basis of wages prevalent in such concerns.
Though therefore the recommendations of the Tripartite Conference are referred to in the Tribunal 's award, its final decision is not based on them and what the Tribunal has done is to make comparisons with what it considered comparable concerns so far as clerical and subordi 367 nate staff are concerned.
We are therefore not prepared to say that reference to the recommendations of the Tripartite Conference in the opening part of the award was irrelevant and therefore the rest of the award must be held to be vitiated on that ground alone.
The main contention of the appellants however is that the tribunal has gone wrong in applying the industry cum region formula which is the basis for fixing wages and dearness and has made comparison with concerns which are not comparable.
It is also urged that the Tribunal has relied more on the region aspect of the industry cum region formula and not on the industry aspect when dealing with clerical and subordinate staff and in this it went wrong.
Reference in this connection is made to two decisions of this Court, namely, Workmen of Hindusthan Motors vs Hindusthan Motors( ',) and French Motor Car Company vs Their Workman (2 ) and it is emphasis that the principles laid down in Hindusthan Motors ' case(") were more applicable to the present case than the principles laid down in the French Motor Car Co. 's case(2).
In the Hindusthan Motors case(1), this Court observed that it was ordinarily desirable to have as much uniformity as possible in the wage scales of different concerns of the same industry working in the same region, as this puts similar industries more or less on an equal footing in their production struggle.
This Court therefore applied the wage scales awarded by the Third Major Engineering Tribunal in Bengal in the case of Hindusthan Motors also.
It is urged that the Tribunal should have taken into account comparable concerns in the same industry and provided wage scales on the same lines so that, so far as manufacturing concerns in the present appeals are concerned, there will be equality in the matter of competition.
In the French Motor Car Co. 's case(2) however this Court held so far as clerical staff and subordinate staff are concerned that it may be possible to take into account (1) (2) [1963] Supp. 368 even those concerns which are engaged in different lines of business for the work of clerical and subordinate staff is more or less the same in all kinds of concerns.
We are of opinion that there is no inconsistency as urged in the principles laid down in these two cases.
As we have already said the basis of fixation of wages and dearness allowance is industry cum region.
Where there are a large number of industrial concerns of the same kind in the same region it would be proper to put greater emphasis on the industry part of the industry cum region principle as that would put all concerns on a more or less equal footing in the matter of production costs and therefore in the matter of competition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs.
But where the number of comparable concerns is small in a particular region and therefore the competition aspect is not of the same importance, the region part of the industry cum region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasised in the French Motor Car Co. 's case() where that company was already paying the highest wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business for the purpose of fixing wage scales and dearness allowance.
The principle therefore which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small it is the region part of the industry cum region formula which (1) [1963] Supp. 369 assumes importance particularly in the case of clerical and subordinate staff, for, as pointed out in the French Motor Car Co. 's case,(" there is not much difference in the work of this class of employees in different industries.
In the present cases it does appear that the Tribunal has leaned more on the region part of the industry cum region formula and less on the industry part.
But we think that it cannot be said that the Tribunal was wrong in doing so for two reasons.
In the first place these four companies are not engaged in the same line of industry; but on account of certain circumstances, namely, that Greaves Cotton and Co. is the controlling company of the other three, it has been usual to keep the same scales for clerical and subordinate staff in all these concerns.
In the second place, it is not clear, as was clear in the Hindusthan Motors case(" that there are a large number of comparable concerns in the same region.
As a matter of fact the main company out of these four is Greaves Cotton and Co. Limited, which is in the main an investment and financial company and the Tribunal was therefore right in taking for comparison such companies as would stand comparison with the main company in the present appeals (namely, Greaves Cotton & Co).
Both parties filed scales of wages prevalent in what they considered to be comparable concerns and it is clear from the documents filed that some of the comparable concerns were the same in the documents filed by the two parties.
On the whole therefore we do not think the Tribunal was wrong in putting emphasis on the region aspect of the industry cum region formula in the present case insofar as clerical and subordinate staff was concerned.
, for the four companies before us do not belong to the same industry and Greaves Cotton and Co. controls the other three.
Considering therefore the standing of the main company (namely, Greaves Cotton and Co. Ltd.), it was not improper for the Tribunal in the present cases to rely on the comparable concerns (1) [1963] Supp. 1/SCI/64 24 (2) 370 which were cited on behalf of the respondents, some of which were common with the comparable concerns cited on behalf of the appellants.
What the Tribunal lid thereafter was to consider the minimum for various categories of clerical and subordinate staff prevalent in these comparable concerns and the maximum prevalent therein at id also the annual increments and the span of years in which.
the maximum would be reached.
The Tribunal then went on to fix scales for various categories of clerical and subordinate staff of the appellants which were in between the scales found in various concerns.
Further, as the financial capacity of the appellants was not disputed, the Tribunal pitched these scales nearer the highest scales taking into account the fact that for nine years after 1950 there had been no increase in wage scales.
We do not think therefore that the wage sales fixed by the Tribunal, learning as it did, on the region aspect of the industry cum region formula, for the clerical and subordinate staff can be successfully assailed by the appellants.
It has however been urged that the Tribunal overlooked considering what would be the total wage packet including basic wages and dearness allowance and that has made the total wages (i.e. basic wage and dearness allowance) fixed by the Tribunal much higher in the case of the appellants than in comparable concerns which it took into account.
It is true that the Tribunal has not specifically considered what the total wage packet would be on the basis of the scales of wages and dearness allowance fixed by it as it should have done; but considering that wage scales fixed are less than the highest in the comparable concerns though more than the lowest, it cannot be said that the total wage packet in the case of the appellants would 'be necessarily higher than in the case of the other comparable concerns.
This will be clear when we deal with the dearness allowance which has been fixed by the Tribunal, for it will appear that the dearness allowance fixed is more or less on the same lines, i.e. less than 371 the highest but more than the lowest in other comparable concerns.
On this basis it cannot be said that the total wage packet fixed in these concerns would be the highest in the region.
Though therefore the Tribunal has not specifically considered this aspect of the matter which it should have done its decision cannot be successfully assailed on the ground that the total wage packet fixed is the highest in the region.
This brings us to the case of factory workmen.
We are of opinion that there is force in the contention of the appellants insofar as the fixation of wagescales for factory workmen is concerned.
The respondents wanted that separate wages should be fixed for each category of workmen.
The Tribunal however rejected this contention and held that the usual pattern of ' having unskilled, semi skilled and skilled grades should be followed and the various workmen, though they should be known by their designation and not by the class in which they were being placed, should be fitted in these categories.
In the present concerns, there were six categories from before, namely (i) unskilled, (ii) semiskilled 1, (iii) semiskilled If, (iv) skilled 1, (V) skilled 11, and (vi) skilled 111.
The Tribunal kept these categories though it introduced a seventh category called the higher unskilled.
It is not seriously disputed that this category of higher unskilled does not exist in comparable concerns; nor have we been able to understand how the unskilled category can be sub divided into two namely, lower and higher unskilled, though we can understand the semi skilled and skilled categories being sub divided, depending upon the amount of ' skill.
But there cannot be degrees of want of skill among the unskilled class.
The Tribunal therefore was not justified in creating the class of higher unskilled.
It is neither necessary nor desirable to create a higher unskilled category and only the six categories which were prevalent from before should continue.
The main attack of the appellants on the wages fixed for these six categories is that in doing so, the 372 Tribunal completely overlooked the wages prevalent for these categories in concerns which it had considered comparable.
A look at the award shows that it is so.
The Tribunal has no where considered what the wages for these categories in comparable concerns are, though it appears that some exemplars were filed before it; but the way in which the Tribunal has dealt with the matter shows that it paid scant regard to the exemplars filed before it and did not care to make the comparison for factory workmen in the same way in which it had made comparison for clerical and subordinate staff.
In these circumstances, wage scales fixed for factory workmen must be set aside and the matter remanded to the Tribunal to fix wage scales for factory workmen dividing them into six categories as at present and then fixing wage after taking into account wages prevalent in comparable concerns.
The parties will be at liberty to lead further evidence in this connection.
Then we come to the question of dearness allowance.
So far as clerical staff is concerned, dearness allowance prevalent in the appellants ' concerns was as follows on the cost of living index of 411 420: Basic salary D.A at cost of Verification for in Rs. living index every 10 point group 411 420 movement 1 to 100 115% of basic salary 5% or the textile scale on 30 day month which ever is higher 101 to 200 35% 1 1/2% 201 to 300 25% 1% 301 and above 17 1/2% 3/4% 373 The Tribunal fixed the dearness allowance as follows: When the consu Variation for Salary slab mer price index each 10 point rise is between 411.
or fall in the 420 index On 1st Rs. 100 115% 5% On 2nd Rs. 100 50% 2.% On 3rd Rs. 100 25% 1%.
Balance upto 20% 1.% Rs. 600 A comparison of these figures will show that on the first hundred and the third hundred there is no difference in the scale fixed by the Tribunal; but there is a slight improvement on the second hundred and a very slight one above three hundred.
This scale fixed by the Tribunal is in line with some scales of dearness allowance recently fixed by Tribunals in that region.
The main improvement is on the second hundred and it cannot really be said that employees in that wage range do not require the higher relief granted to them by tribunals in view of the rise in prices.
We do not think therefore that the dearness allowance fixed by the Tribunal, taking into account what was already prevalent in these concerns and also taking into account the trend in that region, can be successfully assailed so far as clerical staff ' is concerned.
This brings us to the case of subordinate staff.
It appears that in these concerns, subordinate staff was getting dearness allowance on different scales based on the old textile scale of dearness allowance.
The Tribunal has put the subordinate staff in the same scale of dearness allowance as clerical staff.
The reason given by it for doing so is that incongruity in the payment of dearness allowance between clerical and subordinate staff should be removed.
It appears that on account of different scales of 374 dearness allowance for subordinate and clerical staff a member of 'the subordinate staff drawing the same wages would get less dearness allowance than a member of the clerical staff.
The discrepancy is very glaring as between clerical staff and factory workmen who also have different scales of dearness allowance.
The Tribunal therefore thought that dearness allowance which is meant to neutralise the rise in cost of living, should be paid to clerical staff, subordinate staff as well as factory workmen on the same scale, for the need for neutralisation was uniformly felt by all kinds of employees.
It also pointed that there was a trend towards uniformity in the matter of scales of dearness allowance as between clerical staff and other staff and factory workmen and referred to a number of firms where same scales prevailed for all the staff.
It has however been urged on behalf of the appellants that the pattern in the region is that there are different scales of dearness allowance for clerical staff and other staff including factory workmen and the Tribunal therefore should have followed this pattern.
The reasons given by the Tribunal for giving the same scales of dearness allowance to all the categories of staff, including the factory workmen appear to us to be sound.
Time has now come when employees getting same wages should get the same dearness allowance irrespective of whether they are working as clerks, or members of subordinate staff or factory workmen.
The pressure of high prices is the same on these various kinds of employees.
Further subordinate staff and factory workmen these days are as keen to educate their children as clerical staff and in the circumstances there should be no difference in the amount of dearness allowance between employees of different kinds getting same wages.
Further an employee whether he is of one kind or another getting the same wage hopes for the same amenities of the and there is no reason why he should not get them, simply because he is, for example, a factory workman, though he may be coming from the same class of people as a member of clerical staff.
On the whole therefore the Tribunal was in 375 our opinion right in following the trend that has begun in this region and in fixing the same scale of dearness allowance for subordinate staff and factory workmen as in the case of clerical staff.
So far therefore as subordinate and clerical staff are concerned, we see no reason to disagree with the rate of dearness allowance fixed by the Tribunal.
This brings us to the case of the dearness allowance for factory workmen.
In their case we have set aside the award relating to wage scales.
It follows that we must also set aside the award relating to dearness allowance as we have already indicated that the Tribunal has to take into consideration the total pay packet in fixing wages and dearness allowance.
When therefore the case goes back to the Tribunal for fixing wages and dearness allowance for factory workmen, it will be open to the Tribunal to fix the same rates of dearness allowance for factory workmen as for clerical staff; but in doing so the Tribunal must when making comparisons take into account the total wage packet (i.e. basic wages fixed by it as well as dearness allowance) and then compare it with the total wage packet of comparable concerns and thus arrive at a just figure for basic wage, for each category of factory workmen.
But the entire matter is left to the Tribunal and it may follow such method as it thinks best so long as it arrives at a fair conclusion after making the necessary comparison.
This brings us to the question of adjustment.
We have already said that the Tribunal allowed one to three increments depending upon the length of service between 1950 and 1959.
It has been urged that no adjustment should have been allowed taking into account the fact that incremental scales were in force previously also in these concerns and the Tribunal has increased both the minimum and the maximum in its award and has granted generous annual increments reducing the total span within which a particular employee belonging to clerical and subordinate staff will reach the maximum.
Reliance in this connection has been placed on the 376 French Motor Car Co. 's case (".
It is true that the Tribunal has given larger increments thus reducing the span of years for reaching the maximum.
That alone however is no reason for not granting adjustment.
But it is said that in the French Motor Co. case( ' ', this Court held that where scales of pay were existing from before no adjustment should be granted by giving extra increments and that case applies with full force to the facts of the present case.
Now in that case this Court pointed out on a review of a large number of awards dealing with adjustments that "generally adjustments are granted when scales of wages are fixed for the first time.
But there is nothing in law to prevent the industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay scales were in existence; but this has to be done sparingly taking into consideration the facts and circumstances of each case.
The usual reason for granting adjustment even where wage scales were formerly in existence is that the increments provided in the former wage scales were particularly low and therefore justice required that adjustment should be granted a second time." Another reason for the same was that the scales of pay were also low.
In those circumstances adjustments have been granted by tribunals a second time.
This Court then pointed out in that case that the incremental scales prevalent in that company were the highest for that kind of industry and therefore struck down the adjustments granted and ordered that clerical staff should be fixed on the next higher step in the new scales if there was no step corresponding to the salary drawn by a clerk in the new scale.
The question therefore whether adjustment should be granted or not is always a question depending upon the facts and circumstances of each case.
Let us therefore see what the circumstances in the present cases are.
Tables of comparative rates of increments were filed before the Tribunal (1) [1963] Supp. 377 for various grades of clerks.
It is clear from the examination of these tables and pay scales prevalent in the appellants ' concerns from 1950 that pay scales were not high as compared to pay scales in comparable concerns.
If anything, they were on the low side.
Further, as an example, in the case of junior clerks, the first rate of increment was Rs. 5 in the appellants ' concerns and this rate went on for 13 years; in other concerns where the first rate of increment was Rs. 5 it lasted for a much shorter period, which in no case exceeded eight years and was in many cases three or four years.
In some concerns the first rate of increment was higher than Rs. 5.
Almost similar was the case with senior clerks.
So it appears that in the appellants ' concerns the first rate of increment was generally on the low side and lasted for a longer period than in the case of comparable concerns.
In these circumstances if the Tribunal decided to give increments by way of adjustments it cannot be said that the Tribunal went wrong.
The facts 'in these cases are different from the facts in the case of the French Motor Car Co. 's case(2) and therefore (1) we see no reason for interfering with the order of adjustment.
After the change in wage scales, dear ness allowance and adjustment, the employees of the appellants ' concerns will stand comparison with some of the best concerns in that region.
But considering that there is no question of want of financial capacity and that Greaves Cotton & Co. which is the main company concerned in these appeals, has a high standing in that region, we do not think that the total wage packet fixed is abnormal or so disproportionate as compared to the total wage packet in other comparable concerns as to call for any interference with adjustments.
The next question is about the so called retrospective effect of the award.
The first reference was made to the Tribunal on April 8, 1959, while the last was in December 1959.
What the Tribunal has done is to grant wage scales etc., from April 1, 1959.
This cannot in our opinion be said to be really (1)[1963] Supp.
378 retrospective, because it is practically from the date of the first reference in the case of the main company.
On the whole therefore we see no reason to interfere with the order of the Tribunal fixing the date from which the award would come into force.
Lastly we come to the question of gratuity.
The attack in this connection is on two aspects of the gratuity scheme.
The first is about the fixation of 20 months as the maximum instead of ' 15 months, which was usual so far, The second is with respect to deduction from gratuity only to the extent of the financial loss occasioned by misconduct in case of dismissal for misconduct.
So far as the second provision is concerned it cannot be disputed that this is the usual provision that is being made in that region.
So ear as the increase in the maximum from 15 months to 20 months is concerned, it appears that the Tribunal has relied on a number of cases in which the maximum is higher than fifteen months wages.
In these circumstances considering that tri bunals have now begun to, give a higher ceiling and in one concern, namely Mackinnon Mackenzie, the ceiling has been fixed even so high as thirty moths by agreement, we do not think that any interference is called for in the present case.
We therefore dismiss the appeals so far as retrospective effect and adjustments as also fixation of wages and dearness allowance with respect to clerical and subordinate staff are concerned.
We allow the appeal with respect to factory workmen and send the cases back to the Tribunal for fixing the wage structure including basic wage and dearness allowance and for granting adjustments in the light of the observations made by us.
The new award pursuant to this remand will also come into force from the same date, namely, April 1, 1959.
The appeals with respect to gratuity are dismissed.
In the circumstances we order parties to bear their own costs.
Two months from today is allowed to pay up the arrears.
Appeal partly allowed and remanded.
[/INST]On the enactment of the , providing for the nationalisation of life insurance business.
the 126 controlled business i.e., the life insurance business of the appellant, a composite insurer, vested in the respondent corporation.
Thereafter disputes arose between the appellant and the respondent in the matter of ascertainment of the compensation payable to the appellant and in respect of incidental and consequential matters thereto.
The respondent offered to pay the appellant towards compensation a certain amount after setting off the amount due to it from the appellant in respect of part of the paid up capital of the controlled business and assets representing that part.
The appellant refused to accept this offer in toto.
The dispute was referred to the Tribunal.
The Tribunal ascertained the compensation payable to the appellant and set off against that amount the balance of the amount due from the appellant towards the allocable paid up capital.
Relying upon the books of account of the appellant to find out whether the unpaid dividends of any share holder of the appellant was the liability of one department or the other, the Tribunal held that the entire liability for the unclaimed dividends and assets appertained to the controlled business, and therefore, statutorily vested in the respondent.
The Tribunal held that it had no jurisdiction to award interest on the amount of compensation.
On appeal by special leave, it was contended (i)that the Tribunal had no jurisdiction to decide on the question of the capital allocable to the controlled business as there was no dispute thereto between the parties and the said question was not referred to it; (ii) the liability of the appellant for the unclaimed dividends and assets equivalent to the liability were not transferred to and vested in the respondent under section 7(1) of the Act, and (iii) that the appellant would be entitled to interest on the amount of compensation payable to it and the Tribunal had jurisdiction to award the same.
Held: The dispute between the parties related not only to compensation, but to the set off also, that the dispute was referred to the Tribunal, and the Tribunal had jurisdiction to decide that dispute.
A combined reading of cls.
(iv) and (vi) of r. 12A of the Rules under the Act makes it abundantly clear that a claim for set off is certainly covered by the wide phraseology of cl.
(iv) of r. 12A.
The calculations under r. 18(1) show that there is an integral connection between the compensation payable to the insurer and the amount representing the capital allocable to the controlled business transferred to the respondent.
As these figures cannot be dissociated, the respondent made a composite offer.
The Act contemplates the setting off one against the other.
National Insurance Co. v Life Insurance Corporation of India ; , followed.
(ii) The definition of assets and liability of a controlled business in sub section
(2) of section 7 of the Act is certainly comprehensive enough to take in unclaimed dividends and corresponding assets.
Sub sections (1) and (2) of section 7 of the Act provides that the assists and liabilities to be transferred must belong to the controlled 127 business of the insurer.
The antithesis is not between the company and its business but between the controlled business and other business of the insurer.
All the rights and liabilities pertaining to the controlled business are transferred to the Corporation.
(iii) When a company declared a dividend on its shares, a debt immediately becomes payable to each shareholder in respect of his share of the dividend 'for which he can sue at law and the declaration does not make the company a trustee of the dividend for the shareholder.
In re Seven and Wye Severn Bridge Railway Co. , applied.
(iv) The provisions of the do not, expressly or by necessary implication, exclude the jurisdiction of the Courts and Tribunals from going into the correctness of the balance sheet certified by the Controller.
For the purpose of the it would be accepted as correct.
There is no provision in the making the contents of the balance sheet final for the purpose of transfer to and vesting in the Corporation the assets and liabilities of the insurer.
It certainly affords valuable evidence in an enquiry before the Tribunal; but the contents of the balance sheet can be proved to be wrong.
(v) The circumstances of the ease do not justify this Court exercise of the extraordinary jurisdiction under article 136 of the Constitution to permit the appellant to raise the plea of apportionment of the unclaimed dividends for the first time here and to remand the matter to the Tribunal for apportionment of the dividends and the corresponding assets.
(vi) In view of the decision of this Court in the National Insurance Co. Ltd. vs Life Insurance Corporation of India, the appellant will be entitled to interest at the rate of 4% on the amount of compensation.
National Insurance Co. Ltd. vs Life Insurance Corporation of India ; , followed.
</s>
|
<s>[INST] Summarize the judgementminal Appeal No. 178 of 1967.
Appeal by special leave from the judgment and order dated January 5, 1967 of the Madras High Court in Criminal Appeal Nos.
34 to 38 of 1965.
R. N. Sachthey, for the appellant.
H. R. Gokhale, M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu, for respondent No. 1.
A. V. Rangam, for respondent No. 6.
The Judgment of the Court was delivered by Dua, J.
A complaint under section 6 of the Imports and Exports Control Act, 1947 dated 24th February, 1964 was presented by the Chief Controller of Imports and Exports, New Delhi in the court of the Chief Presidency Magistrate, Madras against (1) K. T. Kosalram, Director in charge of Messrs Dina Seithi Ltd., Madras, (2) K. T. Janakiram, Director, Messrs Dina Seithi Ltd., (3) K. Natarajan, Manager, Messrs Mohan Ram Press, Madras, (4) Messrs Dina Seithi Ltd., Madras, (5) Sri T. N. Ramachandran son of section Natesa lyer, Madras and (6) T. Natarajan, Manager, Messrs Dina Seithi Ltd., Madras.
Accord 5 10 ing to the broad allegations in the complaint, on November 28, 1959 accused No. 4 (hereafter called the Company) was registered under the , as a public limited company with the Registrar of Companies, Madras.
Accused nos.
1 and 2 who are brothers were both directors of the Company, accused No. 1 being the Director in charge attending to its day to day management and administration.
He was also authorised to operate its accounts with the banks.
The primary object of the Company was publication of a Tamil daily newspaper "Dina Seithi".
Accused No. 3 was the Manager of Messrs Mohan Ram Press located in the same building in which the Company was located.
Srimati Gomati Devi, wife of accused No. 1 was the sole proprietress of this Press.
She had given power of attorney to her husband for operating the bank account of her Press.
The daily newspaper (Dina Seithi) used to be printed at this press.
Accused No. 5 was a broker engaged in the business of negotiating sale and purchase of printing machinery.
Between 1949 and 1951 he was working as Chief Salesman of Printers ' House, Madras and before that for about two years he had worked as a salesman with Messrs Standard Printing Machinery Company, Madras.
In 1951 he started his independent business as a broker; in addition he also used to work as a correspondent of "Kerala Kaumudi" belonging to the Company.
Accused No. 6 was the Manager of the Company and his wife Smt.
Sarojini was one of its Directors.
On May 5, 1960 accused No. 1 applied on behalf of the Company to the Chief Controller of Imports and Exports, New Delhi, for the grant of an import licence in favour of the Company for importing two secondhand rotary printing presses valued at Rs. 3 lakhs in the category of "Actual Users".
The Chief Controller of Imports & Exports, on the recommendation of the Committee constituted for the purpose, issued in the first instance aft import licence for Rs. 1,50,000 (exhibit P 12).
The number of this licence was A 759626/60/AU/CCI/HO and it was dated September 19, 1960.
Later, on the request of accused No. 2 on behalf of the Company, the value of this licence was raised to Rs. 3 lakhs on the recommendation of the Press Registrar of India.
The licence was returned to the Company on December 16, 1960.
The original period of validity of the licence having expired on June 19, 1961 accused No. 2 requested the Licensing Authority on behalf of the Company to extend the period on the ground that the machinery could not be fixed up by the Company 's Directors.
Under the orders of the Controller in charge of the newsprint sale, the validity of the licence was extended upto March 19, 1962.
Oil July 2, 1961 accused No. 1 sought permission of the Licensing Authority on behalf of the Company to import two secondhand rotary presses instead of one already permitted within the licence value of Rs. 3 lakhs under the import 51 1 licence exhibit P/12 on the ground that one more printing press was required for the proposed office at Madurai (exhibit P/15).
After securing further necessary information about the machinery proposed to be imported the Chief Controller approved the request with the result that the amended licence for two presses was sent to the Company, on August 16, 1961.
On December 19, 1961 the Company as per letter sent by accused No. 1, informed the Chief Controller that one rotary printing press had been imported and the other was expected to arrive by January, 1962.
It was requested that in the import licence the description of the goods be changed from "Rotary Press" to "Rotary Press with Stereo equipment and Turtles".
We find from exhibit P/17 and exhibit P/17(a) that it was represented that the Company was incurring heavy demurrage as the cases were lying on the wharf uncleared for want of the required amendment of the licence.
This was described as a purely technical amendment in the licence.
This request was granted with the approval of the Chief Controller of Imports and Exports.
The amended licence was despatched to, the Company on January 3, 1962.
According to condition (c) reproduced on the reverse of the import licence the licence holder had to utilise the goods imported only for consumption in his own factory and its sale to or use by other parties was specifically prohibited.
The licence holder was further prohibited from pledging the imported goods in whole or in part except with a scheduled bank duly authorised to deal in foreign exchange and that also with prior permission of the Licensing Authority.
One Dr. K. G. Thomas owned "Kerala Dhwani", a daily newspaper of Kottayam having circulation in the State of Kerala.
It has started on August 20, 1959 and C. J. Mani was its general business manager ever since its inception.
On November 10, 1960 Dr. Thomas applied to the Chief Controller of Imports and Exports on behalf of his firm for importing a rotary printing press under a Customs Clearance Permit.
But this was rejected.
On October 25, 1961 he sent another application dated October 3, 1961 on behalf of ,the firm requesting for an import licence for importing a secondhand rotary press for the period October March, 1962.
But this was also rejected.
Still another application dated May 10, 1962 for licence for importing two mono typefacing units was also rejected on April 29, 1963.
C. J. Mani, the General Manager of this concern was also independently trying to secure a rotary printing press through various parties and firms.
Accused No. 5 was known to C. J. Mani and during the former 's visit to Kottayam in the first quarter of 1961 he learnt that Dr. Thomas was desirous of securing a secondhand rotary printing press.
Sometime in April or May, 1961 accused nos.
2 and 5 visited Kottayam and on meeting Dr. Thomas they told him that accused No. 1 was going to have an import licence for two rotary 512 printing presses but he needed only one, with the result that one R. Hoe & Co eight page rotary printing press would be available for sale.
After some correspondence and discussion between accused No. 5 and C. J. Mani and Dr. Thomas and after a personal meeting between Dr. Thomas and accused No. 1 (at the instance of accused No. 5) the terms of sale of rotary press to Dr. Thomas were finally settled on July 17, 1961.
The price was settled at Rs. 2 lakhs ex godown, Madras, The same day Dr. Thomas paid to accused No. 5 Rs. 15,000 by means of a cheque by way of advance money.
Accused No. 5 issued a stamped receipt which was also signed by accused No. 1.
On July 19, 1961 the photo prints of the press offered for sale were forwarded by accused No. 5 to Dr. Thomas.
On the reverse of these prints were the rubber stamp impressions of the Company.
On August 2, 1961 a further sum of Rs. 25,000 was paid by Dr. Thomas for which a receipt was given by accused nos.
1 and 5.
Between September 23, 1961 and March 17, 1962 the balance of Rs. 1,76,700 (total being Rs. 2,16,700) was paid by Dr. Thomas in instalments towards the price of the rotary press and its accessories.
On September 1, 1961 accused No. 1 had 'opened a letter of credit with a nil margin with the Indian Overseas Bank Ltd., Madras on Messrs Universal Printing Equipment Company, ,New York for importing a secondhand rotary press for dollars equivalent to Rs. 1,00, 1 12 against import licence No. A 759626/ 60/AU/CCI/HQ.
On October 28, 1961, the Bank received the relevant import documents and on December 13, 1961 it received from the Company the remittance of the amount in cash towards the letter of credit.
On October 20, 1961 Messrs Binny & Co., Madras, the agents of the ' Shipping Company Messrs Isthmian Lines Inc., U. section A. had requested the Company to remit Rs. 12,712 being the freight payable at Madras towards the con signment of 19 boxes containing secondhand rotary press due to arrive from New York by s.s.
"Steel Vendor" so as to enable them to cable to their principals at New York to issue the bills of leding to the shippers.
A cheque for Rs. 12,712 was accordingly sent by the Company to Messrs Binny & Co., on October 31, 1961.
The necessary cable was then sent to New York.
The import documents pertaining to the rotary press were sent by accused No. 1 on behalf of the Company to Messrs Natesa lyer & Co., Clearing Agents, Madras for clearing the goods from the Madras Port by the Indian Overseas Bank Ltd., Pursawalakam, Madras.
This invoice was issued by the Universal Printing Equipment Company, Lindhurst in the name of Messrs Dina Seithi Ltd., indicating shipment of the goods imported contained in the 19 boxes bearing marks "Dina Seithi".
The customs duty and the clearance charges were paid by the Company.
It is unnecessary to state at length further details of the complaint.
Suffice it to 513 started functioning from May 20, 1962.
In March, 1962 the Deputy Superintendent of Police, Madras, visited the premises of this newspaper and found the rotary printing Press tallying with the description given in the invoice issued to the Company by R. Hoe & Co., New York/London.
The number 458 assigned to the press was also found on its major parts.
No rotary press imported by accused No. 1 on behalf of the Company was found at its (the Company 's) premises.
The amount received by cheques and drafts from Dr. Thomas were credited to the account of Messrs Mohan Ram Press of which Smt.
Gomati Devi, wife of accused No. 1, was the sole proprietress.
On these broad avermerits it was prayed in the complaint that accused nos.
1 to 3 and 5 and 6 be proceeded against for offences under section 120 B, I.P.C. read with section 5 of Imports and Exports (Control) Act, 1947 ' Lind also for an offence under section 5 of the said Act.
The Company was alleged to be guilty under section 5 of the said Act read with cl.
(5), sub cl.
(iv) of Imports (Control) Order, 1955.
The Chief Presidency Magistrate who tried the complaint acquitted accused No. 6 holding that he had nothing to do with the impugned transaction but convicted the rest.
The Company was sentenced to fine only and so were accused nos.
2, 3 and 5; three individual accused persons were directed, in case of default to undergo rigorous imprisonment for three months on each count.
Leniency was shown to accused nos.
2, 3 and 5 because they had acted under the directions given by accused No. 1 who was sentenced to rigorous imprisonment for six months under each count and also to pay fine and in default to undergo further rigorous imprisonment for three months.
The convicted accused appealed to the High Court at Madras and the State applied for enhancement of sentences.
The, High Court acquitted all the accused persons with the result that the revision for enhancement necessarily failed.
The High Court having declined certificate of fitness under article 1 3 4 ( 1 ) (c) of the Constitution the Deputy Chief Controller of Imports & Exports secured special leave to appeal under article 136 of the Constitution against the order of acquittal by the High, Court.
In the High Court, though in the memorandum of appeal several grounds were taken, during arguments the appellant 's counsel confined his submission mainly to the point that condition.
(c) of the licence issued to accused No. 4 (exhibit P/ 1 2) related only to raw material or accessories and that as such the sale of printing press which was neither raw material nor accessories, did not contravene that clause.
The factum of sale of the printing press, 514 to Dr. Thomas (P. W. 16) was not disputed.
The High Court accepting this contention held condition (c) in exhibit P/12 to be inapplicable to printing presses and observed that the Licensing Authority had not applied its mind when this condition was inserted in the licence for importing the printing press in question.
On this ground the conviction recorded by the trial court was set aside.
The appellant 's learned counsel in this Court has questioned the correctness of this view and has submitted that it is not sustainable on the statutory provisions and has resulted in grave failure of justice.
Before dealing with this question we may dispose of a pre liminary objection to the competency of this appeal at the instance of the Deputy Chief Controller of Imports and Exports, raised by Shri H. R. Gokhale on behalf of the respondents.
It has been pointed out that the special leave petition in this Court purports to be filed by the Deputy Chief Controller of Imports & Exports and not by the State.
As the State had conducted the prosecution the complainant, it is argued, cannot seek leave nor can he prosecute this appeal.
Leave already granted ex parte is, according, to Shri Gokhale liable to be revoked.
Reliance has been placed on Management of Hindustan Commercial Bank Ltd., Kanpur vs Bhagwandass(1).
There the appellant had secured from this Court ex parte special leave to appeal under article 136 of the Constitution without first moving the High Court for the necessary certificate and this Court, on objection by the respondent, revoked the special leave as being in contravention of O. 13, r. 2 of the Supreme Court Rules.
The respondents ' contention before us is that the Public Prosecutor and not the Deputy Chief Controller of Imports & Exports had applied to the High Court for the necessary certificate and, therefore, the Deputy Chief Controller has no locus standi to apply for special leave.
Having been granted on an incompetent petition the special leave deserves to be revoked, argues Shri Gokhale.
We are unable to uphold this objection.
The complaint was filed in the court of the Chief Presidency Magistrate by the Deputy Chief Controller of Imports and Exports under section 6 of the Imports and Exports (Control Act, 1947.
It is not disputed that this officer was, as stated in para 1 of the complaint, duly authorised to make the complaint within the contemplation of section 6.
In the appeals filed by the accused against their conviction the State was impleaded, as represented by the Deputy Chief Controller of Imports and Exports (complainant), as the respondent.
It is true that in a petition for enhancement of sentence filed in the High Court the Public Prosecutor was shown as the petitioner and similarly the application for leave to appeal from the judgment of the High Court was (1) ; 515 also filed in that Court by the Public Prosecutor.
But that, in our view, does not in any way disentitle the Deputy Chief Controller of Imports and Exports (the original complainant duly authorised by the statute) to apply for special leave to appeal to this Court and to prosecute the appeal.
, Our attention has not been drawn to any provision of law which can be said to deprive the Deputy Chief Controller the lawfully authorised complainant in this case to seek special leave and prosecute this appeal.
In any event article 136 of the Constitution and the Supreme Court Rules are wide enough in their language to empower this Court to grant special leave to the Deputy Chief Controller in cases like the present and deal with the appeal on the merits.
The preliminary objection must accordingly be repelled.
Coming to the merits we may for a while again turn to con dition (c) of the licence which has already been noticed earlier.
It may be recalled that this condition expressly provides that the goods would be utilised only for consumption as raw material or accessories in the licence holder 's factory and no portion thereof would be sold to, or, be permitted to be utilised by, any other party.
The goods imported are also not to be pledged with any financier other than banks authorised to deal in foreign exchange, provided that particulars of the goods so pledged are reported in advance to the licensing authority.
Under section 3 of the Imports and Exports Act , 18 of 1947 the Central Government is empowered to provide by order published in the official Gazette for prohibiting, restricting or otherwise controlling the import, export, carriage or shipment etc., of goods of any specified description and also the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried.
The Central Government by Order dated December 7, 1955 made the Import Control Order under sections 3 and 4A of the said Act.
Clause (3) of this Order provides for restriction on import of certain goods in these words : "Save as otherwise provided in this Order, no person shall import any goods of the description specified in Schedule 1, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II.
" Clause 7 of this Order empowers the Licensing Authority suo motu or on application by the licensee to amend the licences granted under this Order in such manner as may be necessary to make them conform to the aforesaid Act or this Order or any other law in force or to rectify any error or omission in the licence : on the licensee 's request, however, the licence may be 5 1 6 amended in any manner consonant with the Import and Export Control Regulations.
Item No. 67(1) in Schedule 1, Part V, which appears to us to be relevant for this case reads : "Printing and Lithographic material, namely, presses, lithographic plates, composing sticks, chases, imposing tables, lithographic stones, stero blocks, wood blocks, half tone blocks, electrotype blocks, process blocks, roller moulds, roller frames and stocks, roller composition, lithographic nap rollers, standing screw and hot presses, perforating machines, gold blocking presses, galley presses, proof presses, arming presses, copper plate printing presses, rolling presses, ruling machines, ruling pen making machines, lead cutters, rule cutters, slug cutters, type casting machines, type setting and casting machines, paper in rolls with side perforations to be used after further perforation for typecasting, rule bending machines, rule mitreing machines, bronzing machines, stereotyping apparatus, paper fold ing machines, paging machines, but excluding ink and paper and sets of mats when imported as advertising material in connection with composed films." This item which contains a very large number of various components of a printing press corresponds to item No. 72(2) of the Indian Tariff Act, 1934 which consolidates the law relating to customs duties.
Item No. 67(2) in Schedule I speaks of component parts as defined in import tariff item No. 72(3), of machinery specified in cl.
(1) excluding those covered by sl.
no 6 8 of this schedule.
Serial No. 68 refers to rubber blankets for printing presses etc.
Item No. 67 (1) would suggest that printing presses are included in the expression "printing and lithographic material.
" Our attention has not been drawn to any other entry either in Schedule I of the Imports Control Order or in the first Schedule of the Indian Tariff Act which would cover the import of printing presses and payment of customs duty on such import.
These two statutes forming parts of the Import Control Scheme may appropriately be considered as throwing some light on each other.
The principal argument advanced on behalf of the respondents is that cl.
(c) of the conditions of the licence does not cover the printing presses in question because the plain language of this clause postulates that goods covered by it should be capable of being utilised for consumption as raw material or accessory in a factory.
A complete printing press, it is contended, is neither raw material nor accessories and it cannot be said that by fixing a printing press for running it, the press is utilised for consumption as raw material or accessory.
This argument, though attractive on first impression seems to us on a deeper thought to 517 be unacceptable.
A close scrutiny of the scheme and language of the relevant provisions of the import and export legislation and of the Import Control Policy formulated by the Government leaves no doubt that the argument is unfounded.
Clause (c) reads : " (c) The goods will be utilised only for con sumption as raw materials or accessories in the licence holders ' factory and that no portion thereof will be sold to or be permitted to be utilised by any other party or pledged with any financier other than Banks authorised to deal in foreign exchange provided that particulars of goods so pledged are reported in advance to the licensing authority.
" The respondents have sought assistance for their argument principally from the dictionary meaning of the words "consumption", "raw material" and "utilised" used in this clause.
"Consumption", it is argued, conveys the idea of destruction of the commodity consumed and "raw material" according to this submission, must be "utilised" in this sense.
In our opinion dictionary meanings, however helpful in understanding the general sense of the words cannot control where the scheme of the statute or the instrument considered as a whole clearly conveys a somewhat different shade of meaning.
It is not always a safe way to construe a statute or a contract by dividing it by a process of etymological dissection and after separating words from their context to give each word some particular definition given by lexicographers and then to reconstruct the instrument upon the basis of those definitions.
What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered ?from the context, the nature of the subject matter, the purpose or the intention of the author and the effect of giving to them one or the other permissible meaning on the object to be achieved.
Words are after all used merely as a vehicle to convey the idea of the speaker or the writer and the words have naturally, therefore, to be so construed as to fit in with the idea which emerges on a consideration of the entire context.
Each word is but a symbol which may stand for one or a number of objects.
The context, in which a word con veying different shades of meanings is used, is of importance in determining the precise sense which fits in with the context as intended to be conveyed by the author.
The words used in the licence (exhibit P/12) have accordingly to be construed in the background of the scheme of the Import Control Order, 1955, the entry No. 67 of Schedule I to this Order and the Import Trade Control Policy.
The word "consumption" as used in cl.
(c) in the licence seems to us to convey the idea of using up the goods by L 436 Sup Cl/71 518 fixing them in the factory along with other components.
This is clear from the fact that entry No. 67(1) in Schedule 1 of the Import Control Order does not contain any single item denoting a complete printing press and from the fact that the various ;articles mentioned in this item seem as if to have been intended to constitute "raw material".
This construction fits in with the scheme and policy of the Import Trade Control as we will presently show.
The dictionary meaning of the three words in cl.
(c) on which the respondent relies also seems, in our opinion to harmo nise with this view.
The Government of India (Ministry of Commerce and Industry) has been publishing from time to time Import Trade Control Handbook on rules and procedure providing for the assistance of those interested in imports up to date information as to the manner in which applications for import licences should be made, the appropriate authority to be addressed in each case, the procedure governing the grant of licences for different classes of goods, the validity and use of import licences and other similar matters.
In the Handbook of 1956, which is the relevant Handbook for this case which relates to the licence originally granted in 1960, Schedule I commonly known as the ITC Schedule serves broadly to classify the articles that enter into the import trade.
Part V of the Schedule covers 'industrial requirements and it is in this part that the printing and lithographic material including and Other items are entered at sl.
No. 67(1), already noticed by us.
This Handbook emphasises the importance of correct classification with reference to the serial number and part of the ITC Schedule.
In Appendix III of the Handbook application forms are prescribed.
Form B is the one which was used by the respondents.
This form is meant for the import of goods by actual users not borne on the registers maintained by the Industrial Advisers, Ministry of Commerce and Industry, when licence is sought for import of goods (other than those falling under the capital goods licensing procedure) vide : Government of India, Ministry of Commerce and Industry Order No. 17/55 dated 7th December, 1955.
It is expressly stated in the respondents ' application exhibit P/ 11 (b) 1 that the raw material was required by them for printing newspaper (Dina Seithi, Tamil Daily) : full particulars of the raw materials required to be imported were given as printing machinery and proforma was attached with the application.
ITC number and part was specifically stated to be 67 (1 ) (i), Part V.
It was on the basis of this application that the licence exhibit P/12 was granted subject inter alia to condition (c).
The Government of India, Ministry of Commerce and Industry also publishes from time to time Import Trade Control Policy 519 for the various licensing periods.
in the publication for the licensing period April September, 1960 we find the policy statement, showing the list of items licensable to actual users.
At p. 360 in Appendix IV, Part V, items 67 (1) (i) and 67 (2) occur.
Item 67 (1 ) (i) reads : "Printing machinery (for Newspaper Establishments and quality printers).
" Item 67 (2) reads : "Component parts of printing machinery".
It is obvious that in the respondents ' application serial No. 67(1) (i) refers to this item in the Import Trade Control Policy, AprilSeptember, 1960, the period relevant for this case.
There is no other item in any one of the lists which covers printing presses as a separate item.
This clearly shows that the printing presses are treated by legislative intendment as Printing material or Printing machinery.
Form 'B ' used in the present case indicates that the Press intended to be imported was not considered to fall under the Capital Goods Licensing Procedure.
It seems that it is for all these reasons that in the licence it was provided that these goods would be utilised only for consumption as raw material or accessories in the licence holder 's factory.
The words "utilised", "consumption" and "raw material" have to be fitted into the clearly discernable statutory scheme and this is possible without doing violence to the dictionary meaning of these words.
The appropriate dictionary meaning of words possessing variable shades of meanings has not to be arbitrarily selected and mechanically applied without considering the setting in which they are, used and the purpose sought to be achieved.
There is another very cogent factor in this case, namely, that the respondents, when they sought licence for the import of printing press expressly represented that the imported goods were required to meet the increasing demand of circulation of their newspaper.
This indeed was the sole round for importing the press.
The amended licence was.
also secured by the respondents so as to enable them to import two printing presses on the ground that one press was required for their Madurai office as well.
Licence for both the printing presses was obtained for actual use by them for their newspapers.
Had they not complied with the procedure meant for the import of goods by actual users, they might not have secured the necessary licence.
Having secured a licence expressly for the import of goods for their use they may not be permitted to ignore the condition of actual user on the plea (which by no means seems to be virtuous) that cl.
(c) is inapplicable to actual users.
5 20 The respondents on their own showing clearly knew their dis ability under the conditions imposed by cl.
(c) of the licence.
Knowing full well the condition prohibiting the transfer of the press to other persons the respondents as the correspondence to which our attention has been drawn shows were actually negotiating for the sale of one of the presses during the period when the procedure in regard to its import was being carried out.
On July 2, 1961 amendment of the licence was sought so as to import one more printing press and on July 17, 1961 its resale was actually finalised and a part of the price also received.
These facts do not need any comment on the intention and bona fides of the respondents.
It is unnecessary to go into the evidence on this point because, as already noticed, it is not disputed that one of the printing presses was actually sold to Dr. Thomas prior to its arrival in India.
The amendment of the licence also appears to have been sought with the object of reselling the second press.
The only argument urged namely that condition (c) was inapplicable to the present case having been repelled, the appeal, in our view, must succeed and the order of the High Court reversed.
The validity of condition (c) in the licence has not been questioned and in our opinion rightly in view of the decision of this Court in M/s. Ramchand Jagdish Chand vs Union of India(1).
There is neither any legal nor equitable justification for reselling the printing press.
The suggestion faintly thrown that the Company was the holder of the licence and, therefore, the other respondents (accused persons) should not be held liable is also without merit.
On the facts found and on the authority of State of West Bengal vs Motilal Kanoria (2 ) all the respondents (the individual accused persons along with the Company) are guilty.
The argument that the High Court having acquitted the,res pondents on a view which is a possible view this Court should not convert acquittal into conviction under article 136 of the Constitution has not appealed to us.
The view of the High Court does not seem to be sustainable on the statutory language and on the Import Control Policy of which the respondents were fully aware.
Their own application is proof positive of their awareness of the true position and the breach of the conditions of the licence on their part was deliberate.
Indeed, as observed earlier, the permission for the import of the second press was apparently sought with the object of its resale.
Breach of conditions for import of goods is a serious matter because it prejudicially affects our country 's national economy.
The import licence for the second press having, in our view, been sought on false representation with (1) ; (2) [1966] 3 section C. R. 933.
521 the object and purpose of its resale the breach of the licence was, therefore, fully intended and designed.
The respondents are guilty of malpractices and of abuse of the import licence with the object of making money.
We, however, think that in view of the fact that this litigation has been pending since a long time, it would meet the ends of justice if we impose merely fine and do not sentence anyone to imprisonment.
The final result is that the order of the High Court is set aside and accused nos.
1, 2, 3 and 5 are convicted under section 120 B, I.P.C. and section 5 of the Imports & Exports Act, 1947 read with cl. 5 of the Import Control Order, 1955 and each of the accused nos.
2, 3 and 5 are sentenced to pay a fine of Rs. 2,000/ under each count.
Accused No. 1 who is the principal culprit and who was sen tenced by the trial court to imprisonment and fine is sentenced to pay a fine of Rs. 5,000/ under each count.
In default of payment of fine the defaulting accused persons will undergo rigorous imprisonment for three months.
The Company is convicted only under section 5 of the Imports & Exports Act read with cl. 5 of the Import Control Order and sentenced to pay a fine of Rs. 2,000/ .
V.P.S. Appeal allowed.
[/INST]Prior to January 18, 1944 six companies including M/s. Lakshmiratan.
Cotton Mills Co. Ltd. (the appellant company) and the Aluminium Corporation of India Ltd. (respondent corporation) were jointly managed by two groups known as the Singhania and Gupta groups.
As a result of disputes between the two groups there was a reference to arbitration.
After January 18, 1944, the date of the award, the aforesaid six concerns were brought under the management and control of one or the other of the two groups The Corporation came under the control and management of the Singhania group.
In cl. 9 of the award it was said that the award did not cover the advances which either party or their separate firms may have made to all or any of them or their moneys which may be in deposit with them and that they would be payable and paid in their usual course.
After the award the appellant Company sent a statement of account in respect of advances made to the respondent corporation, and expenditure incurred on its behalf.
The statement was objected to.
on the ground that the appellant company had not properly maintained its accounts during the period of joint management.
Efforts at reconciliation of accounts having faded the appellants filed two suits claiming Rs. 3,56,207.9.6 and Rs. 72,595.4.6 from the Corporation, being suits Nos. 63 and 65 of 1949.
In suit No. 63 of 1949 it was claimed that the suit was within time as after adjustment of several items in 1946 and 1947 a sum of Rs. 2,96,110. 11.6 was found due to the appellant company and that in any event the suit was saved from being barred by limitation by a letter (exhibit 1) dated April 16, 1946 addressed by s the Secretarycum Chief Accountant of the Corporation, thereby acknowledging the liability of the Corporation to pay the amount which would be found due and payable under the said accounts.
Similar averments were made in, Suit No. 65 of 1949.
The written statements filed on behalf of the Corporation inter alia pleaded that the said claim was barred by limitation, that the said letter didnot amount to an acknowledgement within the meaning of section 19 of theLimitation Act, 1908 which was then applicable to the suits, and lastly,that even if the said letter did amount to an acknowledgement, it wasnot binding on the Corporation.
The trial court decreed the suits but theHigh Court dismissed them as being time barred.
In appeals to this Courtthe questions that fell for consideration were (i) whether the letter in question amounted to an acknowledgment;(ii) whether it was an acknowledgement by the corporation, and if not (iii) whethe 'r the Secretary cum Chief Accountant had authority express or implied.
to acknowledge liability on behalf of the Corporation so as, to bind that corporation.
Allowing the appeals, HELD: (1) (a) From the provisions of section 19(1) of the Limitation Act, 1908 it is clear that the statement on which the plea of acknowledgement is founded must relate to a subsisting liability as the section requires 624 that it must be made before the expiration of the period prescribed by the Act.
It need not, however, amount to a promise to pay, for an acknowledgement does not create a new right of action but merely extends the period of limitation.
The statement need not indicate the exact nature or the specific character of the liability.
The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the partes such as, for instance, that of a debtor and a creditor and the intention to admit such a jural relationship Such an intention need not be in express terms and can be inferred by implication or the nature of the admission and the surrounding circumstances.
Generally speaking a liberal construction of the statement in question should be given.
That of course does not mean that where a statement is made without intending to admit the existence of a particular jural relationship, such an intention should be fastened on the person making the statement by an involved or a far fetched reasoning.
[629 C E] Khan Bchadur Shapoor Freedoom Mazda vs Durga Prosad Chamaria, , Tilak Ram vs Nathu, A.I.R. , 938, 939, Green vs Humphreva, [1884] 26 Ch. D. 474, 481, Tajpal Saraogi vs Lallanjee Jain, C.A. No. 766/62 dt.
8 2 1965 and Abdul Rahim Oosman & Co. vs Ojamshee Prushottamdas & Co., Cal.
6,39, referred to.
(b) From the correspondence between the parties and the surrounding circumstances it must follow that there was a subsisting account in the name of the appellannt company in the books of the Corporation in which interest on the balance shown therein from time to time was being credited and in which amounts in respect of items passed during the course of reconciliation were also duly credited.
The statement in the letter exhibit 1 that "after all the above adjustments the position will be as per statement attached", that is to say, that there 'was a balance of Rs. 107447/13/11 due and payable to the appellant company must clearly amount to acknowledgement within the meaning of section 19(1).
If the letter be looked at in the background of the controversy between the parties which controversy was limited to the question as to the correct ness of the amount claimed by the appellant company as also the correspondence which ensued in regard to it, it would be impossible to say that the letter and the statement of account enclosed therewith were merely explanatory and did not amount to an admission of the jural reship of debtor and creditor and of the liability to pay the amount found due at the foot of the account on finalisation.
[635 D F] The mere fact that letter called for confirmation of the amount of the balance mentioned therein and the fact that the appellant company failed to confirm it, could not lead to a conclusion that the admission of liability was conditional and therefore could not operate as an acknow ledgement.
The confirmation sought in the letter was not a condition to the admission as to the existence of a subsisting account and the liability to pay when accounts were finalised but to the specific amount which according to the corporation would be the amount payable by it according to its calculation. 'There was no condition subject to which the admission was to be made which remained unperformed.
[635 G; 636 F G; 637 B] Maniram vs Rupchand, L.R. 33 I.A. 165, Raja Kayali Arunachella Row Bahadur vs Sri Rajah Rangiah Appa Row Bahadur, Mad.
519 and Ballapragada Ramamurthy vs Thammana Gopayya, Mad. 701, distinguished.
625 LAXMIRATAN COTTON MILLS V. ALUMINIUM CORP. (Shelat, J.) In re River Steamer Co. vs Mitchell, , 828, referred to.
, (ii) The plea that the letter exhibit I should be regarded as an acknowledgement by the corporation itself was not included among the issues formulated before the courts below.
It could not be allowed to be raised for the first time in this Court.
[628 B] (iii) If the correspondence between the parties together with the statements of accounts enclosed therewith was closely examined it became clear that S was authorised to scrutinise the claim made by the appellant company, the various items for which the appellant _company claimed credit and to reject the same and, what is important, to allow others.
That he had such an authority was clear from the fact that in respect of such of the items which he allowed, credit was given to the appellant and necessary entries to the credit of the appellant company were posted in the account maintained by the Corporation in its books of account.
It was impossible to say that in the course of finalising the accounts, S accorded his assent to various items claimed by the appellant company without having been authorised so to do.
Nor was it possible to say that on his passing those items necessary entries were made in the books of accounts of the corporation without his having so authorised.
Further, he could not have sent to the appellant company statements of account showing the balance due to it "as per the ledger" unless he was authorised to finalise the accounts and arrive at the amount due and payable to, the company.
[637 E F; 638 B C] Uma Shankar vs Govind Narain, I.L.R. 46 All. 982, referred to.
</s>
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<s>[INST] Summarize the judgementition (Civil) No. 677 of 1991.
(Under Article 32 of the Constitution of India) WITH Civil Appeal Nos.400 403 of 1992.
Shanti Bhushan, Somnath Chatterjee, Biswarup Gupta, Bhaskar Gupta, G.L. Sanghi, Arun Jaitley, Dr. Debi Pal, Anil Diwan A.K. Sen, Harish N. Salve, H.S. Prihar, Kuldip section Parihar, Gopal Subramanium, Abhijit Chatterjee, B. Lahiri, J.B. Dadachanji, S.Sukumaran, R.F. Nariman, G.S. Chatterjee, Ms. Sumita Chatterjee, Ms. Mridula Ray, Arun Madan, Ms. Priya Hingorani, Ms. Radha Rangaswamy, C.N. Sreekumar, Rathin Das, Ranjit Ghose, Sushil Kumar Jain, Sudhanshu Atreya and Dr. A.M. Singhvi for the appearing parties.
The Judgment of the Court was delivered by KASLIWAL, J.
Special Leave granted in all the petitions.
This litigation is an upshot of the earlier case Reserve Bank of India vs Peerless General Finance and Investment Company Ltd. and Others, ; decided on January 22,1987.
In 1978 th Prize Chits and Money Circulation Scheme (Banning) Act, 1978 (in short `the Banning Act, was enacted `to ban the promotion or conduct of prize chits or money circulation schemes and for matters connected therewith or incidental `hereto. ' The question which arose in the above case was whether the Endowment Scheme piloted by the Peerless General Finance and Investment Company Ltd., (hereinafter in short `the Peerless ') fell within the definition of `Prize Chits ' within ' the meaning of Sec. 2(e) of the above Banning Act.
By a letter dated July 23, 1979, the Reserve Bank of India pointed out to the Peerless that the schemes conducted by it were covered by the provisions of the Banning Act which had come into force w.e.f. December 12, 1978.
On September 3, 1979 the Peerless filed a writ petition in the Calcutta High Court for a declaration that the Prize Chits Banning Act did not apply to the business carried on by the Peerless.
A similar writ petition was filed questioning a notice issued by the Madhya Pradesh Government on the same lines as that issued by the West Bengal 419 Government.
A learned Single Judge of the High Court dismissed both the writ petitions but appeals preferred by the Peerless under the Letters Patent were allowed by a Division Bench of the Calcutta High Court.
It was declared that the business carried on by the Peerless did not come within the mischief of the Prize Chits Banning Act.
Against the judgment of the Division Bench of the Calcutta High Court, the Reserve Bank of India, the Union of India and the State of West Bengal preferred appeals before this court.
The question considered in the above case was ``Is the endowment scheme of the Peerless Company a Prize Chit within the meaning of Section 2(e) of the Prize Chits and Money Circulation Schemes (Banning) Act? ' ' This court held that section 2(e) does not contemplate a scheme without a prize and, therefore, the Endowment Certificate Scheme of the Peerless Company was outside the Prize Chits Banning Act.
Appeals filed by the Reserve Bank of India, the Union of India and the State of West Bengal were accordingly dismissed.
Chinnappa Reddy,J. observed: ``It is open to them to take such steps as are open to them in law to regulate schemes such as those run by the Peerless Company to prevent exploitation of ignorant subscribers.
Care must also be taken to protect the thousand of employees.
We must also record our dissatisfaction with some of the schemes of the Life Insurance Corporation which appear to us to be even less advantageous to the subscribers than the Peerless Scheme.
We suggest that there should be a complete ban on forfeiture clauses in all savings schemes, including Life Insurance Policies, since these clauses hit hardest the classes of people who need security and protection most.
We have explained this earlier and we do wonder whether the weaker sections of the people are not being made to pay the more affluent sections! Robbing Peter to pay Paul? It was further observed ``We would also like to query what action the Reserve Bank of India and the Union of India are taking or proposing to take against the mushroom growth of finance and investment companies ' ' offering staggeringly high rates of interest to depositors leading us to suspect whether these companies are not speculative ventures floated to attract unwary and credulous investors and capture their savings.
One has only to look at the morning 's newspaper to be greeted by advertisements inviting deposits and offering interest at astronomic rates.
On January 1, 1987 one of the national newspapers published from Hyderabad, where one of us happened to be spend 420 ing the vacation, carried as many as ten advertisements with `banner headlines ' covering the whole of the last page, a quarter of the first page and conspicuous spaces in other pages offering fabulous rates of interest.
At least two of the advertisers offered to double the deposit in 30 months, 2000 for 1000, 10,000 for 5,000, they said.
Another advertiser offered interest ranging between 30 per cent to 38 per cent for periods ranging between six months to five years.
Almost all the advertisers offered extra interest ranging between 3 per cent to 6 per cent if deposits were made during the Christmas Pongal season.
Several of them offered gifts and prizes.
If the Reserve Bank of India considers the Peerless Company with eight hundred crores invested in government securities, fixed deposits with National Banks etc.
unsafe for depositors, one wonders what they have to say about the mushroom non banking campanies which are accepting deposits, promising most unlikely return and what action is proposed to be taken to protect the investors.
It does not require much imagination to realise the adventurous and precarious character of these business.
Urgent action appears to be called for to protect the public.
While on the one hand these schemes encourage two vices affecting public economy, the desire to make quick and easy money and the habit of excessive and wasteful consumer spending, on the other hand the investors who generally belong to the gullible and less affluent classes have no security whatsover.
Action appears imperative. ' ' Khalid, J., another learned Judge aggreeing with the judgment of Chinnappa Reddy, J., further added his short but important concluding paragraph as under : ``I share my brother 's concern about the mushroom growth of financial companies all over the country.
Such companies have proliferated.
The victims of the schemes, that are attractively put forward in public media, are mostly middle class and lower middle class people.
Instances are legion where such needy people have been reduced penniless because of the fraud played by such financial vultures.
It is necessary for the authorities to evlove fool proof schemes to see that fraud is not allowed to be played upon persons who are not conversant with the practice of such financial enterprises who pose themselves as benefactors of people. ' ' Taking note of the weighty observations made by this Court, the 421 Reserve Bank of India in exercise of the powers conferred by Section 45 (J) and 45 (K) of the (hereinafter referred to as the Act) and of all the powers enabling it in this behalf and considering it necessary in the public interest issued certain directions by notification No. DFC.55/DG(O) 87 dated the 15th May, 1987 (hereinafter referred to as the `directions of 1987 ').
The constitutional validity of these directions of 1987 was challenged by Timex Finance and Investment Company Ltd. (hereinafter referred to as `Timex Company ') by filing a writ petition in the Calcutta High Court before the learned Single Judge.
The learned Single Judge granted an interim order in terms of prayers (g) and (h) of the writ petition.
The Reserve Bank of India aggrieved against the interim order filed an appeal before the Division Bench.
A stay petition was also moved on behalf of the Reserve Bank of India for staying the operation of the order dated 7th October, 1988 passed by the learned Single Judge.
After hearing the stay petition for sometime, the Division Bench of the High Court listed the appeal as well as the stay petition for final disposal.
The Division Bench of the High Court disposed of the appeal as well as the writ petition by an order dated March 23, 1990 and arrived to the following and conclusions. "(a) Reserve Bank of India is empowered to issue directions to the residuary non banking companies under the provisions of Section 45J and 45K of the for the interest of thousands of depositors.
(b) However, to the extent such directions are found to be prohibitory or not workable and as such unreasonable must be held to be beyond the powers of the Reserve Bank of India.
(c) The impugned directions providing that they represent irreducible minimum for safeguarding the interest of and for preventing exploitation of small and unwary depositors cannot be implemented without suitable modification.
It is not reasonably practicable to comply strictly with the directions as they stand by the writ petitioners and the similarly situated companies.
The Supreme Court in Peerless case (Supra). .reserved the liberty to the Reserve Bank of India to take such steps as are open to them in law to regulate the schemes such as those granted by the Peerless to prevent exploitation of subscribers and to protect thousands of employees.
The impugned directions without modifications will run counter to the aforesaid directions of the Supreme Court.
(d) The business of savings and investments carried on by the company and similarly situated companies having not been declared unlawful or banned, power of the Reserve Bank of India to regu 422 late such business cannot be permitted to be prohibitory resulting in the ultimate closure of the business carried on by the writ petitioner company and other similarly situated companies.
If the modifications as suggested by us are not implemented and if ultimately the business is closed down and the company goes into liquidation, the hard earned money of thousands of depositors will be lost and the employees would also lose their job.
If even after modifications are made to the impugned directions in terms of this order, any company fails to comply with such directions, the Government may take such steps as are open to them to protect the interests of the thousands of small depositors and numerous employees.
(e) The reasons why the impugned directions cannot be complied with and held to be unworkable and unreasonable are mainly because of the definition of liability assigned in the impugned directions.
The impugned directions, as they stand now, cannot be implemented by the residuary non banking companies without incurring loss irrespective of their net worth.
According to the impugned directions, the liability is the amount of money deposited by the depositions plus the amount of interest whether or not due to them according to the terms of the respective contracts at the given point of time.
In other words, the entire collection with the interest, Bonus, etc.
whether payable or not would be the liability of the Company.
This leaves no fund for working.
If the definition of liability is amended as suggested by us, it will be possible for the companies to generate working capital.
In our view, liability in clause 6 and in other clauses of the impugned directions should be construed to mean total amount of contractual dues of the depositors including interest, premium, bonus or other advantages by whatever name called, accrued on the amount according to the terms of contract.
Section 45J and 45K of the Act do not authorise the Reserve Bank of India to introduce a concept of liability which is contrary to the accepted commercial practice and trading principles.
The impugned directions have failed to make distinction between the actual liability in presenti and a liability de futuro.
Liberty must be reserved to the companies to adopt normal accountancy practice recognised and accepted in the trading circles so long as such accounting practice provides for payment of the liability to the depositors in accordance with the contractual obligations.
However, the Reserve Bank of India may, having regard to the facts and circumstances of each case issue directions regulating the administrative and management expenses and expenditure on com 423 mission and publicity.
In the impugned directions no restriction has been imposed on the expenditure by a residuary non banking company on any of these heads.
In our view, the impugned directions without modifications, instead of suppressing the mischief, will only lead to adverse unworkable and/or impracticable results inasmuch as if the residuary non banking companies cannot comply with such directions in toto, such companies have to go out of existence.
This cannot be the object of the impugned directions.
If the liability in terms of the contractual obligations is provided not only in the accounts but also by suitable investment in terms of Clause 6 of the directions, in our view, all the residuary non banking companies, irrespective of their net worth, will be able to carry on the business.
(f) Every residuary non banking company shall disclose its Books of Accounts and balance sheet the aggregate amount of liability accrued and payable to the depositors in accordance with the terms of the contract.
(g) The directions contained in clause 6 for deposit or investment and the liability shall be read subject to the modification of the designation of the liability as aforesaid.
(h) The directions are prospective.
The period of deposit and the date of return with respect to all certificates issued prior to 15th May 1987 have been excluded from the purview of the directions as per clause 18 (1).
This exemption should include all contractual obligations on those certificates.
(i) All funds prior to the issue of the directions should be allowed to be kept in the manner as was being done by the respective residuary non banking company.
The direction with regard to the investment shall be applicable from the money collected and/or received on and after 15th May 1987.
The companies shall be allowed reasonable time to make good the deficiency in the investment required to be made in terms of the directions after 15th May 1987.
(j) We are not unmindful of the fact that exercise of power by legislature and executive is subject to judicial restraint.
The only check on judicial exercise of power is the self imposed dicipline of judicial restraint.
But although the courts in exercise of judicial power are not competent to direct the enactment of a particular provision of law, if the statutory directions suffer from arbitrariness, the court is competent to issue necessary direction so that the statutory directions may be brought in conformity 424 with law.
As we have held that the Reserve Bank of India has transgressed the statutory power to the extent indicated elsewhere in the judgment, we are of the view that the Reserve Bank of India shall modify the directions and make them reasonable and workable to safeguard the interest of depositors and protect the employees. ' ' The Division Bench also considered an application filed by Favourite Small Investment Company and by order dated 20th December, 1990 directed that the Reserve Bank of India should revoke the prohibitory order and permit Favourite Small Investment Company to accept fresh deposits and carry on new business.
It may be noted that the Peerless filed a petition before the High Court for becoming a party respondent.
The High Court by order dated 31st August, 1990 allowed the said application and further ordered that the cause title and the records proceedings of appeal, memorandum of appeal and the paper book filed be amended accordingly.
The Peerless also moved an application for clarification of the judgment and order dated 23rd March, 1990.
It prayed that suitable provision should be made for a depositor who wants back the money before maturity.
If the depositor intends to get refund of the money invested before the expiry of actual contract period, he should be required to keep the funds for a minimum period in accordance with the contract.
Before maturity he can only take loan but not the principle amount with interest.
The amounts of returns should also be less than 5 per cent to provide for the collection and other expenses of the non banking companies.
The Division Bench of the High Court took the view that the order dated 23rd March, 1990 required clarification as it was not made clear as to whether non residuary banking companies are under an obligation to pay discontinued certificates before the stipulated period in the contract, if so what would be the rate of interest.
The Division Bench by order dated December 24, 1990 clarified its earlier order dated 23rd March, 1990 as under : ``(a) If the contract by and between the company and the depositor provides that no payment on discontinued certificate will be made before the expiry of the term stipulated in the contract, in such cases, if the certificate is discontinued any time before such stipulated term and payment is made to the depositors according to the terms and conditions of the contract, in other words, on the expiry of the term stipulated in the contract, such depositor shall be paid interest at the rate of 8% compound per annum, but in such a case the company will be at liberty to deduct an amount not exceeding 5% from the total return in or to provide for collection and other expenses incurred in connection with these 425 discontinued certificates (b) In cases where certificates are discontinued before or after the stipulated term but the depositors obtain refund only upon maturity of the certificates such refund shall be made to depositors with compound interest at the rate 8 % per annum without any deduction whatsoever.
(c) Since no payment will be made against the discontinued certificates to the depositors in such cases shall be permitted to take loan, if they so intend, against the payment made till discontinuance of such terms and conditions as the company may stipulate.
" The Reserve bank of India aggrieved against all the above orders of the Calcutta High Court has filed appeals against the orders dated 23 rd March, 1990.
31st August, 1990, 20th December, 1990 and 24th December, 1990.
The Peerless General Finance and Investment Company Ltd., has also filed a writ petition No. 677 of 1991 directly before this Court under Article 32 of the Constitution of India.
In view of the fact that the questions raised in the appeals filed by the Reserve Bank of India against the orders of the High Court and in the civil writ petition filed by the Peerless Company are common, the same were heard together and are disposed of by a single order.
Interlocutory applications were also filed on behalf of the employees of the Peerless Company, agents of Peerless Company working in the field, and some of the depositors in the Peerless company.
We have heard them also.
The main controversy centers round paragraphs (6) and (12) of the directions of 1987 and as such the same are reproduced in full.
Paragraph (6) Security for depositors On and from 15th May 1987 (1) Every residuary non banking company shall deposit and keep deposited in fixed deposits with public sector banks or invest and keep invested in unencumbered approved securities (Such securities being valued at their marked value for the time being), or in other investments, which in the opinion of the company are safe, a sum which shall not, at the close of business on 31st December 1987 and thereafter at the end of each half year that is, 30th June and 31st December be less than the aggregate amounts of the liabilities to the depositors whether or not such amounts have become payable: 426 Provided that of the sum so deposited or invested (a) not less than ten percent shall be in fixed deposits with any of the public sector banks.
(b) not less than 70 percent shall be in unapproved securities; (c) not more than 20 percent or ten times the net owned funds of the company, whichever amount is less, shall be in other investments, provided that such investments shall be with the approval of the Board of Directors of the Company.
Explanation : "Net owned funds" shall mean the aggregate of the paid up capital and free reserves as appearing in the latest audited balance sheet of the company as reduced by the amount of accumulated balance of loss, deferred revenue expenditure and other intangible assets, if any, as disclosed in the said balance sheet.
(2) Every residuary non banking company shall entrust to one of the public sector banks designated in that behalf, deposits and securities referred to in clauses (a) and (b) of the proviso to subparagraph (1) to be held by such designated bank for the benefit of the depositors.
Such securities and deposits shall not be withdrawn by the residuary non banking company, or otherwise dealt with, except for repayment to the depositors.
(3) Every residuary non banking company shall furnish to the Reserve Bank within thirty days from the close of business on 31st December 1987 and thereafter at the end of each half year that is as on 30th June and 31st December, a certificate from its auditiors, being members of Institute of Chartered Accountants, to the effect that the amounts deposited in fixed deposits and the investments made are not less than the aggregate amounts of liabilities to the depositors as on 30th June and 31st December of that year.
Explanation : For the purpose of this paragraph, (a) "Aggregate amounts of liabilities" shall mean total amount of deposits received together with interest, premium, bo 427 nus or other advantage by whatever name called accrued on the amount of deposits according to the terms of contract.
(b) "approved securities" means; the securities in which the Trustee is authorised to invest trust money by any law for the time being in force in India and bonds or fixed deposits issued by any corporation established or constitued under any Central or State enactments.
(c) "public sector banks" means, the State Bank of India, the Subsidiary Banks and the corresponding new banks referred to in Section 45(1) of the (2 of 1934).
(d) "unencumbered approved securities" shall include the approved securities lodged by the company with another institution for advances or any other credit arrangements to the extent to which such securities have not been drawn against or availed of.
Paragraph (12) Every residuary non banking company shall disclose as liabilities in its books of accounts and balance sheets the total amount of deposits received together with interest, bonus, premium or other advantage, accrued or payable to the depositors.
We would first deal with the legal objections raised on behalf of the Peerless and other companies.
It has been submitted on behalf of the Peerless and other companies that the directions of 1987 are ultra vires of Section 45J and 45K of the Reseve Bank of India Act, 1934.
None of the said sections authorises the Reserve Bank to frame any directions prescribing the manner of investment of deposits received or the method of accountancy to be followed or the manner in which its balance sheet and books of accounts are to be drawn up.
It has been contended that Section 45J has no manner of application in the present case.
Section 45K (3) of the Act on which reliance has been placed on behalf of the Reserve Bank, merely provides that the Reserve Bank may, if it considers necessary in the public interest so to do, give directions to non banking institutions either generally or to any non banking institutions in particular, in respect of any matters relating to or connected with receipts of deposits, including the rate of interest payable on such deposits and the purpose for which deposits will be received.
According so Sec.
45K (4) if any non banking institution fails to comply with any direction given by the bank under sub 428 section (3) the Reserve Bank may prohibit the acceptance of deposits by that non banking institution.
It is thus submitted that on a plain reading of Sec.
45K (3) the Reserve Bank is only competent to frame the directions regarding receipt of deposits and such power of direction does not extend to providing the manner in which deposits can be invested or the manner in which the liabilities are to be disclosed in the balance sheet or books of accounts of the company.
It is further submitted that the power under subs.
(4) is to prohibit acceptance of deposits and as such the permissible field of direction making is limited to receipt of deposits and nothing more.
The Reserve Bank of India in framing the directions of 1987 which is a subordinate piece of legislation has clearly over stepped the bounds of the parent statue of Sec.
45K (3) of the Act.
It is further argued that the Reserve bank cannot contend that paragraphs 6 and 12 of the directions of 1987 are covered within the powers conferred on the Reserve Bank under Sec.
45L (1) (b) of the Act.
It is submitted that the Reserve Bank had at no point of time expressed its intention to invoke its powers under Sec.
45L. Even before the Division Bench of the Calcutta High Court the Reserve Bank did not rely on Sec.
45L as alleged source of its power to issue the impugned directions nor the Reserve Bank referred to Sec.
45L in its pleadings before the High Court.
Wherever the Reserve Bank of India wanted to invoke its power under Sec 45L of the Act, it has expressly mentioned that it was exercising its powers under Sec.
45L. In the case of non banking financial companies (Reserve Bank) directions 1977, or the miscellaneous non banking companies (Reserve Bank) Directions, 1977 it has expressly said that it was invoking its powers under sec.
45L of the Act, whereas in the case of the impugned directions, the Reserve Bank has only referred to sections 45J and 45K of the Act.
The Reserve Bank of India itself in the affidavit filed before the High Court had stated that the directions of 1987 were framed after careful deliberations at the highest level and now it cannot take the stand that the source of its power in framing the impugned directions was exercised under sec 45L of the Act.
It is further contended that in order to invoke the powers under sec 45L of the Act it has to state that the Reserve Bank was satisfied for the purpose of enabling it to regulate the credit system of the country to its advantage and it was necessary to give such institutions directions relating to the conduct of business by financial institution or institutions.
In order to exercise its powers under sec.
45L of the Act, it has to apply its mind for the purpose of arriving at the statutorily required satisfaction.
In fact, such recital is necessary since such satisfaction is a pre conditions for the Reserve Bank to exercise its powers under section 45L of the Act.
On the other hand it has been contended on behalf of the Reserve 429 Bank that the power of the Reserve Bank to regulate deposit acceptance activities of non banking and financial institutions under Chapter IIIB of the Act cannot be disputed.
The Reserve Bank has power to issue the impugned directions under Section 45J, 45K and 45L of the Act.
The pith and substance of Para 6 of the directions of 1987 is to ensure that deposits received from the public are invested in a manner to secure the repayment of the deposits.
A deposit is, by definition, a sum of money received with a corresponding obligation to repay the same.
Thus, the repayment of the deposit is an integral part of the transaction of a receipt of deposit.
It is contended that the expression "receipt of deposit" must be construed liberally, in the light of the nature of the provisions as well as in the light of the wide language used in the provision.
It is also argued that even if the impugned directions of 1987 are not covered under the powers conferred under Sections 45J and 45K of the Act, those are squarely covered by Section 45L of the Act.
It is submitted that various provisions under the Act are enabling in nature and confer overlapping powers.
Even if there is no recital of Sec.
45L, it would not be of much consequence, if such exercise of power can be related to Sec.
45L of the Act.
We have considered the arguments advanced by learned counsel for the parties.
Chapter IIIB laying down provisions relating to non banking institutions receiving deposits and financial institutions was inserted in the , by virtue of Act 55 of 1963 w.e.f. 1.2.1964.
Section 45J, 45K (3) & (4) and 45L 1 (b) relevant for our purpose are given as under : Sec.
45J "The Bank may, if it considers necessary in the public interest so to do, by general or special order, (a) regulate or prohibit the issue by any non banking institution of any prospectus or advertisement soliciting deposits of money from the public; and (b) specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued.
Section 45K (1) . . (2) . . (3) The Bank may, if it considers necessary in the public interest so to do, give direction to non banking institutions either generally or to any 430 non banking institution or group of non banking institutions in particular, in respect of any matters relating to or connected with the receipt of deposits, including the rates of interest payable on such deposits, and the periods for which deposits may be received.
(4) If any non banking institution fails to comply with any direction given by the Bank under sub section (3), the Bank may prohibit the acceptance of deposits by that non banking institution.
Section 45L (1) If the bank is satisfied that for the purpose of enabling it to regulate the credit system of the country to its advantage it is necessary so to do; it may (a) . . (b) give to such institutions either generally or to any such institution in particular, directions relating to the conduct of business by them or by it as financial institutions or institution.
A combined reading of the above provisions unmistakably goes to show that the Reserve Bank if considers necessary in the public interest so to do can specify the conditions subject to which any prospectus or advertisement soliciting deposits of money from the public may be issued.
It can also give directions to non banking institutions in respect of any matters relating to or connected with the receipt of deposits, including the rates of interest payable on such deposits, and the periods for which deposits may be received.
This latter power flows from sub section
(3) of Sec.
45K of the Act.
The Bank under this provision can give directions in respect of any matters relating to or connected with the receipt of deposits (emphasis added).
In our view a very wide power is given to the Reserve Bank of India to issue directions in respect of any matters relating to or connected with the receipt of deposits.
It cannot be considered as a power restricted or limited to receipt of deposits as sought to be argued on behalf of the companies that under this power the Reserve Bank would only be competent to stipulate that deposits cannot be received beyond a certain limit or that the receipt of deposits may be linked with the capital of the company.
Such interpretation would be violating the language of Sec.
45K (3) which furnishes a wide power to the Reserve Bank to give any directions in respect of any matters relating to or connected with the receipt of deposits.
The Reserve Bank under this provision is entitled to give directions with regard to the manner in which the deposits are to be invested and also the manner in which such deposits are to be disclosed in the balance sheet or books of accounts of the company.
The word `any ' quali 431 fying matters relating to or connected with the receipt of deposits in the above provision is of great significance and in our view the impugned directions of 1987 are fully covered under Sec.
45K (3) of the Act, which gives power to the Reserve Bank to issue such directions.
As a proposition of law we agree with the contention of the learned counsel for the Reserve Bank that when an authority takes action which is within its competence, it cannot be held to be invalid merely because it purports to to be made under a wrong provision, if it can be shown to be within its power under any other provision.
Learned counsel in this regard has placed reliance on Indian Aluminium Company etc.
vs Kerala State Electricity Board; , In our view as already held above, the Reserve Bank was competent and authorised to issue the impugned directions of 1987, in exercise of powers conferred under Section 45K (3) of the Act.
Having cleared the ground of ultra vires we must now turn to the main challenge posed on behalf on the Peerless and other companies and employees.
Mr. Harish Salve made the leading arguments on behalf of the Reserve Bank of India.
His main thrust of the argument was that the Reserve Bank of India had issued these directions of 1987 in order to carry out observations made by this Court in Peerless case (supra) and in the public interest of safeguarding the money of the depositors in such companies.
The Reserve Bank considered it necessary that the interest of millions of small depositors of rural areas should be made safe and may not be devoured by a mushroom of companies with no stake.
According to Mr. Salve it was not the intention of the Reserve Bank to put any restrictions in the manner or conduct of business to be done by such companies.
But the most important factor weighing in the mind of the Reserve Bank was to safeguard the money of the depositors.
It was not the concern of the Reserve Bank as to how and in what manner these companies would regulate their expenses or would be able to conduct such business for earning more profits.
According to the Reserve Bank of India these companies cannot be allowed to spend a mighty of deposits for meeting their own expenses.
They should find out their own resources for meeting the expenses.
According to the Reserve Bank the rate of interest to be paid by these companies to the depositors has been fixed as 10 per cent per annum.
They could easily invest such amount in bonds issued by public sector corporation and earn interest at the rate of 14 per cent per annum or more and thereby earn a profit of 4 per cent and regulate their expenses within the limits of such profits.
It was submitted that the propensity of the 432 problem has increased manifold in view of the fact that the amount of deposits and investments has gone to staggering heights worth several thousand crores of lower middle class persons living mostly in the rural areas.
A bogey of employment hazards of several thousand regular employees and still a large number of agents working in the field cannot deter the Reserve Bank to lay down some directions which may act harshly and resulting in lessening of profits of such companies.
It was also submitted that according to the affidavit submitted before this Hon 'ble Court on behalf of the Reserve Bank of India it has been stated that prior to 1987 directions, there were 747 such companies which were conducting deposit scheme.
At present they could classify only 392 such companies as required information for classifying of the remaining companies had not been received.
Most of such companies have not designated their banks as it required under paragraph (6) of the directions and in most of such cases amounts invested in bank deposits and approved securities fall much short of deposit liabilities.
The companies operating in these areas also at times become untraceable in that a number of show cause notices issued have been returned as "addressee not known" etc.
In some cases those who have chosen to reply have given evasive replies.
It has been further stated in the affidavit that most of these companies did not comply with the financial discipline sought to be imposed upon them and have avoided and abhorred any scrutiny into their accounts.
It has thus been submitted that to get over these difficulties, the directions of 1987 attempt to provide a steady, stable identificable and monitorable method by which the companies will be able to disclose all their true liabilities and also utilise the money raised from the depositors for investment in safe indentifiable and quantifiable securities instead of investing them in other ventures.
This will ensure complete security to the depositors at all times and will also make the accounts of the companies comprehensible and easy to monitor.
As regards the formula laid down by the High Court it has been submitted that if a variable as against a fixed and definite percentage of investment with respect to amounts collected by way of each instalment is permitted it would be impossible to find out and verify whether the amounts invested are in accordance with the directions at any given point of time when there are thousands of certificates with different and varying maturity periods.
In the circumstances, the formula laid down by the High Court is self defeating and also deprives the depositor of the security envisaged under the directions.
It was also submitted on behalf of the Reserve Bank that it is an admitted position that the business of RNBCs is to collect funds from the public and invest the same in Government securities and bank deposits.
In 433 the application forms and in the advertisement 's issued by these companies it is expressly held out to the public that their moneys are safe with the banks and in Government securities.
It is the very nature of their business which makes it non viable if they are to give fair return to the depositors and private security for the repayment of their money.
The scheme of control as provided in the directions of 1987 might be harsh but the same is in conformity with the assertions held out by these companies to the public at large.
These directions subject the companies to proper discipline by monitoring their actions and such directions cannot be considered as unreasonable.
The reasonableness of the directions when looked at from the point of view of the depositors for whose safeguard they have been issued, is beyond question.
Return provided and the security to be given through proper investment cannot be faulted on any ground.
Thus what seems to be an impossible situation for these companies is not due to the impugned directions but because of the nature of business itself.
The funds are collected at exhorbitant costs and on that account it becomes difficult for the companies to give a fair return to the depositors.
These companies are not genuine investment companies.
If they want to do genuine investment business they can do so by choosing freely their investment, but in that case Reserve Bank of India directions applicable to such companies would permit them to accept deposits not exceeding 25 per cent of paid up capital and reserve.
The directions of 1987 had not imposed any restriction on the right to carry on business but those directions only place a restriction with respect to one of the modes of raising reserves i.e. through public deposits.
It has been further argued that the reasonableness of the directions has not to be looked into from the point of view of the company to whom any such restrictions will be irksome and may therefore be regarded as unreasonable.
The framing of the directions are only regulatory in nature keeping in view the interest of the depositors without unduly jeopardising the interest of the employees.
Keeping this in mind it has been provided that the minimum return would be at 10 per cent, though there are govt.
and public sector bonds which pay interest at a much higher rate.
Even presently bank deposits and other company deposits give return varying between 13 to 15 per cent.
There is no limitation on the quantum of deposits with reference to the overall capital as shown in the case of companies governed by the Companies (Acceptance of Deposits) Rules 1975, Non Banking Financial Companies (Reserve Bank) Directions, 1977.
The linking of deposits with capital as in the case of other regulations is a measure to secure the interest of the depositors namely e.g. Companies (Acceptance of Deposit) Rules, 1975, ensure that the assets 434 are at least three times the deposits received.
In view of the low or total non existent capital of the RNBCs, it was not possible to secure the deposits in this manner.
Instead, it has been provided that the entire liability towards the depositors should be invested and no part of the deposits be utilised for payment of commission etc.
or incurring other expense.
In any event, even if, the directions do not prescribe existence of owners capital as security, it does not imply that it is permissible to use the deposits received to bridge the time gap between income and expenditure.
Merely because the directions do not fix a ceiling on the rate of commissions it does not imply that the Reserve Bank has granted its permission to payment of high commission or incurring of large expenses on management etc.
The RNBCs are free to incur such expenses and organize their business as they desire as long as the depositors are fully secured at all times.
The contention that the business of the RNBCs will close down if the directions of 1987 are to be adhered to is not based on facts and misconceived in law.
A perusal of Directors ' Report of Peerless for the years 1988, 1989 and 1990 clearly go to show that they did not consider the company in any financial difficulty and in fact paid larger dividends even after complying with the impugned directions of 1987.
It has thus been submitted that given a wide latitude in judging the validity of economic legislation on the touch stone of reasonableness, in the absence of patent arbitrariness but having nexus with the public objective sought to be attained, the durations cannot be condemned as being violative of Article 19(1) (g).
The result of the contentions put forward on behalf of RNBCs would be that in the case of endowments repayable after, say 10 years, there will be nothing due and payable in the first nine years and as such there would be no need of investing any sums for the first nine years.
The interpretation placed by the respondent companies upon the judgment of the High Court is that it is now open to them to determine as per their own peculiar estimate, what would be sufficient to meet the liabilities towards the deposits and accordingly such amount would be their "aggregate liability".
According to the Peerless Company if it deposits 75 per cent of the first year 's subscription, it is adequate to cover its liabilities to the depositors.
On the other hand as per Timex Company a deposit of only 50 per cent of the first year 's subscription would be adequate to cover its liabilities to the depositors.
Whereas the Favourite Company contends that investment of 40 per cent of the first year 's subscription will be adequate to cover the liabilities to the depositors.
It has been submitted that according to well accepted accounting practice where any sum is received as a loan or as a deposit it has to be shown as a liability together with accrued interest irrespective of when it is due.
The amount contributed by the depositors being a capital receipt and not a revenue receipt cannot under any circumstances be shown in the 435 balance sheet otherwise then at its full value.
Moreover, being a capital receipt, it cannot be credited to the profit and loss accounts since Part II of Schedule VI to the requires that the amounts to be shown in the profit and loss accounts should be confined to the income and expenditure of the company.
Thus, crediting a part of the first and subsequent year 's deposit instalments to the profit and loss account and not showing them fully as a liability in the balance sheet would be a contravention of the provisions of the .
It has been further submitted on behalf of the Reserve Bank that the question which arises for consideration is whether liability to the depositors can be calculated on an actuarial basis.
It may be noted that actuarial basis is normally adopted (a) in respect of items of income and expenditure, (b) where there is a significant element of uncertainty.
Thus, in so far as the liability arising out of the repayment to the depositors of the amount capitalised by him is considered, the actuarial basis cannot be adopted and this liability must always be stated at its full value.
The principle of actuarial valuation is in opposite for the business of RNBCs.
It has also been submitted that the formula laid down by the High Court about the quantum of investments to be made by RNBCs is incapable of effectively monitoring and hence the provisions made in the directions of 1987 regarding security to depositors would be rendered wholly illusory.
Such impossibility in the monitoring has been demonstrated as follows: (A) These companies do not fix a definite but variable percentage of investment with respect to amounts collected by way of each instalment under the certificates of deposits; e.g. Peerless would invest 75 % of the collections made out of 1st instalment (retaining and taking to P & L A/c, 25 %) and 82 % out of 2nd instalment and so on.
At any given point of time, there will be thousands of deposit certificates with varying maturity and the amounts collected would be an impossibility to find out and verify whether the amounts invested are in accordance, with the proportion fixed by the companies with respect to each instalment.
Regulatory authority would have to depend entirely on these companies for doing its monitoring exercise.
(B) Each company fixes its own proportion of investment with respect to each instalment based on the projected yield from its investment; e.g. Favourite Finance Company claims that it needed to invest only 40 % of the amounts collected by way of 1st instalment claiming that the projected yield from its investment would be 14.8 %.
This would compound the impossibility of monitoring further.
436 It has thus been argued that the formula laid down by the High court is self defeating and depriving altogether benefits of security provisions given to depositors under the directions of 1987.
Mr. Somnat Chatterjee, learned senior counsel appearing on behalf of Peerless Company contended that the Peerless being the largest RNBC in india having an impeccable record of public service decided to give effect to the directions of 1987 as it wanted to avoid any confrontation with Reserve Bank and further not to give an impression of seeking to avoid "regulatory control", tried its best to comply with the said directions w.e.f. 15th May, 1987 till 31st March, 1989.
However, from its working results it appeared bonafide to the Board of Directors of Peerless that it was impossible to carry on its traditional business for any longer period without incurring huge losses.
The company as such decided to approach the High Court for obtaining the benefit of judgment delivered in the Timex case.
The Peerless has only challenged a part of Paragraph 6 of the directions of 1987 and the consequential direction contained in para 12 which shows that Peerless does not wish to remain outside of the regulatory controls of Reserve Bank but challenges only those directions which make the business totally unworkable.
There has been no attempt on the part of Peerless to carry on its business in a manner which may jeopardize the interest of any depositor or which will not protect fully every paisa deposited with Peerless at all points of time.
No real complaint was made by or on behalf of Reserve Bank as to any depositor of Peerless running a risk of loss of any amount or that it has carried on or is carrying on the business in an undesirable manner.
It has been submitted that Peerless should not be made to suffer for the illegality or improprieties, if any committed by any other RNBC and neither Peerless nor its 14 lac field agents, 3 thousand field officers and 4 thousand direct employees should be made to suffer.
The result of following directions of 1987 would be that all the above agents, officers and employees of the Peerless could loose their jobs and their family members will be thrown on the streets.
The Peerless had abolished the provision of forfeiture in all its schemes as early as in 1986 that is even prior to coming into force of the directions of 1987.
The Peerless has been compelled to challenge paragraphs 6 and 12 of the directions of 1987 since enforcement of these provisions would result in complete annihilation of the undertaking of Peerless in the near future.
It was further contended that it is inherent in the business carried on by Peerless and other similar RNBCs that the working capital is generated out of the subscriptions received from the certificate holders.
Such business comprises in collecting subscriptions from depositors either in lumpsum 437 or in instalments and such deposits are paid back with the guaranteed accretions, bonus, interest etc.
in terms of the contract at the end of the stipulated term.
Through this business such companies have rendered great and commendable service to the nation in mobilizing small savings and giving a boost to the movement of capital formation in the country.
Such companies have placed at the disposal of Governmental institutions including public sector banks and other financial institutions huge deposits which could not be collected by the said financial institutions themselves or by anybody in the organised sector.
The method followed by the companies in carrying on the aforesaid business is that a certain portion of the subscriptions received by it is transferred to the profit and loss account shown as income, and the same is used to defray inevitable working capital requirements of the company, namely, payment of agent 's commission, management expenses, staff salaries and other overheads.
However, the balance of the subscriptions (excluding the appropriated part) is transferred to a fund each year and the corpus of the fund is invested in turn in interest bearing investment.
The Peerless company initially used to transfer approximately 95 % of the first year 's subscriptions to the profit and loss account and used to invest the subscriptions received from the second year onwards.
However, at present, Peerless is appropriating 25 % of the first year 's subscription to the profit and loss account and investing the balance 75 % in the manner and mode prescribed by paragraph 6 of the directions of 1987.
It has been contended that the investment is planned in such a manner that at the end of the contractually stipulated maturity period or at any other point of time when any sum of money may become contractually payable to a depositor, an RNBC is always in a position to pay all its conractual dues to the certificate holder.
There is thus no threat to the safety of the depositors money inspite of the aforesaid transfer of a portion of the subscription received to the profit and loss account showing it as income and utilising it for meeting the working capital requirements.
It was pointed out that Peerless had been assessed to income on the basis of above method of accounting and no objection has ever been taken by the revenue authorities or by the auditors of Peerless or even by R.B.I. before the issuance of the directions of 1987.
It was submitted that the Peerless was incorporated in the year 1932 when it used to carry on life insurance business.
It changed over to the present form of business from 1956 and since then it has been carrying on such business with the full knowledge of R.B.I. as well as other concerned authorities.
The R.B.I. never objected to the accounting system followed by the Peerless.
In view of the abolition of the forfeiture clause the alleged risk to the depositors has become totally non existent.
It was further argued that the R.B.I. framed regulatory measures in 1973 such miscellaneous non banking companies (Reserve Bank) Directions, 1973.
438 The Reserve Bank granted exception to Peerless from the provisions of the said Directions of 1973, by an order dated 3rd December, 1973.
The Favourite Small Investments Limited filed a writ petition challenging the refusal of Reserve Bank to grant exemption to them from the provisions of the said 1973 Directions to granting such exemption to Peerless.
In the said writ petition the R.B.I. filed an affidavit justifying the denial of exemption to Favourite Small Investments Ltd. and in the aforesaid affidavit submitted in detail the accounting procedure of Peerless including the fact that Peerless was transferring a portion of the subscriptions to the profit and loss account as income and it also certified that the said method was a permissible business method and by following the said method Peerless would be in a position to pay all contractual dues of the certificate holders at the end of the maturity period.
Thus the said system of accounting which is called an actuarial system of accounting was found satisfactory by the R.B.I. The said affidavit filed in the Favourite 's case has been quoted in the Peerless case in ; , and the said actuarial system of accounting was not held as impermissible or against any recognized method of accounting.
It was also contended on behalf of the Peerless that the interest of depositors is certainly an important consideration but the interest of the depositors is not impaired in any manner whatsoever by the method of accountancy now being followed by Peerless and in fact by all similar companies, namely, appropriation of a part of the subscription to the profit and loss account and meeting the working capital requirements out of the same.
In respect of the above contention certain charts were also produced during the course of arguments and from such charts it was sought to establish that except for the first two years the principal amount paid by a subscriber is always covered by matching investment.
Further, on the date on which a deposit becomes contractually repayable, there is full coverage of such liability.
It was submitted on behalf of All India Peerless Field Officers Association that the said association represents about 14 lac field workers.
These 14 lac persons are engaged by Peerless on the basis of individual contracts of engagements and earn their livelihood solely by collecting business for Peerless.
For collecting such business Peerless pays to them commission at a contractual agreed percentage on the value of business collected.
The said field officers have to meet all expenses for procuring such business such as travelling expenses, boarding, lodging, office and administrative expenses etc.
out of such commission.
Field officers have to undertake long tours and have to travel into remote villages to reach the small depositors.
It has been submitted that if the directions of 1987 are upheld, the undertaking of Peerless will face inevitable closure and almost 439 14 lac field officers will lose their only source of livelihood and will be virtually thrown on the streets.
The field officers and their families will face starvation and extreme penury in case the validity of such directions is upheld.
Thus any restriction which would be prohibitive or which would result in closure of the undertaking of Peerless would be against public interest.
We have heard the arguments of learned counsel for the parties.
It may be made clear at the outset that questions raised in these cases regarding the validity of paragraphs 6 and 12 of the directions of 1987 cannot be determined merely by taking into consideration the working of the financial soundness of the one company alone like Peerles but the matter has to be examined in a broader perspective of all RNBCs.
We have to keep in mind, while deciding the controversies raised in the arguments, such RNBCs which are doing the same kind of business of taking deposits and returning the same to the certificate holders after a gap of 7 to 10 years along with interest, bonus etc.
In the affidavit submitted before this Court on behalf of Reserve Bank of India it has been stated that prior to 1987 directions, there were 747 such companies which were conducting this business under various deposit schemes.
At present they could classify 392 such companies spread over across the entire country.
According to the above affidavit, as on 31st March, 1990 in the eastern zone out of 185 companies, only 35 have filed the annual returns and out of which only 30 have filed the balance sheet.
Similarly, out of 140 companies in the northern zone only 28 have filed annual returns and 32 have filed balance sheet.
A perusal of the returns given by 51 of these companies discloses that 35 companies have a negative net worth (i.e. their losses far exceed their share capital and reserves) which necessarily means that they have not only wiped out the share capital and reserves but their liabilities are far in excess.
Only 16 companies have a positive net worth including Peerless.
It has been further pointed out in the affidavit that apart from Peerless the aggregate capital investment by 15 companies is Rs. 158 lacs only.
As against this, the negative net worth of the 35 companies aggregated to Rs. 3.6 crores.
Despite large accumulated losses (in some cases with meager or nominal capital) these companies apart from Peerless, have realised deposits to the tune of Rs. 86 crores.
Apart from the financial parameters most of these small companies are family concerns.
Most of such companies have not designated their banks as is required under Paragraph 6 of the directions and in most of such cases amounts deposited in banks and approved securities fall much short of deposit liabilities.
It has also been pointed out in the affidavit that the companies operating in these areas also at times become untraceable in that a number of show cause notices issued have been returned as "ad 440 dressee not known" etc.
Thus we have to keep in mind the above mushroom of companies also which have set foot in this sort of business.
It would also be important to note that most of the depositors in such companies belong to the rural areas and who are persons belonging to lower middle class, small agriculturists and small traders, pensioners etc.
These companies advertise their schemes widely in beguiling terms.
Through such advertisements they lure the small savings of the poor ignorant villagers through a special structure of agents, special agents, different kinds of organisers and so on.
The agents commission for the first years subscription is very high and which offers incentive to the agents on securing a fresh business and a disincentive to collect subscriptions of subsequent years.
It is a matter of common experience and knowledge that most rural folk particularly those belonging to the lower strata of society will not pay their subscriptions regularly unless somebody takes the trouble of collecting their subscription with the same enthusiasm as may be shown in enrolling the subscribers in the beginning.
It is no doubt correct that these companies do tap and collect the deposits from such areas where the agents of public sector banks or public sector companies or instrumentalities of the state are unable to reach.
Thus these companies mop up a large amount of money for ultimately investing in the nationalised bank or other Govt.
owned corporations or companies.
However, the Reserve Bank considered the safety of the money of the depositors as the paramount consideration in issuing the direction of 1987.
It cannot be disputed that the interest of the employees as well as the field officers and agents have also to be taken into consideration while deciding the reasonableness of the impugned directions.
It may be further noted that in the Reserve Bank of India vs Peerless Company case (supra) this Court though came to the conclusion that the Endowment Certificate Scheme of the Peerless company was outside the Prize Chit and Money Circulation Schemes (Banning) Act, still it was observed that it would be open to the Reserve Bank to take such steps as are open to them in law to regulate schemes such as those run by the Peerless company to prevent exploitation of ignorant subscribers though care must also be taken to protect the thousands of employees.
The Court expressed grave concern with regard to the mushroom growth of `financial investment companies ' offering staggeringly high rates of interests to depositors leading to the suspicion whether these companies are not speculative ventures floated to attract unwary and credulous investors and capture their savings.
It was clearly pointed out that if the Reserve Bank of India considers the Peerless company with 800 crores invested in Govt.
securities, fixed deposits with national banks etc.
unsafe for depositors one wonders what they have to say about the mushroom of non banking companies which are accepting 441 deposits promising most unlikely returns and as such what action was proposed to be taken by the R.B.I. to protect the investors.
In the above background the Reserve Bank came forward with the impugned directions of 1987.
Before examining the scope and effect of the impugned paragraphs 6 and 12 of the directions of 1987, it is also important to note that Reserve Bank of India which is bankers bank is a creature of Statute.
It had large contingent of expert advice relating to matters affecting the economy of the entire country and nobody can doubt the bonafides of the Reserve Bank in issuing the impunged directions of 1987.
The Reserve Bank plays an important role in the economy and financial affairs of India and one of its important functions is to regulate the banking system in the country.
It is the duty of the Reserve bank to safeguard the economy and financial stability of the country.
While examining the power conferred by Sec.
58A of the on the Central Govt.
to prescribe the limits upto which, the manner in which and the conditions subject to which deposits may be invited or accepted by non banking companies, this Court in Delhi Cloth and General Mills, etc.
vs Union of India, etc.
; , observed as under: "Mischief was known and the regulatory measure was introduced to remedy the mischief.
The conditions which can be prescribed to effectuate this purpose must a fortiori, to be valid, fairly and reasonably, relate to checkmate the abuse of juggling with the depositors/investors ' hard earned money by the corporate sector and to confer upon them a measure of protection namely availability of liquid assets to meet the obligation of repayment of deposit which is implicit in acceptance of deposit.
Can it be said that the conditions prescribed by the Deposit Rules are so irrelevant or have no reasonable nexus to the objects sought to be achieved as to be arbitrary? The answer is emphatically in the negative.
Even at the cost of repetition, it can be stated with confidence that the rules which prescribed conditions subject to which deposits can be invited and accepted do operate to extend a measure of protection against the notorious abuses of economic power by the corporate sector to the detriment of depositors/investors, a segment of the society which can be appropriately described as weaker in relation to the mighty corporation.
One need not go so far with Ralph Nadar in `America Incorporated ' to establish that political institutions may fail to arrest the control this everwidening power of corporations.
And can one wish away the 442 degree of sickness in private sector companies? To the extent companies develop sickness, in direct proportion the controllers of such companies become healthy.
In a welfare state, it is the constitutional obligation of the state to protect socially and economically weaker segments of the society against the exploitation by corporations.
We therefore, see no merit in the submission that the conditions prescribed bear no relevance to the object or the purpose for which the power was conferred under Sec.
58A on the Central Government.
" The function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority.
It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power.
It must keep within the limits of the authority committed to it.
It must act in good faith and it must act reasonably.
Courts are not to interfere with economic policy which is the function of experts.
It is not the function of the Courts to sit in Judgment over matters of economic policy and it must necessarily be left to the expert bodies.
In such matters even experts can seriously and doubtlessly differ.
Courts cannot be expected to decide them without even the aid of experts.
The main grievance raised on behalf of respondent companies is that if the provisions of paragraphs 6 and 12 of the directions of 1987 are complied with, the companies will be left without any fund to meet their working capital.
It would be impossible to run the business without a working capital and to meet even reasonable expenses incurred for payment of agents commission, management expenses and other overhead expenses.
During the course of hearing the counsel for the companies had relied on some charts to show the unworkability and unreasonableness of the impugned paragraphs 6 and 12 of the directions.
It was also pointed out that the arguments made on behalf of the Reserve Bank overlooked the fact that in case of investments in long term schemes such as Indira Vikas Patra and Kisan Vikas Patra the companies will not be able to utilise its return from such investment before the end of the minimum period for which these schemes operate.
The respondent companies will thus be left without any income during the period of operation of such schemes and cannot meet its working capital requirements.
It has been submitted that the directions of 1987 really amount to prohibition of the business in a commercial sense without reasonable basis and are thus violative of article 19(1) (g) of the Constitution.
In support of the above contention reliance has been placed on Mohammad Yasin vs The Town Area Committee, Jalalabad and another; , ; Premier Auto 443 mobiles Ltd. and anothers vs Union of India; , and on Shree Meenakshi Mills Ltd. vs Union of India ; It has also been contended that it is now well settled by plethora of judicial pronouncements that the restrictions on any business caused by regulations should not be more than what would be necessary in the interest of the general public and such restrictions should not overreach the scope of the objects achieved by the regulations.
The contention on behalf of the Reserve Bank is that the directions have been made in public interest of safeguarding the interest of millions of depositors and the Reserve Bank is not concerned and while doing so it was rightly thought necessary by the Reserve Bank that the companies cannot be permitted to incur the expenses out of the corpus of the depositors money.
The business carried on by the companies to restructure their organization by curtailing its expenses.
If such middlemen or brokers are not able to earn a large profit as was done before the enforcement of the impugned directions, it lies with the companies to continue or not such business when the margin of profit is curtailed.
These companies want to do the business without having any stake of their own.
The companies doing such business cannot be subjected to the scheme of control applied to other financial and non financial companies for the simple reason that they have no capital and their schemes are for a period much longer than three years.
After the decision of the Supreme Court in Peerless case these directions of 1987 were issued after mature consideration with the help and advice of experts.
Paragraph 6 of the impugned directions according to the Reserve Bank lays down provisions for security of depositors.
it prescribes the mode of investment of funds collected by the companies.
It cannot be disputed that while collecting deposits the companies clearly hold out to the members of the public that the moneys so collected by them shall be invested in Government securities or kept deposited with the banks and they also assure the depositors that their moneys are safe and secure.
On the basis of such representations and on the strength of exaggerated and misleading advertisements these companies collect huge amounts of deposits from a large number of small, poor and uninformed depositors and that too in such investment spread over a long period.
The contention on behalf of the Reserve Bank of India is that in the above context these companies carry on their activities wholly with the funds provided by the public by way of deposits and hardly have any capital of their own.
In these circumstances it has been urged on behalf of the Reserve Bank that the provisions made in paragraph 6 of, the impugned directions are abso 444 lutely reasonable and are for ensuring repayment of deposits.
It has been submitted that it is common knowledge that small depositors cannot have recourse to courts for recovering their amounts if the companies do not repay the deposits.
The direction in paragraph 6 enjoins on these companies to deposit in fixed deposits with public sector banks or unencumbered approved securities or in other investments, a sum which shall not, at the close of business on 31st December, 1987 and thereafter at the end of each half year i.e. 30th June and 31st December not less than the aggregate amounts of the liabilities to the depositors whether or not such amounts have become payable.
Thus according to the above provision whole of the aggregate amounts of the liabilities to the depositors whether or not such amounts have become repayable, is required to be deposited or invested.
10 % of such amount is required to be deposited in public sector banks and 70 % in approved securities and 20 % has been allowed to be invested by the company according to its own choice.
In order to understand the rigour of the directions laid down in paragraph `6 ', it would be necessary to understand the scope of other directions as well.
Paragraph 4 of the directions lays down that the deposit shall not be accepted for a period of less than 12 months or more than 120 months i.e. one years from the date of receipt of such deposits.
The normal standard applied to non financial and financial companies is that they cannot accept deposits for a period of more than 36 months (except housing finance company).
Thus the companies before us have been permitted to conduct their schemes extending over to a long period upto 120 months.
This is a special kind of concession provided to the companies of the kind before us.
Paragraph 5 of the directions relates to the minimum rate of return fixed at 10 % per annum for a deposit with a maturity of 10 years.
It is a matter of common knowledge that in the present times even the public sector corporations and banks and other financial and non financial companies pay interest at much more higher rates ranging from 14 to 18 %.
Thus according to the above scheme the respondent companies and the others doing such business can easily earn a profit of 4 to 5 % on their investments.
In case of a request of the depositors for repayment of the deposit before maturity then the amount payable by the company by way of interest etc., shall be 2 % less than what could have been ordinarily paid by the company by way of interest if the deposit had run the full contractual period.
However, the question of repayment before maturity or after how many years will depend entirely on the terms and conditions of the contract of such deposit.
Paragraph 12 of the directions of 1987 enjoins upon the company to disclose as liabilities in its books of accounts and 445 balance sheets the total amount of deposits received together with interest, bonus, premium or other advantage, accrued or payable to the depositors.
Under Clause (a) to the explanation to clause 3 of paragraph `6 ' "Aggregate Amounts of Liabilities" shall mean total amount of deposits received together with interest, premium, bonus or other advantage by whatever name called, accrued on the amount of deposits according to the terms of contract.
Thus the company is required to deposit or invest the aggregate amounts of its liabilities having accrued on the amount of deposits according to the terms of contract.
Without going into the figures shown in the various charts, it is clear that if the directions contained in paragraphs 6 and 12 of the directions of 1987 are to be carried out, the companies are not left to utilise any amount out of the deposits as working capital to meet the expenses.
In our view the Reserve Bank is right in taking the stand that if these companies want to do their business, they should invest their own working capital and find such resources elsewhere with which the Reserve Bank has no concern.
If we look at the Annual Report and Accounts of Peerles for the years 1988, 1989 and 1990 it is clear that it had conducted its business following the impugned directions of 1987 and still had earned substantial profits in these years.
It is clear that Peerless is a company having established as back as in 1932 and had substantial funds to invest the entire amount of deposits and had met the expenses out of its accumulated profits of the past years.
This shows that the business can be run and profit can be earned even after complying with the impugned directions of 1987 issued by the Reserve Bank.
It is not the concern of this court to find out as to whether actuarial method of accounting or any other method would be feasible or possible to adopt by the companies while carrying out the conditions contained in paragraphs 6 and 12 of the directions of 1987.
The companies are free to adopt any mode of accounting permissible under the law but it is certain that they will have to follow the entire terms and conditions contained in the impugned directions of 1987 including those contained in paragraphs 6 and 12.
It is not the function of the Court to amend and lay down some other directions and the High Court was totally wrong in doing so.
The function of the Court is not to advise in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent.
The Court can only strike down some or entire directions issued by the Reserve Bank in case the Court is satisfied that the directions were wholly unreasonable or violative of any provisions of the Constitution or any Statute.
It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies.
This court has repeatedly said that matters of economic policy ought to be left to the Government.
While dealing with the validity of an order passed on September 30, 1977 fixing a retail price of mustard oil not 446 exceeding Rs. 10 per kilogram in exercise of powers conferred by Section 3 of the Essential Commodities Act, a bench of 7 Judges of this Court in M/s Prag Ice & Oil Mills and another vs Union of India and Nav Bharat Oil Mills and another vs Union of India ; observed as under: "We have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the country will suffer so that they would give up producing or dealing in mustard oil.
It was urged that this would, quite naturally, have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately.
We do not think that it is the function of this Court or of any Court to sit in judgment over such matters of economic policy as must necessarily be left to the Government of the day to decide.
Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experits can seriously err and doubtlessly be differ.
Courts can certainly not be expected to decide them without even the aid of experts".
In Shri Sitaram Sugar Company Limited and another vs Union of India & others with U.P. State Sugar Corporation Ltd., and another vs Union of India & Others, ; this Court observed as under: "Judicial review is not concerned with matters of economic policy.
The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either.
The Court does not supplant the "feel of expert" by its own views.
When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness.
In all such cases, judicial inquiry is confined to the question whether the findings of fact are reasonably on evidence and whether such findings are consistent with the laws of the land.
In R.K. Garg vs Union of India & others, etc.
; , at p. 690 a Constitution Bench of this Court observed as under: "Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc.
It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, be 447 cause it has to deal with complex problems which do not admit of solution through any doctrinaire or strait jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature.
The Court should feel more inclined to give judicial defence to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved.
Nowhere has this admonition been more felicitously expressed than in Morey vs Doud where Frankfurter, J. said in his Inimitable style: "In the utilities, tax and economic regulation cases, there are good reasons for judicial self restraint if not judicial deference to legislative Judgment.
The legislature after all has the affirmative responsibility.
The courts have only the power to destroy, not to reconstruct.
When these are added to the complexity of economic regulation, the uncertainty, the liability to error the bewildering conflict of the experts, and the number of times the judges have been overruled by events self limitation can be seen to be the path to judicial wisdom and institutional prestige and stability".
It may also be noted that it is not possible for the Court to determine as to how much percentage of deposit of first instalment should be allowed towards expenses which may consist of commission to agents, office expenses etc.
Even amongst the three companies viz.
Peerless, Timex and Favourite, there is a difference in this regard.
According to the Peerless 25 %, Timex 50 % and Favorite 60 % of the deposits of the first instalment would be necessary for generating the working capital for meeting the genuine expenses.
Thus it would depend from company to company based on various factors such as paid up capital, percentage of commission paid to the agents, rate of interest paid to the depositors, period of maturity for repayment, office expenses and various other factors necessary to mop up working capital out of the depositors money.
We cannot ignore the possibility of persons having no stake of their own starting such business and after collecting huge deposits from the investors belonging to the poor and weaker section of the society residing in rural areas, and to stop such business after a few years and thus devouring the hard earned money of the small investors.
It cannot be lot sight that in such kind of business, the agents always take interest in finding new depositors because they get a high rate of commission out of the first instalment, but they do not have same enthusiasm in respect of deposit of subsequent instalments.
In these circumstances, if the Reserve Bank has issued the 448 directions of 1987 to safeguard the larger interest of the public and small depositors it cannot be said that the directions are so unreasonable as to be declared constitutionally invalid.
It has been vehemently contended before us on behalf of the Peerless employees and field agents that in case the impugned directions are not struck down, the Peerless will have to close down its business and several thousands of employees and their family and several lakhs of field agents would be thrown on the street and left with no employment.
We do not find any force in the above contention.
So far as Peerless is concerned there is no possibility of its closing down such business.
It has already large accumulated funds collected by making profits in the past several years.
Thus it has enough working capital in order to meet the expenses.
We are not impressed with the argument of Mr. Somnath Chatterjee, Learned Senior Advocate for the Peerless that after some years the Peerless will have to close down its business if directions contained in paragraphs 6 and 12 are to be followed.
The working capital is not needed every year as it can be rotated after having invested once.
If the entire amount of the subscribers is deposited or invested in the proportion of 10 % in public sector banks, 70 % in approved securities and 20 % in other investments, such amounts will also start earning interest which can be added and adjusted while depositing or investing the subsequent years of deposits of the subscribers.
In any case it lies with the new entrepreneurs while entering such field of business to make arrangement of their own resources for working capital and for meeting the expenses and they cannot insist in utilising the money of the depositors for this purpose.
So far as the companies already in this field they must have earned profits in the past years which can be utilised as their working capital.
It is important to note that the impugned directions of 1987 have been made applicable from 15th May, 1987 prospectively and not retrospectively.
Thus under these directions the question of depositing the entire amount of subscriptions would only apply to the deposits made after 15th May, 1987.
We may also observe that the impugned directions of 1987 as well as any other directions issued from time to time by the Reserve Bank relating to economic or financial policy are never so sacrosanct that the same cannot be changed.
Even the financial budget for every year depends on the economic and financial policy of the Government existing at the relevant time.
So far as the impugned directions are concerned if it is found in future that the same are not workable or working against the public interest, the Reserve Bank is always free to change its policy and scrap or amend the directions as and when necessary.
We have no doubt 449 that if in times to come the Reserve Bank feels that business of the kind run at present by Peerless and other companies, in terms of the directions of 1987 are not yielding the result as envisaged by the Reserve Bank, it will always be prepared to consider any new proposals which may be conducive both in the interest of the large multitude of the investors as well as the employees of such companies.
Mr. Shanti Bhushan, learned Senior Counsel appearing on behalf of the Reserve Bank made a candid statement on behalf of the Reserve Bank that the Reserve Bank would always be prepared to consider any new proposal which would observe the public interest.
In the result I set aside the orders of the High Court and allow the appeals arising out SLP Nos.
6930 30 A of 1991, 7140 of 1991 and 3676 of 1991 filed by the Reserve Bank of India and dismiss the wirt petition No. 677 of 1991.
No order as to costs.
K.RAMASWAMY, J. While respectfully agreeing with my learned brother since the issues bear far reaching seminal importance, I propose to express my views as well.
This Court in Reserve Bank of India etc.
vs Peerless General Finance and Investment Co. Ltd. & Ors.
; , for short `first Peerless case ' while holding that does not attract "Recurring Deposits Schemes", pointed out that the schemes harshly operate against the poor sections of the society who require security and protection; urgent action appeared to be called for and was imperative to protect the public and emphasized to evolve fool proof scheme to prevent fraud being played upon persons not conversant with practices of the financial enterprises who pose themselves as benefactors of the people.
In pursuance thereof the appellant, Reserve Bank of India, for short `RBI ' issued Residuary Non Banking Companies (Reserve Bank) Directions, 1987 for short `the Directions '.
The short shift with avid eye into the relevant provisions of the 2 of 1934 for short `the Act ' and "the directions" would enable us to come to grips with the scope of the scheme of the directions, its purpose and operation.
Chapter III(B) of the Act deals with the power of RBI to regulate non banking institutions receiving deposits.
Section 45 (1) (bb) defines deposit includes and shall be deemed always to have included "any receipt or money by way of deposit or loan or in any other form but does not include. " exceptions are not relevant and hence are omitted.
Section 45(1) (c) defines `financial institution ' to mean any non banking institution which carries on its business, or part of its business, in any of the following activities; clauses (i) to (v) are omitted, clause (vi) collect 450 ing for any purpose of any scheme or arrangement by whatever name called, monies in lump sum or otherwise by way of subscription. or in any other manner by awarding prizes or gifts. , whether in cash or kind or disbursing monies in any other way to persons from whom monies are collected or to any other persons but does not include. the exclusions are not relevant and hence omitted.
Section 45J empowers that RBI may, if it considers necessary in the public interest so to do, by general or special order, (a) regulate or prohibit the issue by any non banking institution of any prospectus or advertisement soliciting deposits of money from the public; and (b) specify the conditions, subject to which any such prospectus or advertisement, if not prohibited, may be issued.
Section 45K empowers the RBI to collect information from non banking institution as to deposit and to give directions that every non banking institution shall furnish to the Bank, in such form, at such intervals and within such time, such statements, information or particulars relating to or connected with deposits received by the non banking institution, as may be specified by RBI by general or special order including the rates of interest and other terms and conditions on which they are received.
Under sub section (3) thereof the RBI is entitled to issue in the public interest directions to non banking institution in respect of any matter relating to or connected with the receipt of deposits including the rates of interest payable on such deposits and the periods for which deposits may be received.
The use of the adjective `any ' matter relating to or connected with the receipt of deposits is wide and comprehensive to empower the RBI to issue directions in connection therewith or relating to the receipt of deposits.
But exercise of power is hedged with and should be "in the public interest.
" Section 45L provides that if the RBI is satisfied that for the purpose of enabling it "to regulate the credit system of the country to its advantage it is necessary so to do"; it may give to such institutions either generally or to any such institution, in particular, "directions relating to the conduct of business" by them or by it as financial institution or institutions including furnishing of information of particulars "relating to paid up capital, reserves or other liabilities", the "investments" whether "in the Government securities" or "otherwise", the persons to whom, and the purposes and periods for which; finance is provided "the terms and conditions", including "the rates of interest", on which it is provided.
Section 45Q provides that the provisions of this chapter shall have effect "notwithstanding anything inconsistent therewith contained in any other law" for the time being in force or any instrument having effect by virtue of any such law.
The directions became operative from May 15, 1987.
They would apply to every Residuary Non Banking Company for short `R.N.B.C ' 451 which receive any deposit scheme in lump sum or in instalment by way of contribution or subscription or by sale of units of certificates or other instruments or "in any other manner" vide Clause II of the definition.
Clause III(A) defines deposits as defined in s.45(1) (bb) of the Act.
Paragraph 4 regulates receipt of deposits for a period not less than 12 months and not more than 120 months from the first day of the receipt of the deposit.
Paragraph 5 prescribes minimum rate of return of 10 per cent per annum (to be compounded annually) on the amount deposited.
The proviso empowers R.N.B.C. at the request of the depositor to make repayment of the deposit, after the expiry of a period of one year from the date of the deposit but before the expiry of the period the deposit with two per cent reduced rate of interest from 10 % interest.
Paragraph 6, the heart of the directions consists of three sub paragraphs with explanations.
The marginal note expresses "security for depositors".
Sub paragraph (1) thereof provides that on and from May 15, 1987 every R.N.B.C. shall deposit and keep deposited in fixed deposits with public sector banks or invest and keep invested in unencumbered approved securities (such securities being valued at their market value for the time being), or in other investments, which in the opinion of the company are safe, a sum which shall not, at the close of business on 31 st December, 1987 and thereafter at the end of each half year that is, 30th June and 31st December be less than the aggregate amounts of the liabilities to the depositors whether or not such amounts have become payable.
The proviso specifies that the sum so deposited or invested (a) not less than 10 per cent shall be in fixed deposits with any of the public sector banks (b) not less than 70 per cent shall be in approved securities; and (c) not more than 20 per cent or 10 times the net owned funds of the company, whichever amount is less, shall be in other investments.
Provided that such investments shall be with the approval of the Board of Directors of the company, the explanation "Net Owned funds" shall mean the aggregate of the paid up capital and free reserves as appearing in the latest audited balance sheet of the company as reduced by the amount of accumulated balance of loss, deferred revenue expenditure and other intangible assets, if any, as disclosed in the said balance sheet.
Sub paragraph (2) enjoins toe R.N.B.C to entrust to one of the public sector banks designated in that behalf.
Deposits and securities referred to in clauses (a) and (b) of the proviso to sub paragraph (1) to be held by such designated bank is for the benefit of the depositors.
Such securities and deposits shall not be withdrawn by the R.N.B.C. or otherwise dealt with, except for repayment to the depositors.
Sub paragraph (3) obligates it to furnish to the R.B.I. within 30 days from the close of business on 31st December, 1987 and thereafter at the end of each half year i.e., as on 30th June and 31st December, a certificate from its auditors, being member of institute of Chartered Accountants, to the effect 452 that the amounts deposited in fixed deposits and the investment made are not less than "the aggregate amounts of liabilities to the depositors" as on 30th June and 31st December of that year.
Explanation thereto makes explicit what the "aggregate amount of liabilities"; "approved securities"; and "public sector banks" and "unencumbered approved securities" are meant to be the details of which are not necessary for the purpose of this case.
Paragraph 7 abolishes the power of the R.N.B.C. of forfeiture of deposits; paragraph 8 prescribes particulars to be mentioned in the form soliciting deposits; paragraph 9 enjoins issuance of the receipts to the depositors and paragraph 10 obligates to maintain the register with particulars of depositors mentioned therein.
Paragraph II enjoins its Board of Directors to furnish the information in their report as envisaged therein.
Paragraph 12 which is also material for the purpose of this case provides that every R.N.B.C. shall disclose as liabilities in its books of accounts and balance sheets, the total amount of deposits received together with interest, bonus, premium or other advantage, accrued or payable to the depositors.
Paragraph 13 enjoins to supply to R.B.I. copies of the balance sheets and accounts together with Directors report.
Paragraph 14 obligates the company to submit returns to the R.B.I. in the manner envisaged thereunder.
R.N.B.C. has to submit balance sheet, returns etc.
to the department of the Financial Companies as per paragraph 15.
Paragraph 16 obligates R.N.B.C. to comply with the requirement of the non banking financial companies and miscellaneous non banking companies (Advertisement) Rules, 1977 etc.
and actual rate of interest etc.
to the depositor.
Paragraph 17 applies to the prospective R.N.B.C. to furnish information in Schedule C. Paragraph 18 accords transitory power and paragraph 19 empowers the R.B.I., if it considers necessary to avoid any hardship or for any other just and sufficient reasons, to grant extensions of time to comply with or exempt, any company or class of companies, from all or any of the provisions of the directions either generally or for any specified period, subject to such conditions as the RBI may impose and paragraph 20 excludes the applicability of paragraph 19 of the Non Banking Financial Companies (Reserve Bank) Directions, 1977.
The High Court declared paragraphs 6 and 12 to be ultra vires of article 19(1)(g) and 14 of the Constitution holding that though the directions do not expressly prohibit the business of receiving any deposit under any scheme or arrangement in lump sum or in instalment by way of contribution or subscription by R.N.B.C. in effect the operation of the directions inhibit the existing business and prohibits the future companies to come into being.
As seen the public purpose of the directions is to secure for the depositors, return of the amounts payable at maturity together with interest, bonus, premium or any other advantage accrued or payable to the 453 depositors.
To achieve that object every R.N.B.C. is enjoined to deposit and keep deposited in fixed deposit and invest and keep invested in unencumbered approved securities a sum which shall not, at the close of each half year, be less than the aggregate amount of the liability to the depositors whether or not such amount has become payable.
The object, thereby, is to prohibit deployment of funds by R.N.B.C. in any other manner which would work detrimental to the interest of the depositors.
The question emerges whether paragraph 6 and 12 are ultra vires of Articles 19(1)(g) and 14 of the Constitution.
Article 19(1)(g) provides fundamental rights to all citizens to carry on any occupation, trade or business.
6 thereof empowers the State to make any law imposing, in the interest of the general public, reasonable restrictions on the exercise of the said rights.
Wherever a statute is challenged as violative of the fundamental rights, its real effect or operation on the fundamental rights is of primary importance.
It is the duty of the court to be watchful to protect the constitutional rights of a citizen as against any encroachment gradually or stealthily thereon.
When a law has imposed restrictions on the fundamental rights, what the court has to examine is the substance of the legislation without being beguiled by the mere appearance of the legislation.
The Legislature cannot disobey the constitutional mandate by employing an indirect method.
The court must consider not merely the purpose of the law but also the means how it is sought to be secured or how it is to be administered.
The object of the legislation is not conclusive as to the validity of the legislation.
This does not mean the constitutionality of the law shall be determined with reference to the manner in which it has actually been administered or operated or probably been administered or operated by those who are charged with its implementation.
The court cannot question the wisdom, the need or desirability of the regulation.
The state can regulate the exercise of the fundamental right to save the public from a substantive evil.
The existence of the evil as well as the means adopted to check it are the matters for the legislative judgment.
But the court is entitled to consider whether the degree and mode of the regulation whether is in excess of the requirement or is imposed in any arbitrary manner.
The court has to see whether the measure adopted is relevant or appropriate to the power exercised by the authority or whether over stepped the limits of social legislation.
Smaller inroads may lead to larger inroads and ultimately result in total prohibition by indirect method.
If it directly transgresses or substantially and inevitably effects the fundamental right, it becomes unconstitutional, but not where the impact is only remotely possibly or incidental.
The court must lift the veil of the form and appearance to discover the true character and the nature of the legislation, and every endeavor should be made to have the efficacy of fundamental right maintained and the legislature is 454 not invested with unbounded power.
The court has, therefore, always to guard against the gradual encroachments and strike down a restriction as soon as it reaches that magnitude of total annihilation of the right.
However, there is presumption of constitutionality of every statute and its validity is not to be determined by artificial standards.
The court has to examine with some strictness the substance of the legislation to find what actually and really the legislature has done.
The court would not be over persuaded by the mere presence of the legislation.
In adjudging the reasonableness of the law, the court will necessarily ask the question whether the measure or scheme is just, fair, reasonable and appropriate or is it unreasonable, unnecessary and arbitrary interferes with the exercise of the right guaranteed in Part III of the Constitution.
Once it is established that the statute is prima facie unconstitutional, the state has to establish that the restrictions imposed are reasonable and the objective test which the court to employ is whether the restriction bears reasonable relation to the authorized purpose or an arbitrary encroachment under the garb of any of the exceptions envisaged in Part III.
The reasonableness is to the necessity to impose restriction; the means adopted to secure that end as well as the procedure to be adopted to that end.
The court has to maintain delicate balance between the public interest envisaged in the impugned provision and the individual 's right; taking into account, the nature of his right said to be infringed; the underlying purpose of the impugned restriction; the extent and urgency of the evil sought to be remedied thereby; the disproportion of the restriction imposed, the prevailing conditions at the time, the surrounding circumstances; the larger public interest which the law seeks to achieve and all other relevant factors germane for the purpose.
All these factors should enter into the zone of consideration to find the reasonableness of the impugned restriction.
The court weighs in each case which of the two conflicting public or private interest demands greater protection and if it finds that the restriction imposed is appropriate, fair and reasonable, it would uphold the restriction.
The court would not uphold a restriction which is not germane to achieve the purpose of the statute or is arbitrary or out of its limits.
This Court in Joseph Kuruvilla Vellukunnel vs Reserve Bank of India & Ors.
,[1962] Suppl.
3 SCR 632, held that the RBI is ``a bankers ' bank and lender of the last resort. ' ' Its objective is to ensure monetary stability in India and to operate regulate the credit system of the country.
It 455 has, therefore, to perform a delicate balance between the need to preserve and maintain the credit structure of the country by strengthening the rule as well as apparent credit worthiness of the banks operating in the country and the interest of the depositors.
In under developed country like ours, where majority population are illiterate and poor and are not conversant with banking operations and in under developed money and capital market with mixed economy, the constitution charges the state to prevent exploitation and so the RBI would play both promotional and regulatory roles.
Thus the R.B.I. occupies place of ``pre eminence ' ' to ensure monetary discipline and to regulate the economy or the credit system of the country as an expert body.
It also advices the Government in public finance and monetary regulations.
The banks or non banking institutions shall have to regulate their operations in accordance with, not only as per the provisions of the Act but also the rules and directions or instructions issued by the RBI in exercise of the power thereunder.
Chapter 3B expressly deals with regulations of deposit and finance received by the R.N.B.Cs.
The directions, therefore, are statutory regulations.
In State of U.P. vs Babu Ram, ; , this Court held that rules made under a statute must be treated, for all purposes of construction or obligations, exactly as if they were in that Act and are to the same effect as if they contained in the Act and are to be judicially noticed for all purposes of construction or obligations.
The statutory rules cannot be described or equated with administrative directions.
In D.V.K. Prasada Rao vs Govt.
of A.P., AIR 1984 AP 75, the same view was laid.
Therefore, the directions are incorporated and become part of the Act itself.
They must be governed by the same principles as the statute itself.
The statutory presumption that the legislature inserted every part thereof for a purpose to and the legislative intention should be given effect to, would be applicable to the impugned directions.
The R.B.I. issued the directions to regulate the operations of the R.N.B.Cs., to safeguard the interest of the depositors.
Payment of interest, bonus, premium or other advantage, in whatever name it may be called is reward for waiting or parting with liquidity.
It is paid because of positive time preference (one rupee today is preferred to one rupee tomorrow)on the part of the depositor.
Therefore, the directions avowed to preserve the right of the depositors to receive back the amount deposited with the contracted rate of interest; it aims to prevent depletion of the deposits collected from the weaker segments of the society and also tends to effect free flow of the business of the R.N.B.Cs.
who would desire to operate in their own way.
The question, therefore, emerges whether the directions in paras 5 and 12 violate articles 14 and 19(1)(g) of the Constitution.
456 The solidarity of political freedom hinges upon socio economic democracy.
The right to development is one of the most important facets of basic human rights.
The right to self interest is inherent in right to life.
Mahatma Gandhiji, the Father of the Nation, said that ``Every human being has a right to live and therefore to find the wherewithal to feed himself, and where necessary, to clothe and house himself ' '.
Article 25 of the Universal Declaration of Human Rights provides that ``everyone has a right to a standard of living adequate for the health and well being of himself and of his family, including food, clothing, housing and medical care. ' ' Right to life includes the right to live with basic human dignity with necessities of life such as nutrition, clothing, food, shelter over the head, facilities for cultural and socio economic well being of every individual.
article 21 protects right to life.
It guarantees and derives therefrom the minimum of the needs of existence including better tomorrow.
Poverty is not always an economic problem alone.
Very often it is a social as well as human problem.
An agriculturist, an industrial worker, the daily wage earner, rickshaw puller and small self employed teacher, artisan, etc.
may have an earning but may be prone to spend his/her entire earnings, apart from on daily necessities of life, on socio religious occasions, fairs, festivals etc.
The urge for better tomorrow and prosperous future; the clamour for freedom from want of any kind and social security, make the vulnerable segments of the society to sacrifice today 's comforts to save for better tomorrow.
The habit of saving has an educative value for thrift.
It endeavors to bring an attitudinal change in life.
It enables individuals to assess future specific needs and to build up a financial provision for the purpose.
The habit of saving becomes a way of life and harnesses the meagre resources to build up better future.
During the days of rising prices, small savings serve as instrument to mop up the extra purchasing power.
In addition to wage a war against poverty, waste, unwise spending, hoarding and other activities, habit of saving also enables family budgeting and postponing expenditure which can be deffered in favour of better utilisation in future.
To strengthen the urge for thrift and streamline the social security, the disadvantaged need freedom from exploitation and Art.46 of the constitution enjoins the State to protect the poor from all forms of exploitation and social injustice.
Investment agencies or commercial banks are intermediaries between savers and investors.
They embark upon deposit mobilisation campaign to mop up the limited resources.
Commercial banks or financial investment agencies, be it public sector or private sector, are vying with one another to scale new heights in deposit growth each year, devising 457 different deposit schemes to suit the individual needs of the depositors or savers.
Mushroom growth of non banking agencies put afloat diverse schemes with alluring offers of staggering high rate of interest and other catchy advantages which would generate suspicion of the bona fides of the offer.
But gullible depositors are lured to make deposits.
It is not uncommon that after collecting fabulous deposits, some unscrupulous people surreptitiously close the company and decamp with the collections keeping the depositors at bay.
Therefore, the need to regulate the deposits/subscriptions, in particular, in private sector became imperative to prevent exploitation or mismanagement as social justice stratagem.
The directions are, therefore, a social control measure over the R.N.B.Cs., in matters connected with the operation of the schemes or incidental thereto.
The direction to investment in the channelised schemes at the given percentage in clauses (a) and (b) of proviso to para 6(1) was intended to deposit or keep deposited the collections in fixed deposit in the public sector banks or invest or keep invested in unencumbered approved securities so as to ensure safety, steady growth and due payment to the subscribers at maturity of the principal amount and the interest, bonus, premium or other advantage accrued thereon.
The amounts deposited shall not be less than the total aggregate amounts of liabilities to the subscribers.
The deposits or securities shall not be withdrawn or otherwise be dealt with except for a repayment to the subscribers.
It should always be shown to be a liability till date of the repayment.
This court in Hatisingh Mfg. Co. Ltd. & Anr.
vs Union of India & Ors.
; , held that freedom to carry on trade or business is not an absolute one.
In the interest of the general public, the law may impose restrictions on the freedom of the citizen to start or carry on his business, whether an impugned provision imposing a fetter on the exercise of the fundamental right guaranteed by article 19(1)(g) amounts to a reasonable restriction imposed in the interest of general public, must be adjudged not in the background of any theoretical standard or pre determinate patterns, but in the light of the nature and the incidence of the right, the interest of the general public sought to be secured by imposing restrictions and the reasonableness of the quality and the extent of the fetters imposed by the directions.
The credit worthiness of R.N.B.Cs.
undoubtedly would be sensitive.
It thrives upon the confidence of the public, on the honesty of its management and its reputation of solvency.
The directions intended to promote ``freedom ' ' and ``facility ' ' which are required to be regulated in the interest of all concerned.
The directions as a part of the scheme of the Act would be protected from the attack.
Vide Latafat Ali Khan & Ors.
vs State of U.P., 458 The R.N.B.C. is required to conduct its business activities in the interest of the depositors or subscribers who are unorganised, ignorant, gullible and ignorant of the banking operations.
If, however, the acts of R.N.B.C. is detrimental to the interest of the depositors, etc.
the R.B.I. has power in Chapter 3B to issue directions and the R.N.B.C. is bound to comply with the directions and non compliance thereof visits with penal action.
Admittedly except Peerless General Insurance, the other companies do not have either paid up capital or reserve fund worth the name.
Peerless was established in the year 1932 and over the years it built up reserve fund.
R.N.B.Cs. are carrying their business by crediting the entire first year 's collections as a capital receipt under actuarial accounting method.
In the affidavit of Sri S.S. Karmic, the Chief Officer of the RBI filed on August 13, 1991, it was stated that prior to the directions, 747 R.N.B.Cs. were doing the business.
As on that date only 392 R.N.B.Cs. were notified to be existing.
Out of them 178 are in West Bengal, 15 in Assam, 26 in Orissa, 6 in Manipur and Meghalaya, 26 in Punjab, 64 in U.P., 22 in Delhi, etc.
As on March 31, 1990 out of 185, 35 R.N.B.Cs.
alone submitted annual returns, and out of them only 30 have filed their balance sheets.
28 R.N.B.Cs.
in the northern region filed their annual returns and 23 filed their balance sheets with incomplete date.
35 of them have negative net worth (loss for exceeding their share capital and reserve).
Apart from Peerless, the aggregate capital investment of 15 companies accounted to Rs. 158 lacs.
The negative net worth of the 35 companies referred to above would aggregate to Rs.3.6 crores.
They raised, apart from Peerless, deposits to the tune of Rs. 86 crores.
Many of them have not even designated their banks as required under para 6 of the direction.
The amount invested in bank deposits and approved securities fell much short of their deposit liabilities.
Verona Commercial Credit and Investment Company, one of the respondents, have accumulated losses to the tune of Rs. 3.8 crores.
As per balance sheet their assets are inadequate to meet the liability.
Favourite Small Scale Investment, one of the respondents as on December 12, 1989, even their provisional balance sheet shows that total liability towards depositors is Rs. 44.62 crores while its investment in banks and Government security is only Rs. 13 crores.
The cash on hand was Rs. 1.74 crores.
Rs.8 crores were shown to be loans and advances.
The accumulated losses are Rs.22.19 crores as against total share capital and reserve of Rs. 20.73 lacs.
It is, thus, clear on its face that while total liabilities are Rs. 49.09 crores, the assets including doubtful loans and advances aggregate to Rs. 26 crores.
An inspection into the affairs of the said company conducted in February, 1990 disclosed that upto the end of 1989 the deposit liabilities including interest would be in the region of 459 over Rs. 132 crores.
The difference between the inspection and the balance sheet would be due to actuarial principle.
It had committed default to pay to its depositors to the tune of Rs. 5.4 crores, which is a gross under estimate.
Sri Somnath Chatterjee, the learned Senior Counsel for the Peerless and adopted by other counsel, contended that paragraphs 6 and 12 are totally unworkable.
Its compliance would jeopardise not only the existing companies but also the very interest of the depositors and large workmen.
No new company would be set up.
The direction given in the first Peerless case was to keep in view the interest of the workmen as well; in effect it was given a go bye.
At least 25% of collections would be left over as working capital of the company, to carry on its business in a manner indicated by the impugned judgment, so that no depositor would lose his money and no workmen would lose his livelihood and it will be in consonance with public interest.
Shri G.L. Sanghi, the learned Senior Counsel for Timex, contended that 50% of collection would be necessary to comply with the impugned directions and another company pleaded for 40%.
Further contention of Shri Chatterji was that the actuarial accounting neither violates any law, nor objected to by the Income tax Department.
Crediting the first year 's subscription in the accounts as capital receipt would generate company 's working capital for its successful business by meeting the expenditure towards establishment, the commission and a part of profits.
Forfeiture clause was already dated before the directions were issued.
Interest at 10% with annual compounding would be reasonable return to the subscribers which is being ensured to the depositors.
The directions issued by the High Court, subject to the above modifications, would subverse the above purpose.
Paras 6 and 12, otherwise, are arbitrary and prohibitive violating their fundamental right to do business assured by articles 19(1)(g) and 14.
Sri Harish Salve resisted the contentions with ability.
Para 12 is myocardium and para 6 ' is the heart of the directions without which the directions would be purified corpse.
On the respondents own showing, for the first two years, by actuarial accounting, the liabilities, as against deposits, are inadequate.
The regulation intends to preserve the corpus of the deposits and the interest payable thereon as on date to be a tangible and unencumbered asset at all times, though not repayable.
Indisputably the depositors/subscribers stand as unsecured creditors.
Undoubtedly every measure cannot be viewed or interpreted in the event of catastrophe overtaking the company.
The catchy and alluring but beguiled terms of offer attract the vulnerable segments of the society to subscribe and keep subscribing the small savings for better tomorrow.
460 But many a time, by the date of maturity, their hopes are belied and aspirations are frustrated or dashed to ground.
They remain to be helpless spectators with all disabilities to recover the amounts.
Pathetic financial position of some of the companies enumerated herein before would amply demonstrate the agony to which the poor subscribers would be subjected to.
The fixed deposits and unencumbered securities as per Clauses (a) and (b) of the proviso to paragraph 6(1) would be 80% of the collections of the year of subscription and Shri Chatterji contends to reduce it to 75% and to allow free play to use the residue in their own way.
The difference is only 5% and others at vagary.
The objects of the direction are to preserve the ability of the R.N.B.C. to pay back to the subscribers/depositors at any given time; safety of the subscribers ' money and his right to unencumbered repayment are thus of paramount public interest and the directions aimed to protect them.
The directions cannot and would not be adjudged to be ultra vires of arbitrary by reason of successful financial management of an individual company.
An over all view of the working system of the scheme is relevant and germane.
The obligation in paragraph 12 of periodical disclosure in the accounts of a company of the deposits together with the interest accrued thereon, whether or not payable but admittedly due as a liability, is to monitor the discipline of the operation of the schemes and any infraction, would be dealt with as per law.
The certificate by a qualified Chartered Accountant is to vouchsafe the correctness and authenticity of accounts and would and should adhere to the statutory compliance.
The settled accounting practice is that a loan or deposit received from a creditor has to be shown as a liability together with accrued interest whether due or deferred.
The actuarial accounting applies to revenues and costs to which the concept of the ``going concern ' ' can be adopted.
Therefore, in providing the costs of the company it can set apart its costs on the basis that liability is created for interest, bonus etc.
payable in foreseeable future.
Undoubtedly the actuarial principle applied by the L.I.C. or the gratuity schemes are linked with life of the assured or the premature death before retirement of an employee, but R.N.B.C. in its contract does not undertake any such risk.
The deposit is a capital receipt but not a revenue receipt and its full value shall be shown in the account books of balance sheet as liability of the company.
It cannot be credited to the profit and loss account.
Para II of Schedule VI of the requires that the amount shown in the profit and loss account should be confined to the income and expenditure of the company.
Para 12 of the directions is, thus, in consonance with the .
Moreover, in its advertisement and the application forms, 461 the R.N.B.C. expressly hold out to the public that their monies are safe with the bank and in the Government securities.
Paragraph 6(1) of the directions only mandates compliance of the promise held out by an R.N.B.C. for repayment at maturity.
Sub para (3) of para 6 keeps the deposits unencumbered and to be utilised by the company only for repayment.
In other words, paragraph 6 only elongates the contract in the public interest to safeguard the interest of the vulnerable sections of the depositors.
The R.B.I. cannot be expected to constantly monitor the working of the R.N.B.C. in its day to day function.
The actuarial basis cannot be adopted by the R.N.B.Cs.
and the liability must always be reflected in its balance sheet at its full value.
Compliance of the direction in para 12, dehors any method of accountancy adopted by a company, intended to discipline its operations.
No one can have fundamental right to do any unregulated business with the subscribers/depositors ' money.
Even the banks or the financial companies are regulated by ceiling on public deposits fixing nexus between deposits and net worth of the company at the ratio of 3:1, i.e. 25% of the capital net worth.
No one would legitimately be expected to get immediate profits or dividend without capital investment.
The effect of the clause (a) and (b) of the provision to paragraph 6(1) of the direction, no doubt, freezes the right to profit for a short time, and fastens an incidental and consequential obligation to mop up paid up capital or investment towards establishment and commission charges to tide over teething trouble.
But that is no ground to say that it is impossible for compliance, nor could it be said that the directions are palpably arbitrary or unreasonable.
Anyone may venture to do business without any stake of his own but is subject to the regulations.
A new company without any paid up capital, no doubt,cannot be expected to come into existence nor would operate its business at initial existence with profits.
Clause (c) of the provision to paragraph 6(1) of the directions gives freedom on leeway to invest or rotate, not more than 20 per cent of collections etc.
in any profitable manner at its choice as a prudent businessman to generate its resources to tide over the teething troubles till it is put on rail to receive succor to its existence, without inhibiting the company 's capacity to mop up small savings, and the directions do not control its operation.
The only rider is the approval of the Board of Directors which is inherent.
Absence of imposition of any limit on quantum of deposit with reference to paid up capital or reserve fund like non banking financial companies, etc.
is a pointer in this regard.
Thus there is a reasonable nexus between the regulation and the public purpose, namely, security to the depositors ' money and the right to repayment without any impediment, which undoubtedly is in the public interest.
462 Looking from operational pragmatism, the restrictions though apparently appears to be harsh in form, in its systematic working, it would inculcate discipline in the business management, subserve public confidence in the ability of the company to honour the contractual liability and assure due repayment at maturity of the amount deposited together with interest, etc, without any impediment.
In other words, the restrictions in paragraph 6 of the directions intended to elongate the twin purposes, viz.habit of thrift among the needy without unduly jeopardising the interest of the employees of the companies and the R.N.B.Cs working system itself in addition to safety and due payment of depositors ' money.
True, as contended by Shri Chatterji that there arises corresponding obligation to pay higher amount of commission to its agents and the commitment should by kept performed and the confidence enthused in the agents.
But it is the look out of the businessman.
The absence of ceiling on the rate of commission would give choice between the company and its agents to a contract in this regard and has freedom to manage its business.
The R.N.B.Cs.
are free to incur such expenses and organize their business as they desire including payment of commission as they think expedient.
But the subscribers/depositors 'liability, under no circumstances would be in jeopardy and the directions were designed to ensure that the interest of the subscribers/depositors is secured at all times, prescribing investment of an equal sum to the total liability to the subscribers/depositors.
Paragraph 12 is only a bridge between the depositors and the promise held out and the contract executed in furtherance thereof as a monitoring myocardium to keep the heart in paragraph 6 functioning without any hiatus.
It is settled law that regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition.
Vide Narendra Kumar vs Union of India, ; But the directions do not do that but act as a siphon between the subscriber/depositor and the business itself.
Therefore, they are neither palpably arbitrary nor unjust not unfair.
The mechanism evolved in the directions is fool proof, as directed by this court in first Peerles case, to secure the interest of the depositors, as well is capable to monitor the business management of every R.N.B.C.
It also, thereby, protects interest of the employees/field staff/commission agent etc.
as on permanent basis overcoming initial convulsions.
It was intended, in the best possible manner, to subserve the interest of all without putting any prohibition in the ability of a company to raise the deposit, even the absence of any adequate paid up capital or reserve fund or such pre commitment of the owner, to secure such deposits.
Thus the directions impose only partial control in the public interest of the depositors.
The deposits invested or keep invested qua the com 463 pany always remained its fund till date of payment at maturity or premature withdrawal in terms of the contract.
The effect of the impugned judgment of the Calcutta High Court namely redefinition of the aggregate liabilities as contractual liabilities due and payable would have the effect of requiring the R.N.B.Cs.
to deposit an amount equal to the sum payable only in the year of maturity allowing free play to the R.N.B.Cs.
to use the subscriptions/deposits in its own manner during the entire earlier period, jeopardise the security of the subscribers/depositors and are self defeating.
The sagging mismanagement prefaced hereinabove would be perpetrated and the depositor was always at the mercy of the company with all disabilities, killing the very goose namely the thrust to save for prosperous future or to tide over future needs.
It is well settled that the court is not a Tribunal from the crudities and inequities of complicated experimental economic legislation.
The discretion in evolving an economic measures, rests with the policy makers and not with the judiciary.
Indian social order is beset with social and economic inequalities and of status, and in our socialist secular democratic Republic, inequality is an anathema to social and economic justice.
The constitution of India charges the state to reduce inequalities and ensure decent standard of life and economic equality.
The Act assigns the power to the RBI to regulate monitory system and the experimentation of the economic legislation, can best be left to the executive unless it is found to be unrealistic or manifestly arbitrary.
Even if a law is found wanting on trial, it is better that its defects should be demonstrated and removed than that the law should be aborted by judicial fiat.
Such an assertion of judicial power deflects responsibilities from those on whom a democratic society ultimately rests.
The court has to see whether the scheme, measure or regulation adopted is relevant or appropriate to the power exercised by the authority.
Prejudice to the interest of depositors is a relevant factor.
Mismanagement or inability to pay the accrued liabilities are evils sought to be remedied.
The directions designed to preserve the right of the depositors and the ability of R.N.B.C. to pay back the contracted liability.
It also intended to prevent mismanagement of the deposits collected from vulnerable social segments who have no knowledge of banking operations or credit system and repose unfounded blind faith on the company with fond hope of its ability to pay back the contracted amount.
Thus the directions maintain the thrift for saving and streamline and strengthen the monetary operations of R.N.B.Cs.
The problems of Government are practical and do require rough accommodation.
Illogical it may be and unscientific it may seem to be, left to its working and if need be, can be remedied by the R.B.I. by 464 pragmatic adjustment that may be called for by particular circumstances.
The impugned directions may at first blush seem unjust or arbitrary but when broached in pragmatic perspective the mist is cleared and that the experimental economic measure is manifested to be free from the taints of unconstitutionality.
Para 19 of the directions empowers the RBI to extend time for compliance or to exempt a particular company or a class thereof from all or any of the provisions, either generally or for a specified period subject to such conditions as may be imposed.
Power to exempt would include the power to be exercised from time to time as exigencies warrant.
An individual company or the class thereof has to place necessary and relevant material facts before the R.B.I. of the hardship and the need for relief.
A criticism of arbitrariness or unreasonableness may not be ground to undo what was conceived best in the public interest.
What is best is not always discernible.
The wisdom of any choice may be disputed or condemned.
Mere errors of Government are not subject to judicial review.
The legislative remedy may be ineffective to mitigate the evil or fail to achieve its purpose, but it is the price to be paid for the trial and error inherent in the economic legislative efforts to grapple with obstinate social issues.
It is proper for interference in judicial review, only, when the directions, regulations or restrictions are palpably arbitrary, demonstrably irrelevant or disriminatory.
Exercise of power then can be declared to be void under article 13 of the Constitution.
So long as the exercise of power is broadly within the zone of reasonableness, the court would not substitute its judgment for that of legislature or its agent as to matters within their prudence and power.
The court does not supplement the feel of the experts by its own values.
It is settled law that so long as the power is traceable to the statute mere omission to recite the provision does not denude the power of the legislature or rule making authority to make the regulations, nor considered without authority of law.
Section 114 (h) of the Evidence Act draws a statutory presumption that official acts are regularly performed and reached satisfactorily on consideration of relevant facts.
The absence of reiteration of objective satisfaction in the preamble as of one under s.45L does not denude the powers, the R.B.I. admittedly has under s.45L to justify the actions.
Though s.45L was neither expressly stated nor mentioned in the Preamble of the directions of the required recitation of satisfaction of objective facts to issue the directions from the facts and circumstances it is demonstrated that the R.B.I. had such satisfaction in its consideration of its power under s.45L when the directions were issued .
Even otherwise s.45K (3) itself is sufficient to uphold the directions.
465 The impugned directions are thus within the power of the R.B.I. to provide tardy, stable, identifiable and monitorable method of operations by each R.N.B.C. and its compliance of the directions.
This will ensure security to the depositors at all times and also make the accounts of the company accurate, accountable and easy to monitor the working system of the company itself and continuance of its workmen.
The directions in paragraphs 6 and 12 are just, fair and reasonable not only to the depositors, but in the long run to the very existence of the company and its continued business itself.
Therefore, they are legal, valid and constitutionally permissible.
The Writ Petition is dismissed and the appeals are allowed.
The Writ Petitions filed in the High Court stand dismissed.
No costs in this Court.
G.N. Petition dismissed Appeals allowed.
[/INST]This appeal challenged the validity of the Jammu and Kashmir Big Landed Estate Abolition Act, XVII Of 2007 which was enacted by Yuvaraj Karan Singh on October 17, 1950, in exercise of the powers vested in him by section 5 of the Jammu and Kashmir Constitution Act 14 of 1996 (1930) and the final proclamation issued by Maharaja Hari Singh on June 20, 1949, by which he entrusted all his powers and function to the Yuvaraj.
The object of the Act was to improve agricultural production by abolishing big landed estates and transferring land to the actual tillers of the soil.
The suit out of which the present appeal arises was brought by the appellant in a representative capacity for a declaration that the Act was void, inoperative and ultra vires and that he was entitled to retain peaceful possession of his lands.
Both the trial Court as also the High Court in appeal found against him and dismissed the suit.
Hence this appeal by special leave.
The validity of the Act was challenged mainly on the ground that Yuvaraj Karan Singh had no authority to promulgate the Act.
It was contended that (i) when Maharaja Hari Singh conveyed his powers to the Yuvaraj by his proclamation of June 20, 1949, he was himself a constitutional monarch and could convey no higher powers, (2) the said proclamation could not confer on the Yuvaraj the powers specified therein, (3) the powers of the Yuvaraj were substantially limited by his own proclamation issued on November 25, 1949, by which he sought to make applicable to his State the Constitution of India, that was soon to be adopted by its Constituent Assembly, in so far as it was applicable, (4) as a result of the application of certain specified Articles, including article 370 of the Constitution of India to the State of Jammu Kashmir, the Yuvaraj became a constitutional monarch without any legislative authority or powers and (5) the decision of the Constituent Assembly of the State not to pay compensation was invalid since the Assembly itself was not properly constituted.
Held, that Yuvaraj Karan Singh, when lie promulgated the Act, had the power to do so and its validity was beyond question.
271 It was indisputable that prior to the passing of the Independence Act, 1947, Maharaja Hari Singh like his predecessors, was an absolute monarch so far as the internal administration of his State was concerned.
Section 3 Of the Regulation 1 of 1991 (1934) issued by the Maharaja not only preserved all his preexisting powers but also provided that his inherent right to make any regulation, proclamation or ordinance would remain unaffected.
The Constitution Act 14 of 1996 (1939) promulgated by him did not alter the position.
Sections 4 and 5 of that Act preserved all the powers that he had under section 3 of the Regulation 1 of 1991 and section 72 preserved his inherent powers so that he remained the same absolute monarch as he was before.
With the lapse of British paramountcy on the passing of the Independence Act, 1947, the Maharaja continued to be the same absolute monarch, subject to the agreements saved by the proviso to section 7 Of the Act, and in the eyes of international law could conceivably claim the status of an independent sovereign.
It was unreasonable to suggest that the provisions of the Instrument of Accession signed by the Maharaja on October 25, 1947, affected his sovereignty, in view of cl. 6 thereof, which expressly recognised its continuance in and over his State.
There was no substance in the argument that as a result of his proclamation issued on March 5, 1948, which replaced the emergency administration by a popular interim Government headed by Sheik Mohammad Abdullah and constituted a Council of Ministers who were to function as a cabinet, the Maharaja became a constitutional monarch.
The cabinet had still to function under the Constitution Act 14 of 1996 (1939) under the overriding powers of the Maharaja.
When the Maharaja on June 20, 1949, therefore, issued the proclamation authorising the Yuvaraj to exercise all his powers, although for a temporary period, it placed the Yuvaraj in the same position as his father till the proclamation was revoked.
The Maharaja was himself an absolute monarch and there could be no question as to his power of delegation.
In Re. ; , , referred to.
The proclamation issued by the Yuvaraj on November 25, 1949, did not vary the constitutional position as it stood after the execution of the Instrument of Accession by the Maharaja nor could it in any way affect the authority conferred on the Yuvaraj by his father.
The contention that the application of certain specified Articles of the Indian Constitution to the State by the Constitution (Application to Jammu and Kashmir) Order (C. O. 10) issued by the President on January 26, 1950, affected the sovereign powers of the Yuvaraj was not correct.
Neither the scheme of article 370 nor the explanation to cl.
(1) of that Article Contemplated that the Maharaja was to be a constitutional ruler.
The temporary provisions of that Article were 272 based on the assumption that the ultimate relationship between India and the State should be finally determined by the Constituent Assembly of the State itself.
So, that Article could not, either expressly or by implication, be intended to limit the plenary legislative powers of the Maharaja.
Till the Constituent Assembly of the State, therefore, made its decision, the Instrument of Accession must hold the field.
The initial formal application of article 385, which was sub sequently deleted from the list of Articles applied to the State, could not justify the conclusion that it had adversely affected the legislative powers of the Yuvaraj.
There was no substance in the contention that the decision of the Constituent Assembly not to pay compensation was invalid as the Assembly itself was not properly called or constituted.
There could be doubt that the Yuvaraj was perfectly competent to issue the proclamation dated April 20, 1951 in variation of the Maharaja 's, under which the Assembly was ultimately constituted, and so the Assembly was properly convened.
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<s>[INST] Summarize the judgementiminal Appeal No. 50 of 1969.
Appeal from the judgment and order dated December 24, 1968 of the Calcutta High Court in Criminal Revisions No. 235 of 1966.
Nur ur din Ahmed, section C. Agarwal and Indiraj Jaisingh, for the appellant.
S.P. Mitra and G. section Chatterjee for Sukumar Basu for the respondent.
The Judgment of the Court was delivered by Jaganmohan Reddy, J.
This appeal is by certificate under article 134(1) (c) of the Constitution.
The appellant is the Manager of Sree Krishna Oil Mills, Midnapore, the proprietor of which was one Srilal Bajoria.
Both these persons were tried jointly for an offence under section 7(1)/16(1)(a)(i) of the Prevention of Food Adulteration Act, 1954 hereinafter referred to as 'the Act '.
The proprietor Srilal Bajoria was acquitted but the appellant was sentenced to one year rigorous imprisonment.
The offence in respect of which the appellant was charged was that he being the Manager of the Oil Mills for manufacturing mustard oil was responsible for the adulteration.
On July 10, 1964, at about II A.M. the appellant was going in a truck carrying 100 tins of mustard oil and was stopped by the Food Inspector, Kharagpore Municipality.
On being 847 questioned by the Food Inspector the appellant informed him that the oil which he was carrying was manufactured at Sree Krishna Oil Mills, Midnapore.
As the Food Inspector suspected that this oil may have been adulterated, he took three samples according to the provisions of the Act.
He sent one sample to the Public Analyst one he kept with himself and the third he gave to the appellant.
The Public Analyst on examining the sample sent to him reported on August 5, 1964, that saponification value of the oil was 181.6, Iodine value 107.2 and B. R. reading at 40 'C was 60.1 and was of the opinion that the sample of mustard oil was adulterated vide Ext.
After obtaining the sanction for prosecution from the Chairman of the Municipality, the appellant was prosecuted before, the Magistrate, 1st Class, Midnapore.
He pleaded not guilty but on the evidence and the report of the Public Analyst he was convicted and sentenced as aforesaid.
An appeal to the Sessions Judge was without success.
Thereafter the appellant filed a revision before the High Court and that was also dismissed.
Before us the learned counsel for the appellant has urged similar points as were urged before the High Court, namely, (i) that the trial was vitiated for want of valid and legal sanction; (ii) that the report of the Public Analyst was not a proper report in law and cannot form the basis of legal conviction; and (iii) that the Public Analyst 's report Was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report.
It is contended on behalf of the appellant that the sanction to prosecute the appellant was given by the Chairman of Kharagpore Municipality Shri K C. Chaki on August 19, 1964.
This sanction did not show (a) that tile Chairman had applied his mind before giving the sanction; (b) that it was valid as it was not granted by the Local Authority, namely, the Municipality; and (c) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman cannot avail himself of that authorisation as by that time there were fresh elections and a new Chairman was elected.
Accordingly it is submitted that the sanction given by Mr. Chaki was not a proper sanction.
It appears to us that the challenge to the validity of the sanction is misconceived.
As pointed out by the High Court, section 51 of the Bengal Municipal Act, 1932, enumerates the powers of the Chairman as under: "Save as hereinafter provided, the Chairman shall for the transaction of the business connected with this Act or for the purpose of making any order authorised 848 thereby, exercise all the powers, vested by this Act in the Commissioners and whereby any other law power is vested in the Commissioners for any purpose, the Chairman may transact any business or make any order authorised by that law in the exercise.
of that power, unless it is otherwise expressly provided in that law." Section 20 of the Act provides for sanction of the Local Authority for prosecutions under the Act which includes a Municipality.
Reading these two provisions together the Chairman of a Municipality duly authorised by the Municipality can accord sanction for prosecution of offences under the Act.
In compliance with the aforesaid power under section 51 of the Bengal Municipal Act, the Municipality by resolution dated July 28, 1960 authorised the Chairman "to perform all the functions and exercise the.
powers of the Local Authority within the meaning of the ." (Exe.
This power, it may be noticed, is not granted to any particular Chairman Eo nominee, but is a general power exercisable by any Chairman for the time being of the Municipality.
It is true that a fresh election of the Chairman was held after the resolution of the Municipality but that does not deprive the new Chairman of the power to grant sanction in under that, resolution.
The appellant in Criminal Miscellaneous Petitions Nos.
450 & 515 of 1970 seeks permission to allow him to adduce additional evidence to show that there was another resolution by the Kharagpore Municipality dated August 18, 1965, which had given a, fresh authorisation to the Chairman to grant sanctions for prosecution under the Act which would show that the previous authorisation was not really valid when sanction was given to prosecute the appellant.
Apart from the fact that, no case has been made out to adduce any fresh evidence, the resolution itself has been passed after the sanction for the prosecution was.
given and even that resolution as can be noticed is in similar terms to the earlier resolution passed by the Municipality.
This subsequent resolution does not in any way indicate that the previous power could not be availed of by the Chairman who in fact had granted the sanction.
At, the most it may have been passed by way of abundant caution, having regard to the contentions raised during the trial of the appellant.
The High Court has pointed out, and we think rightly, that under section 15(2) of the Bengal Municipal Act, the Municipality is a body corporate and it has perpetual succession, if so any authorisation granted by it is not limited to the Chairman then in office, but will continue unless otherwise rescinded.
Nextly it has been strenuously urged before us on behalf of the appellant that the report of the Public Analyst is not a complete report in that out of the seven tests that he had to make under 849 A 17.06 of Appendix B to the Rules he had only made three tests and secondly the report does not give the basis on which.
the Public Analyst came to the conclusion that the sample of the mustard oil was adulterated.
It is true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06 while only one, namely, the saponification test was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated.
Omission to report on the other four tests does not, in our view make the reporter ineffective or the report inconclusive.
Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules the sample cannot be said to have come up to the standard and, therefore, it is adulterated.
An attempt was made to refer us to certain technical books and the decisions in Jagadish Chandra Jain vs Corporation of Calcutta(1) Messrs. Netai Chandra and Surendra Nath Dey vs Corporation of Calcutta,(2) and In re.
Perumal & Co.(3) for the proposition that the standard prescribed by A 17.06 in Appendix B to the Rules is not conclusive because in some places mustard can yield a higher reading.
We cannot allow any fresh evidence to be used, nor do we think that the decisions referred to, even if they justify that contention, can alter or vary the standard fixed in exercise of the powers conferred by the Act in Appendix B to the Rules.
Section 3 of the, Act authorises the Central Government to constitute a Committee called the Central Committee for Food Standards to advise the Central Government and the State Governments on matters arising out of the administration of the Act and to carry out the other functions assigned to it under the Act.
Under section 23 ( 1 ) (b) of the Act the Central Government may, after consultation with the Committee and subject to the condition of previous publication, make rules "defining the standards of quality for, and fixing the limits of variability permissible in respect of, any article of food.
" It is in exercise of this power that r. 5 was made authorising standards of quality of the various articles of food specified in Appendix B to the Rules.
In view of this provision any article of food which does not conform to the standards specified in Appendix B to the Rules which under section 2 (1) of the Act is said to be adulterated because "the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability.
" The contention that the standards cannot be conformed to by an ordinary vendor who is not versed in the technicalities is also (1) (3) A.I.R. 1943 Mad.
(2) A.I.R. 1967 Cal.
65. 850 not of significance.
In this regard it was pointed out by Shah, J., as he then was, speaking for this Court in Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr.
(1) : "The various items in the Schedule setting out standards of quality use technical expressions with which an ordinary, retail dealer may not be familiar, and also set out percentages of components which the dealer with the means at his command cannot verify.
But by section 3, the Central Government has to set up the Central Committee for Food Standards to advise the Central and the State Governments on matters arising out of the administration of the Act. . .
Under section 23 ( 1 ) (b) the Central Government makes rules prescribing the standards of quality and the limits of variability permissible in any article of food.
The rules are made after consultation with the Committee for Food Standards.
The standards set out in the Appendix to the Rules are prescribed after consultation with the Committee for Standards.
" It appears to us therefore that standards having been fixed as aforesaid any person who deals in articles of food which do not confirm to them contravenes the provisions of the Act and is liable to punishment thereunder.
It was again urged that the Public Analyst had not given the basis for his conclusion that the saponification test did not conform to the standards specified in A 17.06 of Appendix B to the Rules which contention is also not tenable.
Under section 13 (5) of the Act any document purporting to be a report signed by a Public Analyst, unless it has been superseded under sub section
(3), or any document purporting to be a certificate signed by the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under the Act or under sections 272 to 276 of the Indian Penal Code.
Under the proviso to that sub section any document purporting to be a certificate signed by the Director of the Central Food Laboratory shall be final and conclusive evidence of the facts stated therein.
If the report of the Public Analyst was not satisfactory, it was open to the appellant to have made an application for the sample which was in his possession to be sent to the Director of the Central Food Laboratory for examination.
If he had made such an application and sent the sample under section 13 (2) the certificate granted by the (1) ; 851 Director of the Central Food Laboratory would have superseded the report given by the Public Analyst.
This he has not done.
In the circumstances he has been properly convicted.
Lastly it has to be considered whether the sentence awarded in the circumstances requires any modification.
It was urged that the prosecution of the appellant was prior to the amendment of sub section
(1) of section 16 of the with effect from March 1, 1965, under which the sentence has to be a minimum of six months rigorous imprisonment, but there is no such injunction under the unamended section and yet the maximum sentence has been awarded to the appellant which is harsh for a first offender.
Offences under the Act being antisocial crimes affecting the health and well being of our people, the Legislature having regard to the trend of courts to impose in most cases only fines or where a sentence of imprisonment was passed a light sentence was awarded even in cases where a severe sentence was called for, a more drastic step was taken by it in prescribing a minimum sentence and a minimum fine to be imposed even for a first offence.
An exception was however made in cases falling under sub cl.
(i) of cl.
(a) of section 16(1) and in respect of an article of food which was considered to be adulterated under section 2 cl.
(i),(i) or misbranded under section 2 cl.
(ix) or for an offence under sub clause (ii) of clause (a) of section 16(1), in which case the Court is given the discretion, for any adequate and special reasons to be mentioned, to award a lesser sentence than six months or impose a fine lesser than one thousand rupees or of both lesser than the minimum prescribed.
If for the offence of which the appellant is convicted even under the amended section a lesser sentence can be awarded, if there were adequate and special reasons, it would be much more so under the unamended section.
The reasons for the Legislature to make the exception is not that the offences specified are not considered to be serious, but the gravity of the offence having regard to its nature can be less if there are any special or adequate reasons.
In our view though offences for adulteration of food must be severely dealt with, no doubt depending on the facts of each case which cannot be considered as precedents in other cases, in this case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the mustard oil sample satisfied all the tests except one but the main person concerned in the manufacture of the said oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of 852 Rs. 1,000/ failing which to be directed to undergo a further term of rigorous imprisonment for one month.
We accordingly so direct.
Subject to this modification, the appeal and the Criminal Miscellaneous Petitions Nos. 450 and 515 of 1970 are dismissed.
K.B.N. Appeal and petitions dismissed.
[/INST]The appellant, manager of an Oil Mill, was convicted under section 7(i)/16(1)(a)(i) of the , and sentenced to one year rigorous imprisonment.
His appeal to the Sessions Judge was without success and a revision to the High Court, was also dismissed.
In appeal to this Court it was contended that (i) the sanction for prosecution did not show (a) that the Chairman of the Muni cipality had applied his mind before giving the sanction, (b) that it was invalid since it was not granted by the local authority, namely, the municipality and (e) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman could not avail himself of that authorisation and, therefore.
the trial was vitiated for want of valid and legal sanction; (ii) the 'report of the Public Analyst was not a proper report in law and was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report; and (iv) the sentence awarded was harsh for a first offender.
Reducing the sentence and dismissing the appeal, HELD : (i) Reading sections 20 and 51 of the Bengal Municipal Act, 1932, the Chairman of a municipality duly authorised by the municipality can accord sanction for prosecution of offences under the Act.
The resolution of the Municipality authorising the Chairman to perform all the functions and exercise the powers of the local authority within the meaning of the , is not to grant power to any particular Chairman eo nominee, but, is a general power exercisable by any Chairman, for the time being, of the municipality.
The High Court has rightly pointed out that under section 15(2) of the Bengal Municipality Act the Municipality is a body corporate and it has perpetual succession and, as such, any authorisation granted by it is not limited to the Chairman then in office but will continue unless rescinded.
[848 D; G H] (ii) It is.
true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06, while, only one, namely, the saponification test, was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated.
Omission to.report on the other four tests does not make the report ineffective or inconclusive.
Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules, the sample cannot be said to have come up to the standard and, therefore, it is adulterated.
It is in exercise of the powers conferred by section 23 (i) (b) that rule 5 was made authorising standards of quality of 846 the various articles of food specified in Appendix B to the Rules.
Standards having been fixed, any person who deals in articles of food which do not conform to them contravenes the provisions of the Act and is liable to punishment thereunder.
[849 A C; 850 E] Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr., A.I.R. , referred to.
If the report of the Public Analyst was not satisfactory it was open to the appellant to make an application for sending the sample which was in his possession to the Director.
If he had made such an application and sent the sample under section 13(2) the certificate granted by the Director of the Central Food Laboratory would have superseded the report given by the Public Analyst.
This has not been done.
In the circumstances he has been properly convicted.
[850 H] (iv) The reason for the legislature to makeexception to the minimum of six months rigorous imprisonment prescribedunder section 16(1) is not that the offences specified are not considered to be serious, but the gravity of the offences, having regard to its nature can be less if there are any special or adequate reasons.
In the present case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the oil sample satisfied all the tests except one but the main person concerned in the manufacture of the oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of Rs. 1000/ .
[851 F, H]
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<s>[INST] Summarize the judgementCivil Appeal No. 924 of 1970.
Appeal by special leave from the Judgment and order dated 19 10 1977 of the Punjab and Haryana High Court in Civil Writ Petition No. 3219/77.
Appellant in person.
H.S. Marwah, R.N. Sachthey and A. Sachthey for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the Punjab & Haryana High Court dismissing the Writ Petition filed by the appellant against the order of his termination passed by the Senior Superintendent of Police.
The appellant was appointed on 2 7 1973 as a temporary Assistant Sub Inspector of Police.
On 26 9 1977, his services were terminated by the Senior Superintendent of Police.
Against this order, the appellant moved the High Court of Punjab & Haryana but his petition was rejected.
Thereafter, he came to this Court and after obtaining special leave from his Court, the appeal has been placed before us for hearing.
The short point taken by the appellant in this appeal is that under Rule 12.8(1) of Punjab Police Rules, the petitioner must be considered to be on probation for a period of three years and as the appellant has crossed this period or three years, he must be deemed to have been confirmed and, therefore, his services could not be terminated.
In support of this submission, reliance is placed by the appellant on a Division Bench Judgment of this Court in case of The Superintendent of Police, Ludhiana and Anr.
vs Dwarka Das etc.
Where Shinghal J. speaking for the Court observed as follows: "So if Rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of a police officer of the rank of constable is three years, for the Superintendent of Police concerned has the power to discharge him within that period.
lt follows that the power of discharge cannot be exercised under Rule 12.21 after the expiry of the period of three years.
" It is true that the observations made by this Court support the contention of the appellant to all extent.
But in our opinion, the 489 Division Bench decision was not correctly decided as it has not considered the Five Bench decision of this Court in case of State of Punjab vs Dharam Singh where after considering the number of cases, the Court observed thus: "This Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the past after the expiry of the period without any specific order of confirmation, he should be deemed to continue in his post as a probationer only, in the absence of any indication to the contrary in the original order of appointment or promotion or the service rules.
Tn such a case an express order of confirmation is necessary to give the employee a substantive right to the post, and from the mere fact that he is allowed to continue in the post after the expiry of the specified period or probation it is not possible to hold that he should be deemed to have been confirmed.
The reason for this conclusion is that where on the completion of the specified period of probation the employee is allowed to continue in the post without an order of confirmation, the only possible view to take in the absence of anything to the contrary in the original order of appointment or promotion or the service rules, is that the initial period of probation has been extended by necessary implication." In the instant case, the appellant was appointed purely on a temporary basis and not on probation and, therefore, Rule 12.8 which deals with officials who are appointed on probation does not apply to this case at all.
It is well settled that a person is appointed on probation only if he is appointed against a substantive vacancy.
In the instant case, it is not disputed that the appellant was appointed only against a temporary vacancy.
Assuming, however, that Rule 12.8 of the Punjab Police Rules applies to the appellant 's case and he is governed by Rule 12.8 even after the probation of three years is over, the police officer shall not be deemed to be confirmed unless there is any rule which provides that in absence of an order of confirmation at the end of the probation? the employee must be presumed to be confirmed.
There is no such provision in the present rules.
In these circumstances, therefore, as held by this Court in the case of Dharam Singh, it must be held that if no express order of confirmation was 490 passed after the appellant completed three years, it must be presumed that his probation was extended.
In this view of the matter, as the appellant was a temporary hand, the services could be terminated at any time.
It appears that the attention of this Court is Dwarka Das 's Case was not drawn to the case of State of Punjab vs Dharam Singh (supra) which has been decided by a larger Bench and therefore, the later decision rendered by this Court in Dwarka Das is directly opposed to the view taken by the larger Bench and must, therefore, be overruled.
For these reasons, therefore, we are unable to find any legal error in the order passed by the Senior Superintendent of Police in terminating the services of the appellant The appeal is accordingly dismissed.
A request has been made by the appellant that he may be allowed to retain the Govt.
quarter which has been allotted to him for some time so as to enable him to find alternative accommodation.
Mr. Marwah, Counsel for the State, has no objection if a reasonable time is given to the appellant for this purpose.
We, therefore, give three months ' time to the appellant to vacate the government quarter allotted to him on his furnishing an undertaking to the Sr.
Supdt.
of Police.
[/INST]Allowing the appeal.
^ HELD: For making the provisions of section 17(1) applicable: (a) the land in respect of which the urgency provision is being applied should be waste or arable and (b) there should be an urgency for taking immediate possession requiring dispensation of the right of the owner for filing an objection under section 5A and this right should not be interfered in a casual or cavalier manner.
[94C, F] In the instant case the Notification under section 17(4) of the Act neither mentioned that the land is waste or arable nor that there was urgency to take recourse to the provisions of the Act.
[94D] The direction given to the Collector to take action under Section 17 on the ground of urgency is not a legal and complete fulfillment of the requirement of the law.
</s>
|
<s>[INST] Summarize the judgementl Appeals Nos.
1091 to 1093 of 1971.
Appeals by special leave from the award dated April 15, 1971 of the Industrial Tribunal, Maharashtra, Bombay in References (IT) Nos. 20 of 1969, 70 of 1970 and 105 of 1969.
V.M. Tarkunde, R. A. Jahagirdar and I.N. Shroff, for the appellant (in all the appeals).
K.T. Sule.
Janardan Sharma and Indira Jaisingh, for respondent No. 1 (in all the appeals).
Urmila Kapoor and Kamlesh Bansal, for respondent No. 2 (in all the appeals).
The Judgment of the Court was delivered by Vaidialingam, J.
These three appeals, by special leave, arise out of the Award, dated April 15, 1971 of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T. Nos. 20 and 105 of 1969 and 70 of 1970).
The main questions that arise for consideration in these appeals relate to the award of Dearness Allowance, Classification of Grades and Fixation of Wages and a direction given by the Industrial Tribunal regarding the Incentive Bonus Scheme, as modified by the Company.
There is also a minor point regarding a particular clause in the Gratuity Scheme as framed by the Tribunal in Reference (I.T. No. 20 of 1969).
Though there are certain other matters dealt with in the Award in Reference (I.T. No. 20 of 1969) they are not the subject of controversy in these appeals.
We will now state the circumstances under Which the Refer ences came to be made to the Tribunal.
570 The appellant was started as a proprietary concern in the year 1944 and was later transformed to a public limited Company and registered as such under the Indian Companies Act, 1962.
From its inception, the Company has been dealing in the business of manufacturing and selling pharmaceutical products.
It had its factory in Jogeshwari in Greater Bombay.
At the time of the Reference, the Company was employing about 714 workmen of whom 558 were operatives and 156 were members of the clerical and subordinate staff.
All these employees were covered by the demands comprised in all the References.
The wage scales of the workmen had been determined originally in Reference (I.T.No. 23 of 1959).
The wage scales of the operatives were as follows "Unskilled A Rs. 1 .52 0 .09.2 .23 0 .12 2 .93
Unskilled B 1.25 0.96 1.85 0.09. 2.30 Semi skilled A 2 .00 0 .12 2 .72 0 .18 3 .80
Semi skilled B 1 .76 0 .11 2 .64 0 .15 3 .39
Skilled 2 59 0 .13 2 .85 0 22 3 .95 0 .30 4 .25".
The wage scales of the clerical and subordinate staff were as follows .200 260 "Junior Chemist Rs. 120 10 12 Manufacturing Assistant140 10 220 15 310 Store keepers Store Assistants 180 10 260 15 350 Stenographers Junior Clerk 60 8 90 10 146 E.B. 15 215.
Intermediate Clerks75 8 115 12 175 E.B. 15 250.
Senior Clerks 115 10 255 15 315 E.B. 20 395.
" In addition to the basic wages, referred to above, the employees were getting dearness allowance, which in the case of operatives was equal to 80% of the revised textile scale of dearness allowance and in the case of clerical and subordinate staff 100% of the revised textile scale of dearness allowance.
The nomenclature of the grades of the operatives was changed by a consent award in Reference (I.T. No. 170 of 1961).
The grades and wages as per this award were as follows "Unskilled Rs. 1 25 0 06 1 85 0 09 2 30 Semi skilled A, 1 52 0 02 2 33 0 12 2 93 Semi skilled B ' 1 76 0 11 2 64 0 15 3 39 Skilled 2 00 0 12 2 72 0 18 3 39 Highly Skilled 2 59 0 13 2 85 .O 22 . 3 95. .
O 30 4 25.
" The dearness allowance of the operatives and clerical and subordinate staff underwent a change by the award in Reference (I.T. No. 402.
of 1963).
Under that award the dearness allowance 571 of the operatives was increased to 90% of the revised textile scale of dearness allowance from January 1, 1964 and to 95% of the revised textile scale of dearness allowance from July 1, 1964.
The dearness allowance of the clerical and subordinate staff was supplemented at different slabs with effect from January 1, 1964 as follows : "Basic salary upto Rs. 100 Basic salary of Rs. 101 to 200 Basic salary of Rs. 201 to 300 Basic salary of over Rs. 300 .
Operatives ' dearness allowance plus Rs. 7 .50 Operative , ' dearness allowanceplus Rs. 15.
Operatives dearness allowance plus Rs. 22 50.
Operatives ' dearness allowance plus Rs. 25.
" Though the award prescribed to the clerical and subordinate staff the same rate of dearness allowance of the operatives plus a fixed amount, as referred to above, the Company continued to give them dearness allowance equal to 100% of the revised textile scale of dearness allowance.
This was also supplemented with the fixed amount depending upon the slab of the salary.
There was a settlement on June 24, 1966 between the Company and its employees, in and by which the wages of the opera tives and the clerical and subordinate staff underwent a final revision.
The wages of the operatives were fixed as follows "Unskilled Rs. 1 .25 0 .10 2 .75
Semi skilled B 1 60 0 .12 2 32 0 .15 3 .67
Semiskilled A 1 .80 0 .15 2 85 0 .20 4 . 45 Skilled 2 .,10 0 20.3 .10 0 .25 5 .10
Highly skilled 2 .75 0 20 3 75 0 .25 5 00 0 .30 6 .50.
" Similarly, the wages of the clerical and subordinate staff were as follows : "Junior Clerk Rs. 75 6 105 10 155 15 260 E. B. 17 311.
Intermediate Clerk 90 8 130 12 190 15 295 E. B. 18 349.
Senior Clerk 125 10 195. 15 270 20 390 E. B 25 440.
Steno and Storekeeper180 10 260 15 380 E. B. 20 4 460.
" The above basic scales in respect of all the categories were again supplemented by dearness allowance as provided for in the award passed in Reference (I.T. No. 402 of 1963).
The Company had also an Incentive Bonus Scheme, by virtue of which a large number of operatives were getting, on an average an additional sum of Rs. 28/ per month.
The Company further revised 572 from about November 1, 1969 the wage scales of Drivers and Watchmen as follows : "Drivers Rs. 70 6 100 9 145 12 205 E. B. 15 250.
Watchmen 45 4 65 6 95 E. B. 8. 135".
The above was the pattern of the wage structure and dearness allowance for the operatives and the clerical and subordinate staff.
The Unions concerned made a demand for introducing the following scheme of dearness allowance in respect of all the workmen with immediate effect : Wage slab .
When the working classVariation in the cost of living in dearness allow dex figure is inance for every 10 the group of 401 points rise or 410.
upto 100 100 per cent 5 per cent From Rs. 101 to 200 50 per cent2 1/2 per cent From Rs. 201 and above 25 per centII percent Minimum dearness allowance Rs. 100.
Minimum variation Rs. 5.
" They also demanded that the above scheme of dearness allow ance was to have retrospective effect from August 1, 1967.
In the same demand the Unions required that the workmen should be granted one month 's wages for every year of service as gratuity in case of resignation, dismissal, discharge, death or termination of service for any reason.
By this demand the Unions required modification of the then existing pattern of payment of dearness allowance at 95% of revised textile scale of dearness allowance to operatives and 100% of revised textile scale of dearness allowance plus Rs. 7.50 to Rs. 25/ paid to the clerical and other staff.
The Company did not agree to the demand and in consequence by order dated January 14, 1969 the Government of Maharashtra referred for adjudication to the Industrial Tribunal the demands.
This Reference was registered as Reference (I.T. No. 20 of 1969).
The Unions again made a demand for revision of scales of pay as well as the classification of employees, their grades and their fitment in the revised scales of pay.
As against the then existing six categories of workmen and their wage scales of the operatives the Unions demanded new classification and gradation into eight grades with new wage scales.
Similarly, as against the then existing five grades of the clerical and subordinate staff, the Unions demanded the creation of six categories with enhanced wage scales.
These demands again were not accepted by the Company which led to the State Government making a reference Oil January 9, 1970, which reference was registered as Reference (I.T. No. 70 of 1970).
573 The Company some time in the year 1959 had introduced an Incentive Bonus Scheme.
This was introduced, according to the appellant, because of the fact that the workmen were not giving a substantial production.
The basis of the scheme, introduced by the appellant, was that if the workmen gave only 30% of the 100% production expected of them, their performance would be considered zero.
On the other hand, if they gave production above 30% and upto 100%, they would be eligible for payment of Incentive Bonus which would be from 31 to 100 points.
In other words, for the 70 points above the first 30 points, the workmen would get Rs. 501 as Incentive Bonus which would work out approximately to about Rs. 71.43 per point.
The appellant desired that the then existing floor limit of 30% ought to be raised to 75% without varying the quantum of Rs. 501 that was originally payable on achievement of 100% production.
What was intended was that the 25 points between 75 and 100 points Were to be made eligible for payment of Incentive Bonus of Rs. 2/ for each point.
The 'Company served a notice of change on the workmen under section 9A of the .
As the workmen protested against this change, this led the Government to make a Reference to the Industrial Tribnual for adjudication.
This was numbered as Reference, (I.T. No. 105 of 1969).
The appellant resisted the claims made for revision of dearness allowance and wage scales as well as the modification sought for in the gratuity scheme.
The appellant also wanted the Tribunal to uphold the notice of change given by it under section 9A of the in respect of the Incentive Bonus Scheme.
In particular the appellant contended that it was not a comparable concern with the units referred to by the Unions and that any modification in the scale of dearness allowance and wages would be beyond its financial capacity.
The appellant also relied oil the coming into force of the Drugs (Price Control) Order, 1970 with effect from May 16, 1970.
According to the appellant the wages and dearness allowance paid by it to the workmen were far higher than what were paid by other units in the region.
The Company also referred to the various awards wherein it had been held that it could not be compared with an International Company having branches in Bombay or with foreign concern though incorporated in India.
The wage scales had been fixed by Settlement dated June, 24, 1966 and that nothing has happened since the date of Settlement to justify a revision of wage scales 'and dearness allowance.
The appellant further urged before the Tribunal that the double linking of dearness allowance, as required by the Unions had never been adopted for the Pharmaceutical units in the Bombay region.
According to the appellant, the revision 574 effected regarding the Incentive Bonus Scheme was justified and the amount of 2/ offered per point was much more than the prevailing rate of Rs. 71.43p.
per point.
It also opposed the revision of the then existing gratuity scheme as demanded by the Unions.
According to the appellant the gratuity scheme which was in force had been introduced by a consent award in 1963.
The appellant filed copies of balance sheets and profit and loss accounts from 1962 63 to 1969 70 and various other charts in support of its plea that it will not be able to bear the additional financial burden that would result if the wage scales and dearness allowance are revised as per the demands made by the Unions.
It will be seen from the facts mentioned above that thr main controversy between the parties related to the revision of wage structure and dearness allowance.
As the demands of the workmen related to regrouping, in different grades, the operatives and the clerical and subordinate staff and as this involved a very radical change in the existing pattern of grades, the Tribunal felt that the opinion of an expert should be obtained on the advisibility of the reclassification.
In this regard both the Unions and the against filed a joint application on December 22, 1970 requesting the Tribunal to appoint Sri N. L. Gadkari, retired Chief Inspector of Factories, Maharashtra State as an assessor.
They also prayed that the points mentioned in the application be referred for the opinion of the assessor.
The Assessor submitted his report on February 22, 1971, in which he recommended the continuance of the then existing grades.
The Unions, while demurring to the report of the Assessor, requested the Tribunal, by their application dated March 25, 1971 to fix for the then existing five grades the following wage scales "Unskilled. .
Rs. 85 8 125 10 225 Semi skilled B. 100 10 150 12 210 15 285.
Semi skilled A 120 12 180 15 255 18 345.
Skilled 140 15 215 18 305 20 405.
Highly skilled 225 25 350 30 500 35 675.
" The appellant, when the Reference came up for hearing, raised an objection to the selection of wage scale by the Unions for the existing grades of the operatives on the ground that such a selection was not permissible, being contrary to the provisions of s.10(4) of the .
The Unions, ultimately, made it clear to the Tribunal that their demand for revision of wage scales of the existing five grades of operatives is to be as follows : "Unskilled Rs. 60 5 85 7 155.
Semi skilled B 70 6 100 8 180.
Semi skilled A 85 8 125 10 225.
Skilled 100 10 150 12 210 15 285.
Highly skilled 120 12 180 15 255 18 345.
" 575 It is on the basis of this claim that the question of revision has been dealt with by the Tribunal.
Regarding the financial incapacity pleaded by the appellant, the Tribunal after an analysis of the balance sheets and profit and loss accounts, held that the average net profit of the Company during the years 1965 66 to 1969 70 works out to about Rs. 1384691/ .
It is also of the, view that the apprehensions of the appellant/regarding the possible impact of the Drugs (Price Control) Order, 1970 are not justified.
It is the view of the Tribunal that in spite of the price freeze effected in 1963, the appellant has been doing very good business from 1962 63 to 1969 70.
Ultimately, the Tribunal found that the financial condition of the appellant is quite sound.
Regarding the comparable concerns in the region, the Unions referred to as many as twenty units.
One of the units relied on as comparable with the appellant was M/s. Burroughs Wellcome & Co. (India) Private Ltd., Bombay.
The appellant opposed its being compared with the concerns relied on by the Unions on the ground that those units were either foreign concerns doing business in India or Indian units working, in collaboration with foreign concerns.
The appellant in turn relied on several other concerns as being comparable with it.
The appellant very strongly relied on certain previous awards in support of its contention that it has been held in those awards that the appellant cannot be compared with foreign concerns or with the concerns working in collaboration with foreign concerns.
The Tribunal, after a consideration of the materials placed ' before it, in this regard, ultimately, held that M/s. Burroughs Wellcome & Co. (India) Private Ltd., was a unit which could be considered as a comparable concern with the appellant.
The Tribunal having regard to the grades and scales of pay obtaining in M/s. Burroughs Welcome & Co. (India) Private Ltd., held that the wage scales for the five grades for the operatives of the appellant should be as follows : "Unskilled .
Rs. 42 3 71 4 112 Semi skilled B 47 3 50 82 4 122 Semi skilled A 50 4 90 5 50 134 Skilled 55 5 50 110 6 50 155 50 High skilled 72 7 142 8 182 9 5C 220.
" The Tribunal fixed the following grades and scales of pay for the clerical and subordinate staff "Junior Clerks and Laboratory Assistants Rs. 85 7 50 145 10 195 12 259 17 323 Intermediate Cierks 120 10 200 12 260 15 335 18 353 Senior Clerks 185 15 305 20 365 25 465" 576 The Tribunal did not accept the large demand made by the Unions for a general adjustment in increments of the employees.
Nevertheless, in view of the revision of the scales of wages, it gave certain directions so that the employees may be fitted in the appropriate revised wage scales.
The parties very hotly contested the question of dearness allowance as well as the pattern to be adopted.
As there were different systems of dearness allowance for the operatives and the clerical and subordinate staff, the Unions desired that a common scheme of dearness allowance on a slab system should be adopted.
The Tribunal having regard to the decisions of this Court in Greaves Cotton and Co. and others vs Their Workmen(1) and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(2) held that there was no justification for having two systems of dearness allowance one for the operatives and the other for the members of the clerical and subordinate staff.
Accordingly, the Tribunal held that all the employees should get the same dearness allowance irrespective of the fact whether they were operatives ,or members of the clerical and subordinate staff.
As the dearness allowance has to be fixed on industry cum region basis, the Tribunal examined the system of dearness allowance followed in the region by the industries belonging to the pharmaceutical units.
The Unions had submitted statements Exs.
DU 1 and MU. 1 containing a list of pharmaceutical units, in support of their contention that such units were adopting a slab system of dearness allowance.
The Company, on the other hand, referred to certain awards of the Industrial Tribunals in support of its stand that slab system of dearness allowance is not considered as an appropriate mode of providing neutralization.
The Unions also relied on certain awards wherein the slab system of dearness allowance had been introduced by the Industrial Tribunals.
Though the Tribunal had held that most of the units referred to in Exs.
DU 1 and MU 1, cannot be, considered for the purpose of being treated as units comparable with the appellant, nevertheless it held that the practice adopted by those units regarding the grant of dearness allowance can be taken into account as providing a guide regarding the system of dearness allowance adopted in the region.
On this basis the Tribunal accepted the statements in Exs.
DU 1 and MU 1 and held that the slab system of dearness allowance was prevalent in a large number of units belonging to pharmaceutical industry.
In this view, the Tribunal further held that slab system of dearness allowance can be adopted, if the financial burden consequent on the adoption of the said system, can be safely borne by the Company.
(1) (2) 577 The Tribunal then proceeded to consider the system obtaining in Burrough Welcome Company regarding the payment of dear ness allowance.
The system in the said Company, which was common for operatives as well as the clerical and subordinate staff, was as follows Basic Salary Dearness allowance per Variationfor month at the Bom points.
bay working class cost of living index 491 500.
Rs. 1 100.
150 percent 5 Per cent Rs. 101 200 1 50 Per cent on the 1st 21 Per cent Rs. 100.
71 Per cent on the balance.
Rs. 201 300 150 per cent on the 1st 11/4 per cent.
Rs. 100.
721 Per cent on the 2nd Rs. 100, and 36 1/4 per cent on the balance.
Minimum Dearness allowance Rs. 4 Rs. 101.
In the said Company the above scale of dearness allowance was however limited only to employees drawing a basic salary upto Rs. 360/ per month.
The appellant accepted before the Tribunal that the scheme of dearness allowance obtaining, in Burroughs wellcome Company would cast a lesser financial burden than the scale of dearness allowance as demanded by the Unions.
In fact, the Company had filed two charts Exs.
C 12 and C 13, showing the burden which it will have to bear if the scheme of dearness allowance as demanded by the Unions was introduced.
, The Company had worked out the demands in different ways and that is why it filed two statements.
According to the appellant the additional financial burden will be about Rs. 878125.00 as per exhibit C 12 and Rs. 1252693.00 as per exhibit C 13.
The Tribunal is of the view that under exhibit C 13, the Company had taken into account a sum of Rs. 186293.00 payable to some members of the staff drawing a salary of over Rs. 200/per month and amongst whom were also included 52 chemists.
According to the Tribunal the 52 chemists are not covered by the Reference and therefore the burden will have to be calculated only in respect of the workmen covered by the Reference and to, whom dearness allowance is being fixed.
On calculation the Tribunal found that about a lakh of rupees payable to 52 chemists and included in exhibit C 13 by the appellant will have to be deducted from Rs. 1252693.00 Accordingly, it held that as per the calculation of the appellant under exhibit C 13, leaving out the 52 chemists, the total burden will only be Rs. 1152693 .00.
Taking 578 into account the tax relief that the Company will get, the Tribunal ultimately held that the additional financial burden that the appellant will have to bear will only be Rs. 555000.00.
As it had already held that the average annual gross profits of the Company are over Rs. 40,00,000.00, the Tribunal held that the Company can easily bear this additional burden.
The Tribunal is further of the view that though the financial impact of the Drugs (Price Control) Order, on the business activities of the Company has had to be seen, the impact will not be such as to make the appel lant 's financial position difficult.
For all these reasons, the Tribunal fixed for the operatives and the clerical and subordinate staff of the appellant dearness allowance on a system prevalent in Burroughs Wellcome Company.
The system of dearness allowance fixed by the Tribunal is as follows : Basic salary Dearness allowance per Variation month at the Bom bay working class cost of living index 521 530.
Rs. 1 100 150 per cent Rs. 101 200 150 per cent on the 1st Rs. 100.
72 1/2 per cent on the balance.
Rs. 201 300 150 Per cent on the 1st 100 Rs.72 1/2 Percenton the 2.
Rs. 100.
36 1/4 per cent.
on the balance.
Minimum dearness allow ance Rs. 101 _ percent _ 1/2 per cent Rs. 4.
The Tribunal has further directed that dearness allowance in accordance with the above scheme will be payable only to em ployees drawing a basic salary upto Rs. 300/ per month.
It will be seen that the Tribunal while adopting the scale of dearness allowance obtaining in Burroughs Wellcome Company, has made a departure in fixing the scale of dearness allowance on the basis of the Bombay Working Class Cost of Living Index 521 to, 530.
The dearness allowance scheme obtaining in Burroughs Wellcome Company was on the Bombay Working Class Cost of Living Index 491 to 500.
The dis rent cost of living index was adopted by the Tribunal in view of the fact that the appellant was Paying incentive wages to its operatives and with a view to lessen the financial burden on the Company.
Another feature of the scheme adopted by the Tribunal is that it puts a ceiling on the employees drawing basic wages upto 579 Rs. 300/ per month alone being eligible for dearness allowance, whereas under the practice originally obtaining in the Company there was no such limit.
The Tribunal held that the revised wage scales and dearness allowance would be effective from October 1, 1969 and directed the Company to pay the arrears within three months from the date of the Award becoming enforceable.
At this stage it may be mentioned that the appellant is not challenging this direction regarding the date from which the wage scales and dearness allowance are to take effect, though it very vehemently attacks the fixation of the scale of revised wage scales and dearness allowance by the Tribunal.
Regarding gratuity, the Company had already a scheme which had been introduced under the Settlement Award in Reference (IT) No. 141 of 1962.
It is not necessary to set out the scheme that was prevalent in the Company because the only.
objection of the appellant to the revised scheme evolved by the Tribunal is in respect of raising the ceiling from 15 months to 17 1/2 months.
The demand in this regard by the Unions was that the ceiling should be raised from 15 months basic wages to 20 months basic wages.
However, the Tribunal did not accept the claim of the Unions in toto.
On the other hand, it adopted the practice obtaining in the Burroughs Wellcome Company and accordingly fixed the ceiling at 17 1/2 months basic wages.
Regarding the notice of change issued to the workmen by the appellant under s.9A of the proposing to alter the existing floor limit of 30% to 75% in the Incentive Bonus Scheme, the Tribunal on the joint application of the parties dated April 10 , 1970 appointed on April 28, 1970 Sri B. Tulpule, as Assessor to examine the question of revising the existing scheme of Incentive Bonus.
The Assessor submitted his report on August 27, 1970 making the following recommendations : "(1) The base performance index for all sections /in the Company 's factory should be revised and raised to 60 per cent.
(2) Consequent upon the revision of the base index as above, an amount of Rs. 100 per day should be added to the basic wages of the workers, this addition being independent of any other revision of the wage structure that the Tribunal may decide upon.
(3) The revised rates of incentive should continue beyond 100 pet cent performance." Though the Unions generally accepted the recommendations, the appellant was opposed, particularly to the second and third 580 recommendations.
The Tribunal, after a consideration of the objection, is, of the view that recommendations Nos. 2 and 3 were beyond the scope of the terms of reference made to him.
Therefore, those two recommendations were negatived.
Regarding the first recommendation, it is stated by the Tribunal that the Unions accepted the same and that the Company also was not opposed to that suggestion made by the Assessor regarding the raising of the base performance index to 60%.
In dealing with this aspect the Assessor in his report had stated as follows "If the base index of any incentive scheme is raised from X to Y, the workers will stop getting the incentive earnings which they used to get for the performance range from X to Y. This is also the main anxiety expressed by both the Unions in the present case.
At the outset I asked the management whether the implication of their proposed change was such a reduction in the workers ' total pay packet, at any given level of performance.
The management categorically assured me that that is not their intention.
Their purpose in proposing the change is stated by them to induce workers to raise their performance above the prevailing level.
" The Tribunal in its Award had stated that the matters men tioned in the above paragraph including the assurance stated to have been given by the appellant were not denied.
Therefore, the Tribunal, in view of the common measure of agreement between both the parties regarding the first recommendation is of the view that if the pay packet of the workman is to be protected at the wage raise base index performance of 60%, some scheme may have to be worked out.
But as the necessary materials for the purpose of evolving a scheme were not available, the Tribunal has thrown out a suggestion that the said question should be dealt with by the appellant in consultation with the Unions and frame a scheme by common consent, if possible.
Accordingly, the Tribunal left the matter to the parties to deal with the matter with the observation that if it is found that no scheme could be framed by consent, the Unions will be free to raise any dispute that may be available to them in that regard.
We have.
exhaustively referred to the questions referred to the Tribunal as well as the decision of the, Tribunal on those points.
In these appeals, as mentioned earlier, the controversy relate to (1) Scale of Dearness Allowance; (2) Fixation of Wage Scales, Classification and Grades; (3) Raising of the ceiling to 17 '2 months basic wages in. the gratuity scheme.
; and (4) the direction given by the Tribunal.
regarding the Incentive Bonus Scheme.
581 As the main points in great controversy between the parties before us relate to the pattern of dearness allowance and the classification and grades of employees and the fixation of the revised wage scales, we will take up for consideration those matters.
The very _first objection of Mr. Tarkunde, learned counsel for the appellant is regarding the manner of ascertaining grosser of its when revising the wage scales and awarding dearness allowance.
We have already pointed out that the Tribunal has proceeded on the basis that the average annual gross profits of the Company are over Rs. 40,00,000.00.
The appellant had submitted balance sheets and profit and loss accounts for the year 1962 63 to 1969 70.
It is enough to refer to the particulars that could be gathered for the five preceding years, namely, 1965 00 to 1969 70.
For those years the figures are as follows Particulars 1965 66 1966 67 1967 68 1968 69 1969 70 Paid up capital 4500000 4 50 000 0 4500000 54 00 00 0 Reserves and Surplus 2152186 2925376442151547856975714988 Sales 21997640 23866647 303593803299445637152031 Depreciation 5449195 55035784 8241111775916719 Development rebate 972426 8266105840110858144511 Provision for taxation 1915000 1590300185050016985001639000 Net Block 4601566 4905509 545821257459977375386 Net Profit 954591 1443489 159709416045011323779 From the above statement it will be seen that the average net profits work out to Rs. 1384691.00 The net profits have been arrived at, by the Company after deducting taxation, depreciation and development rebate.
It is on the basis of the net profits, so arrived at that the appellant appears to have urged before the Tribunal that the wage scales and dearness allowance are to (1),fixed.
The Tribunal rejected this contentions.
On the, other hand, the Tribunal has held that when considering a revision of wage structure what is to be taken into account is not the net profit. ; but gross profits without any deductions having been made for taxa tion, depreciation and development rebate.
It is on that basis.
that the Tribunal held that the average gross profits ' of the Company exceed Rs. 40,00,000.00.
The gross profits without deducting taxation, depreciation and development rebate for the years 1965 66 to 1969 70 will be.
proximately as follows Year Gross profits Rs. "1965 66.
35,11,752 1966 6736 ' 57,000 1961 6843, 37,698 1968 6945, 25,134 1969 7040, 24,009" 9 L1031 Sup.
Cf/72 582 From the above it will be seen that the figure of Rs. 40,00,000.00 arrived at by the Tribunal as average annual grossprofits appears to be prima facie correct.
Mr. Tarkunde, learned counsel for the appellant found con siderable difficulty in challenging the view of the Tribunal that gross profits are to be arrived at without decucting taxation and development rebate.
He rather strenuously urged that there is absolutely no warrant for arriving at gross profits without deducting depreciation.
On the other hand, Mr. K. T. Sule, learned counsel for the respondent No. 1, whose, contentions have been adopted by Mrs. Urmila Kapoor, learned counsel for the second respondent, pointed out that the approach made by the, Tribunal is correct and is also supported by the decisions of this Court.
Mr. Tarkunde referred us to sections 205 and 211 of the , as well as , Schedule VI therein.
We do not think it necessary to% refer to those provisions as, in ouropinion, they have no relevance or bearing when considering a revision of wages and award of dearness allowance under industrial adjudication.
Those provisions are intended for ' a totally different purpose.
We will presently show, by reference to the decisions of this Court that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate.
In view of the decisions, to which we will immediately refer to, Mr. Tarkunde was prepared to accept the position that, at any rate, taxation and development rebate cannot be deducted, but he still maintained that depreciation has to be deducted.
In Gramophone Company Ltd. vs Its Workmen(1), this Court, in dealing with a gratuity scheme, had to consider the principles applicable for ascertaining the financial capacity of an employer.
In that decision the employer contended that before the real profit for each year can be4 arrived at, the provisions made for taxation and for development reserves should be deducted.
On this basis, it was further contended that if these deductions are made, there will not be any profit left which will enable the Company concerned to frame a gratuity scheme.
This claim for deducting taxation and development rebate reserves was negatived by this Court as follows : "When an industrial tribunal is considering the question of wage structure and gratuity which in our opinion stands more or less on the same footing as wage struc (1)[1964] 583 ture, it has to look at the profits made without considering provision for taxation in the shape of income tax and for reserves.
The provision for income tax and for reserves must in our opinion take second place as compared to provision for wage structure and gratuity, which stands on the same footing as provident fund which is also a retrial benefit.
" It was further observed that if an industry is in a stable condition and the burden of provident fund and gratuity does not result in loss to the employer, that burden will have to be borne by the employer, like the burden of wage structure in the interest of social justice.
It was finally held that the contention on behalf of the Company therein that provision for taxation and provision for reserves should take precedence over provision for gratuity cannot be accented.
From the above decision it is clear that Fixation of wage structure stands more or less on the same footing as framing of a gratuity scheme and the principles applicable for ascertaining the profits are the same : (2) Provision for taxation and provision for reserves cannot take precedence over for gratuity and fixation of wages; and (3) The provision for income tax and for reserves must take second place as compared to provision for wage structure and gratuity.
The above decision categorically rules out any deduction of taxation.
It also excludes from deduction all provision for reserves which will take in depreciation reserve also.
But, Mr. Tarkunde contended that the above decision is an authority for the proposition that the only two items that could be deducted are provision for taxation and provision for development rebate reserve.
If so, the counsel urges that the deduction of depreciation reserve as claimed by the appellant is justified and, that the Tribunal erred in declining that item to be deducted.
We are not inclined to accept this contention of Mr. Tarkunde.
The above decision is, in our opinion, an authority for the proposition that the provision for taxation and provision for reserves, which expression will take in depreciation reserve also, cannot be deducted for the purpose of computing the profits.
At 'any rate the, said decision had no occasion to consider whether depreciation reserve can be deducted or not.
We have already pointed out that the only claim made by the appellant therein was for deducting provision for taxation and for development rebate reserve and that claim was rejected.
Therefore, looked at from any point of view, the above decision is certainly not in favour of the contention of Mr. 584 Tarkunde that depreciation reserve has to be deducted before arriving at profits.
In The Indian Link Chain Manufacturers Ltd. vs Their Work men(1), this Court had occasion to consider the principles applicable to ascertain the financial capacity of a company in fixing wage scales and dearness allowance and framing of a gratuity scheme.
The Principle applicable was stated as follows "It is pertinent to notice that gratuity and wages in industrial adjudication are placed on the same footing and have priority over Income tax and other reserves, as such in considering the financial soundness of an undertaking for the purposes of introduction of a gratuity scheme the profits )that must be taken info account are those computed prior to the deduction of depreciation and other reserves.
" The decision in Gramophone Company vs Its Workmen 2 was quoted with approval in this decision.
The Company in that case had calculated profits after deducting depreciation.
This method was deprecated by this Court as follows : "All these profits it may be mentioned are computed after deducting depreciation and this should betoken into account in considering the desirability of formulating a gratuity scheme for the Appellant.
" In the end the provision made for depreciation and which had been deducted by the Company for calculation of profits was added back.
From the above decision it is clear that profits are to be computed prior to the 'deduction of depreciation and other reserves.
The said decision directly holds that provision for depreciation and other reserves cannot be deducted in computing profits be ascertained for framing a gratuity scheme.
This decision again reiterates the legal position that gratuity and wages in industrial adjudication and placed on the same footing and have priority over Income tax and other reserves.
In fact, as pointed out by us earlier, provision made for depreciation and which had been deducted by the Company for arriving at profits was added back.
by this Court.
Mr. Tarkunde urged that this Court in The Indian Link Chain Manufacturers Ltd. vs Their Workmen(1) has misunderstood and misinterpreted the earlier decision in Gramophone Company Ltd. vs Its Workmen (2 ) .
According to the counsel the error committed by this Court was on proceeding on the basis that the decision in (1) ; (2) [1964]2 L.L.J. 131.
585 Gramophone Company Ltd. vs Its Workmen(1) has laid down that depreciation reserve should not be deducted in computing the profits available for framing a gratuity scheme or when fixing a wage scale, We have no hesitation in rejecting this contention of Mr. Tarkunde.
We have already expressed our views regarding the scope of the decision in Gramophone Company Ltd. vs Its Workmen(1) and no error has been committed by this Court in The Indian Link Chain Manufactures Ltd. vs Their Workmen(2).
On the other hand, the latter decision is directly in point to the effect that provision for depreciation cannot be deducted.
We may also refer to the observation of this Court in Ahme dabad Millowners ' Association Etc.
vs The Textile Labour Association(3) that. . it is the figure of gross profit which is more important, because it is not disputed that wages payable to the employees are a first charge,, and.
all other liabilities take their place after the wages.
" Mr. Tarkunde referred us to, the statements contained in certain leading text books on principles of Accounting, Book Keeping and Accounts and Accountancy regarding the nature of depreciation reserve.
In "Principles of Auditing by F. R. M. De Paula, 8th Edition," it is stated that the main object of providing for depreciation of wasting assets is to keep the original capital intact.
In "Balance Sheets, how to read and understand them, by Philip Tovey,3rd Edition" the distinction between a "Reserve" and "Depreciation" has been stated.
The author says that depreciation should be written of before arriving at the year 's profit and that reserve is built up, by setting aside portions of the profits itself.
The author proceeds to state that depreciation represents the estimated wear and tear which will ultimately reduce the property and plant to scrap value.
In "Book Keeping and Accounts" 'by Cropper, Morr 's and Fison, 19th Edition, when dealing with the Trial Balance, Trading and Profit and Loss Accounts, it is mentioned that depreciation is the term employed by the Accountants to indicate the gradual deterioration both in the value and the usefulness of those assets which, by reason of their nature and uses, steadily decline in value.
Again in "Accountancy" by William Pickles, 3rd Edition the author has defined "Depreciation" as the permanent and continuing diminution in the.
quality, quantity or value of an asset.
it Is further stated that the provision for depreciation does not depend upon what the business can afford, as the debit therefore is an (1) [1964] 2 L.L.J.131, (2) ; (3) ; 586 essential one, constituting not an appropriation of, but a charge against, profits for the period in question.
Based upon the above statements contained in the text books, referred to above, Mr. Tarkunde urged that the principle in Accountancy is that depreciation must be deducted before ascertaining the profits.
In our opinion, the above statements may have considerable bearing in the preparation of profit and loss accounts having due regard to the provisions of the and Mercantile usage; but they have no bearing on the question of fixation of wage structure and dearness allowance in an industrial adjudication.
From what is stated above, it follows that the Tribunal was justified in arriving at gross profits without deducting the provision for Depreciation.
As already mentioned by us, Mr. Tarkunde has accepted that the Tribunal was justified in not deducting the Provision made for taxation and development rebate.
The result is that the average gross profits of the appellant being about Rs. 40,00,000,00, as held by the Tribunal, is correct.
In the fixation of wages and dearness allowance the legal position is well established that it has to be done on an industry cumregion basis having due regard to the financial capacity of the unit under consideration vide Express Newspapers (Private) Ltd., and Another vs The Union of India and others(1), Greaves Cotton and Co. and others vs Their Workmen (2) , and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(3).
It has been further stated in Greaves Cotton add Co. and others vs Their Workmen (2 ) as follows : "The principle therefore which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small it is the region part of the industry cum region formula which assumes importance. . (1) (2) ; (3) ; 587 It has been further emphasized in Ahmedabad Millowners ' Association etc.
vs The Textile Labour Association(1) that industrial adjudication should always take into account, when revising the wage structure and granting dearness allowance, the problem of the additional burden to be imposed on the employer and ascertain whether the employer can reasonably be called upon to bear such burden.
The principles to be borne in mind have been stated in the said decision as follows : " It is a long range, plan; and so, in dealing with this problem, the financial position of the employer must be carefully examined.
What has been the progress of the industry in question; what are the prospects of the industry in future; has the industry been making profits; and if yes, what is the extent of profits; what is the nature of demand which the industry expects to secure; what would be the extent of the burden and its gradual increase which the employer may have to face ? These and similar other considerations have to be carefully weighed before a proper wage structure can be reasonably constructed by industrial adjudication. .
As pointed out in Greaves Cotton and Co. and others vs Their Workmen (2) , one of the principles to be adopted in fixing wages and dearness allowance is that the Tribunal should take into account the, wage scale and dearness allowance prevailing in ' comparable concerns carrying on the same industry in the region.
, The factors which have to be taken into account for ascertaining comparable concerns have also been laid down by this Court.
In Workmen of Balmer Lawrie and Co. vs Balmer Lawrie and those principles have been stated as follows "Besides, it is necessary to emphasise that in dealing with the comparable character of industrial undertakings, industrial adjudication does not usually rely on oral evidence alone.
This question is considered in the light of material fact and circumstances which are generally proved by documentary evidence.
What is the total capital invested by the concern, what is the extent of its business, what is the order of the profits made by the concern, what are the, dividends paid, how many employees are employed by the concern, what is its standing in the industry to which it belongs, these and other matters have to be examined by industrial adjudication in determining the question as to whether one concern is com parable with another in the matter of fixing wages.
Now, (1) ; (2) ; (3) ; 588 it is obvious that these questions cannot be decided merely on the interested testimony either of the workmen, or of the employer and his witnesses '" In Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and others(1) , the above principles have again been reiterated.
From the decisions, referred to above, it follows that two principal factors which must weigh while fixing or revising wage scales and grades are: (1) How the wages prevailing in the establishment in question compare with those given to the workmen of similar grade and scale by similar establishments in the same industry or in their absence in similar establishments in other industries in the region; and (2) What wage scales the establishment in question can pay without any undue strain on its financial resources.
The same principles substantially apply when fixing or revising the dearness allowance.
The question is whether the Tribunal has adopted the above principles when revising the wage scales and dearness allowance in the case of the appellant.
The Unions had relied on as many as twenty one concerns located in the region of Greater Bombay and belonging to the same pharmaceutical units of industry as, units comparable with the appellant.
The appellant opposed its being compared with those concern,, on the ground that the units relied on by the Unions were companies haying foreign collaborations or connections, and as such possessing several advantages.
The appellant in turn relied on several concerns in the region as comparable units.
Before we refer to the concerns relied on by the Unions and the appellant as comparable concerns, it is necessary to deal with an objection raised by Mr. Tarkunde that no foreign unit doing business in India or no unit in India doing business in collaboration with a foreign concern, can ever be considered for purposes of comparison.
According to the appellant such concerns have distinct advantages of international research facilities, reputation in business which enables such concerns to market their products more easily and thus enable them to pay higher wages to their employees.
In view of the special technical facilities, that may be available to them, their output will be far higher though the number of employees will be much less, and as such they will be able to pay to their lesser number of employees higher wages.
In this connection Mr. Tarkunde relied on certain awards of the Industrial Tribunal (1)[1969] 589 wherein it is held that the comp 'es having foreign collaboration though in the same region and in the same industry, cannot be considered for the purposes of comparison with purely local On the other hand Mr. Sule, has opposed the above position and urged that the question as to who is the employers is absolutely immaterial so long as the tests for the purposes of comparability as laid down 'by this Court, are satisfied and the capacity to bear the financial burden is established.
We will deal with aspects in the first instance.
It must be stated at the outset that the Unions placed reliance on certain information contained in the prospectus of the Company and certain statements contained in the book "Indian, Pharmaceutical Industry" published in 1963 and 1969, to show that the appellant concern is also one which has foreign collaboration and as such it is to be ranked as a concern with foreign attachment.
has recorded a finding in favour of the appellant that it is not a unit having foreign collaboration.
Therefore, this finding is III favour of the appellant.
The question that now arises for consideration is whether in law there is any objection or prohibition in an industrial tribunal, when dealing with comparable units in a region from taking into account concerns having foreign collaboration.
It is no doubt true that some of the concerns relied on by the Unions are concerns working in collaboration with foreign firms.
In Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen(1), it was held by the Industrial Tribunal that the Cipla cannot be compared to Glaxo Laboratories, Raptakos Brett and other pharmaceutical concerns which are either subsidiaries of foreign concerns or are closely linked with them.
It was further held that if any comparis on could be made,in can only be with concerns like Kemp & Company.
Sandu Pharmaceutical, Fair Deal Corporation, Edison Continental Laboratories, Bengal 'Chemicals and such other indigenous concerns.
Again in Alembic Chemical Works Ltd. Baroda vs Its Workmen (2) , the Tribunal held that Alembic cannot be compared to concerns like the Glaxo Laboratories and others who have associations in different degrees and forms with certain foreign concern, of international repute.
On this reasoning the Tribunal relied more on the scales wages prevailing in concerns like the Jhandu Pharmaceutical, Cipla.
Kemp & Co., and such similar concerns although it held that (2) [1958] I.C.R. Bombay, 1305.
(1) [1957] I.C.R Bombay, 1206.
590 Alembic is a much bigger concern, than the said units.
It must be stated that in both these awards concerns with foreign collaboration have been eliminated from consideration on the ground that they cannot be regarded as comparable concerns and to that extent they support Mr. Tarkunde 's contention.
In Reference (IT) No. 223 of 1959, which related to the appellant Company, the workmen placed reliance on Indian units of foreign concerns for being treated as comparable units.
,The appellant, however, pointed out that those units which have international fame and repute in world market were in a position to sell their products more easily and profitably and hence they cannot be treated as comparable units.
The Tribunal, no doubt, accepted the contention of the appellant that the Unions had selected some of the bigger concerns for comparison and held that it would be more appropriate if the appellant is placed somewhere in between the bigger and smaller concerns.
In this view the Tribunal took to the financial capacity of the appellant.
Again in Reference, (IT) No. 402 of 1963, relating to the appellant, wherein the dearness allowance was revised, the appellant had contended that it should not be compared with the units like Ciba, Dumex, Glaxo, Sandoz and the like.
The Tribunal held that the appellant cannot be compared with international pharmaceutical units having branches in Bombay or with foreign concerns like Glaxo, Ciba, Sandoz etc., which though incorporated in India are subsidiaries of foreign companies having all the advantages of connection with respect of home companies in Europe and America.
The Tribunal referred to the award in Reference (IT) No. 223 of 1,959 and held 'that a fair cross section of the industry has to be taken into account for fixing a scale of dearness allowance, which will be within the financial capacity of the appellant.
But, how ever, the Tribunal held that the appellant is a firm of good reputeand standing and that it has very fair prospects.
Though in Reference (IT) No. 223 of 1959, the Tribunal did not specifically eliminate from consideration units having foreign collaboration as such, nevertheless, in Reference (IT) No. 402 of 1963, the Tri bunal has held that the appellant cannot be compared with international pharmaceutical companies having branches in Bombay or with concerns, though, incorporated in India, are subsidiaries of foreign, companies.
From what is stated above, it is no doubt true that in the three awards, one of which specifically relates to the appellant, concerns having foreign collaboration have been eliminated for purposes of comparison.
But no legal principle on the basis of which such a decision has been arrived at has been stated in any of these awards.
591 In our opinion, so long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region, we do not see any reason why they should not be taken into account for purposes of being treated as comparable units, provided the tests for such purposes as laid down by this,, Court are satisfied.
No doubt some of those concerns may be having an advantage in various matters.
But merely because that they possess such advantage in the field of business is not a circum stance for eliminating such concerns for purposes of comparability.
The object of industrial adjudication is, as far as possible, to secure uniformity of service conditions amongst the industrial units in the same region.
If a concern having foreign collaboration properly satisfies the tests of comparability, it would be improper to regard ' such unit as uncomparable merely on the ground that it is a con cern with foreign collaboration or interest and that 'the unit with which it is sought to be compared is entirely of Indian origin and resources.
The object of Industrial.
Law is to improve the service conditions of industrial labour so as to provide for them the ordinary amenities of life with a view to bring about industrial peace which would in 'turn accelerate productivity of the country resulting in its prosperity.
The prosperity of the country, in its turn will help to improve the condition of labour.
The principles regarding fixation of wage scales and dearness allowance have been laid down in several decisions, by this Court and they apply equally to all industries irrespective of the character of the employer.
The worker is interested in his pay packet and given reasonable wages, he can be expected to be a satisfied worker.
There is no justification from the stand point of view of the employees for fixing different wage scales merely because of the fact that some workmen are in the employ of purely local concerns while some others are in the employ of units though in the same region, working in collaboration with, foreign concerns.
As the paramount consideration is the interest of the worker, the character of the employer is irrelevant, provided ' the latter 's financial capacity to bear the burden is established.
In the ultimate analysis the, character of the employer or the destination of profits has no relevance in the fixation of wages and dearness allowance.
We are fortified in the above view by The decision of the Constitution Bench of this Court in Hindustan Antibiotics Ltd. vs The, Workmen and others(1).
In that case on behalf of the appellant it was urged that as it was a government company in the public sector, the principles governing the fixation of wages applicable to companies in the private sector do not have any relevance.
On (1)[1967]1.S.C.R.652. 592 the other hand, on behalf of the workmen it was contended that in fixing the wage structure including dearness allowance the question, who is the employer, is irrelevant and that only the needs of the employee are of paramount importance.
The contention on behalf of the workmen was accepted by this Court and it was held that the same principles that have been laid down by the industrial adjudication and the courts regarding the fixation of wage scales and dearness allowance in respect of companies in the private sector apply with equal force to companies in the public sector also.
It was further held that in the application of the industry cum region principle to be adopted to distinction can be made between one unit and another in the same industry in the fixation of wage scale,; provided the test of financial capacity is satisfied.
It was further held that by and large the acceptance of the principle of industry cum region will be more conducive to industrial relations and that the same principles evolved by the industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence.
Though the decision cited above had to deal with a claim for ,differentiation being made on behalf of a company in the public sector and which claim was rejected, in our opinion, the basic principle underlying the said decision will apply even with respect 'to the question whether the units, having collaboration with foreign concerns can be taken into account for purposes of comparison, In our opinion, the above decision warrants the conclusion that such units having foreign collaboration or foreign companies doing 'business in India can be taken into account for purposes of being considered whether they are comparable units.
Of course, the test laid down by this Court for treating one unit as a comparable one, will have to be satisfied, and once that test is fulfilled, there can be no distinction made between such units and purely local units.
Therefore, in our view, the Tribunal, in the case 'before us, was perfectly justified in taking into account for purposes of comparison units having collaboration with foreign concerns and foreign units doing business in India in the same region and being in the same industry.
It follows, therefore, that the principles laid down to the contrary in the awards relied on by Mr. Tarkunde, are erroneous.
Coming to the units relied on by the parties as comparable units.
as mentioned earlier, the Unions relied on as many as 21 concerns as comparable with the appellant.
No doubt some of the units relied on by them were units having collaboration with foreign concerns.
The appellant also, in turn filed statement exhibit C 26.
referring to six companies which could be treated as comparable concerns. 593 The Tribunat rejected most of the units relied on by the Unions on the ground that the information furnished regarding such units.
were not adequate and complete regarding various factors necessary to constitute a comparable unit.
We have also gone through the statements filed by the Unions.
In exhibit DU 2, one of the Unions furnished information regarding the business performance of about nine concerns till the year 1964 65.
Similarly, in exhibit DU 3, another Union had given the average performance of nearly ton units for the years 1962 63 to 1964 65.
As it would be more desirable to consider the financial capacity of the appellant in the light of the trading results disclosed in the balance sheets and profit and loss accounts from the years 1965 66 to 1969 70, it must he considered that the information furnished in Exs.
DU 2 and DU 3 cannot he considered to be upto date and helpful.
The Unions also did not make any further attempt to supplement the informa tion contained in these two exhibits by furnishing information regarding the years subsequent to 1964 65.
No doubt, the Unions have furnished particulars regarding one unit, Burroughs Welcome India) Private Ltd., which will be dealt with later.
Therefore, the rejection by the Tribunal of most of the units relied on by the Unions, was justified.
The appellant Company relied on six units mentioned in exhibit C 26.
Those units are Cipla, Chemo Phama, Zandu, Opil, Sigma and Bengal Chemicals.
But the Company did not furnish information regarding the business performance of these concerns for a period of years in the immediate past.
But it will be noted that the four units referred to in exhibit C 26.
namely, Zandu, Cipla, Opil and Sigma, had been considered by the Industrial Tribunal in its previous award Reference (IT) No. 402 of 1963, when the scale of dearness allowance obtaining in the appellant Company was revised.
On that occasion the Tribunal had held that it was only Cipla which came nearest to the appellant Company and even there the dearness allowance obtaining in Cipla cannot be taken for comparison.
That means that these four units were left out of account and were not treated as units comparable with die appellant.
No fresh materials were placed by the appellant regarding these four units after the decision of the Tribunal in Reference (IT) No. 402 of 1963.
Therefore, the Tribunal in the present case, was justified in rejecting the claim of the appellant that those four units are comparable concerns.
The elimination of the four units.
thus left for consideration only two concerns, namely, Chemo Phama and Bengal Chemicals.
Even here the Unions had furnished statements Exs.
DU 8 and DU 9, regarding these two units in Ex ' DU 8, the business performance of Chemo Phama froth 1965 to 1969 was given and in exhibit DU 9, the business performance of Bengal Chemicals from 1965 to 1970 was given.
The 594 'Unions had also furnished exhibit DU 44 regarding the business performance of the appellant.
A comparison of the statements contained in Exs.
DU 8 and DU 9 with the material relating to the appellant in exhibit DU 44, regarding the paid up capital, reserves and surplus sales, net block, net profits and gross profits, it is quite clear that the business performance of Chemo Phama and Bengal Chemicals do not come anywhere nor that of the appellant.
The appellant in all respects stands on a much higher footing.
The average gross profits of the appellant work out to Rs. 40,11,176.
while the average gross profits of Chemo Phama works out to Rs. 5,31,511 and that of the Bengal Chemicals to Rs. 11,39,553.
Therefore, it is clear that these two units also cannot be treated as concerns comparable with the appellant and hence the wage structure prevailing in those concerns cannot provide any useful guidance.
We have already mentioned that the Tribunal has ultimately held that M/s Burroughs Wellcome (India) Private Limited is a concern comparable with that of the appellant.
It is no doubt a foreign company in the sense that its entire capital is held by foreign company as shown in the statement exhibit C 11, filed by the appellant.
But we have already rejected the contention that such a concern cannot be ruled out of consideration for purpose of comparability.
A very severe attack has been levelled by Mr. Tarkunde in the Tribunal 's treating M/s Burroughs Wellcome Company as a comparable unit.
According to the learned counsel if the various factors relevant for the purpose of comparison are considered, it will be clear that the appellant cannot stand any comparison with this unit.
Mr. Tarkunde further pointed out that instead of taking ,only one unit for purposes of comparison, the Tribunal should have taken fair cross section of the industry in order to find out where exactly the appellant can be fitted in.
It is no doubt true that a fair cross section of the industry should be taken into account.
But in this case when all the other units have been held to be not ,comparable with the appellant, this criticism levelled against the approach made by the Tribunal cannot be accepted.
Regarding Burroughs Wellcome Company, the Unions had sub mitted a statement exhibit DU 2A under a seal of confidential as it was a private limited company.
A comparison of the information ,contained in the said statement exhibit DU 2A regarding the paid up ,capital ', reserves and surplus sales, depreciation, development rebate, provision for taxation, net profits, gross profits, net block and dividend declared for the years 1967 to 1970 with the corresponding items in exhibit DU 4A with respect to the appellant shows that both the units are substantially on a par.
Normally, the 595 statements in exhibit DU 2A could have been extracted in this judgment but for the fact that Burroughs Wellcome Company being a private limited company and the statements having been furnished in a sealed cover, they could not be made public.
The paid up capital.
is identical in both the concerns.
The average sales of Burroughs Wellcome Company and those of the appellant are substantially the same.
The difference between the, net profits of the two is significantly small.
The gross profits of the two units are also close to each other.
No doubt there are some small differences between the two in these items, but they are of no significance.
The various factors which have to be taken into account for he purpose of a unit being treated as a comparable one as laid down by this Court have already been referred to.
If so, all those factors taken into account clearly show that Burroughs Wellcome Company is a unit comparable with the appellant.
No doubt the appellant has relied on the ratio of employees to sales, as well as to debt equity ration and the percentage of profit to sales in respect of the appellant and the Burroughs Wellcome Company.
exhibit C 22 contains the ratio of employees to sales in 1968 69.
Though there are certain other units referred to therein, we will only advert to the particulars regarding the appellant and the Burroughs Wellcome Company, which are as follows Ration of Employee to Sales No. of Per Name of the Company Year SalesEmployees employee sale Rs. Rs. Unichem 68 6932994456 752 43875 Burroughs.
69 25000000 425 58823 A reference to exhibit C 22 will show that the sales of the appellant is higher than that of Burroughs Welcome Co. No doubt the ratio per employee is slightly less in the case of the appellant.
It is also seen that the appellant employs nearly 752 workmen whereas Burroughs Wellcome Co. employs only 425 workmen.
In exhibit C 18, particulars regarding Debt Equity Ratio have been given.
That statement contains particulars regarding the various firms including the appellant.
In 1969 the capital of the appellant was Rs. 101.86 lakhs.
It had borrowed Rs. 95.89 lakhs and the percentage on borrowed funds to capital works out to 94.1 %.
It is no doubt true that there is no borrowed capital in Burroughs Wellcome Co. In exhibit C 18 particulars regarding nine Units have been given and it is seen that except two units, all the other seven units, including the appellant, have borrowed.
In fact it is interesting to note that Glaxo, which has a capital of Rs. 1196.81 lakhs had also borrowed Rs. 26 80 lakhs.
Similarly, 596 Chemo Phama which had a capital of only Rs. 32.05 lakhs had borrowed Rs. 37.08 lakhs and the percentage works out to Rs. 115.7%.
We are referring to these aspects because it was stressed by Mr. Tarkunde that the Debt Equity Ratio in the appellant is very high and that it has to pay a large amount by way of interest on borrowed funds which is not the case with Burroughs Wellcome Company.
But the statements contained in exhibit C 18 themselves clearly show that borrowing for the purpose of business seems to be a usual pattern followed by the companies in the region.
exhibit C 15 is a statement relating to percentage of profit to sales for the years 1965 66 to 1969 70.
No doubt the figures given therein show that the percentage of profits has been fluctuating.
but, in our opinion, the particulars contained in the above exhibits.
relied on by the appellant, do not affect the findings of the Tribunal that Burroughs Wellcome Company is a unit comparable with the appellant.
Another criticism that has been levelled by Mr. Tarkunde is that the Tribunal has not taken into account the prospects of the future business of the appellant.
In this connection the appellant relied on the coming into force with effect from January 1, 1971 of ' the Drugs (Price Control) Order, 1970.
According to Mr. Tarkunde whatever may have been the financial.
position of the appellant in the past, its future business is bound to suffer in view of this price control order.
He referred us to the decision in Williamsons (India) Private, Ltd. vs Its Workinen(1) of this Court wherein it has been held, amongst the various factors which have to be taken into account for the purpose of fixation of wage scales and dearness allowance, the prospect of future business is a very relevant circumstance.
This factor, according to the appellant, has not been taken into account by the Tribunal.
We have earlier referred to the decisions of this Court regarding the principles governing the fixation of wages and dearness allowance.
It is no doubt a long, range plan and the Prospects of future business amongst other factors have also to be taken into account.
The case of the appellant is that in 1963, there has been a price freeze and that has affected its business and therefore the Drugs (Price, Control) Order, 1970 will affect its future business.
We have, already, extracted in the earlier part of the judement the trading results, of the appellant from 1965 66 to 1969 70.
If the price freeze which came into force in 1963 had any affect, then it must have been reflected in the trading results of the appellant.
The (1) 597 trading results of the appellant during the years 1962 63 to 1964 65 are as follows : Particulars1962 63 1963 64 1964 65 Paid up capital 4491000 44992504499500 Reserves and Surplus 476569 1010753 1505353 Sales 10241405 1566588317388705 Net Block 3907400 4371113 4345467 Provision for Taxation 934000 1065000 1515000 Depreciation297243379256390878 Development rebate 33686 100617 22329 Net Profits 442881 703567 877271 A glance of the above statement clearly shows that though the paid up capital remains the same, there has been a steady rise in the reserve and surplus sales and net profits.
Similarly, the net block has also an increase.
There has been no set back in the sales.
On the other hand there has beena steady rise in the sales.
No doubt for the year 1969 70 the profits did go down; but the drop is comparably small and the appellant has not been able to, satisfy.
us that it is due to the price freeze.
Then the question is regarding the impact of the Drugs (Price Control) Order, 1970, which has come into effect from January 1,1971.
In this connection it is necessary to refer to the speech made bythe Chairman of the Board of Directors of the appellant Companyat the Annual General Meeting held on January 9, 1971.
At thisstage it may be mentioned that the Accounting year of the appellant Company is from October 1, to September 30, of the succeeding year.
On January 9, 1971, the Chairman was giving a review of the working of the Company for the year ending September 30, 1970.
He had clearly stated that the impact of the Drugs (Price Control) Order, 1970, which had come into force only recently will be felt by the Company only after the year 1970 71.
The appeal was heard by us from January 3, 1972 and concluded only on January 10, 1972.
As the Company, in the previous years had been having its Annual, General Meetings in early January, of each year, we suggested to the counsel for the appellant that as the approximate trading results for the year commencing from October 1, 1970 to September 30, 1971 would have been available by then, they may be furnished so that it may be possible to find out the impact of the Drugs (Price Control) Order on the trading results of the appellant.
But it was represented that the figures are not available.
It is not necessary for us to cornment except to state that going by the fact that on former occasions the figure had been ready by the first week of January to enable the Annual General Meeting of the Company to be held, it would not have been difficult for the appellant to have furnished at least 1031 Sup.
CI/72 598 the approximate figures, if really the trading results had shown a decline.
The appellant has missed an opportunity 'that was provided to it to establish that the Drugs (Price Control) Order has adversely affected its business.
Under those circumstances, it is not possible for us to disagree with the view of the Tribunal that the impact of the Drugs (Price Control) Order will 'not be such as to affect materially the business prospects of the appellant Company.
We may state that if the Drugs (Price Control) Order, mate rially affects the prosperity of the appellant 's trade, it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order, their financial position has been weakened to such an extent that they cannot bear the burden of wage structure fixed by the present award, the matter may have to be examined on its merits.
The question of fixation of wage scales need not detain us very long.
We have already extracted the wage scales prevailing in the appellant company as well as the categories of workmen when the reference was made.
We have also referred to the fixation of wage scales by the, Tribunal on a comparison with the wage scale obtaining in Burroughs Wellcome Company.
The wage structure.
as well as the grades that were prevalent in Burroughs Wellcome Co. in pursuance of the settlement dated June 13, 1966 regarding the ,operatives and clerical and subordinate staff have been incorporated ,by the Tribunal in its Award.
We do not think it necessary to reproduce the same.
A comparison of the wage scales in Burrough Wellcome Company and the wage scales fixed by the Tribunal in the Award for the Company will show that the Tribunal has only made some slight variation in view of the fact that it accepted the report of the assessor for the continuance of the existing grades in the Company.
As some of those grades were, not existing in BurToughs Wellcome Company, the Tribunal bad to make some slight changes.
Wherever it was possible the wage structure in Burroughs Wellcome Co. has been retained but the maximum has been raised a little and some slight changes have also been made in the incremental stage.
Once Burrough Wellcome Company is treated as a comparable unit, we are satisfied that the wage scales awarded by the Tribunal cannot be 'considered to be unjustified.
The Tribunal 's finding regarding the financial capacity of the appellant has already been referred to and we accept the same.
it was, however, pointed out by Mr. Tarkunde that in consi dering the comparability of a unit; strength of the labour force has also to be given due importance.
Mr. Tarkunde pointed out that 599 while the appellant employs 752 workmen, there are only 436 in Burroughs Wellcome Co. as is seen from the Statement exhibit C 22.
No doubt to this extent, the two units differ, but when one bears in mind the business performance of both the units,there is not much of a substantial difference.
It may be that because of the fact that Burroughs Wellcome Co. adopts more modem methods of production, it was employing a smaller complement of workers.
Having due regard to all the other tests that have been satisfied, this difference in the strength of labour force alone, in our opinion, cannot be given undue importance.
It is pertinent to note that this Court in Workmen of New Egerton, Woollen Mills vs New Egerton Woollen Mills and others(1) did not disagree with the view of the Industrial Tribunal which had treated the respondent therein and another unit as a comparable unit, notwithstanding the that the respondent was employing at the material time about 3000 workmen whereas the unit which was treated as a comparable unit was having the labour force of only about 1000 men, in view of the fact that all other requirements for comparability Were satisfied.
In fact, in the case before us, the Tribunal has adverted to this difference of labour force of the appellant and Burroughs Wellcome Company, but nevertheless it held that, that by itself is not sufficient to eliminate Burroughs Wellcome Company as a comparable unit.
We agree with this approach made by the Tribunal.
An objection was taken on the basis of section 10(4) of the that the Tribunal has permitted the Unions to revise their demand regarding classification and grades of workmen and that the Tribunal has further committed an error in upholding the grades of Stenographers, Assistants and Store keepers and merging them with that of the Senior Clerks.
We are not inclined to accept this contention advanced on behalf of the appellant.
We have already referred to the fact that as the question of classification and fixing grades were matters cf a technical nature, at the joint request of both the parties, the Tribunal appointed Sri Gadkari, as an assessor.
It was really in view of the stand taken by both the parties before the assessor and the Tribunal, after the report was submitted by the assessor that the Tribunal has accepted the report that the existing grades should continue.
But as the workmen had to be fitted in 'the appropriate grades, the Tribunal was justified in fitting in the categories the workmen and their grades as well as their scales of wages.
The above contention based upon section 10(4) of the , at the most can relate, if at all.
only to the operatives.
The report of Sri Gadkari has already been referred to.
He had suggested the ' retention of the existing categories.
The workmen have necessarily to, be classified for the purpose of being put in particular categories (1)[1969] 2 L.L.J.782.
600 and the wages also have to be suitably fixed depending upon the category in which they are so fitted.
Having due regard to the, nature of the reference, classification though jobwise and the fixing of wages of pay and fitting the workmen in suitable categories were all matters incidental and as such the Tribunal has acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories.
In the view above expressed, we do not think it necessary to refer to the decisions referred either by Mr. Tarkunde, learned counsel for the appellant or by Mrs. Urmila Kapoor, on behalf of the respondent No. 2 as to when exactly the matter can be considered to be incidental to the question referred for adjudication.
Before we take up the question of dearness allowance, one other point that requires to be adverted to is the objection taken on behalf of the appellant regarding the raising in the gratuity scheme the ceiling limit from 15 months to 17 21 months ' basic wages.
The Tribunal has adopted the pattern obtaining in Burroughs Wellcome Company.
We do not see any question of principle involved in this matter and therefore we find no merit in the objection raised by the Company.
The pattern of dearness allowance that was in force in the appellant Company at the time of the reference has been indicated already.
We have also referred to the scale of dearness allowance fixed by the Tribunal.
There were different systems of dearness allowance for the operatives and the clerical and subordinate staff.
That such a different system of dearness allowance for the employees working under the same employer is not warranted, is clear from the decisions of this Court in Greaves Cotton & Co. and others vs Their Workmen(1) and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(2).
Therefore, the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant.
The Unions required a common scheme of dearness allowance of slab system to be introduced for all employees.
The appellant resisted the claim on the ground that there was already a scheme of dearness allowance existing in the Company and that there is, no justification for revising the same.
But, nevertheless, the Tribunal has adopted, by and large, the scheme of dearness allowance which was in vogue in 'Burroughs Wellcome Co. Normally, once Burroughs Wellcome Co. is treated as a unit comparable with the appellant, the Tribunal must be considered prima facie to be justified in introducing the pattern obtaining in that unit.
However, it is pointed out on behalf of the appellant that the slab system of dearness allowance does not obtain in any of the pharmaceutical industries in the region.
(1) ; (2) ; 601 The contention that because there was a system of dearness allowance in existence in the Company and therefore there was no justification for revising the same, cannot be accepted.
A similar contention raised in Remington Rand of India vs Its Workmen(1) was rejected by this Court.
In that.
case there was a system of dearness allowance providing for payment of not only a rate of percentage on the basic salary but also a variation in the percentage on the rise or fall of the cost of living index.
The workmen demanded revision of the scale of dearness allowance on the ground that the cost of living index had increased.
The claim was resisted by the Company on the ground that the scheme of dearness allowance then existing in the Company itself provided for an increase in the cost of living index and therefore no revision is required.
This contention was not accepted by this Court.
It was held that a claim made by the Workmen, if otherwise justified, cannot be rejected on the sole ground that a provision is already made in an existing scheme of dearness allowance for adjustment depending upon an increase in the cost of living index.
This Court further held that if it is established that the cost of living shows a tendency to rise very high, the workmen would be entitled to claim and there may be a change in the rate of dearness allowance originally fixed, so, as to provide for more neutralisation.
It was further held that a claim made by the workmen win have to be properly considered and adjudicated upon by the Tribunal.
In fact, in that case, it is seen that there was only a 50 point rise in the cost of living index and nevertheless the revision of the scale of dearness allowance by the Tribunal was upheld.
We may also refer to the decision of this Court in Workmen of Balmer Lawrie and Co. vs Balmer Lawrie and Co.(2) wherein it has been held as follows : "If the paying capacity of the employer increases or the cost of living shows an upward trend, or there are other anomalies, mistakes or errors ', in the award fixing wage structure, or there has been a rise in the wage structure in comparable industries in the region, industrial employees would be justified in making a claim for the reexamination of the wage structure and if such claim is referred for adjudication, the Adjudicator would not normally be justified in rejecting it solely on the ground that enough time has not passed after the making of the award, or that material change in relevant circumstances had not been proved.
It is of course, not possible to lay down any hard and fast rule in the matter.
The question as to revision must be examined, on the merits in each (1) (2) ; 602 individual case that is brought before an adjudicator for his adjudication.
" On the date when the settlement was entered into between the appellant and its workmen on April 20, 1966, the cost of living , index was 630.
From exhibit C 1 it is seen that in August 1969, the cost of living index had gone up to 7 90 and from exhibit DU IO dated December 8, 1970, it is seen that when the second settlement was entered into between Burroughs Welcome, Co. and its workmen, the cost of living index had gone upto 800.1.
It is also seen that at the time of the Award it had gone up further to about 850 points.
Therefore, from the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points.
At the time when the demand for revision of wage scales and dearness allowance wag made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high.
That clearly shows that the workmen had made out a case for revision of wage scales and dearness allowance.
We have earlier referred to the scheme of dearness allowance fixed by the Tribunal in the Award.
The scheme provides for payment of a particular percentage on the basic salary and it also provides for variation on 10 points.
But the dearness allowance has been fixed on the Bombay Working Class Cost of Living Index of 521 530.
Though more or less the same pattern of dearness allowance was obtaining in Burroughs Welcome Co. , the dearness allowance in the latter was fixed at the Bombay Working Class Cost of Living Index of 491 500.
The scale of dearness allowance, as demanded by the Unions, was on the basis of the cost of living index 401 410.
It was accepted by the appellant that the scheme obtaining in Burroughs Welcome Company is more advantageous from the financial point of view than the scheme of dearness allowance demanded by the Unions.
In fact, the Tribunal itself has made a further concession in favour of the appellant by adopting the cost of living index of 521 530 instead of 491 500 as was obtaining in Burroughs Welcome Co. The Tribunal had made this change in the cost of living index in view of the fact that in the appellant Company, there was an Incentive Wages Scheme in and by which operatives 'were getting on an average, about Rs. 28/ per month.
Therefore the financial burden cast on the appellant by the dearness allowance scheme fixed by the Tribunal is such that the appellant can bear the burden.
in order to show that in the Bombay region the pharmaceutical units were adopting the slab system of dearness allowance, the Unions had filed a chart exhibit DU 1.
It is evident from exhibit DU 1, that out of 19 pharmaceutical units, referred to therein, at least 1 1 of them adopt the slab system of dearness allowance which.
has been 603 introduced in the case of the appellant in the Award.
No doubt, it is pointed out by Mr. Tarkunde 'that in the statement filed bay the appellant, exhibit C 25, it will be.
seen that none of the Indian owned units have adopted the slab system.
But whether those units have adopted or not, we have already indicated, that no distinction can be made between a purely local unit and a foreign unit doing business in India or an Indian unit doing business in collaboration with foreign concern.
When once such units can be taken into, account as comparable units, the pattern of dearness allowance, obtaining therein can very well be considered to ascertain the system adopted by the industry as that will show the trend in the region.
As pointed out above, at least 11 units, referred to in exhibit DU 1 have adopted the.
system now introduced in the case of ' the appellant by the Tribunal.
Under those circumstances when such system is prevailing in the industry in the same region, it cannot be held that the Tribunal has committed any error, in introducing a similar pattern in the case of the appellant.
The slab system has been approved by this Court as will be seen by the decisions in Greaves Cotton and Co. and others vs Their Workmen(2) and Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen (2) .
Even in Bombay that such a pattern of dearness allowance, as the one introduced in the case of the appellant, is existing is seen by the decisions of this Court in Greaves Cotton and Co. and others vs Their Workmen(2) and Kamani Metals & Alloys Ltd. vs Their Workmen (3).
No doubt the industries therein were not pharmaceutical units.
But that such a system exists in Bombay region is clear from the above decisions.
Mr. Tarkunde referred us to the Award of the Industrial Tri bunal in Reference (IT) No. 411 of 1966 in Voltas Limited, Bombay vs The Workmen Employed under them dated September 30, 1969 wherein the adoption of slab, system has not been approved.
On the other hand, Mrs. Urmila Kapoor, learned counsel for respondent No. 2 has drawn our attention to a number of awards of the Industrial Tribunal rendered during the years 1965 to 1968 wherein the slab system of dearness allowance has been adopted in Bombay region.
It is only necessary to refer to the award in the case of May and Baker Limited, Bombay vs Its Workmen, because that is a pharmaceutical unit.
The award was given in or about June 1967 and it is seen that the dearness allowance on the pattern now given by the Tribunal in respect of the appellant has been adopted.
We have already referred to the fact that in exhibit DU71, it is seen that as many as 11 pharmaceutical unit s in Bombay region have adopted the pattern of granting dearness allowance on the slab (1) ; (3) ; (2) 3.
604 system now incorporated in the present award.
Though most of the units referred to therein could not be treated as units comparable with the appellant because of lack of full information regarding material factors, yet those concerns can be taken into account inasmuch as the system Obtaining in those concerns will show that the slab system is not something new to the pharmaceutical units.
We have already referred to the award in May and Baker Limited, Bombay vs Its Workmen.
These facts clearly show that the scheme of dearness allowance provided in the award before us in respect of the appellant is not anything new.
On the other hand, the Tribunal has only adopted the system prevailing in the region in respect of pharmaceutical units.
So far as the financial burden is concerned we have already referred to the findings recorded by the Tribunal.
Even on the basis that the Tribunal was not justified in proceeding on the assumption that 52 chemists are not covered by the reference, in our opinion, the additional burden that will be cast on the appellant can be easily borne by if.
Therefore, we see no error in the scheme of dearness allowance introduced, in the case of the appellant, by the Tribunal.
The only other point that requires to be considered is in respect of the direction given by the Tribunal regarding the Incentive Bonus scheme in respect of which the appellant had given notice of change under section 9A of the industrial Disputes Act, 1947.
We have already referred to the nature of the scheme that originally existed and the modification sought to be made by the, appellant.
We have also pointed out that the Tribunal has not accepted most of the recommendations made by Sri Tulpule, who was appointed as an a ssessor on the joint application of both the parties.
The Tribunal has stated that it is desirable that a scheme is worked out, if possible, by consent of parties for the purpose of protecting the interest of the workmen at the increased base performance index.
According to Mr. Tarkunde the Tribunal itself should have gone into the matter and evolved a scheme.
No doubt, it would have been desirable if the Tribunal had actually evolved a scheme.
But the Tribunal has stated that the necessary material for that purpose has not been made available and as such it has not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index.
In fact, we also suggested to, the counsel that the parties may consider the matter and submit a scheme for that purpose.
But it was represented to us on February 9, 1972 by Mrs. Urmila Kapoor, learned counsel for respondent No. 2, that it has not been possible for the parties to arrive at an agreement in respect of that matter, at present.
Therefore, there is nothing further that could 605 be done by this Court in this regard; and the result is that the observations made by the Tribunal in this regard will have full effect.
In the result, all the conventions of the appellant are rejected and the Award of the Industrial Tribunal in respect of the matters ,in controversy in the appeals are confirmed.
All the appeals are dismissed.
In Civil Appeal No. 1091 of 1971, the appellant will pay the costs of respondents Nos. 1 and 2.
In the other appeals, parties will near their own costs.
The appellant will have three months ' time from today for payment of the amounts due under the award.
[/INST]In the appeal against the order of the High Court dismissing the appellant 's petition for a writ of habeas corpus the appellant urged that he was not produced before a magistrate within 24 hours after his arrest as required by section 167 of the Code of Criminal Procedure or even later; that he was never informed of the grounds for his arrest; that no custody warrant was ever issued warranting the jail authorities to keep the appeal]ant in jail custody; that the remand orders passed by the magistrate were tinder section 167 and not under section 344 of the Code, as the latter section did not apply at the stage of investigation and that even if section 344 applied the magistrate could not order detention for more than 15 days in the whole.
He also urged that the Jail Superintendent did not produce before the High Court the jail records but only produced his report, thus disabling the appellant from establishing his case.
Dismissing the appeal, HELD : (1) The order sheet produced before the High Court showed that the appellant was produced before the magistrate within 24 hours after his arrest and that the magistrate remanded him to jail custody.
Though the order sheet had entries showing that on subsequent occasions when remand orders were made the appellant was produced before the magistrate, the High Court has found that the Magistrate had wrongly recorded that the appellant was produced before him on those occasions.
However, the wrong entries made by him do not mean that the remand orders were not in fact passed by him though he did so in the absence of the appellant.
Such orders can be lawfully passed if an accused person cannot for some reason or the other be brought before the magistrate.
[134 E F] Rai Narain vs Superintendent, Central Jail, New Delhi, Writ Petition No. 330 of 1970, decided on Sept. 1, 1970, referred to.
(ii) The facts negative the suggestion of the appellant being kept in ignorance of the reasons for his arrest.
[135 F] (iii) There is no reason to think that the magistrate ordered the appellant to lie taken into jail custody without custody warrant.
[136 A] (iv) section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot be completed within 24 hours.
Section 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence 130 and further evidence may be obtained, to enable the police to do which a remand to jail custody is necessary.
The fact that section 344 occurs in the Chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and collection of evidence is still going on.
Therefore, it is not as if the stage at which the Magistrate passed the remand orders was still the stage when section 167 applied and not section 334.
The Magistrate, provided he complied with the condition to the Explanation, was competent to pass remand orders from time to time subject to each order being not for a period exceeding 15 days.
The Magistrate had satisfied that Condition.
[136 G] View contra in Artatran vs ATR 1956 Orissa 129 disapproved.
A Lakshamanrao vs Judicial Magistrate, ; , Chanaraatn vs State, and Ajit Singh vs State, (1970) 76 Crl.
L.H. 1075, referred to The appellant was content with the production of the superintendent 's report.
No prejudice was caused to the appellant 's case since the jail record could not have proved anything more than what the jail superintendent 's report proved.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1106 of 1964.
Appeal by special leave from the judgment and order dated the October 31, 1961 of the Madras High Court in Tax Case No. 67 of 1958.
A. V. Viswanatha Sastri, R. Venkataraman and R. Gopala krishnan, for the appellant.
section T. Desai, Gopal Singh, B. R. G. K. Achar and R. N. Sachthey, 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 High Court of Judicature at Madras answering the following question of law in favour of the respondent : "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of rupees 84,633/ expended by the assessee in obtaining the loan or any part thereof is an allowable expenditure ?" The facts and circumstances of the case as stated by the Tribunal in the statement of the case are as follows : The appellant, India Cements Limited, Madras, hereinafter referred to as the assessee, is a public limited company.
The question arises in respect of the assessment year 1950 51, accounting period April 1, 1949 to March 31, 1950.
During the accounting year it obtained a loan of 40 lakhs of rupees from the Industrial Finance Corporation of India.
This loan was secured by a charge on the fixed assets of the company.
Since Mr. section T. Desai, the learned counsel for the respondent, has disputed some facts as stated by the Appellant Tribunal, it would be convenient to give these facts in the words of the Appellate Tribunal.
It is stated in the statement of the case that "the proceeds of this loan was utilised to pay off a prior debt of 25 lakhs due to Messrs A. F. Harvey Limited and Madurai Mills, Limited.
It cannot be stated definitely how the balance of 15 lakhs was used but the directors, while reporting on the accounts for the year ended 946 31 3 1949 on 4 10 1949 stated that that was utilised towards working funds.
" The expenditure of Rs. 84,633/ in connection with this loan was made up of thefollowing items : Stamps 60,02300 Registration Fee 16,,06700 Charges for certified copy of the mortgage deed 2800 Indemnity deed by Essen and Company, Limited 1500 Vakil 's fee for drafting deed 7,50000 Legal fees 1,00000 Total Rs. 84,633 0 0 The assessee did not charge this expenditure in the profits and loss account for that year.
It was shown in the Balance Sheet as mortgage loan expenses.
It continued to be so shown till March 31, 1952.
In the accounts for March 31, 1953 this was written off by appropriation against the profits of that year.
The Income Tax Officer refused to allow the deduction of Rs. 84,633/ .
He observed "As per the information furnished by the auditors, Rs. 25 lakhs of the loan was to be paid to Messrs A. F. Harvey, Limited, and Mathurai Mills, Limited in, discharge of the amount borrowed from them and utilised on the capital assets of the company.
Though in the Company 's books the amount of Rs. 84,633 was not charged to revenue but capitalised and carried forward in the Balance Sheet, for purposes of income tax, the Company 's auditors claim the same as an admissible item of revenue expenditure." He held that the expenditure was incurred in obtaining capital and should be distinguished from interest on borrowed capital which was alone admissible as a deduction under section 10 (2) (iii).
According to him, section 10 (2) (xi) specifically excludes from consideration any item of capital expenditure.
He further held that the case was not distinguishable from the decision in The Nagpur Electric Light and Power Co. vs Commissioner of Income tax, Central Provinces(1).
The Appellate Assistant Commissioner agreed with the Income Tax Officer.
The Appellate Tribunal distinguished the case of Nagpur Electric Light and Power Co. (1) 947 vs Commissioner of Income Tax(1) on the ground that in the Nagpur Electric Light(1) case money was expended for obtaining capital.
It observed as follows "Here we find the position to be different.
A study of the balance sheets of the company as at 31 3 1949 discloses the fact that the paid up capital was sufficient to cover the entire capital outlay of the company and that the further borrowal of Rs. 25 lakhs was for aug menting the working.
funds of the company.
It appears to us that even at that early stage the money was borrowed and used not for capital purposes but for augmenting the working funds of the company.
We, therefore, consider that the whole of the mortgage loan was used firstly to discharge the loan of Rs. 25 lakhs and the balance for working funds and, as such, the whole of the amount was purely for the purposes of augmenting the working capital of the company and that it could not be stated that it was used for capital purposes.
In this view of the matter, we hold that the money expended in obtaining the loan is an allowable expenditure." The High Court, after noticing the findings of the Income Tax Officer and the Tribunal preferred the findings of fact made by the Income Tax Officer.
It observed "At this stage, we may point out that the conclusion reached by the Tribunal that the money was borrowed only for working expenses and not for capital investment proceeded on an inference based upon the balance sheet.
The Tribunal did not investigate how the sum of Rs. 25 lakhs earlier borrowed from A. H. Harvey and Madurai Mills Ltd. was actually utilised.
Though in the order of the Income tax Officer it is found stated that that amount was utilised on the capital assets of the company and that statement was based on the authority of the information furnished by the auditors of the assessee, the Tribunal either overlooked or ignored this circumstance.
In the face of the statement so recorded by the Income tax Officer, the Tribunal does not appear to have been justified in relying upon inferences in ascertaining whether the earlier borrowal was on capital or revenue account." (1)6 I.T.C. 28.
948 The High Court after reviewing various cases, observed : "If we ask for what purpose the expenditure in the present case was incurred, the only answer must be that it was incurred for the purpose of bringing into existence an asset in the shape of borrowing these Rs. 40 lakhs.
The further question would then be whether this asset or advantage was not for the enduring benefit of the business and whether the expenditure incurred was one which was incurred once and for all.
The answer to both questions would again be in the affirmative.
It is true that the borrowed money has to be repaid and it cannot be an enduring advantage in the sense that the money becomes part of the assets of the company for all time to come.
But, it certainly is an advantage which the company derives from the duration of the loan and undoubtedly it could not have been for any purpose other than an advantage to the business that the borrowing was made.
That it is not enduring in the sense that the borrowing has to be repaid after a short or long period, as it were, cannot affect the conclusion that it was nevertheless an asset or an advantage that was secured.
Viewed in the light of the tests adumbrated in the above decision Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1) it seems to us that the expenditure must be regarded as capital expenditure.
As the facts of the case which we have set out earlier indicate, there can be no doubt that at least to the extent of Rs. 25 lakhs that amount was expended for purposes of a capital nature, clearly in order to bring into existence capital assets.
We have also pointed out that though it was vaguely stated by the Tribunal that the other sum of Rs. 15 lakhs was utilised as working funds, there seems to be no material whatsoever before the Tribunal to justify its coming to that conclusion." The learned counsel for the assessee company, Mr. A, V. Viswanatha Sastri, urges that the expenditure is admissible as a deduction under section 10(2) (xv) of the Act.
He says that the High Court erred in holding that the expenditure was made to acquire any asset or advantage of an enduring nature within the test laid down by Viscount Cave and approved by this Court in Assam, Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1).
He (1) 949 further says that what was secured by the expenditure was a loan and in India money expended in raising a loan, whether by means of a debenture or a mortgage and whether you call it a loan capital or not, is not an expenditure in the nature of capital expenditure.
He further submits that the expenditure was expended wholly and exclusively for the purpose of the business of the company.
The learned counsel for the revenue, Mr. section T. Desai, supports the reasoning of the High Court.
He says that the High Court was right in preferring the findings of the Income Tax Officer on the ground that there was no material for the finding made by the Appellate Tribunal and the finding was based on surmises and material evidence was ignored.
He says that the High Court in a reference is entitled to ignore any findings of fact made by the Appellate Tribunal if those findings are vitiated.
In the alternative, he says that the question referred is wide enough to include the question whether there was any material for the finding of the Appellate Tribunal.
On the merits he contends that expenditure takes the colour from the thing on which the expenditure is made.
If the money is spent to obtain capital then the expenditure assumes the nature of capital expenditure, but if the money is spent to obtain raw materials then the expenditure takes the colour of revenue expenditure.
He further says that the borrowed money is an enduring asset and any expenditure made to obtain this money falls within the test laid down by Viscount Cave and approved by this Court.
A number of cases have been referred to during the hearing of the case by both the counsel but we do not propose to refer to all of them.
We must start first with the cases decided by this Court and see what principles have been laid down for distinguishing revenue expenditure from expenditure in the nature of capital expenditure, and especially those cases which dealt with similar problems.
We will first consider State of Madras V. G. J. Ceolho(1).
This was not a case arising under the Indian Income Tax Act but under the Madras Plantations Agricultural Income Tax Act, 1955, in which a section exactly similar to section 10 (2) (xv) existed.
In brief, the facts in that case were that the assessee had borrowed money for the purpose of purchasing the plantations and he claimed that in computing his agricultural income from these plantations the entire interest paid by him on moneys borrowed for the purpose of purchasing the plantation should be deducted as expenditure, under section 5(e) of the Act.
In (1) [1964]8 S.C.R. 60 1 ; 950 the Madras Act there was no provision similar to section 10(2) (iii) of the Act and thus interest was not expressly deductible as an allowance.
This Court applied the test formulated by Viscount ,Cave, L. C., in Atherton vs British Insulated and Helsby Cables Ltd.(1) and approved by the Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1), and held that the payment of interest was a revenue expenditure.
It observed that "no new asset is acquired with it; no enduring benefit is obtained.
Expenditure incurred was part of circulating or floating capital of the assessee.
In ordinary commercial practice payment of interest would not be termed as capital expenditure.
" This Court further held that the expenditure was for the purpose of business.
Mr. Desai tried to distinguish that case on the ground that what was at issue was interest on loan and not expenditure incurred for ,obtaining the loan.
In our opinion, there is no justification for drawing this distinction in India.
As observed by Lord Atkinson in Scottish North American Trust vs Farmer(1) "the interest is, in truth, money paid for the use or hire of an instrument of their trade as much as is the rent paid for their office or the hire paid for a typewriting machine.
It is an outgoing by means of which the Company procured the use of the thing by which it makes a profit, and like any similar outgoing should be deducted from the receipts, to ascertain the taxable profits and gains which the Company earns.
Were it otherwise they might be taxed on assumed profits when, in fact, they made a loss.
" It will be remembered that there was no section like section 10(2) (iii) of the Act in the English Income Tax Act.
On the other hand, there were certain rules prohibiting the deduction in respect of "any capital withdrawn from, or any sum employed or intended to be employed as capital in such trade. " or "any interest which might have been made if any such sums as aforesaid had been laid out at interest." Lord Atkinson first held in that case that the express prohibitions did not apply to the facts of the case and then proceeded to discuss general principles.
These observations show that where there is no express prohibition, an outgoing, by means of which an assessee procures the use of a thing by which it makes a profit, is deductible from the receipts of the business to ascertain taxable income.
On the facts of this case, the money secured by the loan was the thing for the use of which this expenditure was made.
In principle, apart from any statutory provisions, we see no distinction between interest in respect of a loan and an expenditure incurred for obtaining the loan.
(1) (2)[1955] 1 S.C.R. 972 : (3)5 T.C. 693 at 707.
951 Mr. Desai urges that these observations of Lord Atkinson should be limited to a case where temporary borrowings are made.
It is true that the House of Lords. was dealing with the case of a company and the moneys that were borrowed were of a temporary character.
But this fact was only relied on to hold that the moneys secured were not 'capital ' within rule 3 of First Case, section 100 (5 and 6 Vic.
35) of the Income Tax Act, 1842, for Lord Atkinson observed at p. 706; ".
it appears to me, simply, amounts to this that the word "capital" must, in this rule, be held to bear a wholly artificial meaning differing altogether from the ordinary signification, though there be no context in the clause requiring that there should be given to it a meaning different from that which it bears in ordinary commercial transactions." He then referred to the decision in Bryon vs The Metropolitan Saloon Omnibus Company(1) to show that the borrowing by a joint stock company of money by the issue of debentures does not amount to an increasing of the capital of the company.
In Bombay Steam Navigation Co. Ltd. vs Commissioner of Income Tax(2), this Court again examined the question of distinguishing between capital expenditure and revenue expenditure.
This Court first held that on the facts of the case, cl.
(iii) of section 10(2) did not apply, because the assessee in that case had agreed to pay the balance of consideration due by the purchaser and this did not, in truth, give rise to a loan.
Then Shah, J., observed : "Whether a particular expenditure is revenue expenditure incurred for the purpose of business must be determined on a consideration of all the facts and circumstances, and by the application of principles of commercial trading.
The question must 'be viewed in the larger context of business necessity or expediency.
If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit earing process and not for acquisition of an asset or a right of a permanent character, the possession of which is a condition of the carrying on of the business, the expenditure may be regarded as revenue expenditure: ' (1) 3 D.G. and J. 123.
(2) ; : L8Sup.
Cl/63 14 952 We will now briefly deal with relevant decisions of the High Courts.
The first case referred is In re Tata Iron and Steel Company Ltd.(1) In that case, the Tata Iron and Steel Co. Ltd. had incurred an expenditure of Rs. 28 lakhs as underwriting commission paid to underwriters on an issue of 7 lakhs preference shares of Rs. 100/ each and the company claimed to deduct this amount as expenses under section 9 (2) (ix) of the Indian Income Tax Act (VII of 1918).
Macleod, C.J., observed: "If it is admitted that the cost of raising the original capital cannot be deducted from profit after the first year, it is dffficult to see how the cost of raising additional capital can be treated in a different way.
Expenses incurred in raising capital are expenses of exactly the same character whether the capital is raised at the flotation of the company or thereafter : The Texas Land and Mortgage Company vs William Holtham (2)".
He further observed that "as long as the law allows preliminary expenses and goodwill to be treated as assets, although of an intangible nature, the money so spent is in the nature of capital expenditure just as much as money spent in the purchase of land and machinery." The Chief Justice accordingly held that Rs. 28 lakhs could not be treated as expenditure (not in the nature of capital expenditure) solely incurred for the purpose of earning the profits of the company 's business.
Shah, J., also came to the same conclusion, and he thought that the ratio decidendi in Texas Land and Mortgage Company vs William Holtham (2 ) and the principles underlying the decision in Royal Insurance Company vs Watson(1) lent support to this conclusion.
At this stage it would be convenient to consider the Case of Texas Land and Mortgage Company vs William Holtham (2) relied on in this decision.
We have already mentioned that the statute law in England is different from the law in India and the observations of the learned Judges in the English cases must be appreciated in the light of the background of the English Income Tax Act.
In this case a mortgage company had raised money by the issue of debentures and debenture stock and incurred expenses for the issue of mortgage and placing of such debentures and debenture stock.
The Company claimed to deduct these expenses but the High Court held that the expenses could not be deducted under Schedule D of the English Income Tax Act as trading ex (1) (3) ; (2) 953 penses.
Mathew, J., gave the following reasons for disallowing the claim: "The amount paid in order to raise the money on debentures, comes off the 'amount advanced upon the debentures, and, therefore, is so much paid for the cost of getting it, but there cannot be one law for a company having sufficient money to carry on all its operations and another which is content to pay for the accommodation.
This appears to me to be entirely concluded by the decision of yesterday.
(Anglo Continental Guano Works vs Bell(1)".
In the course of arguments, Cave J., had remarked "It is only so much capital.
A man wants to raise pound 1 00,000 of capital, and in order to do that he has to pay pound 4,000.
That makes the capital pound 96,000.
That is all.
" In reply to the argument of Finlay, Q.C., that "the capital of the, company, properly so called, is the share capital" Cave, J. remarked : "To the extent that you borrow you increase the capital of the company." In our opinion, if one keeps in mind the background of the English Income Tax Act, the observations reproduced above have no relevance to cases arising under the Indian Income Tax Act.
In face of rule 3, Case 1, section 100 (5 & 6 Vict.
35) prohibiting the deduction of any expenditure in respect of any sum employed or intended to be employed as capital, Mathew and Cave, JJ.
were only concerned with the question whether the amount secured by debentures and the amount obtained by the issue of debentures and debenture stock could be called capital employed or intended to be employed within the meaning of this rule.
Rightly or wrongly, the English Courts have held that the amount obtained by the issue of debentures is capital employed within the meaning of the rule, but this does not give us any guidance in interpreting the words 'capital expenditure ' occurring in section 10 (2) (xv) of the Act.
In our opinion, the Bombay High Court was wrong in relying on Texas Land and Mortgage Company vs William Holtham(2).
But we do not say that the Tata Iron and Steel (1) (2) 954 Co. (1) case was wrongly decided.
Obtaining capital by issue of shares is different from obtaining loan by debentures.
In Nagpur Electric & Light Co. vs Commissioner of Income Tax(1), the Court of the Judicial Commissioner, Nagpur, held that expenses for raising debenture loan required for changing the system of supplying current from D.C. to A.C. and for discharging a prior loan was not allowable as deduction of the company 's assessable income.
The Judicial Commissioner followed the case of Texas Land and Mortgage Company vs William Holtham(3) and In re Tata Iron and Steel Company Ltd.(1).
After referring to these two cases, the only additional reason given was that "apart from authority it seems to us to stand to reason that money expended in obtaining capital must be treated as capital expendiure." With great respect we must hold that this case was wrongly decided.
The Kerala High Court in Western India Plywood Ltd. vs
Commissioner of Income Tax, Madras(4)held that the expenditure incurred by the company a capital expenditure and was 10(2)(xv).
The High Court Trust Company vs Jackson(5) Du#(1) and some other cases Madras(4) held that the expenditure raise a loan by debenture was therefore not deductible under section relying on European investment and Ascot Gas Water Heaters vs drew a distinction between the borrowing of capital and securing merely temporary or day to day accommodation or banking or trading facilities.
According to the High Court, the expenses for borrowing capital could not be treated as revenue expenditure.
This distinction may be valid in English Law but we are unable to appreciate how the distinction is valid under the Indian Income Tax Act.
As the decision is mainly based on this distinction and relies inter alia on In re Tata Iron and Steel Co. Ltd.(") and Nagpur Electric and Light Co. vs Commissioner of Income Tax (2 we must with respect hold that the case was wrongly decided.
In Vizagapatnam Sugars and Refinery Ltd. vs Commissioner of Income Tax(") the Andhra Pradesh High Court relying on Texas Land and Mortgage Company V. William Holtham(3) and the decision in Western India Plywood Ltd. vs C.I.T., Madras(4) held that on the facts and circumstances of that case, brokerage and commission of four annas on every maund of sugar paid by (2) (3) (1) (4) (5) (6) (7) 955 the assessee company was not revenue expenditure but capital expenditure.
In our opinion, the derision, as far as the brokerage was concerned, was wrong, but we do not say anything in this case with respect to the decision as far as the commission on sale of goods was concerned.
The Calcutta High Court examined the question in great detail in Sri Annapurna Cotton Mills Ltd. vs Commissioner of Income Tax(1), Bachawat, J., held that the loan of Rs. 10 lakhs obtained by the company was an asset or advantage for the enduring benefit of the business of the assessee.
He placed reliance on a number of cases,some of which we have already considered.
But we are unable to agree that a loan obtained can be treated as an asset or advantage for the enduring benefit of the business of the assessee.
A loan is a liability and has to be repaid and, in our opinion, it is erroneous to consider a liability as an asset or an advantage within the test laid down by Viscount Cave and approved and applied by this Court in many cases.
Sinha, J., after referring to a number of cases, felt that the raising of capital by issue of debentures was a recognised mode of raising capital and he felt that the decided cases had laid down the proposition that borrowing money by the issue of debentures was an acquisition of capital asset and that any commission or expenditure incurred in respect thereof was of a capital nature and not to be considered as in the nature of revenue.
He was impressed by the fact that not a single case to the contrary was brought to his notice.
But we have to decide the case on principle, and with respect it seems to us that he erred in treating the loan as equivalent to capital for the purpose of section 10(2) (xv) of the Act.
In section F. Engineer vs Commissioner of income Tax (2) the Bombay High Court held that the expenditure incurred for raising loan for the carrying on of a business cannot in all cases be regarded as an expenditure of a capital nature.
On the facts of the case they held that as construction and sale of the building was the sole business of the firm and the building was its stock intrade, and the loan was raised and used wholly for the purpose of acquiring this stock in trade and not for obtaining any fixed assets or raising any initial capital or for expansion of the assessee 's business, the expenditure incurred for the raising of loan was not an expenditure of capital nature but revenue expenditure.
Although the conclusion of the High Court was correct, we are not able to agree with the principle that the nature of the expenditure incurred in raising a loan would depend upon the nature and purpose of (1) (2) 956 the loan.
A loan may be intended to be used for the purchase of raw material when it is negotiated, but the company may after raising the loan change its mind and spend it on securing capital assets.
Is the purpose at the time the loan is negotiated to be taken into consideration or the purpose for which it is actually used ? Further suppose that in the accounting year the purpose is to borrow and buy raw material but in the assessment year the company finds it unnecessary to buy raw material and spends it on capital assets.
Will the income tax officer decide the case with reference to what happened in the accounting year or what happened in the assessment year ? In our opinion, it was rightly held by the Nagpur Judicial Commissioner in Nagpur Electric Light and Power Co. vs Commissioner of Income Tax(1) that the purpose for which the new loan was required was irrelevant to the consideration of the question whether the expenditure for obtaining the loan was revenue expenditure or capital expenditure.
To summarise this part of the case, we are of the opinion that (a) the loan obtained is not an asset or advantage of an enduring nature; (b) that the expenditure was made for securing the use of money for a certain period , and (c) that it is irrelevant to consider the object with which the loan was obtained.
Consequently, in the circumstances of the case, the expenditure was revenue expenditure within section 10(2)(xv).
The last contention of Mr. Desai is that even if it is revenue expenditure, it was not laid out wholly and exclusively for the purpose of business.
Subba Rao, J., reviewed the case law in Commissioner of Income Tax vs Malayalam Plantation(1) and observed as follows : "The expression "for the purpose of the business" is wider in scope than the expression "for the purpose of earning profits.
" Its range is wide : it may take in not only the day to day running of a business but also the rationalisation of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile tide; it may also comprehend pay ment of statutory dues and taxes imposed as a precondition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business." (1) (2) ; 957 Mr. Desai says that the act of borrowing money in this case was not 'incidental to the carrying on of a business.
We are unable to accept this contention.
In Eastern Investments Ltd. vs Commissioner of Income Tax(") this Court held that the Eastern Investments Ltd., an investment company, when it borrowed money on debentures, the interest paid by it was incurred solely for the purpose of making or earning such income, profits or gains within the purview of section 12(2) of the Indian Income Tax Act.
It held on a review of the facts that the transaction was voluntarily entered into in order indirectly to facilitate the running of the business of the company and was made on the ground of commercial expediency.
This case, in our opinion, directly covers the present case, although Mr. Desai suggests that the case of an investment company stands on a different footing from the case of a manufacturing company.
In some respects, their position may be different but in determining the question whether raising money is incidental to a business or not, we cannot discern any difference between an investment company and a manufacturing company.
We may mention that in that case this Court was not considering whether the expenditure was in the nature of a capital expenditure or not, because it was agreed all through that the expenditure was not in the nature of capital expenditure, and the only question which this Court dealt with was whether the expenditure was incurred solely for the purpose of making or earning income, profits or gains.
The case of Dharamvir Dhir vs Commissioner of Income Tax(1) also supports the conclusion we have arrived at on this part of the case.
It was held in that case that the payment of interest and a sum equivalent to 11/16th of the profits of the business of the assessee in pursuance of an agreement for obtaining loan from the lender were in a commercial sense expenditure wholly and exclusively laid out for the purpose of the assessees business and they were, therefore, deductible revenue expenditure.
Before we conclude we must deal with the point raised by Mr. Sastri that the High Court erred in law in preferring the findings of the Income Tax Officer to that of the Appellate Tribunal.
It is not necessary to decide this question but it seems to us that in a reference the High Court must accept the findings of fact made by the Appellate Tribunal and it is for the person who has applied for a reference to challenge those findings first by an application under section 66(1).
If he has.
failed to file an application under (1) (2) ; : 958 S.66(1) expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for one reason or the other.
To conclude we hold that the expenditure of Rs. 84,633/ was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee 's business.
The answer to the question referred, therefore, must be in the affirmative.
The appeal is allowed, the judgment of the High Court set aside and the question referred answered in the affirmative.
The appellant will have its costs incurred here and in the High Court.
Appeal allowed.
[/INST]In the years prior to 1950 the respondent company with headquarters in the erstwhile state of Indore was assessed to tax under the Indore Industrial Rules, 1927 and also under the Indian Income tax Act, 1922 in so far as its income fell within sections 4(1) (a) and 4(1)(c) read with section 42 of the Act.
Depreciation had been allowed to it under the Indore Industrial Rules as well as the Indian Act.
The written down value of its assets for the purpose of 1950 51 and subsequent assessments had to be determined under the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 which laid down in the proviso to paragraph 2 that .where in respect of any asset, depreciation has been allowed for any year, both in the assessment made in the Part B State and in the taxable territories, the greater of the two sums allowed shall only be taken into account.
" The Income tax Officer found that up to and including the year 1944 the sum allowed as depreciation under the Indian Income tax Act was larger and therefore in computing written down value as on 1 1 49 he took the sum allowed as depreciation under the Indian Act up to the end of 1944 and under the Indore Industrial Rules after that date.
In the assessments made for the period up to the end of 1944 the respondent company had been treated as a non resident and its taxable income under the Indian Income tax Act had been worked out under Rule 33 of the Indian Income tax Act, 1922 as a fraction of its total world income.
In determining the total world income the depreciation claimable under the Indian Act had been allowed, and it was the full amount of this depreciation allowed against the total world income that the Income tax Officer took into account in determining the written down value of the respondent company 's assets for the purpose of the 1950 51 assessment.
The respondent company claimed that as only a fraction of the total world income had been treated as taxable income, therefore only a fraction of the depreciation allowed against the world income should be taken as having been 'actually allowed ' in the terms of paragraph 2 of the Removal of Difficulties Order.
The Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal having rejected this plea the matter went in reference to the High Court.
That Court took the view contended for by the respondent viz. that only the proportionate amount of depreciation which was attributable to the taxable income could be taken into account.
The Revenue appealed to this Court It was urged on behalf of the appellant that depreciation was allowed in respect of the use of the assets in the business, that the allowance did not depend on the assessable income, and that the High Court, therefore went wrong in striking a proportion on the basis of a part of the income 926 actually assessed under the Indian Income tax Act.
The different expressions used in various parts of paragraph 2 of the Removal of Difficulties Order came for consideration.
HELD : Per Subba Rao and Sikri, JJ. (i) The word "assessment" used in the proviso to paragraph 2 has been given a very wide meaning in decided cases.
It means sometimes 'the computation of income ', sometimes the determination of the amount of tax payable; and some,times the procedure laid down in the Act for imposing liability upon the tax payer.
The proviso used the word 'assessment ' both with reference to Part B States and also with reference to the taxable territories.
But in the present case the different shades of meaning of the said word were not relevant.
For the purpose of computing the written down value, the amount of depreciation allowed for the purpose of the assessment only was relevant.
[931 G H; 932 A] (ii)The key to the understanding of paragraph 2 is the expression "allowed '.
The expression 'actually allowed ' in the main paragraph, 'allowed ' in the proviso, and 'taken into account ' in the Explanation mean the same thing.
What the Income tax Officer has to take into consideration in computing the written down value is the depreciation actually allowed under the Income tax Act or the laws obtaining in Part B States and adopt the greater of the two sums so allowed under that head.
The determination of the depreciation actually allowed under the Income tax Act for the years up to and including 1944 must depend on the provisions of that Act.
[932 B] (iii)Under the Income tax Act depreciation allowance is in respect of such assets as are used in the business and shall be calculated on the written down value, which means, in the case of assets acquired in the previous year, the actual cost to the assessee, and in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under the Act.
The allowance towards depreciation is conditioned an the user of the assets, wholly or in part., during the accounting year and thus contributing to the earning of the income.
Though it is not unrelated to the profits it does not depend upon the increase or decrease in the earning capacity of the assets, but is only linked up with physical depreciation in their value.
Even so only amount of depreciation actually allowed can be deducted from the original cost of the assets to ascertain the written down value.
De hors such an allowance.
, it has no significance in income tax law.
[932 F H;933 A B] (iv) During the years up to and including 1944 the assessee was taxed as a nonresident on the income which fell under section 4(1)(a) or unders.
4(1)(c), read with section 42 of the Indian Income tax Act.
The assessee was only assessed during the said years in respect of that part of its profits which could be said to be attributable to the sale proceeds or goods received in British India or in regard to which contract , were signed in British India.
Such income was brought to tax in terms of r. 33 of the Indian Income tax Rules, 1922.
The method adopted was that the amount of income for the purpose of Indian Income tax was calculated on an amount which bore the same proportion to the total profits of the business as the receipts accruing or arising in India bore to the total receipts, of the business.
By applying the formula in r. 33 the Income tax Officer had actually allowed only a fraction of the amount towards depreciation allowable in assessing the world income of the assessee.
The mere fact that in the matter of calculation the total amount of depreciation was first deducted from the world income and thereafter the proportion was struck in terms of r. 33 does not amount to an actual allowance of the entire depreciation in ascertaining the tax 927 able income accrued in India.
The Income tax Officer could have adopted a different method by first ascertaining the gross income accrued in India and then deducting from it the allowance under the Act proportionate to the said income.
Whatever method was adopted only a fraction of the total depreciation was actually allowed in ascertaining the taxable income in India.
The view taken by the High Court was therefore correct.
[933 B H] Hakumchand Mills Ltd. vs Commissioner of Income (Central) Bombay, , endorsed.
Per Shah, J. (dissenting) Under section 10 of the Income tax Act taxable profits or gains earned by an assessee under the head 'business ' after making appropriate allowances under Subs.
(2) have to be computed.
One of such allowances is depreciation in respect of the assets used for the purpose of business.
But depreciation determined according to the rules merely enters into the computation of taxable profits, whether the assessee is a resident or a non resident.
In the assessment of a company the same rates of tax apply under the Income tax Act, whether the company is resident or non resident.
If the company is resident under section 4A(c) its entire world income would be chargeable, subject of course to special exemptions like those provided in section 14(2)(c) : if it is nonresident only a slice of the income would be chargeable.
Under the scheme of the Indian Income tax Act depreciation like any other allowance has to be allowed in computing the total profit; after the total profit is determined depreciation does not survive as a separate head of allowance.
A part only of the total profit of a company determined in the manner prescribed by section 10, may be taxable.
But total profit being determined after depreciation is allowed, between the taxable profits which may be a fraction of total profits and depreciation there is no definable relation.
Therefore it is wrong to presume that the depreciation allowed in the taxable territories which is to be taken into account under the proviso to paragraph 2 of the Removal of Difficulties Order is a fraction of the depreciation considered for computing total profits.
[940 E H; 941 A D] The fact that income was computed under r. 33 made no difference.
In the ascertainment of total profits either for the purposes of assessment in the ordinary manner when the income of the assessee is determined or when a fraction is to be adopted for the purpose of the second method contemplated by section 33, there is no scope for assuming that only a fraction of the depreciation is actually allowed.
Depreciation is deducted only once and for all, and it is deducted in determining the total profits of the business.
[942B D] There is therefore no warrant either in section 10(2)(vi) or in paragraph 2 of the Removal of Difficulties Order or in r. 33 framed under the Indian Income tax Act for the view that the depreciation allowed is a fraction of the total depreciation of the business.
[942 H]
</s>
|
<s>[INST] Summarize the judgementAppeals Nos.
480 to 487 of 1960.
Appeals by special leave from the judgment and order dated July 15, 1960, of the Allahabad High Court in Civil Misc.
Writ Nos.
1554, 1561, 1553, 1560, 1556, 1558, 1559 and 1557 of 1960.
N. C. Chatterjee, R. K. Garg, section C. Agarwal, D. P. Singh, K. K. Sinha, V. A. Seyid Muhamad and M. K. Ramamurthi, for the appellants (in C. As.
Nos. 480 and 481 of 60).
R. K. Garg, M. K. Ramamurthi, section C. Agarwal, D. P. Singh, V. A. Seyid Muhamad and K. K. Sinha, for the appellants (in C. As.
482 to 487 of 60).
G. N. Kunzru and I. N. Shroff, for the respondents.
January 10.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These are eight appeals against the judgment and " decree " of the High Court of Allahabad dated July 15, 1960, with special leave granted by this Court.
By the writ petitions, which failed before the High Court, the appellants had asked that Resolutions Nos. 90, 94 to 96 and 99 to 102 passed by the Executive Council of the Banaras Hindu University on May 15, 1960, terminating their services from June 1, 1960, be quashed.
The names of the appellants, the posts they held and the gist of the Resolutions passed against them have been set down below : Group I 1.
Dr. Akshaibar Lal: Reader in College of (C. A. No. 480 of 1960) Agriculture.
(Resolution No. 100 4months ' pay in lieu of notice) 2.
Dr. Gopal Tripathi Professor of Chemi (C. A. No. 482 of 1960) cal Engineering and Principal, College of Technology.
(Resolution No. 101 4months ' pay in lieu of notice) 389 3.
Pandit Ram Vyas Pandey : Reader and Head of (C. A. No. 486 of 1960) Department of Jyotish Sanskrit Maha vidyalaya.
(Resolution No. 99 under cls.
4 and 7 of the agreement dated March 26, 1931, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice) 4.
Dr. Gauri Shankar Tiwari : Lecturer in Chemis (C. A. No. 487 of 1960) (Resolution No. 102 4 months ' pay in lieu of notice) Group II 5.
Dr. Rain Deo Misra: Professor and Head (C. A. No. 481 of 1960) of Department of Botany, College of Science.
(Resolution No. 94 under cls.
4 and 7 of the agreement dated February 3, 1959, and Ordinance No. 6 of the Ordinances of the University 4 months ' pay in lieu of notice) 6.
Mr. Ganesh Prasad Singh: Lecturer in Physical (C. A. No. 483 of 1960) (Resolution No. 95 under cls.
4 and 7 of the agreement dated January 18, 1946, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice) 7.
Mr. Radhey Shyam Sharma: Lecturer, College of (C. A. No. 484 of 1960) Technology.
(Resolution No. 90 under cls.
4 and 9 of the agreement dated January 21, 1957, and Ordinance No. 6 of the Ordinances of the University 4 months ' pay in lieu of notice) 8.
Dr. Ram Yash Roy: Lecturer in Botany, (C. A. No. 485 of 1960) College of Science.
(Resolution No. 96 under cls.
4 and 7 of the agreement dated August 12, 1932, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice).
390 The cases of the appellants are very similar; but fall into two groups as indicated above.
The differences are not many, and some of them are indicated in the gist of the resolutions noted against their names.
Other differences will appear from the facts, which are given below.
The affairs of the Banaras Hindu University, for reasons with which we are not concerned, had been deteriorating, and a situation had arisen which required intervention immediately.
The President of India, in his capacity as Visitor and in exercise of the powers conferred by section 5(2) of the , appointed a Committee of Enquiry (known as the Mudaliar Committee) consisting of: 1.
Dr. A. L. Mudaliar (President) 2.
Mr. M. C. Mahajan 3.
Dr. P. Subbarayan 4.
Sucheta Kripalani 5.
Dr. Nairoji Wadia (Members) to enquire into and report, inter alia, on the general state of discipline in the University, keeping in view the disturbances in some of the Institutions of the University, and to suggest remedies and measures of reform for the betterment of academic life and efficient functioning of the University.
The Committee made a report suggesting that a " Screening Committee " should be appointed to review the appointments made to the teaching staff and the work of the teaching staff, and that action should be taken in the light of the findings of the Screening Committee.
On June 14, 1958, the President of India promulgated an Ordinance (IV of 1958) to amend the .
By section 8 of the Ordinance, the Statutes of the University were amended, and in place of Statute No. 30, another Statute was substituted, which set up a " Screening Committee ", consisting of (a) a person who is or has been a Judge of a High Court (Chairman), (b) the Vice Chancellor (Ex officio) and (c) a person having administrative or other experience in educational matters, to examine the cases of all persons holding teaching, administrative or other 391 posts in the University at the commencement of the Ordinance, in respect of whom there was reason to believe that their continuance in office would be detrimental to the interests of the University, and to forward its recommendations to the Executive Council to take such action as it may deem fit.
The Ordinance of the President was repealed by the Banaras Hindu University (Amendment) Act, 1958 (XXXIV of 1958), which re enacted Statute No. 30 as follows: " 30.
(1) If the Executive Council has reason to believe that the continuance in office of any person who on the 14th day of June, 1958, was holding any teaching, administrative or other post in the University would be detrimental to the interests of the University, it may, after recording briefly the grounds for such belief, refer the case of any such person, together with the connected papers, if any, in its possession, to the Solicitor General to the Government of India: Provided that, where an allegation of the nature referred to in this subsection relates to a member of the Executive Council who was holding any teaching, administrative or other post in the University on the said date, the Executive Council shall, without considering the allegation, refer the case of such person, together with a copy of the allegation, to the Solicitor General to the Government of India.
(2) If on any such reference the Solicitor General to the Government of India is of opinion that there is a prima facie case for inquiry, he shall refer the case of the person concerned to a Committee to be constituted for the purpose by the Central Government and known as the Reviewing Committee, which shall consist of the following persons, namely : (a) a person who is or has been a Judge of a High Court nominated by the Central Government who shall be the Chairman of the Committee; and (b) two persons nominated by the Central Government from among persons who have had administrative or other experience in educational matters, 392 (3) It shall be the duty of the Reviewing Committee to examine the case of every person referred to it by the Solicitor General; and the Reviewing Committee shall, after holding such inquiry into the case as it may think fit, and after giving to the person concerned an opportunity of being heard, if he so desires, forward its recommendations to the Executive Council.
(4) The meetings of the Reviewing Committee shall be convened by such person as may be appointed for this purpose by the Chairman.
(5) On receipt of the recommendations of the Reviewing Committee, the Executive Council shall take such action thereon as it may think fit: Provided that when the recommendations relate to any such person as is referred to in the proviso to sub section (1), such person shall not take part in any meeting of the Executive Council in which the recommendations are considered.
(6) Before taking any action against any person on the recommendations of the Reviewing Committee, the Executive Council shall give him a reason.
able opportunity of being heard.
" Under the powers granted by this Statute and after sundry procedure, the Solicitor General sent up the cases of the appellants (and some others, who are not before us) to the Reviewing Committee.
The appellants appeared before the Reviewing Committee and represented their cases.
Except in the case of Mr. Radhey Shyam Sharma (Civil Appeal No. 484 of 1960), whose case was kept pending because certain matters were sub judice, the Reviewing Committee sent its findings to the University.
These findings were considered in respect of the four appellants in Group I (above), and on February 13, 1960, the Executive Council passed Resolutions Nos. 436 to 439 calling upon them to show cause why their services be not terminated, in view of the findings of the Reviewing Committee that the continuance in office of those appellants was detrimental to the interests of the University, which the Executive Council had accepted.
These four appellants showed cause on March 5, 1960, No notices 393 were, however, sent to the four appellants in Group II above, and this is one distinguishing feature in the cases.
The four appellants (Group I) filed petitions under article 226 of the Constitution (W. Ps.
Nos. 712 to 715 of 1960) on March 9,1960, in the High Court of Allahabad for relief against the proposed action.
On the same day D. section Mathur, J. passed an ad interim order as follows: " The respondents Nos. 1 to 3 are directed until further orders, not to take any further proceedings against the petitioners.
" The Registrar of the University then applied to the High Court, and on April 25, 1960, Jagdish Sahai, J., made the following order: " In supersession of the interim order dated 9 3 1960, I order that the proceedings before respondent No. 2, Executive Council of Banaras Hindu University, arising out of the recommendations of the Reviewing Committee shall remain stayed.
" On May 15, 1960, the Executive Council of the University passed a number of Resolutions.
Resolution No. 89 took into consideration the explanations sent by the four appellants (Group 1) on March 5, 1960, and the order of the High Court, and it was resolved: ". . that the consideration of the above cases be postponed till after the writ petitions above mentioned are disposed of by the High Court.
" On the same day, however, Resolutions Nos.
99 to 102 were passed terminating the services of the four appellants (Group 1) from June 1, 1960, giving to them four or six months ' salary, in lieu of notice.
In the Resolution concerning Pandit Ram Vyas Pandey, there was a mention that the action was taken under cls.
4 and 7 of the agreement executed by him and Ordinance No. 6 of the Ordinances of the University.
In the remaining three cases, it was not stated under what exercise of power the action was taken.
Even earlier than the notice to show cause issued on February 13, 1960, explanations were called from Pandit Ram Vyas Pandey and Dr. Gopal Tripathi by Resolutions Nos. 278 and 281 dated September 9, 1959, and these explanations were ordered to be filed by Resolution No. 103 50 394 passed on the same day.
Four Resolutions were also passed terminating the services of the other appellants belonging to Group II.
It was after these Resolutions were communicated that the eight petitions were filed by the appellants in the High Court of Allahabad.
The High Court by a common judgment, which is under appeal, dismissed all the petitions with costs.
The case of the appellants, broadly stated, is that the Executive Council could not take recourse to the provisions of Ordinance No. 6 of the Ordinances of the University, having started action under Statute No. 30, that Ordinance No. 6 was subordinate to, Statute No. 30 and could not prevail where Statute No. 30 applied, that action against the four appellants in Group I was stayed by the High Court and Resolution No. 89, and that any action thereafter under the agreement or Ordinance No. 6 was incompetent.
The action of the Executive Council was characterised as mala fide and a fraud upon the University Act and Statute No. 30.
The High Court did not accept any of these contentions.
Before us, the same points have been urged again, and in reply, the University contends that the Executive Council could take action Under the terms of the agreements, where such agreements existed, or under Ordinance No. 6 or Statute No. 30 at its Option, and that where alternative remedies were provided by law, all or any.
of the remedies could be invoked.
Before we deal with these arguments, it is necessary to examine closely the powers of the Executive Council of the University, as they can be gathered from the , the Statutes and Ordinanaces framed under it.
The Act was passed in 1915 (XVI of 1915), but it was amended in 1930, 1951 and 1958.
Originally, the Act provided for the framing of Statutes and Regulations by the University ; but in 1951, the existing Regulations were deemed to be the first Ordinances under section 18(2) of the amended Act.
A further power to make Regulations was conferred by section 19.
Thereafter, there were Regulations in addition ,to the University Act, Statutes and Qrdinances, We 395 are not concerned with the Regulations, and no reference need be made to them except to say that they ranked below the Ordinances and had to be consistent, with the Act, the Statutes and the Ordinances.
In the Act, the word "Statute" was defined to ' mean " the Statutes for the time being in force ", and ' there was an analogous definition of the word " Ordinances ".
Section 17(2) of the Act enacted that " the first Statutes shall be those set out in Schedule I ".
The power to frame Statutes was conferred on the Executive Council by section 17(3), but was subject to the previous approval of the Visitor.
This sub section, as it was amended by section 4 of the Banaras Hindu University (Amendment) Act, 1958, read as follows: " The Executive Council may, from time to time, make new or additional Statutes or may amend or repeal the Statutes; but every new Statute or addition to the Statutes or any amendment or repeal of a Statute shall require the previous approval of the Visitor who may sanction, disallow or remit it for further consideration.
Section 4A of the Act invested the University with powers, and sub sections
(7) and (13) may be quoted here: " (7) to institute professorships, readerships, lectureships and other teaching posts required by the university and to appoint persons to such professorships, readerships, lectureships and other posts; (13) to create administrative, ministerial and other necessary posts and to make appointments thereto.
" Section 7 of the Act named the officers and authorities of the University, but power was reserved to the University to declare, by statutes, other officers and authorities of the University.
In addition to being an authority of the University, the Executive Council was appointed the executive body of the University.
Sub section (2) of section 10 of the Act laid down: " The Executive Council shall exercise such powers and perform such duties as may be vested in it by the Statutes.
" Section 17 of the Act provided how the statutes were to be framed and what they were to contain.
We 396 have already referred to the first Statutes of the Uni versity which were placed in Schedule of the Act and the power of the Executive Council to make new or additional Statutes or to amend or repeal existing Statutes subject to the prior approval of the Visitor.
Section 17 provided: " 17(1).
Subject to the provisions of this Act, the Statutes may provide for all or any of the following matters, namely: (c) the appointment, powers and duties of the officers of the University.
" From the above analysis, it is clear that the Act created the Executive Council as an authority and the executive body of the University; but its powers were conferred and its duties were created by the Statutes.
The source of power and duties in respect of the Executive Council was thus the Statutes under the authority of the Act.
Section 18 of the Act (as amended in 1951) provided: " 18(1).
Subject to the provisions of this Act and the Statutes, the Ordinances may provide for all or any of the following matters, namely: Ordinances: emoluments and terms and conditions of service of teachers of the University.
" The Ordinances were thus made subordinate to the Act and the Statutes, and could not go beyond them or derogate from them.
One more provision of the Act as amended in 1951 may be read here.
It is s.19A,which provided: " 19A. (1) Every salaried officer and teacher of the University shall be appointed under a written con.
tract, which shall be lodged with the University and a copy of which shall be furnished to the officer or teacher concerned.
(2) Any dispute arising out of a contract between the University and any of its officers or teachers shall, at the request of the officer or teacher concerned or at the instance of the University, be referred to a Tribunal of Arbitration consisting of one member appointed 397 by the Executive Council, one member nominated by the officer or teacher concerned and an umpire, appointed by the Visitor, and the decision of the Tribunal shall be final.
" The powers granted to the Executive Council by the Statutes may now be seen.
Statute No. 18 was amended in 1958, and is referred to as amended.
It laid down: " 18(1).
The Executive Council shall, subject to the control of the Visitor, have the management and administration of the whole revenue and property of the University and the conduct of all administrative affairs of the University.
(2) Subject to the provisions of the Act, the Statutes and the Ordinances, the Executive Council shall, in addition to all other powers vested in it, have the following powers, namely: (i) To appoint, from time to time,.
Principals of Colleges and institutions established by the University, and such Professors, Readers, Lecturers and other members of the teaching staff, as may be necessary, on the recommendation of Selection Committees constituted for the purpose (Proviso omitted) (ii) to appoint members of the administrative staff or to delegate the power of appointment to such authority or authorities, or officers as the Executive Council may, from time to time, by resolution, either generally or specially direct;. " The power of appointment was thus conferred by the Statutes on the Executive Council.
We now turn to the Ordinances, where the disciplinary rules are to be found.
On October 13, 1958, the Executive Council by Resolution No. 181 reconstituted the material Ordinance.
Chapter III in part I of the Banaras Hindu University Calendar (1958) contains the terms of appointment, grades, salary and conditions of service of teachers, officers and other employees of the University.
That Chapter is divided into many sections and sub sections.
Section 5 deals with teaching and administrative posts, and section 6, with the conditions 398 of service and terms of appointment.
Ordinance No. 2 in this section lays down: " The conditions of service of the staff shall be embodied in the Agreement Form of service.
Every employee shall on confirmation sign the agreement Form.
" Ordinance No. 6, before its amendment, read: " The Executive Council shall be entitled to terminate the engagement of an employee (i) on grounds of misconduct and (ii) physical unfitness for good cause and after calling for and considering his explanation and after giving four months ' notice in writing or payment of four months ' salary in lieu of notice.
The Ordinance was unhappily worded.
The expression "physical unfitness for good cause" hardly makes sense.
More difficulty arises by the use of the conjunction "and".
That word used for the first time in the Ordinance is obviously used disjunctively; but on the second and third time it is used conjunctively, introducing two conditions precedent.
So far, there is no dispute, though much bad drafting.
Dispute arises over the last use of the conjunction 'and" in the Ordinance.
The appellants contend that it must be read conjunctively as introducing a third condition precedent, while the University urges that it is a separate power of termination unconnected with the others.
The High Court was persuaded to read the clause as interpreted by the University and, in our opinion, rightly.
In 1958, the Executive Council re framed this Ordinance but surprisingly enough, without any better success.
The re enacted Ordinance, as printed in the amendment slip, read: " 6.
The Executive Council shall be entitled to terminate the engagement of an employee for (i) misconduct, or (ii) physical unfitness, or (iii) inefficiency, or (iv) breach on his part of one or more of the terms of his agreement with the University, after 399 calling for and considering his explanation in each of the cases mentioned above; or (v) after giving four months ' notice or payment ' of four months ' salary in lieu thereof.
The dispute this time arises from the careless use of the word "or".
The Ordinance mentions four reasons for termination of services, which are numbered (i) to (iv).
In each of those cases, there is the condition precedent that explanation must be called for and considered.
So far, the meaning is clear, even though the drafting is far from commendable.
Then follow a semi colon and "or" and number (v).
The word "or" does not seek to create an option between calling for and considering an explanation and a four months ' notice, etc.
The number (v) and the semi colon between " mentioned above " and " or " do not permit this reading.
The difficulty, however, does not end there.
If we read the fifth clause as connected independently with the opening words, we get this: " The Executive Council shall be entitled to terminate the engagement of an employee for . . . . . . . . . (v) after giving four months ' notice. . . which makes the word "for " superfluous in the sentence.
In our opinion, the sense of the Ordinance can be obtained by rearranging the matter thus: " 6.
The Executive Council shall be entitled to terminate the engagement of an employee for (i) misconduct, or (ii) physical unfitness, or (iii) inefficiency, or (iv) breach on his part of one or more of the terms of his agreement with the University, after calling for and considering his explanation in each of the cases mentioned above; or (v) after giving four months ' notice or payment of four months ' salary in lieu thereof " This means that, if action is taken under cls.
(i) to (iv), an opportunity of showing cause against the termination of the service must be given; but action can also be taken to terminate the service, without assigning a 400 cause, on four months ' notice or four months ' salary ,in lieu of notice.
The case of the University is that all these orders of termination of service were passed under the power granted by cl.
(v) of this Ordinance, modified by the terms of the agreements as they existed.
The result of this analysis shows that the power of the University to terminate the services of the incumbents was derived from (a) agreements, (b) Ordinances, and (c) Statute No. 30.
The agreements merely represented the general right of a master to terminate the services of incumbents, where they were subject to agreements, after reasonable notice, without giving any reason.
The Ordinances, in addition to preserving that right, gave power to terminate service for proved misconduct, inefficiency or physical unfitness.
These powers, unless used according to the stated conditions, were unexercisable, and in the case of a service which was protected against arbitrary action, being perma nent, could only be invoked in an appropriate instance.
In those cases which would fall within the categories of proved misconduct, inefficiency and physical unfitness, the University was required to take action in accordance with the Ordinance and the Rules.
This was the position before the new Statute No. 30 was added by Parliament.
This legislative measure was undertaken as the result of the sorry state of affairs of the University, and a special ground was required to be proved.
It was that the continuance of an incumbent was detrimental to the interests of the University.
The power to terminate the services of an incumbent on this ground was hedged in with appropriate safeguards, due to the struggle for power which it is said, had arisen in the University in the past; and though the Mudaliar Committee had suggested a Screening Committee to go into the cases of all teachers, Parliament thought it necessary that before any case reached the Screening Committee (renamed the Reviewing Committee) it should be scrutinised by the Solicitor General.
The procedure which the new Statute enacted, ensured fair play and proper scrutiny.
First, the Executive Council had to resolve that the continuance in office of any particular person 401 was detrimental to the interests of the University.
The reasons for such belief had to be recorded briefly, and the Resolution together with the connected papers had to be sent to the Solicitor General.
In the case of a teacher who was a member of the Executive Council, the Executive Council was not to consider the allegations but to send the papers to the Solicitor General.
The Solicitor General had to decide if there was a prima facie case for enquiry, and then he was to refer suitable cases to the Reviewing Committee.
The Reviewing Committee was then to enquire into the matter, and forward its recommendations to the Executive Council.
The Executive Council was thereafter required to proceed under cl.
(6), which was as follows: " Before taking any action against any person on the recommendations of the Reviewing Committee, the Executive Council shall give him a reasonable opportunity of being heard.
" The power of the Executive Council was conferred by cl. 5, which provided: " On receipt of the recommendations of the Reviewing Committee, the Executive Council shall take such action thereon as it may think fit.
" The procedure laid down in Statute No. 30 was followed by the University.
The cases of the appellants went before the Solicitor General and then before the Reviewing Committee.
In seven cases out of eight, ' the Reviewing Committee gave its opinion.
In four out of seven cases, a show cause notice was issued under cl. 6 but not in others; and the four appellants (Group 1) also showed cause.
They also obtained a stay from the High Court of Allahabad against action under Statute No. 30, and the Executive Council decided to postpone consideration of their cases.
But the Executive Council abandoned action under Statute No. 30, and proceeded to act under powers which, it thought, flowed from the agreements and the Ordinances, and terminated the services of the eight appellants, giving four or six months ' salary in lieu of notice.
51 402 In so far as the power of terminating services with.
out notice was concerned, the general power could not be invoked, when allegations of conduct detrimental to the interests of the University had already been made and scrutinised by the Solicitor General and the Reviewing Committee and the matter was pending before the Executive Council.
The powers granted by the Ordinances are expressly subject to the Statutes, and the Ordinances cannot prevail over the Statutes.
Statute No. 30 provided for special action in special circumstances.
The existence of the special circumstances is expressly admitted, inasmuch as the cases were referred to the Reviewing Committee.
The existence of the special circumstances and the special remedy excluded the right of the University to invoke its general powers, not to start with, but after the special procedure had been deliberately adopted and had commenced.
If the cases of these appellants had not been sent to the Solicitor General and the Reviewing Committee at all, other considerations might have arisen.
The question is whether after the special procedure was once invoked, it could be dropped in the middle and other powers exercised.
The University relies on three arguments in this connection.
It is first contended that the powers of the University were cumulative, and that the University could resort to any of the remedies open to it.
Reliance is placed in support of this argument on Shankar Sahai vs Din Dial (1) (observations of Mahmood, J., at p. 418), Om Prakash Gupta vs State of U. P. (2), The State of Madhya Pradesh vs Veereshwar Rao Agnihotry 3 ), Brockwell vs Bullock (1), Seward vs " Vera Cruz" (5) and Barker vs Edger (6).
It is not necessary to refer to these cases in detail.
It has been laid down recently by this Court that, where the law allows alternative remedies, one or the other or both can be invoked unless one remedy is expressly or by necessary implication excluded by the other (See State (1) All. 409.
(2) ; (3) ; , (4) (5) (6) [1898] A.C. 748 (P.C.), 403 of Kerala vs G. M. Francis and Co. (1)).
The question thus is whether there is anything expressly stated by law or clearly implied which would exclude powers under the agreements and the Ordinances, when action has been taken under the Statutes.
The University Act expressly makes the Ordinances subject to the Statutes, and in case of any clash between them, the Ordinances must be made to stand down.
Further, Statute No. 30 was enacted by Parliament to meet a special situation, and contained a code for dealing with certain special kinds of cases.
To that extent, the implication is not only one way, but is also clear.
The University could not, having started enquiries under Statute No. 30, abandon the enquiries in midcourse and pass on to something else.
This is illustrated by the contradictory Resolutions passed on the same day.
In the case of the four appellants belonging to Group I, action under Statute No. 30 was deferred till after the decision of the High Court.
But one is tempted to ask what possible further action was con templated when their services were terminated the same day.
It may be pointed out here that dropping of action under Statute No. 30 deprived the appellants of the right to show cause against what had been alleged against them or found by the Reviewing Committee.
The appellants characterised the whole action as lacking in bonafides.
The action can only be questioned if it is ultra vires ' and proof of alien or irrelevant motive is only an example of the ultra vires character of the action, as observed by Warrington, L.J., in the following passage: " My view then is that only case in which the Court can interfere with an act of a public body which is, on the face of it, regular and within its powers, is when it is proved to be in fact ultra vires, and that the references in the judgments in the several cases cited in argument to Lad faith, corruption, alien and irrelevant motives, collateral and indirect objects, and so forth, are merely intended when properly understood as examples of matters (1) ; 404 which if proved to exist might establish the ultra vires character of the action in question " (Short vs Poole Corporation (1).
We are not concerned so much with the motives, nor even with the justice of the action as with its legality, and, in our opinion, having invoked Statute No. 30 in the special circumstances and having gone on with that procedure, it was not possible to undo everything and rely upon other powers, which were not only subordinate but were clearly not available in those special circumstances which led, to action under Statute No. 30.
The next argument is that Statute No. 30 itself left liberty of action, inasmuch as el.
5 gave power to the Executive Council to act as it thought fit.
To begin with, it is wrong to think that the words conferring discretion are to be read in the abstract.
Those words have to be read within the four corners of Statute No. 30.
Tile words are permissive, no doubt, as to the choice of action, but are imperative in so far as they require some act completing the intent and purpose of the enquiry itself.
The words " shall take such action thereon as it may think fit " give liberty of action on the recommendations of the Reviewing Committee, but lay a duty to form an opinion.
The words do not give a discretion to take action outside the Statute.
Lastly, it is argued that the Executive Council as the appointing authority had the power also to dismiss, and reference is made to sections 4(7) and 4(13) of the Act and section 16 of the General Clauses Act.
None can deny that the University did possess such a power.
The question is whether it exercised it correctly under the Statutes and Ordinances.
We are quite clear that the Executive Council did not.
We may say here that we have not accepted the contention that the action of the Executive Council was based upon malice or any indirect or oblique motive.
The error was in thinking that there were cumulative or alternative powers, even after the adoption of the special procedure under Statute No. 30.
We are, therefore, of opinion that (1) , 91. 405 the impugned Resolutions were ultra vires and should be quashed.
In the result, the appeals are allowed.
Resolutions Nos. 90, 94 to 96 and 99 to 102 dated May 15, 1960, of the Executive Council of the Banaras Hindu University are quashed, and an appropriate writ or writs shall issue to the respondents to that effect.
The respondents shall pay the costs of these appeals, as also of the High Court.
Only one set of hearing fee here and in the High Court shall be allowed.
Appeals allowed.
[/INST]Under an agreement dated July 11, 1945, the appellants were appointed managing agents of the Coimbatore Spinning and Weaving Co. Ltd., for 20 years, and certain remuneration was provided for them including 10% commission on the net profits of the company due and payable yearly immediately after the accounts of the company were closed and commissions on purchases and capital expenditure of the company.
Prior to October 1, 1944, the appellants were the managing agents of the Coimbatore Mills Agency Ltd., who were the managing agents of the Coimbatore Spinning and Weaving Co. Ltd. The year of account of the appellants ended on March 31, of the company on June 30, and of the Agency Company on September 30.
For the assessment year 1945 46 the appellants submitted a return of their income which included the stipulated remuneration and commissions.
This return was accepted by the Income tax Officer, and Excess Profits Tax liability for the chargeable accounting period ending March 31, 1945, was also worked out on that basis.
A return of income was submitted by the appellants for the assessment year 1946 47 which included commission for the period 1 4 45 to 30 6 45 on purchases of cotton and stores and on capital expenditure.
The Tax Officer directed that the commission on purchases and capital expenditure be taken into account 272 for the year April 1, 1945, to March 31, 1946, and that the receipts be computed accordingly.
The assessment for 1945 46 was then reopened under section 34 of the Income tax Act under section 15 of the Excess Profits Tax Act and as a result of apportionment made by the application of r. 9 of Sch.
1 of the Excess Profits Tax Act, the liability of the appellants for Income tax and Excess Profits 'fax was revised and fresh assessments were made.
The orders of assessment were confirmed by the appellate authorities.
Held, that as in the instant case the chargeable accounting period for the assessment of Excess Profits Tax and the year of account of the company did not tally, by the assessment of income made on the assumption that they did tally, there had resulted under assessment and it was open to the Tax Officer to take action under section 15 of the Excess Profits Tax Act.
The Excess Profits Tax Officer acted properly in apportioning under r. 9 of Sch. 1 the commission received by the appellants.
Rule 9 of Sch. 1 of the Excess Profits Tax Act is enacted in general terms and it is applicable to all contracts which are intended to be operative for fixed periods.
If, for the performance of the entire contract, remuneration is payable at certain rates the profits earned out of that remuneration must be apportioned in the manner prescribed by 19 if the performance of the contact extends beyond the accounting period.
E. D. Sassoon & Co., Ltd. vs The Commissioner of Income tax, Bombay City; , , distinguished.
</s>
|
<s>[INST] Summarize the judgementing been subsequently filled in by introducing section 132A of the Act with effect from October, 1975, it will be open to the income tax authorities to approach the appropriate authorities to realise any amount of money or to recover any books of account or documents in accordance with the law.
[307D E] & CIVIL APPELLATE JURISDICTION: Civil Appeal No.1666 (NT) of 1974.
297 From the judgment and order dated 26th November, 1973 of the A Punjab & Haryana High Court in Civil Writ No. 3355 of 1972.
S.C. Manchanda, M.B. Rai and Ms. A. Subhashini for the Appellants.
Harbans Singh for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MIJKHARJI, J.
This appeal is by special leave from a judgment and order of Punjab and Haryana High Court in an application under article 226 of the Constitution.
The judgment in question is reported in By a petition under articles 226 and 227 of the Constitution the order of the Income Tax Department dated 10th May, 1972, passed under section 132 of the Income tax Act, 1961 (hereinafter called the 'Act ') and Rule 112(II) of the Income tax Rules, 1962 (hereinafter called the 'Rules ') was challenged.
The division bench by the impugned judgment allowed the petition, quashed the search and seizure warrants and directed the Income Tax Department to return the moneys to the Customs authorities and gave certain consequential directions.
In order to appreciate the points involved, it is necessary to refer to certain facts as found by the High Court.
On 23rd August, 1970 the petitioner before the High Court, who is the respondent here, was travelling by car, alleged to be belonging to his brother from Ambala to Batala.
He was intercepted near the Beas river by the Customs officer and was forcibly taken along with the driver, Gurnam Singh, to the Customs House at Amritsar.
The said petitioner in that application was searched along with his driver and the Customs authorities took into possesion Rs.93,500 in Indian currency, 10 gold sovereigns and the car.
On the 24th August, 1970, the petitioner was produced before a Duty Magistrate at Amritsar and was granted bail.
In the meantime, the Customs department took proceedings under section 110(2) of the and extended the period of issuing of the show cause notice under section 124 of the .
These proceedings were challenged in the High Court by Writ Petition and the order of the Customs authority under section 110(2) was quashed by an order of the learned single judge of the High Court on 24th April, 1972.
The appeal against that decision was dismissed by the division bench along with this petition by the High Court.
After the said judgment of the learned single judge, the respondent had approached the Customs authorities for the return of H 298 the money and the car.
The gold sovereigns were not demanded be cause according to the said petitioner, these did not belong to him.
He had been directed to come on the following day to get back the currency notes and the car.
In the meantime on 12th May, 1972 the Income tax officer, had served the warrant of authorisation dated 10th May, 1972 issued under section 132 of the Act and rule 112(II) of the Rules on the respondent as well as on the Customs department, with the result that only the cash was taken possession of by the income tax authorities.
Thereafter, the respondent filed the petition under articles 226 and 227 of the Constitution before the High Court in respect of which the judgment impugned here was rendered.
It was submitted that the authorisation warrant was illegal, be cause the money was not in his possession but was in the possession of the Customs authorities.
It was secondly urged that the action taken by the Income tax authorities under section 132 of the Act militated the provisions of section 110(2) of the .
The High Court felt that so far as the first contention was concerned, it was concluded by the decision of the said High Court in The Commissioner of Income tax vs Ramesh Chander & Ors., The High Court relied on the following observations at pages 478 479 of the report: "I have come to the conclusion that the search and seizure warrants issued under sub section (1) of section 132 of the Income tax Act were illegal, firstly, because the search and seizure warrants were issued in the name of Ramesh Chander and he was in fact not in possession of either the currency notes or account books, and secondly, the income tax authorities could not seize the currency notes and account books from the police officer who is duty bound to proceed with the case property in accordance with the pro visions of the Code of Criminal Procedure.
" The High Court held that where the amount was seized by the Customs authorities and the seizure was held illegal by the Court, Customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the .
The Income tax authorities could not seize such an amount from the Customs authorities under section 132 of the Act.
Moreover, the authorisation was illegal if issued in the name of the person who did not have possession of the article, in respect of which it was issued.
The High Court further held that in the facts and circum 299 stances of the case the order under section 132 of the Act was not Justified.
Therefore, the High Court held that the search and seizure warrants were liable to be quashed and the money returned to the customs department.
The judgment of the High Court is reported in The validity of the judgment is impugned in this appeal.
It is necessary in order to appreciate the contentions urged in this case to refer to the relevant provisions of section 132 of the Act.
Sub section ( I) of section 132 provides as follows: "Search and Seizure (1) Where the Director of Inspection or the Commissioner [or any such Deputy Director of Inspection or Inspecting Assistant Commissioner as may be empowered in this behalf by the Board,] in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under sub section (1) of section 37 of the Indian Income tax Act, 1922 (XI of 1922), or under sub section (1) of section 131 of this Act, or a notice under sub section (4) of section 22 of the Indian Income Tax Act, 1922, or under sub section (1) of section 112 of this Act was issued to produce or cause to be produced any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to any proceeding under the Indian Income tax Act, 1922 (XI of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be, disclosed] for the purposes of the Indian Income tax Act, 1922 (XI of 1922), or this Act H 300 (hereinafter in this section referred to as the undisclosed income or property), [then, (A) the Director of Inspection or the Commissioner, as the case may be, may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income tax officer, or (B) such Deputy Director of Inspection or Inspecting Assistant Commissioner, as the case may be, may authorise any Assistant Director of Inspection or Income tax officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer to ) (i) enter and search any [building, place, vessel, vehicle or aircraft] where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (iia)search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;] (iii)seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place mark of identification on any books of ac count or other documents or make or cause to be made extracts or copies therefrom; 301 (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing; " The only other sub section to which reference need be made is sub section (3) which is as follows: B "The authorised officer may, where it is not practicable to seize any such books of account, other document, money bullion, jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub section.
" It is not necessary to refer to the other provisions for the present purpose.
But the procedure indicated that if necessary, force may be used for search seizure.
Rule 112 of the said Rules provides the manner in which such search and seizure should be conducted.
On a construction of the section; and the context, in which the words "search", "possession" and "seizure" have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority.
It is important to note that the expression "possession" has not been defined in the Act.
It may be noted that sub section (3) of section 132 of the Act uses the expression "who is in immediate possession or control thereof".
"Possession" is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense.
Reference may be made to Halsbury 's Laws of England, Vol. 35, 4th Edn.
articles 1111 11267 pages 617 627.
Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys.
It appears to us that when the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it would be improper to contend that possession as used in section 132 of the Act was still with the respondent.
The use of the expression "immediate possession" in sub section 302 (3) of section 132 does not detract from the meaning of possession in the popular sense.
This construction is not unmindful of the fact that in some of the sub sections of section 132 the expressions "retention" and "custody" have been used, but reading these expressions in the context these have been used, it cannot be said that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income tax Act, 1961.
In this connection, reference may be made to Burrows Words & Phrases Judicial Dictionary, 4th Edn.
page 306.
All these aspects were discussed by the Calcutta High Court (by one of us, Sabyasachi Mukharji, J singly) in Laxmipat Chororia vs K.K. Ganguli & ors., 82 l.
T.R. 306 (Cal).
This decision was affirmed on appeal and the bench decision of the said Court is reported in 93 I.T 'R. at p. 489.
This aspect of the matter has been clearly dealt with by a judgment of the division bench of the Allahabad High Court in Motilal and ors.
vs Preventive Intelligence officer, Central Excise and Customs, Agra and others, where the judgment was delivered by one of us (R.S. Pathak, J.).
There the Court held that the power conferred under section 132(1) of the Act was contemplated in relation to those cases where the precise location of the article or thing was not known to the Income tax department and therefore, a search was necessary for it, and where it would not be ordinarily yielded over by the person having possession of it.
The view that section 132(3) of the Act would include a case where the location of the article or thing was known and where ordinarily the person holding custody of it would readily deliver it up to the Income tax department was not correct, it was so held by the division bench of the Allahabad High Court.
It was further held that consequently goods in the custody of the Assistant Collector of Customs and Central Excise were not things which could be the subject of an order under section 132(3) of the Act.
Pathak, J. spoke for the division bench there at p. 422 of the report thus: "In my opinion, the power conferred under section 132(1) is contemplated in relation to those cases where the precise location of the article or thing is not known to the income tax department and, therefore, a search must be made for it, and where it will not be ordinarily yielded over by the person having possession of it and, therefore it is necessary to seize it.
If it is only such article or thing which 303 is contemplated by section 132(1) then it is such article or A thing alone which can be the subject of an order under section 132(3).
I am unable to accept the contention on behalf of the Income tax department that section 132(3) will include a case where the location of the article or thing is known and where ordinarily the person holding custody of it will readily deliver it up to the Income tax department.
Such article or thing, I think, requires neither search nor seizure. " Mr. S.C. Manchanda, learned advocate for the revenue, drew our attention to several decisions including the decision in Noor Mohd. Rahimatulla Gillani, vs The Commissioner of Income tax Vidrabha and Marathwada, Nagpur and another, 1976 Taxation Law Reports 688 (Bombay).
In that case, after referring to the views expressed by the division bench of Allahabad High Court and division bench of Punjab and Haryana High Court in the judgment under appeal and the Calcutta High Court, as indicated before, Chandurkar J. Of the Bombay High Court observed as follows: "We are not inclined to accept the submission that no valid authorisation to seize the amount Lying with the Collector of Central Excise and Customs, Nagpur could have been issued under Section 132(1).
The relevant provision in the instant case is to be found in Section 132(1) (c) of the Act and all that is required in order to issue an authorisation under Section 132(1) is that either the Director of Inspection or the Commissioner must have reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed for the purposes of the Act or the Income tax Act of 1922.
It is the character of money or assets as undisclosed income or property and their possession that gives jurisdiction to issue the authori risation.
Merely because some authority has seized that money or property, its character which is believed to be that of undisclosed income or property does not change.
The seizure of the cash amount of Rs.3.05.530 by the 304 Central Excise Authorities in the instant case no doubt transferred physical possession of that amount from the petitioner to the Central Excise Department, but the legal ownership of that money still continued to be with the petitioner.
As long as that amount was not confiscated or did not become the property of the Central Excise Depart ment by virtue of an order passed under the relevant provision of law if at all any order could be so passed the property or the money did not cease to be that of the petitioner.
Though the Collector of Central Excise and Customs was in possession of the money, since its alleged character of being undisclosed income or property remained unattended the Collector satisfied the description of "any person" being in possession of undisclosed income or property though the property represented the undisclosed income or property of the petitioner himself.
The words used in section 132(1) (c) are "any person".
Such a person may be a person who is in possession of his own undisclosed income or property or a person who is in possession of somebody else 's undisclosed income or property.
The fact that the Collector of Central Excise and Customs happened to be an officer of the Government of India was not relevant because the Income tax Authorities and the Central Excise Authorities were functioning under two separate enactments which created two different liabilities the enforcement of which was entrusted to independent authorities under the law.
Disagreeing, therefore, with the authorities relied upon by the 3 petitioner, we must hold that the authorisation issued even against the Collector of Central Excise and Customs enabling the Income tax officer to seize that amount was a valid authorisation.
In any case, in the instant case, a subsequent order under section 132(3) was already made and even by the order under section 132(5) that amount was directed to be released.
" It is true that the title was not transferred to the Customs authorities by seizure under the .
But in the context.
in which the expressions "possession" and "seizure" have been used, it p cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title Was with the respondent herein.
In this context, the physical posses 305 sion having regard to the language used is relevent and material.
Physical possession was with the Customs authorities when the seizure authorisation was passed.
Therefore, where the exact location of the property was known and there was no need to seize the money, the Income tax department could direct handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities.
In that view of the matter we are unable to sustain the view of Chandurkar, J. as the learned Chief Justice then was of the Bombay High Court.
Mr. Manchanda also drew our attention to the case of Pannalal vs Income Tax officer, B Ward, Chhindwara and ors.
, 93 I.T.R. p.480 (M.P.) where the division bench of the Madhya Pradesh High Court was of the view that an order under section 132(3) could only be passed after an authorisation for search and seizure had been made under section 132(1) of the Act.
The thing in respect of which the order is made must be one regarding which the conditions mentioned in clauses (a), (b) and (c) of section 132 are satisfied.
But there was nothing in the requirements of section 132 to support the view that if the Commissioner has definite knowledge that the books of account, documents, money, bullion, etc., sought to be searched and seized are in the possession of a particular person he cannot issue an authorisation for search and seizure of the same.
In our opinion.
it may be mentioned that if the location was certain, then there was nothing to search or look for.
Madhya Pradesh High Court, however, observed that the expression "has reason to believe" signified that the Commissioner has reason to be satisfied that the things to be searched are in the possession of a particular person.
The object of section 132 was according to the High Court, not merely to get information of the undisclosed income but also to seize the money, bullion, etc.
representing the undisclosed income and to retain.
them for purposes mentioned in section 132(5).
Section 132(1)(C) of the Act did not contain a condition either expressly or impliedly that the thing to be seized should not be in the possession of a person who may willingly part with his possession.
There is no obligation on any one, not even on Government officers of other department, to deliver anything to G the income tax authorities except when the law requires them to do so.
The person authorised by the Commissioner could enter and search any building, break open the lock of any door etc.
But that did not mean that in every case the person authorised by the warrant would have to exercise all those powers in making the search and seizing the thing, according to the High Court.
It was not necessary that an actual 306 search must precede an order under section 132(3) directing a person not to part with articles in his possession.
Section 132(1)(c) did not contemplate that the person who has not disclosed his income or property for the purposes of the Income tax Act should himself be in possession of money, bullion, etc.
representing such income.
Clause (c) spoke of "any person who is in possession" and it did not specifically refer to possession by the person who had not disclosed his income.
All that the clause required was that the money, bullion etc. should be such which represents either wholly or partly income or property which had not been disclosed for purposes of the Income tax Act and such money, bullion, etc.
should be in the possession of a person.
This construction was supported by the use of words "immediate possession" in section 132(3) of the Act.
This was the view of the High Court.
There an order under section 132(3) was passed by the Commissioner of Income tax on the Collector of Customs and Central Excise in respect of currency notes of the value of Rs.2,02.500 belonging to a firm, which the Collector was holding under the Gold Control Act and which, as no offence was committed under that Act, the Collector had ordered to be released.
It was also held by the High Court that the Collector was under a legal obligation to return the currency notes to the firm after the proceedings under the Gold Control Act had been finalised.
The power of the Collector was only to retain the currency notes for a limited period.
It could be held that the currency notes were held by the Collector for and on behalf of the firm and the order passed under section 132 was valid.
For the reasons mentioned hereinbefore, we are unable to sustain that view of the High Court.
As mentioned before though legal title might have been with the person whose income was sought to be taxed the physical possession was with the Customs authorities.
Our attention was drawn to a bench decision of the Madras High Court where similar view was taken in Gulab and Company and Anr.
vs Superintendent of Central Excise (Preventive) Trichy, and ors.
For the reasons we have indicated hereinbefore, we are also unable to sustain this view.
The Kerala High Court in the case of Assainar and Anr.
vs Income tax Officer, Calicut and on,., also accepted this view.
We are, for the aforesaid reasons, unable to sustain this view with respect.
The High Court observed that the word "search" has varied meanings and it should be given the general meanings "to look for" or "seek" which are also well known.
But in the context the expression "seizure" and in the context 307 the expression "search" where the location of the property was known A to the Government, we are of the opinion that it could not be said that one government department could search any other government department, and seize those documents.
Relying on the decision of the Allahabad High Court in Motilal 's case (supra) as well as the decision of the Calcutta High Court in Laxmipat 's case (supra), the learned single judge of the Punjab and Haryana High Court in Ramesh Chander vs Commissioner of Income Tax (supra) held that the word "seizure" implied forcibly taking from the owner or who has the possession and who was unwilling to part with the possession.
In that case custody was with the police and it would be inappropriate to accept the position that the income tax department which was another department of the Union of India had to be armed with authority to seize from the unwilling persons.
We are in agreement with these views of the learned single judge.
This view of the learned single judge has been confirmed in the judgment of the division bench, already referred to hereinbefore (reported in 93 I.T.R. p. 450).
The lacuna in law has subsequently been filled in by 132A of the Act with effect from October, 1975.
In the view of the law as it stood at the relevant time, we are unable to sustain the challenge to the order, impugned in this appeal.
The appeal, therefore, fails and is accordingly dismissed with the . observations that it will be open to the Income tax authorities to approach the appropriate authorities to realise any amount of money or to recover any books of account or documents in accordance with law.
In the facts and the circumstances of the case, parties will pay and bear their respective costs.
S.R. Appeal dismissed.
[/INST]On 23rd August, 1970, when the respondent was travelling by car, alleged to be belonging to his brother, from Ambala to Batala, the Customs officer intercepted him near the Beas river and forcibly taken along with the driver, Gurunam Singh to the Customs House at Amritsar.
The respondent along with the driver was searched and the customs authorities took into possession Rs.33,500 in Indian currency, 10 gold sovereigns and the car in which he travelled.
The Customs authorities, thereupon initiated departmental proceedings under section 110(II) of the and extended the period of issuing of the show cause notice under section 124 of the .
These proceedings were quashed by an order of the Learned Single Judge of the High Court of Punjab on 24th April, 1372 following an earlier decision of that Court.
After the said judgment, the respondent approached the customs authorities for the return of the money and the car on 11.5.1972.
The gold sovereigns were not demanded because ac cording to the respondent these did not belong to him.
He had been directed to come on the following day to get back the currency notes and the car.
On the next day, however the Income Tax officer served the warrant of authorisation dated 10th May, 1972 issued under section 132 of the Income Tax Act, read with Rule 112(II) of the Rules on the respondent as well as on the customs department with the result the cash was taken possession of by the Income Tax authorities.
Thereafter 295 the respondent filed another writ petition under Article 226 and 227 of A the Constitution.
The customs authorities also filed an appeal against the decision of the Single Judge dated 24th April, 1972.
The writ petition and the appeal were heard together by a Division Bench of the Punjab High Court.
Dismissing the appeal and allowing the writ petition the High Court held that where the amount was seized by the customs authorities and the seizure was held illegal by the Court customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the ; that the Income Tax authorities could not seize such an amount from the customs authorities under section 132 of the Income Tax Act and authorisation of search and seizure was illegal if issued in the name of the person who did not have possession of the Article in respect of which it was issued.
Hence this appeal by the revenue by special leave.
Dismissing the appeal, the Court, ^ HELD: 1.1 on a construction of section 132 of Income Tax Act, 1961 and the context, in which the words "search", "possession", and "seizure" have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority where the location of the property was known to the Government one government department could not search another department and seize them.
[301E F] 1.2 Sub Section (3) of section 132 of the Act uses the expression "who is in immediate possession or control thereof".
"Possession" is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense.
Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys.
When the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it cannot be said that possession as used in section 132 of the Act was still with the respondent Tarsem Kumar.
[30 1F H] 1.3 Reading the expressions "retention" and "custody" in some of the sub sections of section 132 in the context these have been used, it cannot be said, that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income Tax Act, 1961.
[302A B] 296 The Commissioner of Income Tax vs Ramesh Chander & Ors.
, PunJab; Tarsem Kumar & Anr.
vs The Commissioner of Income Tax, Haryana, Himachal Pradesh & Delhi & ors.
, ; Laxmipat Chororia vs K.K. Ganguli Motilal and ors.
vs Preventive Intelligence officer, Central Excise and Customs, Agra & Ors., Allahabad, distinguished and partly overruled.
Noor Mohd. Rahimatulla Gillani vs The Commissioner of Income tax Vidrabha and Marathwada, Nagpurand Anr., [1976] Taxation Law Reports, 688, Bombay; Pannalal vs Income Tax officer, Ward.
Chhindwara and ors.
, 93 ITR p. 480 Madhya Pradesh; Gulab and Company and Anr.
vs Superintendent of Central Excise (Preventive) Trichy, and ors.
, Madras; Assainar and Anr.
vs Income tax officer, Calicut and ors.
, Kerala, overruled.
1.4 It is true that in the instant case, the title was not transferred to the Customs authorities by seizure under the .
But in the context, in which the expressions "possession" and "seizure" have been used, it cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title was with the respondent herein.
In this context, the physical possession having regard to the language used is relevant and material.
Physical possession was with the Customs authorities when the seizure authorisation was passed.
Therefore, where the exact location of the property was known and there was no need to seize the money, the Income tax department could direct handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities and not by resort to section 132 of the Income Tax Act.
This is so because if the location was certain then there was nothing to search or look for.
[304G H; 305A B]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 341 of 1960.
Appeal from the judgment and order dated March 3,1960, of the Madras High Court, in W. P. No. 1051 of 1959.
N. C. Chatterjee, B. R. L. Iyengar and D. Gupta, for the appellants.
589 section Mohan Kumaramangalam, M. K. Ramamurthy, R. K. Garg and T. section Venkataraman, for the respondent and the intervener.
April, 28.
The Judgment of Gajendragadkar, Sarkar and Das Gupta, JJ., was delivered by Gajendragadkar, J. Wanchoo and Ayyangar, JJ., delivered separate Judgments.
GAJENDRAGADKAR, J.
On a writ petition filed by the respondent K. Rangachari in the Madras High Court under article 226 of the Constitution a writ of mandamus has been issued by the said High Court restraining the appellants, the General Manager, Southern Railway, and the Personnel Officer (Reservation), Southern Railway, from giving effect to the directions of the Railway Board ordering reservation of selection posts in Class III of the railway service in favour of the members of the Scheduled Castes and Scheduled Tribes and in particular the reservation of selection posts among the Court Inspectors in Class III one of which is held by the respondent.
After the writ was thus issued the appellant applied for and obtained a certificate from the said High Court under article 132(1) of the Constitution as it involved a substantial question of law, namely, the scope of article 16(4) of the Constitution.
It is with this certificate that the appeal has been brought to this court, and the.
only question which it raises for our decision is about the scope and effect of article 16(4).
This question is of considerable public importance though the dispute raised by it lies within a very narrow compass.
In the railway services there are four grades of Court Inspectors included in Class III, (1) Court Inspectors on Rs. 200 300, (2) Court Inspectors on Rs. 260 350, (3) Chief Court Inspectors on Rs. 300400, and (4) Chief Court Inspectors on Rs. 360 500.
It appears that Inspectors of the first category are recruited partly directly and partly by selection from other categories of railway services.
To the remaining three grades appointments are made by promotion and they are classified as selection posts.
Selection to 75 590 these grades is made by a committee of officers constituted for the purpose.
In respect of non selection posts seniority in service is the qualification but in regard to selection posts seniority is only one of the qualifications for promotion to such posts; suitability to promotion is considered on other relevant grounds .as well.
The respondent was initially recruited to the grade of Rs. 200 300 and was confirmed in that, grade on November 21, 1956.
Between May 23, 1958, and August 22, 1958 as well as between December 8, 1958 and December 31, 1958, he was promoted to officiate in the grade of Rs. 260 350.
He got a chance of another similar promotion to officiate on April 8, 1959.
These promotions were in the nature of ad hoc promo tions and were consequently of temporary duration.
Later, on June 16, 1959, he was interviewed by the selection committee and his promotion to the said higher grade was regularised and an order was passed in that behalf on June 30, 1959.
By this order lie was allowed to continue to officiate in the said grade.
Since then he has been officiating in that grade.
On April 27, 1959, and on June 12, 1959, the two impugned circulars were issued by the Railway Board and addressed to the General Managers.
As a result of the said circulars the selection committee decided to consider the case of Hiriyanna for promotion to the grade of Rs. 260 350, Hiriyanna being a member of the Scheduled Castes.
The record shows that at the time when the respondent was interviewed and selected he was placed as Number One by the selection committee and one Partliasarathy was placed as Number Two.
On the said occasion Hiriyanna was not selected and put in the panel.
The selection committee desired to examine the case of Hiriyania in order to decide whether he was suitable for promotion to higher grade in the light of the two directives issued by the Railway Board and so a meeting of the selection committee was called on November 18, 1959.
The respondent thought that the proceedings of the said proposed meeting may result prejudicially to his interest and so on November 16, 1959, he filed the 591 present Writ Petition No. 1051 of 1959.
In this petition he applied for a writ in the nature of mandamus and also prayed for an interim injunction restraining the holding of the meeting of the selection committee proposed to be held on November 18, 1959.
An interim injunction as prayed for by the respondent was issued by the High Court and in consequence the proposed meeting has not been held.
According to the respondent the two directives issued by the appellants under the two impugned circulars were ultra vires, illegal, inoperative and unconstitutional in that they were not justified by article 16(4).
He alleged that a reading of articles 16, 335, 338 and 339 would show that the Constitution draws a clear distinction between Scheduled Castes or Tribes on the one hand and backward classes on the other and so it was urged by him that the impugned circulars were illegal.
The petition further urged that the safeguard provided by article 16(4) applied only to reservation Of posts at the stage of appointment and not for reservation of posts for promotion after appointment and so the circulars were outside the provisions of article 16(4) and as such contravened article 16(1).
The petition expressed the apprehension that if the circulars are implemented the respondent would be reverted and that would cause great loss both financially and in status to him.
It is on these allegations that the respondent prayed for the issue of a writ in the nature of mandamus directing the appellants to forbear from implementing the two impugned circulars.
These pleas were denied by the appellants.
It was alleged by them that the expression "backward class" appearing in article 16(4) would include not only the Scheduled Castes and Scheduled Tribes but all backward communities who could not stand on their own legs.
Therefore the reservations made by the impugned circulars were fully covered by article 16(4).
The appellants ' case was that the safeguards provided by article 16(4) would extend not only to initial appointment but also to promotions made by selection and that clearly brought the impugned circulars within the 592 protection of article 16(4).
The appellants categorically denied that the respondent would suffer any loss or because persons who had already been promoted on the basis of earlier regular selections were not intended to be reverted as a consequence of the implementation of the impugned circulars.
According to the appellants the petition filed by the respondent was permature and on the merits no case had been made out for the issue of a writ of mandamus.
At this stage it would be material to set out the relevant portions of the impugned circulars.
The circular issued by the Railway Board on April 27, 1959, contained, inter alia, the following directions.
"There are different grades of Class III posts.
Some of these posts are 'non selection ' posts, promotion to which is made on 'seniority cum suitability ' basis, while, in the case of others which are 'Selection ' posts, promotion is made by a positive act of selection.
There will be no quota for Scheduled Castes and Scheduled Tribes candidates in respect of promotion to 'non selection ' posts.
For promotion to 'Selection ' posts, however, there will be the prescribed quota of reservation.
The field of consideration in the case of Scheduled Castes and Scheduled Tribes candidates should be four times the number of posts reserved without any condition of qualifying period of service in their case, subject to the condition that consideration should not normally extend to such staff beyond two grades immediately below the grade for which selection is held.
" There is one more direction given by the said circular which must be read.
The decision of the Railway Board providing reservation for Scheduled Castes and Scheduled Tribes in promotion vacancies as laid down above comes into effect from January 4, 1957.
It will, therefore, be necessary to calculate the number of posts that should have been made available to the Scheduled Castes and Scheduled Tribes during 1957 and 1958 and these should be carried forward to be filled in 1959.
Thus it would be noticed that the effect of this circular was to prescribe a quota of reservation for selection posts and to give effect to this reservation retrospectively from January 4, 593 1957.
In a sense it is this retrospective operation of the circular which appears to be the main cause of the present dispute.
On June 12,1959, another circular was issued giving guidance and directions as to how the earlier circular should be implemented.
This circular directed, inter alia, by paragraphs 2(ii) and 2(iii) as follows: "2(ii).
The Special Rosters in force for section C. & section T. in direct recruitment categories are to be followed to work out the number of posts to be reserved for section C. & section T. in promotions made in Selection Grades and for promotion from Class IV to Class 111.
2(iii).
As the Board 's orders have retrospective effect from 4th January, 1957, it is necessary that the promotions made in each selection grade on your Division/Office from 4th January, 1957, are reviewed and the number of posts due to section C. & section T. worked out applying the Roster referred to in item (ii) above.
" It appears certain doubts were raised in regard to the manner in which the reservation circulars had to be implemented and so on September 11, 1959, the Railway Board issued a letter clarifying the doubts raised.
One of the points thus clarified was whether the instructions issued in the Board 's letter contemplated reversion of staff already promoted to selection posts after January 4, 1957, to accommodate section Cs.
and section Ts.
(which stand for Scheduled Castes and Scheduled Tribes) according to percentage basis.
The clarification issued was that the said orders did not contemplate such reversion.
It was, however, desired that the shortfalls should be made good against the existing as well as the future vacancies.
It is by virtue of this clarification that the respondent was assured by the appellants during the proceedings before the High Court that he need not entertain any apprehension of reversion as a result of the implementation of the impugned circulars.
We would now briefly summarise the findings and conclusions of the High Court on the points raised before it by the contentions of the parties in the 595 whether article 16(1) and (2) refer to promotion or whether they are confined to the initial appointment to any post in civil service.
In the appeal before us the s, appellants and the respondent both conceded that cases of promotion fell within article 16(1) and (2) though they differed as to whether they were included in article 16(4).
It would be immediately noticed that the respondent 's petition postulates the inclusion of promotion in article 16(1) and (2) for it is on that assumption that he challenges the validity of the impugned circulars.
Similarly, the appellants ' defence postulates that article 16(1) and (2) as well as article 16(4) refer to cases of promotion for it is on the basis that article 16(4) includes promotion that they seek to support the validity of the impugned circulars.
When this appeal was argued before the Constitution Bench on the first occasion it became clear that neither party was interested in contending that the guarantee afforded by article 16(1) and (2) is confined only to initial appointment and does not extend to promotion, and so notice was ordered to be issued to the Attorney General.
In response to the notice the Attorney General has appeared and is represented by Mr. Sen. He has also taken the same stand as the appellants have done and so in the result nobody before us is interested in challenging the inclusion of promotion within article 16(1) and (2).
However, we would briefly indicate our reasons for accepting the concession made by the parties that promotion is included in article 16(1) and (2).
Article 16(1) reads thus: "There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State." In deciding the scope and ambit of the fundamental right of equality of opportunity guaranteed by this Article it is necessary to bear in mind that in construing the relevant Article a technical or pedantic approach must be avoided.
We must have regard to the nature of the fundamental right guaranteed and we must seek to ascertain the intention of the Constitution by construing the material words in a broad 596 and general way.
If the words used in the Article are wide in their import they must be liberally construed in all their amplitude.
Thus construed it would be clear that matters relating to employment cannot be confined only to the. initial matters prior to the act of employment.
The narrow construction would confine the application of article 16(1) to the initial employment and nothing else; but that clearly, is only one of the matters relating to employment.
The other matters relating to employment would inevitably be the provision as to the salary and periodical increments therein, terms as to leave, as to gratuity, as to pension and as to the age of superannuation.
These are all matters relating to employment and they are, and must be, deemed to be included in the expression "matters relating to employment" in article 16(1).
Similarly, appointment to any office which means appointment to an office like that of the Attorney General or Comptroller and Auditor General must mean not only the initial appointment to such an office but all the terms and conditions of service pertaining to the said office.
What article 16(1) guarantees is equality of opportunity to all citizens in respect of all the matters relating to employment illustrated by us as well as to an appointment to any office as explained by us.
This equality of opportunity need not be confused with absolute equality as such.
What is guaranteed is the equality of opportunity and nothing more.
Article 16(1) or (2) does not prohibit the prescription of reasonable rules for selection to any employment or appointment to any office.
Any provision as to the qualifications for the employment or the appointment to office reasonably fixed and applicable to all citizens would certainly be consistent with the doctrine of the equality of opportunity; but in regard to employment, like other terms and conditions associated with and incidental to it, the promotion to a selection post is also included in the matters relating to employment, and even in regard to such a promotion to a selection post all that article 16(1) guarantees is equality of opportunity to all citizens who enter service.
597 If the narrow construction of the expression "matters relating to employment" is accepted it would make the fundamental right guaranteed by article 16(1), illusory.
In that case it would be open to the State ' to comply with the formal requirements of article 16(1) by affording equality of opportunity to all citizens in the matter of initial employment and then to defeated its very aim and object by introducing discriminatory provisions in respect of employees soon after their employment.
Would it, for instance, be open to the State to prescribe different scales of salary for the same or similar posts, different terms of leave or superannuation for the same or similar post? On the narrow construction of article 16(1) even if such a dis criminatory course is adopted by the State in respect of its employees that would not be violative of the equality of opportunity guaranteed by article 16(1).
Such a result could not obviously have been intended by the Constitution.
In this connection it may be relevant to remember that article 16(1) and (2) really give effect to the equality before law guaranteed by article 14 and to the prohibition of discrimination guaranteed by article 15(1).
The three provisions form part of the same constitutional code of guarantees and supplement each other.
If that be so, there would be no difficulty in holding that the matters relating to employment must include all matters in relation to employment both prior, and subsequent, to the employment which are incidental to the employment and form part of the terms and conditions of such employment.
Article 16(2) provides that no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
This sub Article emphatically brings out in a negative form what is guaranteed affirmatively by article 16(1).
Discrimination is a double edged weapon; it would operate in favour of some persons and against others; and article 16(2) prohibits discrimination and thus assures the effective enforcement of the fundamental right of equality of 76 598 opportunity guaranteed by article 16(1).
The words "in respect of any employment" used in article 16(2) must, therefore, include all matters relating to employment as specified in article 16(1).
Therefore, we are satisfied that Mr. Sen is right when on behalf of the Attorney General he conceded that promotion to selection Posts 'is included both under article 16(1) and (2).
Broadly stated the Bombay and the Patna High Courts sup , port the concession made by Mr. Sen (Vide: Pandurang Kashinath More vs The Union of India(1); Sukh nandan vs State (2) ) whereas the Allahabad High Court is against it (vide: Moinuddin vs State of Uttar Pradesh (3) ).
In this connection we ought to add that Civil Appeal No. 579 of 1960 (4) in which the Union of India challenged the correctness of the Bombay decision was set down for hearing along with this appeal, and in the judgment which we are pronouncing in the said appeal today we are accepting the appellants ' contention that the question about the invasion of the fundamental right guaranteed by article 16(1) was not properly raised by the respondent in his plaint in that case and had in fact not been proved; accordingly we are holding that 'the High Court was in error in proceeding to deal with the dispute on the basis that violation of article 16(1) had been admitted by the Union.
In the result we are allowing the said appeal and setting aside the decision of the High Court on this narrow ground.
Article 16(3) provides for one exception to the provisions of article 16(1) and (2) in that it authorises Parliament to make any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment.
We are not concerned with this provision in the present appeal.
(1) I.L.R. (2) Pat.
(3) A.I.R. 1960 All. 484.
(4) Union of India vs Pandurang Kashinath More.
599 That takes us to article 16(4).
It reads thus: "Nothing in this article shall prevent the State, from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State." In construing article 16(4) the respondent is no doubt entitled to contend that this sub Article in substance provides for an exception to the fundamental rights guaranteed by article 16(1) and (2) and as such it must be strictly construed.
On the other hand, the appellants may well urge that in construing its provisions the Court should not lose sight of the fact that the Constitution has, if we may say so wisely, showed very great solicitude for the advancement of socially and educationally backward classes of citizens.
Article 15(4) which provides, inter alia, for an exception to the prohibition of discrimination on grounds specified in article 15(1) lays down that nothing contained in the said Article shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.
Similarly, article 335 requires that the claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State.
For historical reasons which are well known the advancement of socially and educationally backward classes has been treated by the Constitution as a matter of paramount importance and that may have to be borne in mind in construing article 16(4).
On one point in relation to the construction of article 16(4) the parties are in agreement.
It is common ground that article 16(4) does not cover the entire field covered by article 16(1) and (2).
Some of the matters relating to employment in respect of which equality of opportunity has been guaranteed by article 16(1) and (2) do not fall within the mischief of non obstantive 600 clause in article 16(4).
For instance, it is not denied by the appellants that the conditions of service relating 'to employment such as salary, increment, gratuity, y pension and the age of superannuation there can be no exception even in regard to the backward classes of citizens.
In other words, these matters relating to employment are absolutely protected by the doctrine of equality of opportunity and they do not form the subject matter of article 16(4).
That is why we have just observed that part of the ground covered by article 16(1) and (2) is admittedly outside the scope of article 16(4).
The point in dispute is: Is promotion to a selection post which is included in article 16(1) and (2) covered by article 16(4) or is it not? It is on, this point that there is a sharp controversy between the parties.
Before construing article 16(4) it would be convenient to deal with the question as to whether posts specified by it are posts inside the services or outside them.
As we have already seen the High Court has taken the view that the posts in the context must necessarily mean posts outside the services and that in fact is the sole basis of the decision of the High Court against the appellants.
The High Court has held that the legislative history of the words "appointments" and "Posts" justifies the conclusion that "posts" are ex cadre posts.
Is that really so? In our opinion, the answer to this question must be in the negative.
The argument that legislative history about the use of the relevant words is decisively in favour of excluding service posts from the purview of article 16(4) ignores the fact that there can be no legislative history for the provisions of article 16(4) which have found a place in the Constitution for the first time.
Besides, it is not correct to assume that even the legislative history shows that "posts" always and inevitably meant posts outside services though it may be conceded that in the majority of corresponding constitutional provisions they do refer to ex service posts.
Let us look at the relevant provisions of the Constitution itself.
Article 309 empowers the appropriate Legislature to regulate the recruitment and conditions of service of persons appointed to public services and 601 posts in connection with the affairs of the Union or of any State.
In the context "posts" means posts outside services.
Similarly article 310(1) refers to every person 'who is a member of a defence service or of a civil service of the Union or of an all India service or holds any post connected with defence or any civil post under the Union.
The word "post" in the context means an ex cadre post.
Likewise the expression "civil post" in article 311(1) means a civil post outside the services.
Article 335 to which we have referred uses the word "posts" in the same sense.
But, when we go to article 336 the word "posts" in the context means posts in the services therein enumerated.
The position disclosed by the corresponding provisions of the Constitution Act of 1935 is substantially the same.
Sections 240 and 241 for instance use the word "posts" in the sense of ex service posts; whereas section 246 refers to civil posts in the sense of posts inside the services.
In our opinion, it would, therefore, be unreasonable to treat the word "posts" as a term of art and to clothe it inexorably with the meaning of excadre posts.
It is the context in which the word "posts" is used which must determine its denotation.
What does the context of article 16(4) indicate? That is the next question which we must consider.
Article 16(4) clearly shows that the power conferred by it can be exercised in cases where the State is of the opinion that any backward class of citizens is not adequately represented in the services under it.
In other words, the opinion formed by the State that the representation available to the backward class of citizens in any of the services is inadequate is a condition precedent for the exercise of the power conferred by article 16(4), and so the power to make reservation as contemplated by article 16(4) can be exercised only to make the inadequate representation in the services adequate.
If that be so, both "appointments" and "posts" to which the operative part of article 16(4) refers and in respect of which the power to make reservation has been conferred on the State must necessarily be appointments and posts in the ser vice.
It would be illogical and unreasonable to 602 assume that for making the representation adequate in the services under the State a power should 'be given to the State to reserve posts outside the cadre of services.
If the word "posts" means excadre posts reservation of such posts cannot possibly cure the imbalance which according to the State is disclosed in the representation in services under it.
Therefore, in our opinion, the key clause of article 16(4) which prescribes a condition precedent for invoking the power conferred by it itself unambiguously indicates that the word "posts" cannot mean ex cadre posts in the context.
In fairness to Mr. Kumaramangalam, who appeared for the respondent, we ought to add that he did not resist the contention of Mr. Chatterjee, for the appellants, that the context requires that "Posts" should be deemed to be posts inside services and not outside them.
Therefore, the main, if not the sole, reason given by the High Court in support of its conclusion does not appear to us to be well founded, and so article 16(4) must be construed on the basis that both "appointments" and "posts" to which its operative clause refers are appointments and posts in the services under the State.
Incidentally, we may repeat what we have already pointed out that the tenor of the judgment under appeal shows that if the High Court had construed the word "posts" as posts inside the services it would not have issued the writ in favour of the respondent.
Having in substance conceded that "posts" does not mean posts outside services Mr. Kumaramangalam presented a very plausible argument in support of his case that the impugned circulars fall outside article 16(4).
He contends that the key clause on which Mr. Chatterjee relies in construing the word "posts" as meaning posts in the services itself shows that direct promotion to selection posts by reservation is not permissible under article 16(4).
His argument is that if it is discovered that any backward class of citizens is not adequately represented in the services under the State the State may no doubt seek to introduce the balance by giving adequate representation to the backward class by making reservations for initial 603 appointments.
It may decide the proportion of the said reservation in order to introduce the balance and then give effect to it by making adequate number of appointments by reservation at the initial stage.
If ' this process by itself appears to the State to be slow and tardy it may even reserve selection posts but this reservation can be given effect to again by promoting( suitable backward candidates to the said posts after they fall vacant and making a proportionately larger number of appointments at the initial stage.
In any case reservation must work from the bottom and reservation cannot be permitted to allow direct appointment to selection posts as the impugned circulars seek to do.
It may be conceded that reservation of appointments or posts maybe made in the manner suggested by Mr. Kumaramangalam.
It may also be assumed that giving retrospective effect to reservations may well cause heart burning or dissatisfaction amongst the general class of employees and in that sense it would be an act of wisdom not to give effect to reservation retrospectively.
But, with the propriety or the wisdom of the policy underlying the circulars We are not directly concerned.
Even if it be assumed that it would be open to the State to adopt the method suggested by Mr. Kumaramangalam to give effect to the power of reservation in order to make the representation of the backward classes adequate in its services does it follow that it is the only method permissible under article 16(4)? We are inclined to hold that the answer to this question cannot be in favour of the respondent.
If it is conceded that selection posts can be reserved it is difficult to see how it would be open to the respondent to contend that these reserved selection posts must be filled only prospectively and not retrospectively.
The concession that selection posts can be reserved on which the argument is based itself provides the answer to the argument that if the said posts can be reserved the reserved posts can be filled either prospectively or retrospectively.
In adopting the latter course there can be no violation of the constitutional provision contained in article 16(4).
604 The condition precedent for the exercise of the powers conferred by article 16(4) is that the state ought to be satisfied that any backward class of citizens is not adequately represented in its services.
This condition precedent may refer either to the numerical inadequacy of representation in the services or even to the qualitative inadequacy of representation.
The advancement of the socially and educationally backward classes requires not only that they should have adequate representation in the lowest rung of services but that they should aspire to secure adequate representation in selection posts in the services as well.
In the context the expression 'adequately represented ' imports considerations of "size" as well as "values", numbers as well as the nature of appointments held and so it involves not merely the numerical test but also the qualitative one.
It is thus by the operation of the numerical and a qualitative test that the adequacy or otherwise of the representation of backward classes in any service has to be judged; and if that be so, it would not be reasonable to hold that the inadequacy of representation can and must be cured only by reserving a proportionately higher percentage of appointments at the initial stage.
In a given case the state may well take the view that a certain percentage of selection posts should also be reserved, for reservation of such posts may make the representation of backward classes in the services adequate, the adequacy of such representation being considered qualitatively.
If it is conceded that "posts" in the context refer to posts in the services and that selection posts may be reserved but should be filled only in the manner suggested by the respondent then we see no reason for holding that the reservation of selection posts cannot be implemented by promoting suitable members of backward class of citizens to such posts as the circulars intend to do.
We must in this connection consider an alternative argument that the word "posts" must refer not to 605 selection posts but to posts filled by initial appointments.
On this argument reservation of appointments means reservation of certain percentage in the initial appointments and reservation of posts means reservation of initial posts which may be adopted in order to expedite and make more effective the reservation of appointments themselves.
On this construction the use of the word "posts" appears to be wholly redundant.
In our opinion, having regard to the fact that we are construing the relevant expression "reservation of appointments" in a constitutional provision it would be unreasonable to assume that the reservation of appointments would not include both the methods of reservation, namely, reservation of appointments by fixing a certain percentage in that behalf as well as reservation of certain initial posts in order to make the reservation of appointments more effective.
That being so, this alternative argument which confines the word "posts" to initial posts seems to us to be entirely unreasonable.
On the other hand, under the construction by which the word "posts" includes selection posts the use of the word "posts" is not superfluous but serves a very important purpose.
It shows that reservation can be made not only in regard to appointments which are initial appointments but also in regard to selection posts which may fall to be filled by employees after their employment.
This construction has the merit of interpreting the words "appointMents" and "posts" in their broad and liberal sense and giving effect to the policy which is obviously the basis of the provisions of article 16(4).
Therefore, we are disposed to take the view that the power of reservation which is conferred on the State under article 16(4) can be exercised by the State in a proper case not only by providing for reservation of appointments but also by providing for reservation of selection posts.
This construction, in our opinion, would serve to give effect to the intention of the Constitution makers to make adequate safeguard for the advancement of backward classes and to secure for their adequate representation in the services.
Our 77 06 conclusion, therefore, is that the High Court was in error in holding that the impugned circulars do not all within article 16(4).
It is true that in providing for the reservation of appointments or posts under article 16(4) the State has to take into consideration the claims of the members of the backward classes consistently with the maintenance of the efficiency of administration.
It must not be forgotten that the efficiency of administration is of such paramount importance that it would be unwise and impermissible to make any reservation at the cost of efficiency of administration.
That undoubtedly is the effect of article 335.
Reservation of appointments or posts may theoretically and conceivably mean some impairment of efficiency; but the risk involved in sacrificing efficiency of administration must always be borne in mind when any State sets about making a provision for reservation of appointments or posts.
It is also true that the reservation which can be made under article 16(4) is intended merely to give adequate representation to backward communities.
It cannot be used for creating monopolies or for unduly or illegitimately disturbing the legitimate interests of other employees.
In exercising the powers under article 16(4) the problem of adequate representation of the backward class of citizens must be fairly and objectively considered and an attempt must always be made to strike a reasonable balance between the claims of backward classes and the claims of other employees as well as the important consideration of the efficiency of administration; but, in the present case, as we have already seen ' the challenge to the validity of the impugned circulars is based on the assumption that the said circulars are outside article 16(4) because the posts referred to in the said Article are posts outside the cadre of services and in any case, do not include selection posts.
Since, in our opinion, this assumption is not well founded we must hold that the impugned circulars are not unconstitutional.
In the result the decision of the High Court under appeal is reversed and the respondent 's application 607 for a writ is dismissed.
There would be no order as to costs.
WANCHOO, J. I have read the judgment just delivered by my learned brother Gajendragadkar J., and I agree with him as to the scope of article 16(1) of the Constitution.
I also agree with him that the scheduled castes and the scheduled tribes are included in the words "backward class of citizens" in article 16(4) and that the word "Posts" in that Article refers to posts in the services and not to posts outside the services.
I regret however that I have not been able to persuade myself that article 16(4) permits reservation even in grades within a particular service in case the service has various grades in its cadre, and proceed to give my reasons for the same.
Before I construe the words of article 16(4), I may state that I am not unmindful of the fact that article 16(4) is a constitutional provision and that constitutional provisions are not to be interpreted in any narrow or pedantic sense.
At the same time it cannot be forgotten that article 16(4) is in the nature of an exception or a proviso to article 16(1), which is a fundamental right providing equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
This aspect of article 16(4) in my opinion inevitably requires that the proviso or the exception should not be interpreted so liberally as to destroy the fundamental right itself to which it is a proviso or exception.
The construction therefore of article 16(4) cannot ignore this aspect of the matter.
I now read article 16(4): "Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.
" Before I turn to the actual words used in the Article I must refer to what I consider is implicit in that Article.
The Article provides for reservation of 608 appointments or posts and it seems tome obvious that it is implicit in the Article that the reservation of appointments or posts cannot go to the length of reserving all appointments or posts or even to the length of reserving a majority of them.
The reason why I say that all appointments or posts cannot be reserved under article 16(4) (though that would be the result if the widest possible interpretation is given to the words used in the Article) is that if all appointments or posts could be reserved under article 16(4) it would mean complete destruction of the fundamental right guaranteed under article 16(1).
It could not be the intention of the Constitution makers that the proviso or exception in article 16(4) should be so used as to destroy completely the fundamental right enshrined in article 16(1).
Nor do I think that it is permissible under article 16(4) to reserve a majority of appointments or posts, for that again, in my opinion, though it may not completely destroy the fundamental right guaranteed under article 16(1) will certainly make it practically illusory.
Again it could not be the intention of the Constitution makers that article 16(4) should be so interpreted as to make the fundamental right guaranteed under article 16(1) illusory.
I may in this connection refer to article 335, which occurs in Part XVI dealing with Special Provisions relating to certain Classes, which reinforces what I have said above.
That Article provides that "the claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State." Now the scheduled tribes and the scheduled castes are included in the words "backward class of citizens" used in article 16(4).
Therefore in considering the claims of, at any rate, a part of, those included in article 16(4) (and I presume the same will apply to the whole) the maintenance of efficiency of administration must be kept in mind, for the reservation provided in article 16(4) is to meet the claims of the members of the 609 scheduled castes and the scheduled tribes.
Reservation, therefore, of all appointments or posts or even a majority of them is certain to result in the impairment of efficiency of administration and therefore what I consider as implicit in article 16(4) is borne out also by the provision in article 335.
It is in this background that the interpretation of article 16(4) falls to be considered.
Turning now to the words in article 16(4), it appears to me that the key words in that Article are "not adequately represented in the services under the State." Obviously, reservation can be made under this Article only if the State comes to the conclusion that any backward class of citizens is not adequately represented in the services under it.
If, for example, the State is of opinion that backward classes are adequately represented in the services it can make no reservation under article 16(4).
What then is the meaning of these key words in this Article? What these words require is that reservation may be made in order to make the representation of any backward class of citizens adequate in the services.
Does the word "adequate" imply only numerical representation in the services or does it imply something more than that? The three meanings of the word "adequate" given in the Shorter Oxford English Dictionary are (i) equal in magnitude and extent; (ii) commensurate in fitness, sufficient, suitable; and (iii) fully representing (logic).
It seems to me that it is the second meaning (namely, sufficient) which properly applies to the words "adequately represented" as used in this Article.
"Sufficient" has two meanings: (i) Sufficing, adequate, esp.
in amount or number to the need, (ii) enough, adequate quantity.
Therefore, when article 16(4) says that reservation may be made in order that any backward class of citizens may be adequately represented in the services it means that reservation may be made in order to make the number of any backward class sufficient in the services under the State.
These words do not in my opinion convey any idea of quality and can only mean sufficient quantitative representation in the services under the State.
If 610 the intention of the Constitution makers was that there may also be reservation in various grades in a particular service where there are grades in the ser vice, I should have expected different words being used in article 16(4) to convey that meaning.
These key words used in this Article further convey the idea of representation in the services as a whole, for there are no words which suggest that the service should be broken up in case there are grades in it for the purposes of adequate representation.
The conclusion therefore at which I arrive is that these key words convey the idea of adequate numerical representation for any backward class of citizens in a particular service as a whole and it is for this purpose alone that reservation can be made of appointments or posts in the services.
This brings me to the question as to bow the reservation is to be made.
article 16(4) tells us that it may be made either by reserving appointments to the services or reserving posts in the services.
Appointments in my opinion clearly mean the initial appointments to a service, for a person is appointed only once in a service and thereafter there is no further appointment.
Therefore, when the Article speaks of reservation of appointments it means reservation of a per centage of initial appointments to the service.
Posts refer to the total number of posts in the service and when reservation is by reference to posts it means reservation of a certain percentage of posts out of the total number of posts in the service.
The reason why these two methods are mentioned in this Article is also to my mind plain.
The method of reservation of appointments would mean that the goal of adequate representation may be reached in a long time.
Therefore, in order that the goal.
may be reached in a comparatively shorter period of time, the Article also provides for the method of reservation of posts.
This will be clear from an example which I may give.
Suppose there are 1,000 posts in a particular service and the backward classes have no representation at all in that service.
The State considers it necessary that they should have adequate representation in that 611 service.
Suppose also that the annual appointments to be made to the service in order to keep it at full strength is thirty.
Now the State if it chooses the method of reservation of appointments will reserve a percentage of appointments each year for backward classes.
Now suppose that percentage is fixed at ten per century.
In order therefore to reach the ten per centum of the total number of posts in the service by the method of reservation of appointments, the period taken would be roughly 34 years.
This period may be considered too long and therefore the State may decide to adopt the other way, i.e., the reserva tion of posts; and suppose it is decided to reserve ten per centum of the posts, i.e., 100 in all.
It will then be open to the State having reserved 100 posts in this particular service for backward classes to say that till these 100 posts are filled up by backward classes all appointments will go to them provided the minimum qualifications that may be prescribed are fulfilled.
Suppose further that it is possible to get annually the requisite number of qualified members of backward classes equal to the annual appointments, the representation of the backward classes will be made adequate in about four years.
Once the representation is adequate there will be no power left for making further reservation.
Thus by the method of reserva tion of appointments the representation is made adequate in a long period of time while by the method of reserving posts the representation is made adequate in a much shorter period.
That seems to be the reason why the Article speaks of reservation of appointments as well as of posts.
It is however said that this construction of article 16(4) makes the use of the word "posts" therein superfluous, and that the same result of making the representation adequate quickly could have been achieved if the word "appointments" only had been used therein.
I am of opinion that this is not so and the use of the word "appointments" only in article 16(4) would not have made it possible for the State to make the representation of backward classes adequate in a short space of time.
In the example I have given the 612 representation of backward classes was made adequate in four years by the method of reservation of posts; it would however not have been possible to make the representation adequate in this hypothetical case in such a short time if the Article only provided for reservation of appointments.
I have already said that it is implicit in the Article that reservation cannot be of all appointments or even of a majority of them, for that would completely destroy the fundamental right enshrined in article 16(1) to which article 16(4) is in the nature of a proviso or an exception or at any rate make it practically illusory.
Therefore, it would not be open to the State to reserve all or even a majority of the appointments for backward classes, if the word "appointments" only had been used in article 16(4).
Even if a larger percentage than ten per centum were reserved for backward classes in the matter of appointments in the hypothetical case given by me it would not be possible to reach the total of 100 posts for the backward classes in the service in less than twice or thrice the time taken by the method of reservation of posts, for the State could not reserve all or even the majority of appointments in any particular year, in view of what is implicit in article 16(4), if the word " a appointments" only had been there.
It seems to me therefore that the use of the word "posts" in that Article was with a purpose, namely, that by the method of reservation of posts the inadequate representation may be made adequate within a short space of time and the objection that could be raised to the reservation of all appointments, if only the word "appointments" had been used in the Article, would no longer be available.
It cannot therefore be said that on the interpretation I have placed on article 16(4) the use of the word "posts" therein becomes superfluous.
I have already said that if the intention was not only to make reservation in the service as a whole whether by the method of reserving appointments or by the method of reserving posts but also to include reservation in various grades in which a service may be divided, the words of article 16(4) would have been different.
I may in this connection refer to article 335 613 again, which lays down that the claims of the scheduled castes and the scheduled tribes (which are part of backward classes of citizens) shall be considered So,.
, consistently with the maintenance of efficiency of administration.
It seems to me that reservation of posts in various grades in the same service is bound to result, for obvious reasons, in deterioration in the efficiency of administration; and reading article 335 along with article 16(4) which to my mind is permissible on the principle of harmonious construction (see Pandit M. section M. Sharma vs Shri Sri Krishna Sinha (1)), it could not be the intention of the Constitution makers that reservation in article 16(4), for at any rate a part of those comprised therein, should result in the impairment of the efficiency of administration.
It also seems to me equally obvious that what applies to a part of those comprised in the words "any backward class of citizens" also applies to the whole.
Therefore, in the absence of clear words in article 16(4) which would compel one to hold that reservation was meant to apply not only to the service taken as a whole but also to various grades in which the service might be divided, I feel that an interpretation should not be given which would result in the impairment of efficiency of administration, which is jealously safeguarded even when considering the claims of the scheduled castes and the scheduled tribes.
I am therefore of opinion that giving the words used in article 16(4) as liberal an interpretation as is possible without destroying or making illusory the fundamental right guaranteed in article 16(1) to which article 16(4) is in the nature of an exception or a proviso, article 16(4) can only mean that the State has the power thereunder to reserve numerically a certain percentage of appointments or posts in the manner I have indicated above and it has no power to split the service into various grades which might exist in it and make reservation in each grade because of the use of the word "posts" therein.
I would therefore dismiss the appeal but for different reasons.
(1) , 859 60 78 614 AYYANGAR, J. I regret that I cannot share the view of my learned brethren expressed by Gajendragadkar, J. that the appeal should be allowed and I agree with Wanchoo, J. that the appeal should be dismissed and the order of the High Court maintained.
The facts of the case have been set out in great detail in the judgments already delivered and it is unnecessary to repeat them.
Mr. Chatterji when he opened the appeal appeared to claim that the scope and content of article 16(1) and of sub article
(4) thereof were identical and that if article 16(1) guaranteed by the use of the wide expression "matters relating to employment", "equality of opportunity" in relation to promotions also, article 16(4) should be construed to have the same width.
But this argument however he abandoned at a later stage.
The point therefore does not call for any consideration and the judgments now delivered proceed on the basis that the scope of the limitation on the equality of opportunity which is provided in article 16(4) is not co extensive with the freedom guaranteed by article 16(1).
The only question therefore is in what respect is article 16(4) narrower than article 16(1).
In considering this the rule of construction should be borne in mind that a restriction on a guaranteed freedom should be narrowly construed so as to afford sufficient scope for the freedom guaranteed.
The judgment of the learned Judge now under appeal proceeds on the basis that the expression "Posts" in article 16(4) was a reference to what are termed in service parlance 'ex cadre posts ' and not posts in the service.
Mr. Chatterji 's submission was that the learned Judge had no basis for importing the nomenclature and the classifications to be found in Part XIV into Part III dealing with fundamental rights.
In particular, Mr. Chatterji quarrelled with the statement by the learned Judge that the expression appointments and posts ' occurring in article 16(4) were "virtually terms of art which had to be interpreted and understood in the light of the legislative history of the constitutional enactments that 615 preceded the Constitution, and in consonance with the scheme that underlies the provisions of the Constitution, which have reference to the civil services ' and civil servants in this country." Mr. Chatterji ' further pointed out that the learned Judge went wrong in observing that "The expressions appointments and posts in article 16(4) have really to be read as appointments to services and appointments to posts" on the ground that the words used in article 16 '4) were merely "appointments and posts" and not "appointments to services" etc.
, the latter occurring only in Part XIV.
It was,, however, common ground that if the learned Judge was right in considering that "appointments" in article 16(4) meant "appointments to services," the notification now impugned should be held to be unconstitutional.
Mr. Chatterji did not dispute that when the expressions 'appointments to services and appointments to posts ' occurred in Ch.
XIV vide for instance in articles 309, 311, etc.
, being phrases borrowed from statutory provisions of the Government of India Act, 1935, the expression 'appointment to a post ' designated an 'ex cadre post '.
The submission, however, of learned Counsel was that there was no justification for importing the phraseology employed in Part XIV in article 16(4), notwithstanding that article 16 dealt with equality of opportunity for employment in the services of the State and sub article
(4) was concerned with the reservation of appointments in Services under the State.
His submission was that article 16(4) had no legislative precedent in the previous constitutional enactments to justify the importation of service rules and service jargon as an aid to its construction.
My learned Brothers have acceded to this submission of Mr. Chatterji.
With great respect to them I consider that the view of the learned Judge of the High Court is correct.
In the first place, the Article being one concerning the right to be employed in the Services of the State, one has necessarily to turn on the relevant provisions in relation to the Services to discover the precise import of the expressions used in relation to the Services.
Besides, we are not left in 616 doubt as to the inter connection between article 16 and Part XIV dealing with Services, because article 335 forms, as it were, the link between Part XIV and the provisions for reservation in favour of the backward communities in article 16(4) Betting out as it does the principles that should guide the State in the matter of reservation in the Services which could obviously be only a reference to that provided for by article 16(4).
article 335 runs: "The claims of the members of the Scheduled Castes and Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State.
" In this Article, at any rate, it cannot be contended, and I did not understand Mr. Chatterji to contend, that 'Posts ' had any reference to 'posts in the services. ' If it were so then in my judgment it would follow that the phraseology employed in this Article which deals with the same subject as that dealt with by article 16(4) throws light on and explains the meaning of the expression 'posts ' in article 16(4).
It is only necessary to add that article 320(4) which runs: "Nothing in clause (3) shall require a Public Service Commission to be consulted as respects the manner in which any provision referred to in clause (4) of article 16 may be made or as respects the manner in which effect may be given to the provisions of article 335." to which learned Counsel for the respondent drew our attention indicates, if other indication were necessary., that articles 16(4) and 335 have to be read together and not as if the 'posts ' referred to in article 335 indicated a different idea or connoted a different concept from the same word used in article 16(4).
Even if the above view were wrong and the expression 'Posts ' were intended to designate not 'ex cadre posts ' but 'posts in the service, ' I am unable to hold that the appellant derives any advantage.
As my learned Brother Wanchoo, J. has pointed out, the crucial words in article 16(4), and which form as it were 617 the key to its interpretation, from which the power of the State to make the reservation stems, are that a class of citizens "is not adequately represented in the Services of the State." The action permitted to be taken to redress this inadequacy is by reservation of appointments and posts.
If by the expression 'posts ' are meant 'posts in the service.
itself ' I feel unable to attribute to the expression 'posts ' any special significance beyond an appointment to the service.
Every appointment in a service must be to "a post" in a service, because there cannot be an appointment in the air but can only be to a "post" in a service.
In that sense, in my view, the expression 'post ' would be really redundant unless, of course, as I have said earlier, it meant not posts in a service but ex cadre posts.
There is also one other aspect to which I might advert.
In some of the top grades there are single posts in the Service.
If at any point of time the incumbent is not a member of the backward class, it would certainly be a case of inadequate representation as regards that post which would mean that such posts which are single may be reserved for all time to be held by members of the backward classes, because if at any moment such a person ceases to hold the post there would be inadequate representation in regard to that post.
I have drawn attention to this because it pointedly demonstrates that the correct view is that when "inadequacy of representation" is referred to in article 16(4) as justifying a reservation, the only rational and reasonable construction of the words are that it refers to a quantitative deficiency in the representation of the backward classes in the service taken as a whole and not to an inadequate representation at each grade of service or in respect of each post in the service.
Besides, even on the footing that "posts" mean posts in the Services, article 16(4) properly construed in the light of article 335 of the Constitution whose inter.
action has been discussed in great detail by Wanchoo, J. in the judgment just now pronounced with which entirely agree, contemplates and permits 618 reservation only in respect of appointments to Services at the initial stage and not at each stage even after the appointment has taken place.
There is one other matter also which I consider relevant in this context.
Under article 16(4) the State is enabled to make provision for the reservation of appointments if in their opinion certain backward classes of citizens are not adequately represented in the Service.
The Article therefore contemplates action in relation to and having effect in the future when once the State forms the opinion about the inadequacy of the Service.
If an inadequacy exists today, to give retrospective effect to the reservation, as the impugned notification has done, would be to redress an inadequate representation which took place in the past by an order issued today.
In my judgment that is not contemplated by the power conferred to reserve which can only mean for the future.
As this point however has not been argued I do not desire to rest my judgment on it, but have mentioned it to draw attention to another feature of the notification which deserves consideration.
I would therefore dismiss the appeal with costs.
By COURT: In accordance with the opinion of the majority the appeal is allowed; the decision of the High Court under appeal is reversed and the respondent 's application for a writ is dismissed.
There will be no order as to costs.
[/INST]In 1946 the appellant was granted a right to cut and remove bamboos and certain other timber to be found in a specific area of the forest Village of Jun by certain persons known as Manjhis who held under a mokarari lease granted by the Raja of Ranka and whose names had been entered in the revenue records.
Meanwhile, the Bihar Private Forests Act, 1046, was enacted and it came into force on February 25, 1946.
This Act was repealed and reenacted by Bihar Act 9 Of 1948.
On October 14, 1946, the Governor of Bihar issued a notification under sections 14 and 21 of the Bihar Private Forests Act, 1946, declaring the forest of Jun as a protected forest.
Though in the Schedule to the said notification, against the column headed "name of the proprietor" the name of Raja of Ranka was entered, a copy of the notification was however served on the Manjhis.
Immediately on the issue of the notification the officials of the Government of Bihar prevented the appellant from working the forest any further.
The appellant challenged the validity of the proceedings under the Act by filing a suit.
The trial court held that the Act was valid but decreed the suit on the ground that the notification issued under section 14 was invalid, primarily for the reason that the name of the Manjhis as landlord had not been mentioned in it.
The High Court on appeal reversed the decree and dismissed the suit, holding that the omission of the name of the Manjhis in the notification did not render the same invalid and that even otherwise the proceedings under Ch.
III of the Act had been validated by section 2 of Bihar Act 12 Of 1949.
Held, that the Bihar Private Forests Acts of 1946 and 1948 were validly enacted and were within the Legislative compe tence of the Province under the Government of India Act, 1935, and were not otherwise obnoxious to its provisions.
Bihar Act 3 Of 1946 was an Act supplementary to, or rather a complement of the Indian Forests Act of 1927 and was clearly 293 covered by the Entry 'Forests ' in item 22 of Provincial Legislative List under which the Province could enact legislation not merely generally in relation to "Forests" but also to enable the Government to assume management and control of forests belonging to private proprietors.
Such a legislation involved no violation of the guarantee against "acquisition by the State without compensation" contained in section 299(2) of the Government of India Act, 1935.
Property, as a legal concept, was the sum of a bundle of rights and the imposition of a compulsory Governmental agency for the purpose of managing the forest with a liability imposed to account to the proprietor for the income derived as laid down by the statute was not an "acquisition" of the property itself within section 299(2) of the Government of India Act, 1935.
Nor does section 299(5) affect the matter.
The rights referred to in it are derivative rights, like interests carved by an owner a lessee, mortgagee etc.
and not an incident of a property right.
Held, further, that the correct specification of the name of the landlord was not a legal pre requisite of a valid notification under section 14 Of the Bihar Act 3 Of 1946 but the emphasis was on specification of the land and not so much on the owner or the person interested in it.
The proceedings taken under Ch.
III of the Act including the notification issued under section 14 Of the Act were valid and in accordance with the law and the validity of the service of notices required by section 14 or other provisions of the Act could not be challenged in view of the provisions of section 2 Of the Bihar Private Forests (Validating) Act, 1949.
Held, also, that the legislation under which the appellant 's rights were extinguished, subject to his claim for compensation, was a valid law which took effect in 1946, long before the Constitution came into force and the appellant had therefore no rights which could survive the Constitution so as to enable him to invoke the protection of Part III thereof.
M.D. Sir Kameshway Singh vs State of Bihar, Pat.
790 and Dwarkadas Shrinivas of Bombay vs Sholapur Spinning & Weaving Co., Ltd. ; , distinguished.
Khemi Mahatani vs Charan Napit, A.I.R. 1953 Pat. 365, K.B.N. Singh vs State, Pat. 69, Administrator, Lahore Municipality vs Daulat Ram Kapur, , State of West Bengal vs Subodh Gopal Bose, ; , Bhikaji Narain Dhakras vs State of Madhya Pradesh, ; , Slattery vs Naylor, and Shanti Sarup vs Union of India, A.I.R. , referred to.
Belfast Corporation vs O. D. Cars Ltd., , applied.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1360 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 22 11 1967 of the Andhra Pradesh High Court in Second Appeal No. 804/64).
T.S. Krishnamurthi lyer, R.K. Pillai and R. Vasudev Pillai, for the appellants.
T. V. section Narasimhachari, for the respondents.
The Judgment of P.N. Bhagwati and A.C. Gupta, JJ. was delivered by Bhagwati, J.S. Murtaza Fazal Ali, J. gave a separate opinion.
BHAGWATI, J. We have had the advantage of reading the judgment prepared by our learned brother section Murtaza Fazal Ali and we agree with the conclusion reached by him in that judgment but we would prefer to give our own reasons.
The facts giving rise to the appeal are set out clearly and succinctly in the judgment of our learned brother and we do not think it necessary to reiterate them.
The short question that arises for determination in this appeal is as to whether it is sub section (1) or sub section (2) of section 14 of the that applies where property is given to a Hindu female in lieu of maintenance under an instrument which in so many terms restricts the nature of the interest given to her in the property.
If sub section (1) applies, then the limitations on the nature of her interest are wiped out and she becomes the full owner of the property, while on the other hand, if sub section (2) governs such a case, her limited interest in the property is not enlarged and she continues to have the restricted estate prescribed by the instrument.
The question is of some complexity and it has evoked wide diversity of judicial opinion not only amongst the different High Courts but also within some of the High Courts themselves.
It is indeed unfortunate that though it became evident as far back as 1967 that subsections (1) and (2) of section 14 were presenting serious difficulties of construction in cases where property was received by a Hindu female in lieu of maintenance and the instrument granting such property pre scribed a restricted estate for her in the property and divergence of judicial opinion was creating a situation which might well be described as chaotic, robbing the law of that modicum of certainty which it must always possess in order to guide the affairs of men, the legislature, for all these years, did not care to step in to remove the constructional dilemma facing the courts and adopted an attitude of indifference and inaction, untroubled and un moved by the large number of cases on this point encumbering the files of different courts in the country, when by the simple expedient of an amendment, it could have silenced .judicial conflict and put an end to needless litigation.
This is a classic instance of a statutory provision which, by reason of its inapt draftsmanship, has created endless confusion for litigants and proved a para dise for lawyers.
It illustrates forcibly the need of an authority or body to be set up by the Government or the Legislature which would constantly keep in touch with the adjudicatory 267 authorities in the country as also with the legal profession and immediately respond by making recommendations for suit able amendments whenever it iS found that a particular statutory provision is, by reason of inapt language or unhappy draftsmanship, creating difficulty of construction or is otherwise inadequate or defective or is not well conceived and is consequently counter productive of the result.
it was intended to achieve.
If there is a close inter action between the adjudicatory wing of the State and a dynamic and ever alert authority or body which responds swiftly to the draw backs and deficiencies in the law in action, much of the time and money, which is at present expended in fruitless litigation, would be saved and law would achieve a certain amount of clarity, certainty and simplicity which alone can make it easily intelligible to the people.
Since the determination of the question in the appeal turns on the true interpretation to be placed on sub section (2) read in the context of sub section (1) of section 14 of the , it would be convenient at this stage to set out both the sub sections of that section which read as follows: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. Explanation.
In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or device, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what ever, and also any such property held by her as stridharas immediately before the commence ment of this Act.
(2) Nothing contained in sub section (1) shah apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
" Prior to the enactment of section 14, the Hindu law, as it was then in operation, restricted the nature of the interest of a Hindu female in property acquired by her and even as regards the nature of this restricted interest, there was great diversity of doctrine on the subject.
The Legisla ture, by enacting sub section (1) of section 14, intended, as pointed by this Court in S.S. Munna Lal vs
S.S. Raikumar(1) "to convert the interest which a Hindu female has in property, however, restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate".
This Court pointed out that the is a codifying enactment and has made far reaching changes in the structure of the Hindu law of inheritance, and succession.
The Act confers upon Hindu females full rights of inheritance (1) [1962] Supp. 3 S.C.R. 418. 268 and sweeps away the traditional limitations on her powers of disposition which were regarded under the Hindu law as inherent in her estate".
Sub section (1) of section 14, is wide in its scope and ambit and uses language of great amplitude.
It says that any property possessed by a female Hindu,.
whether acquired before or after the commencement of the Act, shall be held by her as full owner thereof and not as a limited owner.
The words "any property" are, even without any amplification, large enough to cover any and every kind of property, but in order to expand the reach and ambit of the section and make it all comprehensive, the Legislature has enacted an explanation which says that property would include "both movable and immovable property acquired by a female Hindu by inheritance or device, or at a partition, or in lieu of maintenance or arrears of mainte nance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatever, and also any such property held by her as stridhana immediately before the commencement" of the Act.
Whatever be the kind of property, movable or immovable, and whichever be the mode of acquisition, it would be cov ered by subsection (1) of section 14, the object of the Legislature being to wipe out the disabilities from which a Hindu female suffered in regard to ownership of property under the old Sastric law, to abridge the stringent provi sions against proprietary rights which were often regarded as evidence of her perpetual tutelege and to recongnize her status as an independent and absolute owner of property.
This Court has also in a series of decisions given a most expansive interpretation to the language of sub section (1) of section 14 with a view to advancing the social purpose of the legislation and as part of that process, construed the words 'possessed of ' also in a broad sense and in their widest connotation.
It was pointed out by this Court in Gummalepura Taggina Matada Kotturuswami vs Setra Veeravva(1) that the words 'possessed of mean "the state of owning or having in one 's hand or power".
It need not be actual or physical possession or personal occupation of the property by the Hindu female, but may be possession in law.
It may be actual or constructive or in any form recognized by law.
Elaborating the concept, this Court pointed out in Mangal Singh vs Rattno(2) that the section covers all cases of property owned by a female Hindu al though she may not be in actual, physical or constructive possession of the property, provided of course, that she has not parted with her rights and is capable of obtaining possession of the property.
It will, therefore, be seen that sub section (1) of section 14 is large in its amplitude and covers every kind of acquisition of property by a female Hindu including acquisition in lieu of maintenance and where such property was possessed by her at the date of commence ment of the Act or was 'subsequently acquired and possessed, she would become the full owner of the property.
Now, sub section (2) of section 14 provides that nothing contained in sub section (1 ) shall apply to any property acquired by way of gift or under a will or any other instru ment or under a decree or order (1) [1959] supp.
1 S.C.R. 968.
(2) ; 269 of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
This provi sion iS more in the nature of a proviso or exception to sub section (1) and it was regarded as such by this Court in Badri Pershad vs Smt.
Kanso Devi(1).
It excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section (1) and being in the nature of an exception to a provision which is calculated to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society, it must be construed strictly so as to impinge as little as possible on the broad sweep of the ameliorative provision contained in sub section (1 ).
It cannot be interpreted in a manner which would rob sub section (1 ) of its efficacy and deprive a Hindu female of the protection sought to be given to her by sub section (1 ).
The language of sub section (2) is apparently wide to include acquisition of property by a Hindu female under an instrument or a decree or order or award where the instrument, decree, order or award pre scribes a restricted estate for her in the property and this would apparently cover a case where property is given to a Hindu female at a partition or m lieu of maintenance and the instrument, decree, order or award giving such property prescribes limited interest for her in the proper ty.
But that would virtually emasculate sub section (1), for in that event, a large number of cases where property is given to a Hindu female at a partition or in lieu of mainte nance under an instrument, order or award would be excluded from the operation of the beneficent provision enacted in sub section (1 ), since in ,most of such cases, where property is allotted to the Hindu female prior to the enact ment of the Act, there would be a provision, in consonance with the old Sastric law then prevailing, prescribing limit ed interest in the property and where property is given to the Hindu female subsequent to the enactment of the Act, it would be the easiest thing for the dominant male to provide that the Hindu female shall have only a restricted interest in the property and thus make a mockery of sub section (1).
The Explanation to sub section (1) which includes within the scope of that sub section property acquired by a female Hindu at a partition or in lieu of maintenance would also be rendered meaningless, because there would hardly be a few cases where the instrument, decree, order or award giving property to a Hindu female at a partition or in lieu of maintenance would not contain a provision prescribing re stricted estate in the property.
The social purpose of the law would be frustrated and the reformist zeal underlying the statutory provision would be chilled.
That surely could never have been the intention of the Legislature in enacting sub section (2).
It is an elementary rule of construction that no provision of a statute should be construed in isola tion but it should be construed with reference to the con text and in the light of other provisions of the statute so as, as far as possible, to make a consistent enactment of the whole statute.
Sub section (2) must, therefore, be read in the context of sub section (1) so as to leave as large a scope for operation as possible to sub section (1) and so read, it must be confined to cases where property is ac quired by a female Hindu for the first time as a grant without any pre existing (1) ; 270 right, under a gift, will, instrument, decree, order or award, the terms of which prescribe a restricted estate in the property.
This constructional approach finds support in the decision in Badri Prasad 's case (supra) where this Court observed that sub section (2) "can come into operation only if acquisition in any of the methods enacted therein is made for the first time without there being any pre existing right in the female Hindu who is in possession of the property".
It ' may also be noted that when the Hindu Suc cession Bill 1954, which ultimately culminated into the Act, was referred to a Joint Committee of the Rajya Sabha, clause 15(2) of the Draft Bill, corresponding to the present sub section (2) of section 14, referred only to acquisition of property by a Hindu female under gift or will and it was subsequently that the other modes of acquisition were added so as to include acquisition of property under an instru ment, decree, order or award.
This circumstance would also seem to indicate that the legislative intendment was that sub section (2) should be applicable only to cases where acquisition of property is made by a Hindu female for the first time without any pre existing right a kind of acquisi tion akin to one under gift or will.
Where, however, proper ty is acquired by a Hindu female at a partition or in lieu of right of maintenance, it is in virtue of a pre existing right and such an acquisition would not be within the scope and ambit of sub section (2), even if the instrument, de cree, order or award allotting the property prescribes a restricted estate in the property.
This line of approach in the construction of sub section (2) of section 14 is amply borne out by the trend of judi cial decisions in this Court.
We may in this connection refer to the decision in Badri Parasad 's case (supra).
The facts in that case were that one Gajju Mal owning self acquired properties died in 1947 leaving five sons and a widow.
On August 5, 1950, one Tulsi Ram Seth was appointed by the parties as an arbitrator for resolving certain dif ferences which had arisen relating to partition of the properties left by Gujju Mal.
The arbitrator made his award on December 31, 1950 and under clause 6 of the award, the 'widow was awarded certain properties and it was expressly stated in the award that she would have a widow 's estate in the properties awarded to her.
While the widow was in possession of the properties, the Act came into force and the question arose whether on the coming into force of the Act, she became full owner of the properties under sub section (1) or her estate in the properties remained a restricted one under sub section (2) of section 14.
This Court held that although the award gave a restricted estate to the widow in the properties allotted to her, it was sub section (1) which applied and not sub section (2), because inter alia the properties given to her under the award were on the basis of a pre existing right which she had as an heir off .her husband under the Hindu Women 's Right to Property Act, 1937 and not as a new grant made for the first time.
So also in Nirmal Chand vs Vidya Wanti (dead) by her legal representatives(1), there was a regular partition deed made on December 3, 1945 between Amin chand, a coparcener and (1) C.A. No. 609 of 1965, decided on January 21, 1969.
271 Subhrai Bai, the widow of a deceased coparcener, under which a certain property was allotted to Subhrai Bai and it was specifically provided in the partition deed that Subhrai Bai would be entitled only to the user of the property and she would have no right to alienate it in any manner but would only have a life interest.
Subhrai Bai died in 1957 subse quent to the coming into force of the Act after making a will bequeathing the property in favour of her daughter Vidyawati.
The right of Subhrai Bai to bequeath the property by will was challenged on the ground that she had only a limited interest in the property and her case was covered by sub section (2) and not sub section (1).
This contention was negatived and it was held by this Court that though it was true that the instrument of partition prescribed only a limited interest for Subhrai Bai in the property, that was in recognition of the legal position which then prevailed and hence it did not bring her case within the exception contained in sub section (2) of section 14.
This Court observed: "If Subhrai Bai was entitled to a share in her husband 's properties then the suit proper ties must be held to have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allotted to her share is merely recording the true legal position.
Hence it is ' not possible to con clude that the properties in question were given to her subject to the condition of her enjoying it for her life time.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fall within section 14(2) of the Hindu Succession Act, 1955.
" It will be seen from these observations that even though the property was acquired by Subhrai Bai under the instrument of partition, which gave only a limited interest to her in the property, this Court held.
that the case fell within sub section (1) and not sub section (2).
The reason obviously was that the property was 'given to Subbrai Bai in virtue of a pre existing right inhering in her and when the instrument of partition provided that she would only have a limited interest in the property, it merely provided for something which even otherwise would have been the legal position under the law as it then stood.
It is only when property is acquired by a Hindu female as a new grant for the first time and the instrument, decree; order or award giving the property prescribes the terms on which it is to be held by the Hindu female, namely, as a restricted owner, that sub section (2) comes into play and excludes the applicability of sub section (1).
The object of sub section (2), as pointed out by this Court in Badri Persad 's case (supra) while quoting with approval the observations made by the Madras High Court in Rangaswami Naicker vs Chinnammal(1), is "only to remove the disability of women imposed by law and not to interfere with contracts, grants or decree etc.
by virtue of which a woman 's right was restricted" and, there fore, where property is acquired by a Hindu female under the instrument in virtue of a pre existing (1) A.I.R. 1964 Mad.
387. 272 right, such as a right to obtain property on partition or a fight to maintenance and under the law as it stood prior to the enactment of the Act, she would have no more than limit ed interest in the property, a provision in the instrument giving her limited interest in the property would be merely by way of record or recognition of the true legal position and the restriction on her interest being a "disability imposed by law" would be wiped out and her limited interest would be enlarged under sub section (1).
But where property is acquired by a Hindu female under an instrument for the first time without any pre existing right solely by virtue of the instrument, she must hold it on the terms on which it is given to her and if what is given to her is a restricted estate, it would not be enlarged by reason of sub section (2).
The controversy before us, therefore, boils down to the narrow question whether in the 'present case the proper ties were acquired by the appellant under the compromise in virtue of a pre existing right or they were acquired for the first time as a grant owing its origin to the compromise alone and to nothing else.
Now, let us consider how the properties in question came to be acquired by the appellant under the compromise.
The appellant claimed maintenance out of the joint family properties in the hands of the respondent who was her deceased husband 's brother.
The claim was decreed in favour of the appellant and in execution of the decree for mainte nance, the compromise was arrived at between the parties allotting the properties in question to the appellant for her maintenance and giving her limited interest in such properties.
Since the properties were allotted to the appel lant in lieu of her claim for maintenance, it becomes neces sary to consider the nature of the right which a Hindu widow has to be maintained out of joint family estate.
It is settled law that a widow is entitled to maintenance out of her deceased husband 's estate, irrespective whether that estate may be in the hands of his male issue or it may be in the hands of his coparceners.
The joint family estate in which her deceased husband had a share is liable for her maintenance and she has a right to be maintained out of the joint family properties and though, as pointed out by this Court in Rant Bai vs Shri Yadunanden Ram,(1) her claim for maintenance is not a charge upon any joint family property until she has got her maintenance determined and made a specific charge either by agreement or a decree or order of a court, her right is "not liable to be defeated except by transfer to a bona fide purchaser for value without notice of her claim or even with notice of the claim unless the transfer was made with the intention of defeating her right".
The widow can for the purpose of her maintenance follow the joint family property "into the hands of any one who takes it as a volunteer or with notice of her having set up a claim for maintenance".
The courts have even gone to the length of taking the view that where a widow is in possession of any specific property for the purpose of her maintenance, a purchaser buying with notice of her claim is not entitled to possession of that property without first securing proper maintenance for her, vide Rachawa & Ors.
vs Shivayanappa (2) cited with approval in Ranibai 's case (supra).
It is, therefore, clear (1) ; (2) I.L.R. 273 that under the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow takes the necessary steps for having her maintenance ascertained and specifically Charged in the joint family property and even .if no specif ic charge i.s created, this right would be enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim.
The right of the widow to be maintained is of course not a ]us in rein, since it does not give her any interest in the joint family property but it is certainly jus ad rem, i.e., a right against the joint family property.
Therefore, when specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfac tion of her jus ad rem, namely, the right to be main tained out of the joint family property.
It would not be a grant for the first time without any pre existing right in the widow.
The widow would 'be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right and not making a grant of the property to her for the first time without any antecedent right or title.
There is also another consideration which is very relevant to this issue and it is that, even if the instrument were silent as to the nature of the interest given to the widow in the property and did not, in so many terms, prescribe that she would have a limited interest, she would have no more than a limited interest in the property under the Hindu law as it stood prior to the enactment of the Act and hence a provision in the instrument prescribing that she would have only a limited interest in the property would be, to quote the words of this Court in Nirmal Chand 's case (supra), "merely recording the true legal position" and that would not attract the applicability of sub section (2) but would be governed by sub section (1) of section 14.
The conclusion is, therefore, inescapable that where proper ty is allotted to a widow under an instrument, decree, order or award prescribes a restricted estate for her in the property and sub section (2) of section 14 would have no application in such a case.
We find that there are several High Courts which have taken the same view which we are taking in the present case.
We may mention only a few of those decisions, namely, B.B. Patil vs Gangabai(1), Sumeshwar Misra vs Swami Nath Tiwari,(2) Reddayya vs Varapula Venkataraju,(3) Lakshmi Devi vs Shankar Jha (4) N. Venkanegouda vs Hanemangouda,(5) Smt.
Sharbati Devi vs Pt.
Hiralal,(6) Sesadhar Chandra Dev vs Smt.
Tara Sundari Dasi,(7) Saraswathi Ammal vs Anantha Shenoi (8) and Kunji Thomman vs Meenakshi(9).
It is (1) A.I.R. (1972) Bom.
16 (2) A.I.R. (1970) Pat.
(3) A.I.R. (1965) A.P. 66 (4) A.I.R. (1967) Mad.429 (5) A.I.R. (1972) Mys.
(6) A.I.R. (1964) Pub.
(7) A.I.R. (1962) Cal.
(8) A.I.R. (1966) Ker.
(9) I.L.R. 3 436SCI/77 274 not necessary to refer to these decisions since we have ourselves discussed the question of construction of sub sections (1) and (2) of section 14 on Principle and pointed out what in our view is the correct construction of these provisions.
We may only mention that the judgment of Pale kar, J., as he then was, in B.B. Patii vs Gangabai (supra) is a well reasoned judgment and it has our full approval.
The contrary view taken in Gurunadham vs Sundarajulu,(1) Santhanam vs Subramania,(2) section Kachapalava Gurukkal vs I7.
Subramania Gurukkal(3), Shiva Pujan Rai vs Jamuna Missir,(4) Gopisetti Kondaiah vs Gunda Subbarayudu(5), Ram Jag Misir vs The Director Consolidation, U.p.(6) and Ajab Singh vs Ram Singh (7) does not, in our opinion, represent the correct law on the subject and these cases must be held to be wrong ly decided.
In the circumstances, we reach the conclusion that since in the present case the properties in question were acquired by the appellant under the compromise in lieu or satisfac tion of her right of maintenance, it is sub section (1 ) and not sub section (2) of section 14 which would be applicable and hence the appellant must be deemed to have become full owner of the properties notwithstanding that the compromise prescribed a limited interest for her in his properties.
We accordingly allow the appeal, set aside the judgment and decree of the High Court and restore that of the District Judge, Nellore.
The result is that the suit will stand dismissed but with no order as to costs.
FAZAL ALI, J. This is a defendant 's appeal by special leave against the judgment of the High Court of Andhra Pradesh dated November 22, 1967 and arises in the following circumstances.
Venkatasubba Reddy, husband of appellant No. 1 Vaddebo yina Tulasamma hereinafter to be referred to as 'Tulasam ma ' died in the year 1931 in a state of jointness with his step brother V. Sesha Reddy and left behind Tulasamma as his widow.
On October 11, 1944 the appellant Tulasamma filed a petition for maintenance in forma pauperis against the respondent in the Court of the District Munsif, Nellore.
This application was set ex parte on January 13, 1945 bug subsequently the petition.was registered as a suit and an ex parte decree was passed against the respondent on June 29, 1946.
On October 1, 1946 the respondent filled an interlocutory application for recording a compromise alleged to have been arrived at between the parties out of Court on April 9, 1945.
The appellant Tulasamma opposed this application which was ultimately dismissed on October 16, 1946.
An appeal filed by the respondent to the District Judge,Nellore was also dismissed.
Thereafter Tulasamma put the decree in (1) I.L.R. (2) I.L.R. (3) A.I.R. (1972) Mad.
(4) I.L.R. (1947) Pat.
(5) I.L.R. (6) (7) A.I.R. (1969) J & K 92.
275 execution and at the execution stage the parties appear to have arrived at a settlement out of Court which was certi fied by the Executing Court on July 30, 2949 under O. XXI r. 2 of the Code of Civil Procedure.
Under the compromise the appellant Tulasamma was allotted the Schedule properties, but was to enjoy only a limited interest therein with no power of alienation at all.
According to the terms of the compromise the properties were to revert to the plaintiff after the death of Tulasamma.
Subsequently Tulasamma con tinued to remain in possession of the properties even after coming into force of the Hindu Succession Act, 1956 here inafter to be referred to as. 'the 1956 Act, or 'the Act of 1956 '.
By two registered deeds dated April 12, 1960 and May 26, 1961, the appellant leased out some of the proper ties to defendants 2 & 3 by the first deed and sold some of the properties to defendant 4 by the second 'deed.
The plaintiff/respondent filed a suit on July 31, 1961 before the District Munsiff, Nellore for a declaration that the alienation made by the widow Tulasamma were not binding on the plaintiff and could remain valid only till the life time of the widow.
The basis of the action filed by the plain tiff was that as the appellant Tulasamma had got a restrict ed estate only under the terms of the compromise her inter est could not be enlarged into an absolute interest by the provisions of the 1956 Act in view of section 14(2) of the said Act.
The suit was contested by the appellant Tulasamma who denied the allegations made in the plaint and averred that by virtue of the provisions of the 1956 Act she had become the full owner of the properties with absolute right of alienation and the respondent had no locus standi to file the present suit.
The learned Munsiff decreed the suit of the plaintiff holding that the appellant Tulasamma got merely a limited interest in the properties which could be enjoyed during her lifetime and that the alienations were not binding on the reversioner.
Tulasamma then filed an appeal before the District Judge Nellore, who reversed the finding of the Trial Court, allowed the appeal and dismissed the plaintiff 's suit holding that the appellant Tulasamma had acquired an absolute interest in the properties by virtue of the provisions of the 1956 Act.
The learned Judge further held that sub section
(2) of section 14 had no applica tion to the present case, because the compromise was an instrument in recognition of a pre existing right.
The plaintiff/respondent went up in second appeal to the High Court against the judgment of the District Judge.
The plea of the plaintiff/respondent appears to have found favour with the High Court which held that the case of the appel lant was clearly covered by section 14(2) of the Hindu Succes sion Act and as the compromise was an instrument as contem plated by section 14(2) of the 1956 Act Tulasamma could not get an absolute interest under section 14(1) of the Act.
The High Court further held ' that by virtue of the compromise the appellant Tulasamma got title to the properties for the first time and it was not a question of recognising a pre existing right which she had none in view of the fact that her husband had died even before the Hindu Women 's Right to Property Act, 1937.
We might further add that the facts.
narrated above have not been disputed by counsel for the parties.
The appeal has been argued only on the substantial questions of law which turn.
upon the interpretation of sub sections
(1) & (2) of section 14 276 of the .
It is common ground that in this case as also in the.
other connected appeals, the properties in suit were allotted under a compromise or an instrument in lieu of maintenance.
It is also admitted that the appellant Tulasamma was in possession of the properties at the time when the 1956 Act came into force.
Finally it is also not disputed that the compromise did purport to confer only a limited interest on the widow restricting completely her power of alienation.
We have now to apply the law on the facts mentioned above.
Similar points were involved in the other two appeals Nos.
135 of 1973 and 126 of 1972.
We have heard all the, three appeals together and in all these appeals counsel for the parties have confined their argu ments only to the questions of law without disputing the findings of fact arrived at by the Courts below.
Thus the two points that fall for determination in this appeal may be stated thus: .lm18 (1) whether the instrument of compromise under which the properties were given to the appellant Tulasamma before the 1956 Act in lieu of maintenance falls within section 14(1) or is covered by section 14(2) of the 1956, Act and (2) Whether a Hindu widow has a right to property in lieu of her maintenance, and if such a right is conferred on her subsequently by way of maintenance it would amount to mere recognition of a preex isting right or a conferment of new title so as to fall squarely within section 14(2) of the 1956 Act.
There appears to be serious divergence of judicial opinion on the subject and the High Courts have taken con trary views on this point.
Some High Courts, particularly, Bombay, Punjab, Calcutta and Patna have veered round to the view that a right of maintenance claimed by a Hindu widow is a pre existing right and any instrument or document or transaction by which the properties are allotted to the widow in lieu of her maintenance would only be recognition of a pre existing right and would not confer any new title on the window.
Following this line of reasoning the afore said High Courts have held that the properties allotted to the Hindu widow even though they conferred a limited inter est would fall clearly within the ambit of section 14(1) of the 1956 Act by virtue of which the limited interest would be enlarged into an absolute interest on the coming into force of the 1956 Act.
On the other hand the Orissa, Allahabad, Madras and Andhra Pradesh High Courts have taken a contrary view and have held that as the Hindu widow 's right to maintenance is not a right to property, property allotted to her in lieu of maintenance confers on her a right or title to the property for the first time and therefore such Conferment is protected by section 14(2) of the 1956 Act and is not covered by section 14(1).
Unfortunately, however, there is no decision of this Court which is directly in point, though there are some decisions which tend to support the view taken by the Bombay High Court.
277 Before, however, resolving this important dispute it may be necessary to consider the real legal nature of the incident of a Hindu widow 's right to maintenance.
In order to determine this factor we have to look to the concept of a Hindu marriage.
Under the Shastric Hindu Law, a marriage, unlike a marriage under the Mohammadan Law which is purely contractual in nature, is a sacrament a religious ceremony which results in a sacred and a holy union of man and wife by virtue of which the wife is completely transplanted in the household of her husband and takes a new birth as a partner of her husband becoming a part and parcel of the body of the husband.
To a Hindu wife her husband is her God and her life becomes one of selfless service and unstinted devotion and profound dedication to her husband.
She not only shares the life and love the joys and sorrows, the troubles and tribulations of her husband but becomes an integral part of her husband 's life and activities.
Cole brooke in his book 'Digest of Hindu Law ' Vol.
II de scribes the status of wife at p. 158 thus: "A wife is considered as half the body of her husband, equally sharing the fruit of pure and impure acts; whether she ascend "the pile after him, or survive for the benefit of her husband, she is a faithful wife.
" This being the position after marriage, it is manifest that the law enjoins a corresponding duty on the husband to maintain his wife and look after her comforts and to provide her food and raiments.
It is well settled that under the Hindu!Law the husband has got a personal obligation to maintain his wife and if he is possessed of properties then his wife is entitled as of right to be maintained out of such properties.
The claim of a Hindu widow to be main tained is not an empty formality which is to be exercised as a matter of concession or indulgence, grace or gratis or generosity but is a valuable spiritual and moral right which flows from the spiritual and temporal relationship of the husband an wife.
As the wife is in a sense a part of the body of her husband, she becomes co owner of the property of her husband though in a subordinate sense.
Although the right of maintenance does not per se create a legal charge on the property of her husband, yet the wife can enforce this right by moving the Court for passing a decree for maintenance by creating a charge.
This right is available only so long as the wife continues to be chaste.
Thus the position is that the right of maintenance may amount to a legal charge if such a charge is created either by an agree ment between the parties or by decree.
There are a number of authorities which have taken the view that even if the property is transferred and the trans feree takes the property with notice of the right of the widow to be maintained out of the property, the purchaser takes the obligation to maintain the widow out of the property purchased and the wife or widow can follow the property in the hands of the purchaser for the limited purpose of her maintenance.
We shall, however, deal with these authorities a little later.
278 Colebrooke in his 'Digest of Hindu Law Vol.
1I, quotes the.
Mahabharata at p. 121 thus: "Where females are honoured, there the deities are pleased; but where they are unhonoured, there all religious acts become fruitless.
" This clearly illustrates the high position which is bestowed on Hindu women by the Shastric Law.
Again Colebrooke in his book Vol.
II at p. 123, while describing the circumstances under which the maintenance is to be given to the wife, quotes Manu thus: "MANU : Should a man have business abroad, let him assure a fit maintenance to his wife, and then reside for a time in a foreign country; since a wife, even though virtuous, may be tempted to act amiss, if she be distressed by want of subsistence: While her husband, having settled her maintenance, resides abroad, let her continue firm in religious austerities; but if he leave no support, let her subsist by spinning an other blameless articles" This extract clearly shows that there is a legal obligation on the part of the husband to make arrangements for his wife 's due maintenance even if he goes abroad for business purposes.
Colebrooke again quotes Yajnawalkya at p. 243 of his book Vol.
thus: "When the father makes an equal partition among his sons, his wives must have equal shares with them, if they have received no wealth either from their lord or from his father.
If he makes an equal partition among his sons by his own choice, he must give equal shares to such of his wives also as have no male issue.
" This shows that when a partition is effected, the Hindu Law enjoins that the wife must get an equal share with the sons, thus reinforcing the important character of the right of maintenance which a Hindu wife or widow possesses under the Hindu Law.
Similarly Gopalchandra Sarkar Sastri dealing with the nature and incidents of the Hindu widow 's right to mainte nance observes in his treatise 'Hindu Law ' at p. 533 thus: "When the husband is alive, he is per sonally liable for the wife 's maintenance, which is also a legal charge upon his proper ty, this charge being a legal incident of her marital co ownership in all her husband 's property .
But after his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the husband 's estate; but the Courts appear to hold, 279 in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" The view of the author appears to be that the Courts hold that the right of maintenance of a widow does not amount to a legal charge and this is so because proper materials were not placed before the Courts.
In other words, the author seems to indicate that the original Hindu Law contained clear provisions that the right of! maintenance amounts to a charge on the property of her husband and the obligation runs; with the property so that any person who inherits the property also takes upon the obligation to maintain the widow.
Sastri quotes from the original texts various ex tracts regarding the nature and extent of the right of maintenance of the Hindu women some of which may be extract ed thus: "The support of the group of persons who should be maintained, is the approved means of attaining heaven, but hell is the man 's portion if they suffer; therefore he should carefully maintain them.
The father, the mother, the Guru (an elderly relation worthy of respect), a wife, an offspring, poor dependants, a guest, and a religious mendicant are declared to be the group of persons who are to be maintained.
Manu, cited in Srikrishna 's commentary on the Dayabhaga, ii, 23.
It is declared by Manu that the aged mother and father, the chaste wife, and an infant child must be maintained even by doing a hundred misdeeds, Manu cited in the Mitak ' shara while dealing with gifts.
" The last extract dearly shows the imperative nature of the duty imposed on the owner of the property to maintain wife, aged mother, father etc.
even at the cost of perpetrating a hundred misdeeds.
Similarly Sastri in his book quotes Yajnaval kya at p. 523 thus: "Property other than what is required for the maintenance of the family may be given.
" The learned author highlights the importance of the right maintenance as being a charge on the property of the husband and observes as follows: "The ancestral immovable property is the hereditary source of maintenance of the mem bers of the family, and the same is charged with the liability of supporting its members, all of whom acquire a right to, such property from the moment they become members of the family, by virtue of which they are at least entitled to maintenance out of the same.
Such 280 property cannot be sold or given away except for the support of the family; a small portion of the same may be alienated, if not incompat ible with the support of the family.
There is no difference between the two schools as regards the view that the ances tral property is charged with the maintenance of the members of the family, and that no alienation can be made, which will prejudi cially affect the support of the group of persons who ought to be maintained.
Hence heirs are bound to maintain those whom the last holder was bound to maintain.
" The author further points out that under the Mitakshara law the daughter in law does, with her husband, acquire a right to the ancestral property, since her marriage, but she becomes her husband 's co owner in a subordinate sense, and the principal legal incident of this ownership is the right to maintenance, which cannot be defeated by gift or devise made by the holder of such property.
Similar observations have been made by the learned author at p. 528 of the book which may be extracted thus: "According to both the schools, the lawfully wedded wife acquires from the moment of her marriage a right to the property be longing to the husband at the, time and also to any property that may subsequently be acquired by him, so that she becomes a co owner of the husband, though her right is not co equal to that of the husband, but a subor dinate one, owing to her disability founded on her status of perpetual or life long tutelege or dependence.
. . . . . .
This right of the wife to maintenance from her husband is not lost even if the husband renounce Hinduism.
This right subsists even after the husband 's death although her husband 's right as distinguished from hers may pass by suvi vorship or by succession to sons or even to collaterals; these simply step into the posi tion of her husband, and she is required by Hindu law to live under their guardianship after her husband 's death.
" Finally it is pointed out by the learned author at p. 529 of the Book that the right which a woman acquires to her husband 's property subsists even after his death and ob served thus: "According to both the schools, the right which a woman acquires to her husband 's property subsists after his death, whether his interest passes by succession or by survivor ship to the male issue or any other person, and that this right does not depend upon the widow 's not possessing other means of support.
" 281 Summarising the nature of the liability of the husband to maintain his wife, the learned author observed as follows at p. 533 of his Book: "When the husband is alive, he is person ally liable for the wife 's maintenance, which is also a legal charge upon his property, this charge being a legal incident of her marital co ownership in all her husband 's property . .
But after 'his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the hus band 's estate; but the Courts appear to hold, in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" To sump up, therefore, according to.
Sastri 's interpre tation of Shastric Hindu Law the right to maintenance possessed by a Hindu widow is a very important right which amounts.
to a charge on the property of her husband which continues to the successor of the property and the wife is regarded as a sort of co owner of the husband 's property though in a subordinate sense, i.e. the wife has no dominion over the property.
Similarly Mayne in his "Treatise on Hindu Law & Usage", 11th Edn., has traced the history and origin of the right of maintenance of a Hindu woman which according to him arises from the theory of an undivided family where the head of the family, is .bound to maintain the members including their wives and their children.
The learned author observes thus: (p. 813).
"The importance and extent of the right of maintenance necessarily arises from the theory of an undivided family.
The head of such a family is bound to maintain its mem bers, their wives and their children, to perform their ceremonies and to defray the expenses of their marriages;" Again at p. 816 para 684 the author stresses the fact that the maintenance of a wife is a matter of personal obligation on the part of the husband and observes thus: "The maintenance of a wife, aged parents and a minor son is a matter of personal obli gation arising from the very existence of the relationship and quite independent of the possession of any property, ancestral or acquired . . 'It is declared by Manu that the aged mother and father, the chaste wife and an infant child must be maintained even by doing a hundred misdeeds.
" 282 Again it has been observed at p. 818 para 687: "The maintenance of a wife by her hus band is, of course, a matter of personal obligation., which attaches from the moment of marriage." The author points out at p. 821 paragraph 689 that even after the coming into force of the Hindu Women 's Right to Property Act, 1937 which confers upon the widow a right of succession in respect of the non agricultural property, she is still entitled to maintenance from the family property.
The author observes thus: "It cannot, therefore, be said that the reason of the right has ceased to exist and the right is gone.
It was accordingly held that the widow of a deceased coparcener is still entitled to maintenance notwithstanding her right under the Act to a share in.
the non agricultural part of the family estate.
" Furthermore, the author cites the passage of Narada cited in Smriti Chandrika regarding which there is no dispute.
The saying runs thus: "Whichever wife (patni) becomes a widow and ' continues virtuous, she is entitled to be provided with food and raiment.
" At p. 822 para 690 the author points out that the right of a widow to be maintained is taken over even by the heirs of the husband who succeed to his property either by inheri tance or by survivorship.
In this connection the following observations are made: "She is entitled to be maintained where her husband 's separate property is taken by his male issue.
Where, at the time of his death, he was a coparcener she is entitled to maintenance as against those who take her husband 's share by survivorship." The Hindu law is so jealous in guarding the interests .
of Hindu women that the obligation for maintaining the Hindu women falls even on the King when he takes the estate by escheat or by forfeiture.
Similarly Mulla in his book "Hindu Law", 14th Edn., describes the incidents and characteristics of Hindu wife 's right to maintenance and observes thus at p. 597: "A wife is entitled to be maintained by her husband, whether he possesses property or not.
When a man with his eyes open marries a girl accustomed to a certain style of liv ing, he undertakes the obligation of maintain ing her in that style.
The maintenance of a wife by her husband is a matter of personal obligation arising from the very existence of the relationship, and quite independent of the possession by the husband of any property, ancestral or self acquired.
" 283 We might further mention that the Hindu wom en 's right to maintenance finally received statutory recognition and the entire law on the subject was consolidated and codified by the Hindu Married Women 's Right to Separate Maintenance and Residence Act, 1946 hereinaf ter to be referred to as 'the Act of 1946 ' which came into force on April 23, 1946.
Thus there appears to be complete unanimity of the various schools of Hindu law on the important incidents and indicia of the Hindu women 's right to maintenance which has now received statutory recognition and which only shows that the right to maintenance though not an indefeasible right to property is undoubtedly a pre existing right.
We shall now refer to some of the authorities which have dealt with this aspect of the matter.
In Narayan Rao Ramchandra Pant vs Ramabai(1), the Judicial Committee pointed out that the widow 's right to maintenance arises from the common law which developed from time to time.
justice West of the Bombay High Court appears to have entered into a very elaborate discussion of the entire law on the subject in Lakshman Ramchandra Joshi and Anr.
vs Satyabhamabai(2) and observed as follows: "These several authorities, no doubt, afford, in combination, a strong support to the proposition that a widow 's maintenance, especially as against the sons, the a charge on the estate, a right in re in the fullest sense adhering to the property, into whatever hands it may pass.
" These observations were reiterated in a later case in Narba dabai vs Mahadeo Narayan, Kashinath Narayan and Shamabai(3).
The observations of West J., in Lakshman Ramchandra Joshi and Anr 's case (supra) were fully approved by the Judicial Committee in Mst.
Dan Kuer vs Mst.
Sarla Devi(4), where it was observed: "But, apart from this circumstance, the judgment of West J., whose dissertations on Hindu Law must always command great esteem, contains an exposition of the law on this point, and the case is therefore rightly regarded as a leading authority on the ques tion.
In the course of his judgment that learned judge quotes with approval the remarks of Phear J., in Srimati Bhagabati vs Kanailal Mitter (1872) 8 Ben.
L.R. 225 that "as against one who has taken the property as heir, the widow has a right to have a proper sum for her maintenance ascertained and made a charge on the property in his hands.
She may also, doubtless, follow the property for this purpose into the hands of anyone who.
takes it as a volunteer, or with notice of her having set up a claim for maintenance against the heir" and that "when the property (1) L.R. 6 I.A. 114.
(2) I.L.R. (3) I.L.R. (4) L.R. 73 I.A. 208.
284 passed into the hands of a bona ' fide purchaser without notice, it cannot be affected by anything short of an already existing proprietary right; it cannot be subject to that which is not already a specif ic charge, or which does not contain all the elements necessary for its ripening into a specific charge.
" Summarising the entire position the Privy Council enunci ated the law thus: "The true rule of Hindu law in such matters would appear to be as follows: Two, obliga tions confront a joint Hindu family.
(1) The obligation to pay the debts (for instance, of the father) binding on the family; and (2) the moral obligation "to provide maintenance to the widows of the family.
" The latter obligation would, under certain circumstances, ripen into a legal obligation, as, for in stance, when a charge is created on specific property of the family either by agreement or a decree of the court; that, so long as neither of these two obligations has taken the form of a charge on the family property, the obligation to pay the binding debts will have precedence (as, for instance, in the course of the administration of the estate) over mere claims of a female member 's main tenance, but, if either of these two obliga tions assumes the shape of a charge, it would take precedence over the other." In Pratapmull Agarwalla vs Dhanabati Bibi,(1) the Judicial Committee pointed out that while a mother may not be the owner of her share until partition is made and has no pro existing right with regard to the share in the property, but she has a pro existing right for maintenance.
This Court also has made similar observations in a large number of cases regarding the nature and extent of the Hindu women 's right to maintenance.
In Rani Bai vs Shri Yadunandan Ram & Artr (2) this Court, while dealing with a situation where a widow claimed the right of maintenance but refused to hand over possession of the property until she secured her proper maintenance, observed as follows: .lm 15 "It cannot be disputed that the appel lant who is the widow of a pre deceased son of Jangi Jogi was entitled to receive main tenance so long as she did not to marry out of the estate of her father in law.
Although her claim for maintenance was not a charge upon the estate until it had been fixed and specifically charged thereupon her right was not liable to be defeated except by transfer to a bona fide purchaser for value without notice of a claim or even with notice of a claim unless the transfer was made with the intention of defeating her right.
The courts in India have taken the view that where a widow is in possession of a specific proper ty for the purpose of her maintenance a pur chaser buying with notice of her claim is not entitled to (1) L.R. 63 1.A. 33.
(2) ; 285 possession of that property without first securing proper maintenance for her: [vide Rachawa & others vs Shivayogappa I. .
In the present case it is difficult to understand how the appellant could be deprived of the possession of proper ties by a trespasser.
Moreover she was presum ably in possession of these properties in lieu of her right of maintenance and could not be deprived of them even by Jugli Bai without first securing proper maintenance for her out of the aforesaid properties.
" In Sheo Dyal Tewaree vs Judoonath Tewaree, (1) the Calcutta High Court stressed the fact that although the widow may not be the owner of a share but she had a pre existing right of maintenance.
Elucidating the nature and extent of a right of a Hindu wife to maintenance, the Calcutta High Court pointed out in Srinath Das vs Probodh Chunder Das(2) that the right of maintenance is really identified with the husband 's property right though of a subordinate nature.
In Hemangini Dasi vs Kedarnath Kundu Chowdhury(3) the Privy Council held that if the estate remained joint and undivided the maintenance of the mother remained a charge on the whole estate and that any share that the widow took in the property which was equal to the share of a son was really in lieu of maintenance for which the estate was liable.
The position has been very succinctly stated and meticu lously analysed by a decision of the Madras High Court in K.V. Thangavelu vs The Court of Wards, Madras,(4) where, dealing with the entire history of the matter and relying on various original texts of the Hindu jurists, the Madras High Court pointed out that a cogent ground for preferring the widow 's claim is to be found in her qualified or subordinate co ownership in the husband 's property declared by the Mitakshara.
The Court referred to verse 52 of Vyavaharad haya (chapter II) where the Mitakshara refers to Apastam ba 's Dharmasutra as follows: "From marriage arises also jointness (sahatwam) in the holding of property (dravya paragraphestiu)." In an earlier case Sarojinidevi vs Subrahmanyam,(5) the Madras High Court held that even after the coming into force of the Hindu Women 's Right to Property Act, 1937, which did not apply to agricultural lands, the right of the Hindu widow to maintenance stood in tact and the widow was enti tled to maintenance notwithstanding her right under the Act to a share in the non agricultural part of the family es tate.
To the same effect is an earlier decision (1) (2) 11 C.L.J. 580.
(3) I.L.R. (4) (5) I.L.R. 286 of the Madras High Court in Jayanti Subbiah vs Alamelu Mangamma( ') where the High Court pointed out that under the Hindu Law the maintenance of a wife by her husband is a matter of personal obligation arising from the very exist ence of her relationship and quite independent of the pos session by the husband of any property ancestral or self acquired.
We fully agree with this exposition of the law which is supported by a large number of authorities as discussed above.
In Yella 'wa vs Bhimangavda(2), the Bombay High Court was of the view that even the heir of the husband 's property could not be allowed to recover possession from the widow without first making proper arrangements for her mainte nance.
This case was approved by this Court in Rani Bags case (supra).
Thus on a careful consideration and detailed analysis of the authorities mentioned above and the Shastric Hindu Law on the subject, the following propositions emerge with respect to the incidents and characteristics of a Hindu woman 's right to maintenance: (1) that a Hindu woman 's right to maintenance is a personal obligation so far as the husband is ' concerned, and it is his duty to maintain her even if he has no property.
If the hus band has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obliga tion to maintain the widow; (2) though the widow 's right to maintenance is not a right to property but it is undoubtedly pre existing right in property, i.e. it is a jus ad rem not jus in rem and it can be en forced by the widow who can get a charge created for her maintenance on the property either by an agreement or by obtaining a decree from the civil court; (3) that the right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchas er has notice of the widow 's right to mainte nance, the purchaser is legally bound to provide for her maintenance; (4) that the right to maintenance is undoubt edly a preexisting right which existed in the Hindu Law long before the passing of the Act of 1937 or the Act of 1946, and is, therefore, a pre existing right; (5) that the right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort I.L.R. (2) I.L.R. 287 of co owner in the property of her husband, though her co ownership is of a subordinate nature; and (6)that where a Hindu widow is in possession of the property of her husband, she is enti tled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make due arrangements for her maintenance.
With this preface regarding a Hindu woman 's right to maintenance and the necessary concomitants and incidents of those rights, we now proceed to determine the question of law that arises for consideration in this appeal.
Before taking up that question, I might trace the historical growth of the legislation introducing slow and gradual changes in the Shastric Hindu from time to time.
The exact origin of Hindu Law is steeped and shrouded in antiquity and, therefore, it is not possible to determine the ethics or Justification for assigning a somewhat subordinate position to a Hindu woman in matters of inheritance, marriage and the nature of the limited interest which she took even after inheriting her husband 's property.
It is also strange that the Hindu Law made no provision for divorce at all.
This may be due to 'the fact that during the time of Manu and Yajnav alkya the structure of the Hindu society was quite different 'and there being no social problem of the magnitude that we have today, it was not considered necessary to break up the integrity and solidarity of a Hindu family by allowing ownership rights to the Hindu females.
Another object may have been to .retain the family property within the family in order to consolidate the gains which a particular family may have made.
However, these are matters of speculation.
But one thing is dear, namely, that the Hindu jurists were very particular in making stringent provisions safeguarding the maintenance of the Hindu females either by the husband or even by his heirs after his death.
Perhaps they thought that the property which a widow may receive in lieu of maintenance or the expenses which may be incurred for her maintenance would be a good substitute for the share which she might inherit in her husband 's property.
Nevertheless, the Legislature appears to have stepped in from time to time to soften the rigours of the personal law of Hindus by adding new heirs, conferring new rights on Hindu females and making express provisions for adoption, maintenance etc.
It appears that the question of conferring absolute interest on the Hindu female had engaged the attention of the Legisla ture ever since 1941 but the idea took a tangible shape only in 1954 when the Hindu Succession Bill was introduced and eventually passed in 1956.
This Bill was preceded by a Hindu Code Committee headed by Mr. B. N. Rau who had made a number of recommendations which formed the basis of the 1956 Act.
After the attainment of independence, the entire per spective changed, the nature of old human values assumed a new complexion and the need for emancipation of womanhood from feudal bondage became all the more imperative.
Under the strain and stress of 288 socio economic conditions and a continuous agitation by the female Hindus for enlargement of their rights a new look to the rights of women as provided by the Shastric Hindu Law had to be given.
In pursuance of these social pressures, it was necessary to set up a new social order where the women should be given a place of honour and equality with the male sex in every other respect.
This was the prime need of the hour and the temper of the times dictated the imperative necessity of making revolutionary changes in the Hindu Law in order to abolish the invidious distinction in matters of inheritance between a male and a female.
Similarly it was realised that there should be express provision for divorce on certain specified grounds inasmuch as the absence of such a provision had perpetrated a serious injustice to the Hindu females for a long time.
It seems to me that it was with this object in view that the Legislature of our free country thought it as its primary duty to bring forth legis lation to remove the dangerous anomalies appearing in the Hindu Law.
Even during the British times, there were certain legislation modifying certain provisions of the Hindu Law, e.g., the Hindu Law Inheritance Act which added a few more heirs including some females; the Hindu Women 's Right to Property Act, 1937, which provided that on partition a widow would be entitled to the same share as the sons in the property of her husband.
The Act of 1937, while giving a share to the wife on partition had not disturbed her right to claim maintenance which was preserved in tact and al though she was not permitted to sue for partition she was undoubtedly entiled to sue for maintenance without having recourse to the remedy of partition.
After independence the Parliament passed the Hindu Minority and Guardianship Act, 1956; the ; the Hindu Marriage Act, 1956 which regulated the law of marriage and divorce and ultimately the which provided for intestate succession.
The Hindu Succes sion Act, 1956 was, therefore, undoubtedly a piece of social legislation which fulfilled a long felt need of the nation and was widely acclaimed by the entire people as would appear from the debates which preceded the passing of the Act.
It is in the light of these circumstances that we have now to interpret the provisions of section 14(1) & (2) of the Act of 1956.
Section 14 of the 1956 Act runs thus: "14.
(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
Explanation.
In this Sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase 289 or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the com mencement of this Act.
(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property." This Court has interpreted the scope and ambit of section 14(1) and the Explanation thereto on several occasions and has pointed out that the object of the legislation was to make revolutionary and far reaching changes in the entire struc ture of the Hindu society.
The word "possessed" used in section 14(1) has also been interpreted by this Court and it has been held that the word has been used in a very wide sense so as to include the st.ate of owning or having the property in one 's power and it is not necessary for the application of section 14 (1) that a Hindu woman should be in actual or physical possession of the property.
It is sufficient if she has a right to the property and the said property is in her power or domain.
In S.S. Munnalal vs
S.S. Rajkumar (1) it was held that mere declaration of the share of the widow passed only an of her share under a preliminary decree would fall within the ambit of section 14(1) and even though the widow did not get actual possession of the property until a final decree is passed she would in law be deemed to be in posses sion of the property.
In that case, the High Court had held that mere declaration of the share of the widow passed only an inchoate interest to her and she never came to possess the share within the meaning of section 14 of the Act and there fore the property remained joint family property.
This Court reversed the judgment of the High Court holding that once a preliminary decree was passed in favour of the widow granting her a share in the property she must be deemed to be in possession of the property in question.
Their Lordships emphasised that the words "possessed by" used in section 14(1) clearly indicated that such a situation was envis aged by the Legislature.
White interpreting the provisions of section 14 the Court also pointed out that the 1956 Act was a codifying enactment which had made far reaching changes in the structure of the Hindu society and the object was to sweep away traditional limitations placed on the rights of the Hindu women.
In this connection, the Court observed as follows: "The Act is a codifying enactment, and has made farreaching changes .in the structure of the Hindu law of inheritance, and succes sion.
The Act confers upon Hindu females full rights of inheritance, and sweeps away the traditional limitations on her powers of dispositions which were regarded under the Hindu law as inherent in her estate . .
Normally a right declared in an estate by a preliminary decree would be regarded as property, and there is nothing in the context in which section 14 occurs or in the phraseology (1) [1962] Supp. 3 S.C.R. 418.
4 436 SCI/77 290 used by the Legislature to warrant the view that such a right declared in relation to the estate of a joint family in favour of a Hindu widow is not property within the meaning of section 14.
In the light of the scheme of the Act and its evolved purpose it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to proper ty.
If under a preliminary decree the right in favour of a Hindu male be regarded a.s property the right declared in favour of a Hindu female must also be regarded as proper ty.
Earlier the Court observed in that very case as under: "By section 14 (1) the Legislature sought to convert the interest of a Hindu female which under the Sastric Hindu law would have been regarded as a limited interest into an abso lute interest 'and by the explanation thereto gave to the expression "property" the widest connotation.
The expression includes property acquired by a Hindu female by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage or by her own skill or exertion, or by purchase or by prescription, or in any other manner what soever.
By section 14(1) manifestly it is intended to convert the interest which a Hindu female has in property however restricted "the nature of that interest under the Sastric Hindu law may be into absolute estate.
" The matter was again considered by this Court in Eramma vs Verrupanna (1) where it was held that before a widow can get absolute interest under section 14(1) she must have some vestige of title, i.e. her possession must be under some title or right and not be that of a rank trespasser.
In this connection the Court observed as follows: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or 'after the com mencement of the Act.
It may be noticed that the Explanation to section 14(1 ) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title however, restricted the nature of her interest may be . .
It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title.
It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser.
In other words, the provisions of section 14( 1 ) of the Act cannot be attracted in the case of .
a Hindu female who is in possession of the property of the last (1) 291 male holder on the date of the commencement of the Act when she is only a trespasser without any right to property.
" In Mangal Singh vs Smt.
Ratno (1) a widow came into posses sion of her husband 's property in 1917 and continued to be in possession of the same till 1954 when she was dispos sessed by a collateral of her husband under the orders of the Revenue authorities.
She filed a suit for recovery of possession and during the pendency of the suit the Act of 1956 came into force.
This Court upholding the judgment of the High Court held that the dispossession of the widow being illegal, she must be deemed to be, in the eye of law, to continue in possession of the properties and acquired an absolute interest with the coming into force of the Act of 1956.
It was not a case where a Hindu female had parted with her right so as to.
place herself in a position where she could in no manner exercise her rights in that property any longer when the Act came into force.
This Court observed as follows: "It is significant that the Legislature begins section 14(1) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu.
" If the expression used had been "in possession of" instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession.
The constructive possession may be through a lessee, mortga gee, licensee, etc.
The use of the expression "possessed by" instead of the expression "in possession of", in our opinion, was intended to enlarge the meaning of this expression.
It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession." "It appears to us that the expression used in section 14(1) of the Act was intended to cover cases of possession in law also where lands may have descended to a female Hindu and she has not actually entered into them.
It would of course cover.
the other cases of actual.
or constructive possession.
On the language of section 14( 1 ), therefore, we hold that this provision will become applicable to any property which is owned by a female Hindu, even though she is not in actual physical or constructive possession of that property." Again, while referring to an earlier case, namely, Eramma Verrupanna (supra), the Court clarified the position thus: "This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for eases where the Hindu female possesses the right of ownership of 'the property in question.
Even (1) ; 292 mere physical possession of the property without the right of ownership will not at tract the provisions of this section.
This case, also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the right of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.
The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could,.
in no manner, exercise her rights of ownership in that property any longer." In Sukhram & Anr.
vs Gauri Shanker &.
Another(1) the facts Were as follows: Hukam Singh and Sukh Ram were two brothers.
Chidda, the second appellant was the son of Sukh Ram and thus Chidda, Hukam Singh and Sukh Ram were members of a joint Hindu family governed by the Benares School of Mitakshara Law.
Hukam Singh died in 1952 leaving behind his widow Krishna Devi.
On December 15, 1956, Krishna Devi sold half share of the house belonging to the joint family.
This sale was challenged by the other members of the joint family on the ground that Krishna Devi had merely a life interest.
The question raised .was whether Krishna Devi acquired an abso lute .interest in the properties after coming into force of the .
It was argued before this Court that according to the Benaras School, a male coparcen er was not entitled to alienate even for value his undivided interest in the coparcenary without the consent of other coparceners and, therefore, Krishna Devi could not have higher rights than what her husband possessed.
This Court, however, held that in view of the express words of section 14 of the 1956 Act, once the widow was possessed of property before or after the commencement of the Act, she held it as full owner and not as a limited owner and, therefore, any restriction placed by Shastric Hindu Law was wiped out by the legislative intent as expressed in the Act of 1956.
The Court observed thus: "But the words of section 14 of the are express and explicit; thereby a female Hindu possessed of property whether acquired before or after the commence ment of the Act holds it as full owner and not as a limited owner.
The interest to which Krishna Devi became entitled on the death of her husband under section 3(2) of the Hindu Women 's Right to Property Act, 1937, in the property of the joint family is indisputably her "property" within the meaning of section 14 of Act 30 of 1956, and when she became "full owner" of that property she acquired right unlimited in point of user and duration and uninhibited in point of disposition." (1) ; 293 This case indirectly supports the view that if the intention of the Legislature was.
to confer absolute interest on the widow, no limitation can be spelt out ' either from the old Shastric Law or otherwise which may be allowed to defeat the intention.
This Court went to the extent of holding that the words in section 14(1) are so express and explicit that the widow acquired a right unlimited in point of user, though a male member governed by .the
Benaras school had no power of alienation without the consent of other coparceners.
Under the Act the female had higher powers than the male because the words of the statute did not contain any limitation at all.
On the parity of reasoning, therefore, where once a. property is given to the widow in lieu of maintenance and she enters in_to possession of that property, no amount of restriction contained in the document can prevent her from acquiring absolute interest in the property because the contractual restriction cannot be higher than the old Hindu Shastric Law or the express words the Act of 1956.
In Badri Prashad vs Smt.
Kansa Devi(1) the prepositer died in 1947 leaving behind five sons and a widow.
Soon after his death disputes arose between the parties and the matter was referred to an arbitrator in 1950.
The arbitrator in his award allotted shares to the parties wherein it was stated that the widow would only have widow 's estate in those properties.
While .the widow was in possession of the properties, the Act of 1956 came into force and the question arose whether or not she became full owner of the property or she only had a restricted interest as provided in the grant, namely, the award.
Court held that although the award had given a restricted estate, but this was only a narration of the state of law as it existed when the award was made.
As the widow, however, inherited the property under the Hindu Women 's Right to Property Act, her interest became absolute with the passing of the Act of 1956 and she squarely fell within the provisions of section 14(1) .of the Act.
It was further held that the mere fact that the partition was by means; of an award would not bring the matter within section 14(2) of the Act, because the interest given to, the widow was: on the basis of pre existing right and not a new grant for the first time.
This Court observed as follows: "The word "acquired" in sub section
(1 ) has also to be given the widest possible meaning.
This would be.
so be cause.
of the language of the Explanation which takes sub section
(1) applicable to acquisition of property by inheritance or devise or at a partition or in lieu of maintenance or arrears of maintenance or by gift or by a female 's own skill or exertion or by purchase or prescription or in any manner whatsoever.
Where at the commencement of the Act a female Hindu has a share in joint properties which are later on partitioned by metes and bounds and she gets ' possession of the properties allotted to her there can be No. manner of doubt that she is not only possessed of that property at the time of the coming into force of the Act but has.
also acquired the same before its commencement." (1) ; 294 This Court relied upon two earlier decisions: viz. S.S. Munnalal 's case and Sukhram 's case (supra).
This case appears to be nearest to the point which falls.
for determi nation in this appeal, though it does not cover the points argued before us directly.
Lastly our attention was.
drawn to.
an unreported deci sion of this Court in Nirmal Chand vs Vidya.
Wanti (dead) by her legal representatives(1) in which case Amin Chand and Lakhmi Chand were the owners of agricultural and non agri cultural properties.
The properties were partitioned in the year 1944 and Lakhmi Chand died leaving behind him the appellant and his second wife Subhrai Bai and his daughter by this wife.
There was a regular partition between Amin Chand and Subbrai Bai by a registered document dated Decem ber 3, 1945 under which a portion of the property was allot ted to Subhrai Bai and it was provided in the document that Subhrai Bai would be entitled only to the user of the land and she will have no right to alienate it in any manner but will have only life interest.
Later, Subhrai Bai bequeathed the property in 1957 to her daughter Vidya Wanti.
Subhrai Bai died and Vidya Wanti 's name was mutated in the papers after coming into ,force of the Act of 1956.
The point raised before the High Court was.
that as Subbrai Bai had been given only a limited interest in the property she had No. power to bequeath the property to her daughter as her case was not covered by section 14(1) but fell under section 14(2) of the Act.
This Court pointed out that at the time when the property was allotted to.
Subbrai Bai, the had.
not come into force and according to the state of Hindu Law as it ' then prevailed Subbrai Bai was undoubtedly entitled only to a limited interest.
There was a restric tion in the partition deed that Subhrai Bai would enjoy usufruct of the property only and shall not be entitled to, make any alienation.
It was not a restriction as such but a mere.
statement of law .as it then prevailed.
Such a re striction, therefore, ' would not bring the case of Subhrai Bai under section 14(2) of the Act and, therefore, she would acquire an absolute interest after the passing of the Act of 1956 and was, therefore, competent to execute the will in favour of her daughter.
This Court observed as follows: "If Subhrai Bai was entitled to.
a share in her husband 's properties then the suit properties must be held to.
have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allot ted to.
her share is merely recording the true legal position.
Hence it is not possibIe to, conclude that the properties in question were given to her subject to the condition.
of her enjoying it for her lifetime.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fail within section 14(2) of the .
In the light of the above decisions of this Court the following principles appear to be clear: (1) C.A. No. 609 of 1965 decided on Jan. 21, 1969.
295 (1) that the provisions of section 14, of the 1956 Act must be liberally construed in order to advance the object of the Act which is to enlarge the limited interest possessed by a Hindu widow which was in consonance with the changing temper of the times; (2) it is manifestly clear that sub section
(2) of section 14 does not refer to any transfer which merely recognises a pre existing right without creating or conferring a new title on the widow.
This was clearly held by this Court in Badri Parshad 's case (supra).
(3) that the Act of 1956 has made revolution ary and far reaching changes in the Hindu society and every attempt should be made to carry out the.
spirit of the Act which has undoubtedly supplied a long felt need and tried to do away with the invidious distinc tion between a Hindu male and female in matters of intestate succession; (4) that sub section
(2) of section 14 is merely a proviso to.
(1) of section 14 and has to be interpreted as a proviso and not in a manner so ' as to destroy the effect of the main provision.
We have given our anxious consideration.
to the language of section 14(1) & (2) and we feel that o.n a proper interpreta tion of section 14(2) there does not appear to be any real incon sistency between section 14(1),.
the explanation thereto and sub section
To begin with, section 14(1) does not limit the enlargement of the estate of a Hindu widow to any particular interest in the property.
On the other hand the Explanation to section 14(1) brings out the real purpose.
of section 14(1) by giving an exhaustive category of cases where principle of section 14(1 ) has to operate, i.e. to 'cases where a Hindu female would get an absolute interest.
The argument of the learned counsel for the appellant is that as the right of maintenance was a pre existing right, any instrument or transaction by which the property was allotted to the appel lant would not be a new transaction so as to create a new title but would be only in recognition of a pre existing right, namely, the right of maintenance.
On the other hand Mr. Natesan appearing for the respondents submitted that the object of the proviso was to.
validate rather than disturb the past transactions which had 131aced certain restrictions or curbs on the power of a Hindu female and as.
the language of the proviso is very wide there is no warrant for not applying it to cases where pre existing rights are con cerned.
In the alternative, Mr. Natesan argued that the Hindu woman 's right to maintenance is not a legal right.
unless an actual charge is created in respect of the property and is, therefore not enforceable at law.
It is, therefore, not correct to describe a claim of a Hindu fe male 's right to.
maintenance simpliciter as a pre existing right because all the necessary indicia of a legal right are wanting.
After considering various aspects of the matter we are inclined to agree with the contentions raised by Mr. Krishna Murthy Iyer appearing for the appellant.
In the: first place, the appellant 's contention 296 appears to be more in consonance with the spirit and object of the statute itself.
Secondly, we have already pointed out that the claim of a Hindu female for maintenance is undoubtedly a pre existing right and this has been So held not only by various Courts in India but also by the Judicial Committee of the Privy Council and by this Court.
It seems to us, and it has been held as discussed above, that the claim or the right to maintenance possessed by a Hindu female is really a substitute for a share which she would have got in the property of her husband.
This being the position, where a Hindu female who.
gets a share in her husband 's property acquires an absolute interest by virtue of section 14(1) of the Act, could it be intended by the legisla ture that in the same circumstances a Hindu female who could not get a share but has a right of maintenance would not get an absolute interest ? In other words, the position would be that the appellant would suffer because her husband had died prior to the Act of 1937.
If the husband of the appellant had died after 1937, there could be no, dispute that the appellant would have got an absolute interest, because she was entitled to her share under the provisions of the Hindu Women 's Right to Property Act, 1937.
Furthermore, it may be necessary to study the language in which the Explanation to section 14(1) and sub section
(2) of section 14 are couched.
It would be seen that while the Explanation to section 14( 1 ) clearly and expressly mentions "property acquired by a female Hindu" at a partition or in lieu of maintenance or arrears of mainte nance there is no reference in sub section
(2) at all to this particular mode of acquisition by a Hindu female which clearly indicates that the intention of the Parliament was to exclude the application of sub section
(2) to, cases where the property has been acquired by a Hindu female.
either at a partition or in lieu of maintenance etc.
The Explanation is an inclusive definition and if the Parliament intended that everything that is mentioned in the Explanation should be covered by sub section
(2) it should have expressly so stated in sub section
Again the language of sub section
(2) clearly shows that it would apply only to such transactions which. are absolutely independent in nature and which are not in recog nition of or in lieu of pre existing rights.
It appears from the Parliamentary Debates that when the Hindu Succes sion Bill, 1954, was referred to a Joint Committee by the Rajya Sabha, in section 14(2) which was clause 16(2) of the Draft Bill of the Joint Committee, the words mentioned were only gift or will.
Thus the intention of the Parliament was to confine sub section
(2) only to two transactions, namely a gift or a will, which clearly would not include property received by a Hindu female in lieu of maintenance or at a partition.
Subsequently, however, an amendment was proposed by one of the, members for adding other categories, namely, an instru ment, decree, order or award which was accepted by the Government.
This would show that the various terms, viz., gift, will, instrument, decree, order or award mentioned in section 14(2) would have to.
be read ejusdem generis so as refer to transactions where right is created for the first time in favour of the Hindu female.
The intention of the Parliament in adding the other categories to sub section
(2) was merely to ensure that any transaction under which a Hindu female gets a new or independent title under any of the modes mentioned in section 14(2), namely, gift, will, decree, order, award or m instrument which prescribes a restricted estate would not be disturbed and would continue to occupy the field covered by section 14(2).
This 297 would be the position even 'if a Hindu male was to get the property by any of the modes mentioned in section 14(2): he would also get only a restricted interest and, therefore, the Parliament thought that there was no warrant for making any distinction between a male or a female in this regard and both were, therefore, sought to be equated.
Finally, we cannot overlook the scope and extent of a proviso.
There can be no doubt that sub section
(2) of section 14 is.
clearly a proviso to section 14 (1) and this has been so held by this Court in Badri Prasad 's case (supra).
It is well settled that a provision in the nature of a proviso merely carves out an exception to the main provision and cannot be interpreted in a manner so as to.
destroy the effect of the main provision or to render the same nugatory.
If we accept the argument of the respondent that sub section
(2 ) to section 14 would include even a property which has been acquired by a Hindu female at a partition or in lieu of maintenance then a substantial part of the Explanation would be completely set at naught which could never be the intention of the proviso Thus we are clearly of the opinion that sub section
(2) of section 14 of the proviso should be interpreted in such a way so as not to substantially erode section 14(1) or the Explanation thereto.
In the present case we feel that the proviso has carved out completely a separate.
field and before it can apply three conditions must exist: (i) that the property must have been acquired by way of gift, will, instrument, decree, order of the Court or by an award; (ii) that any of these documents executed in favour of a Hindu female must prescribe a restricted estate in such property; and (iii) that the instrument must create or confer a new right, title or interest on the Hindu female and not merely recognise or give effect to a pre existing right which the female Hindu already possessed.
Where any of these documents are executed but no restricted estate is prescribed, sub section
(2) will have no application.
Similarly where these instruments do not confer a new title for the first time on the female Hindu, section 14(1) would have no application.
It seems to me that section 14(2) is a salutary provision which has been incorporated by the Parliament for historical reasons in order to maintain the link between the Shastric Hindu Law and the Hindu Law which was sought to be changed by recent legislation, so that where a female Hindu became possessed of property not in virtue of any pre existing right but otherwise, and the grantor chose to impose certain conditions on the grantee, the legislature did not want to interfere with such a transaction by oblit erating or setting at naught the conditions imposed.
There was some argument at the bar regarding the use of the term " 'limited owner" in section 14(1) and "restricted es tate" in section 14(2).
Not much, however, turns upon this.
I think that the Parliament advisedly used the expression "restricted estate" in section 14(2), because while a limited interest would indicate only life estate, a restricted estate is much wider in its import.
For instance, suppose a donor while giving 298 the property to a Hindu female inserts a condition that she will have to pay Rs. 200/ to donor or to one of his rela tives till a particular time, this would not come within the term "limited interest", but it would be included by the term "restricted estate".
That is the only justification for the difference in the terminology of section 14( 1 ) and (2) of the Act.
Having discussed the various aspects of section 14(1) and (2) we shall now deal with the authorities cited before us by.
counsel for the parties which are by no means consist ent.
We will first deal with the authorities which took the view that we have taken in this case.
In this connection the sheet anchor of the argument of the learned counsel for the appellant is the decision of the Bombay High Court in B.B. Patil vs Gangabai (1) and that of the counsel for the re spondents is the decision of the Madras High Court in Guru nadham vs Sundrarajulu(2) and Santhanam vs Subramania(3).
The latter case was affirmed in appeal by the Division Bench of the Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (4) and the aforesaid Division Bench judgment forms the subjects matter of Civil Appeal No. 135 of 1973 which will be disposed of by us by a separate judg ment.
We will now take up the case of the Bombay High Court relied upon by the learned counsel for the appellant which, in our opinion, lays down the correct law on the subject.
In B.B. Patil vs Gangabai (supra) the facts briefly were that the properties in question were the self acquired properties of Devgonda and after his death in 1902 Hira Bai daughter in law of Devgonda (widow of his son Appa, who also died soon thereafter) came into possession of the proper ties.
Disputes arose between Hira Bai and Nemgonda, the nephew of Devgonda, and the matter having been referred to the arbitrator he gave his award on October 16, 1903 and a decree in terms of the award was passed on October 24, 1903.
Under the decree in terms of the award, 65 acres of land and one house was allotted to Hira Bai out of which 30 acres were earmarked for the provision of maintenance and marriage of the three daughters and the rest of the property was ordered to be retained by Hira Bai for life with certain restrictions.
After her death these prop.reties were to revert to Nemgonda.
The dispute which was the subject matter of the appeal before the High Court was confined to 35 acres of land and the house which was in possession of Hira Bai.
Hira Bai continued to be in possession of these properties right upto February 25, 1967.
Meanwhile Nemgon da had died and his sons defendants 2 to 6 claimed the properties.
After the death of Hira Bai, the plaintiffs, who were two out of the three daughters of Hira Bai, filed a suit for possession claiming entire title to the properties in possession of Hira Bai on the ground that Hira Bai was in possession of the properties as limited owner at the time of the passing of the and (1) A.I.R. [1972] Bom.16.
(2) I.L.R. (3) I.L.R. (4) A.I.R. [1976] Mad. 279.
299 so her limited estate was enlarged into an absolute estate and the plaintiffs were, therefore, entitled to succeed to.
her properties in preference to the reversioners.
The suit was contested by defendants 2 to 6 mainly on the ground that as Hira Bai under the compromise was to retain only a life interest in the properties, her case would be covered by section 14(2) of the Act and after her death the properties would revert to the reversioners.
The Court held that as Hira Bai was put in possession of the properties in lieu of her maintenance, section 14 (2) had no application, because the award merely recognised the pre existing rights of Hira Bai and did not seek to confer any fresh rights or source of title on Hira Bai.
Thus even though the award did provide that Hira Bai would have a limited interest, section 14(2) would have no application and Hira Bai will get an absolute interest after the coming into force of the Hindu Success; on, Act, 1956.
The Court observed: "The explanation, thus, brings under ' its purview all properties traditionally acquired by a Hindu female on which merely by reason of the incidents of the Hindu law she has limited ownership.
In other words, sub section (1 ) read with this explanation provides that any property, howsoever acquired and in possession of a Hindu female after the commencement of the Act shall be held by her as a full owner in all cases where she former ly held merely limited ownership.
As a matter of fact, this sub section proceeds on the basis that there are.
several categories of properties of which a Hindu female, under the provisions of Hindu Law, is merely a limited owner.
By this enactment her rights! are enlarged and wherever under the Hindu Law she would merely obtain limited ownership, she would, after the commencement of the Act, obtain full ownership." "There is consensus of judicial opinion with regard to the ambit of sub section
(2) of section 14 of the Act.
It covers only those cases of grants where the interest in the grantee is created by the grant itself, or, in other words, where the gift, will, instrument, decree, order or award is the source or origin of the interest created in the grantee.
Where, however.
the instruments referred to above are not the source Of inter est created but are merely declaratory or definitive of the right to property anteced ently enjoyed by the Hindu female, sub section (2) has no application; and it matters not if in such instruments it is specifically provided in express terms that the Hindu female had a limited estate or ' that the property would revert on her death to the next reversioner such terms are merely the reiteration of the incidents of the Hindu Law applicable to the limited estate.
" Dwelling on the nature and incidents of the right of the widow ' to maintenance before the Hindu Women 's Right to Property Act, 1937, Palekar, J., speaking for the Court described the various 300 characteristics and incidents of the right of a Hindu female for maintenance (which have already been discussed by us).
Finally, the Judge observed as follows: "It appears to us that in the context of the Hindu widows the right to maintenance conferred under the Hindu Law is distinguisha ble in quality from her right to a share in the family property.
That may well be the reason why the explanation to sub section (1) of section 14 of the Act makes the female allottee of property "in lieu of maintenance" as much a limited owner as when the widow acquires "inheritance" or "at a partition".
And if in the latter two cases it is conceded that sub section (2) does not apply on the ground of antecedent right to the family properties, we do not see any rational justi fication to exclude a widow who has an equally sufficient claim over the family properties for her maintenance." Thus the following propositions emerge from a detailed discussion of this case: .lm10 (1) that the widow 's claim to maintenance is undoubtedly a tangible right though not an absolute right to property so as to become a fresh source of title.
The claim for maintenance can, however, be made a charge on the joint family properties, and even if the properties are sold with the notice of the Said charge, the sold properties will be bur dened with the claim for maintenance; (2) that by virtue of the Hindu Women 's Right to Property Act, 1937 the claim of the widow to main tenance has been crystallized into a full fledged right and any property allotted to her in lieu of maintenance becomes property to which she has a limited interest which by virtue of the provisions of Act of 1956 is enlarged into an absolute title; (3) Section 14(2) applies only to cases where grant is not in lieu of maintenance or in recognition of pre existing rights but confers a fresh right or tide for the first time and while conferring the said title certain restrictions are placed by the grant or transfer.
Where, .however, the grant is merely in recognition o.r in implementation of a pre existing right to claim maintenance, the case.
falls beyond the purview of section 14(2) and comes squarely within the explanation to section 14 (1).
The Court dissented from the contrary view taken by the Orissa and Madras High Courts on this question.
We find that the facts of this case are on all fours with the present appeal, and we are in complete agreement with the view taken and the reasons given by Palekar, J. Once it is recognised that right of maintenance is a pre existing tangi 301.
ble right, it makes no difference whether a Hindu widow died before or after the enactment of Hindu Women 's Rights to Property Act, 1937.
A similar view was taken by an earlier decision of the Andhra Pradesh High Court in Gadem Reddayya vs Varapula Venkataraju and Am, C) where the Court held that the family settlement was only in recognition of the pre existing right of the widow to maintenance and, therefore, was not covered by section 14(2) of the Act of 1956.
In our opinion, this case correctly states the law on the subject.
In Sumeshwar Mishra vs Swami Nath Tiwari, (2) the High Court of Patna appears to have taken the same view, and in our opinion very correctly.
The Patna High Court differed from the decision of the Madras High Court in Thatha Gurunadhan Chetti vs Smt.
Thatha Navaneethamma,(3) and in our opinion rightly.
We are of the opinion, for the reasons that we have already given above, that the.
view of the Madras High Court was not legally correct.
A later deci sion of the Patna High Court in Lakshmi Devi vs Shankar Jha(4) has also taken the same view.
We, however, fully approve of the view expressed by the Patna High Court and Andhra Pradesh High Court referred to above.
Similarly in H. Venkanagouda vs Hanamangouda(5) the Mysore High Court adopted the view of the Bombay High Court in B.B. Patil vs Gangabai (supra) and dissented from the contrary view taken by the Madras and the Orissa High Courts.
In our opinion, this decision seems to have correct ly interpreted the provisions of section 14(2) of the 1956 Act and has laid down the correct law.
The view of the Madras High Court and the Orissa High Court which was dissented fro.m by the Mysore High Court is, in our opinion, legally erroneous and must be overruled.
In Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr.(6) the Punjab High Court clearly held that application of section 14(2) was limited to only those cases.
where a female Hindu ac quired a title for the first time, for otherwise the proper ty acquired in lieu of maintenance even though conferring a limited estate fell clearly within the ambit of explanation to section 14(1) of the Act and would, therefore, become the absolute property of the widow.
Thus the Punjab High Court also fully favours the view taken by the Bombay, Patna, Mysore, Andhra Pradesh and other High Courts discussed above and has our full approval.
The only distinction in the Punjab case is that here the widow got the properties after the coming into force of the Hindu Women 's Rights to Proper ty Act, 1937, but that, as we shall point out hereafter, makes no difference with respect to the legal right which a widow has to maintain herself out of the family property.
(1) A.I.R. 1965 .A.P. 66.
(2) A.I.R. 1970 Pat.
A.I.R. 1967 Mad. 429.
(4) A.I.R. 1074 Pat.
(5) A.I.R. 1972 Mys. 286.
(6) A.I.R. 302 The Calcutta High Court has also taken the same view in Sasadhai Chandra Dev vs Smt.
Sundari Desi (1) which we endorse.
In Saraswathi Ammal vs Anantha Shenoi, (2) the Kerala High Court, after a very detailed discussion and meticulous analysis of the law on the subject, pointed out that the right of a widow to maintenance was not a matter of conces sion but under the Sastri 's Hindu Law it was an obligation on the heirs who inherited the properties of the husband to maintain the widow and any property which the widow got in lieu of maintenance was not one given purely as a matter of concession, but the widow acquired a right in such property.
We fully agree with the view taken by the Kerala High Court in the aforesaid case.
In Kunji Thomman vs Meenakshi(3) although the Kerala High court reiterated its facts of that particular case previous view, on the High Court held that under the family settle ment the widow did not get any right to maintenance but was conferred a new right which was not based on her pre existing right and on this ground the High Court felt that the widow would not get an absolute interest in view of the explanation to section 14 (1).
In Chellammal vs Nallammal(4) the facts were almost similar to the facts of the present case.
A single Judge of the Madras High Court held that.
the case was clearly covered by the Explanation to section 14(1) of the Act and the properties given to the widow in lieu of maintenance became her absolute properties and would not be covered by section 14(2) of the Act.
This decision appears to have been overruled by a later decision of the same High Court in section Kachapalaya Gurukkal vs V. Subramania.
Gurukkal (supra) which is the subjectmatter of Civil Appeal No. 126 of 1972 and we shall discuss the Division Bench 's decision when we refer to the authorities taking a contrary view.
We find ourselves in complete agreement with the view taken by the Single Judge in Chellammal vs Nellammal (supra).
and we overrule the Division Bench decision in section Kachapalaya Gurukkal 's case (supra).
Thus all the decisions discussed above proceed on the right premises and have correctly.appreciated the nature and incidents of a Hindu woman 's right to maintenance.
They have also properly understood the import and applicability of section 14(2) of the 1956 Act and have laid down correct law on the subject.
We now deal with the authorities taking a contrary view.
which, in our opinion, does not appear to.
be the correct view.
In Narayan Patra vs Tara Patrani(5) the Orissa High Court, following a decision of the Andhra Pradesh High Court in G. Kondiah v.G. Subbarayya(6), held that since the widows were given only a (1) A.I.R. 1962 Cal.
(2) A.I.R. 1966 Ker.
(3) I.L.R. (4) (5) [1970] 35 Cuttak L.T. 667=A.I.R. 1970 Orissa 131.
(6) 303 restricted estate their case squarely fell within the ambit of section 14(2) of the Act and their interest would not be enlarged.
Reliance was also placed on a Madras decision in Thatha Gurunadharn Chetty vs Thatha Navaneethamma (supra).
It is obvious that the conclusions arrived at by the High Court are not warranted by the express principles of Hindu Sastric Law.
It is true that a widow 's c/aim for mainte nance does not ripen into a full fledged right to property, but nevertheless it is undoubtedly a right which in certain cases can amount to a right to property where it is charged.
It cannot be sand that where a property is given to a widow in lieu of maintenance, it is given to her for the first time and not in lieu of a pre existing right The claim to maintenance, as also the right to claim proper ty in order to maintain herself, is an inherent right con ferred by the Hindu Law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before.
It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document the widow had no vestige of a claim or fight at all.
Once it is established that the instrument merely recognised the pre existing right, the widow would acquire absolute interest.
Second ly, the Explanation to section 14(1) merely mentions the various modes by which a widow can acquire a property and the property given in lieu of maintenance is one of the modes mentioned in the Explanation.
Sub section (2) is merely a proviso to section 14(1) and it cannot be interpreted in such a manner as to destroy the very concept of the right conferred on a Hindu woman under section 14(1).
Sub section (2) is limit ed only to those cases where by virtue of certain grant or disposition a right is conferred on the widow for the first time and the said right is restricted by certain conditions.
In other words, even if by a grant or disposi tion a property is conferred on a Hindu male under certain conditions, the same are binding on the male.
The effect of sub section
(2) is merely to equate male and female in respect of grant conferring a restricted estate.
In these circum stances we do not agree with the views expressed by the Orissa High Court .
The other High Courts which have taken a contrary view are mainly the Andhra Pradesh, Allahabad and the Madras High Courts.
In an earlier decision of the Patna High Court in Shiva Pujan Rat and Others vs Jamuna Missir and Others(1) the High Court seems to rally round the view taken by the Madras High Court.
We shall take up the decisions of the Andhra Pradesh High Court.
As already indicated above, the earlier decision of the Andhra Pradesh High Court in Gadam Reddayya vs Vara pula Venkataraju took the same view which was taken later by the Bombay High Court and held that in a case like the present, a Hindu female would get an absolute interest and her case would not be covered by sub section
(2) of section 14 of the 1956 Act.
In Gopisetti Kondaiah vs Gunda Subbarayudu(2) another Division Bench of the same High Court appears to have taken a contrary view.
Jaganmohan Reddy, C.J., speak ing for the Court observed as follows: (1) I.L.R. 47 Pat.
(2) I.L.IR, 304 "In so far as the right of a Hindu woman to maintenance is concerned, it is necessary at this stage to point out one other basic con cept.
A Hindu woman has a right to be main tained by her husband or from her husband 's property or Hindu joint family property.
But that is merely a right to receive maintenance out of the properties without in any way conferring on her any right, title or interest therein.
It is not a definite right, but is capable of being made a charge on specific properties by agreement, decree of Court or award, compromise or otherwise . .
But this indefinite right, to be maintained from out of the properties of a Hindu Joint family, does not, however, create in her a proprietary right in the property . .
But if a restricted estate is given by any such instru ment, even if it be in lieu of maintenance, which is inconsistent with an estate she would get under the Hindu Law, then sub section (2) of section 14 would operate to give her only a restricted estate.
But if it is the latter, notwithstanding the fact that it was trans ferred in lieu of maintenance, if only a restricted estate was conferred by the instru ment, then she would only have the restricted estate.
" While we fully agree with the first part of the observations made by the learned Chief Justice, as he then was.
that one of the basic concepts of Hindu Law is that a Hindu woman has right to be maintained by her husband or from her husband 's property or the joint family property we respectfully disa gree with his conclusion that even though this is the legal position yet the right to receive maintenance does not confer on her any right, title or interest in the property.
It is true that the claim for maintenance is not an enforceable right but it is undoubtedly a pre existing right, even though no charge is made on the properties which are liable for her maintenance.
We also do not agree with the view of the learned Chief Justice that if the property is given to the widow in lieu of maintenance she will get only a restricted estate.
In our opinion, the High Court of Andhra Pradesh has proceeded on wrong prem ises.
Instead of acknowledging the right of a Hindu woman to maintenance as a right to a right or that matter a pre existing right and then considering the effect of the subsequent transactions, the High Court has first presumed that the claim for maintenance is not a tangible right at all and, therefore, the question of a pre existing right does not arise.
This, as we have already pointed out, is against the consistent view taken by a large number of Courts for a very long period.
Furthermore, this case does not appear to have noticed the previous Division Bench decision in Gadam Reddayya 's case (supra) taking the contrary view, and on this ground alone the authority of this case is considerably weakened.
At any rate, since we are satisfied that the claim of a Hindu woman for mainte nance is a pre existing right, any transaction which is in recognition or declaration of that right clearly falls beyond the purview of section 14(2) of the 1956 Act and, there fore, this authority does not lay down the correct law.
We, therefore, do not approve of the view taken in this case and overrule the same.
305 As regards the Madras High Court, the position appears to be almost the same.
There also, while a single Judge took the same view as the Bombay High Court and held that section 14(2) was not applicable, the Division Bench of the Court in an appeal against the order of another Single Judge took the contrary view.
In section Kachupalaya Gurukal vs Subramania Gurukkal (supra) the Court seems to draw an artificial distinction between a claim of a widow for maintenance and a pre existing right possessed by her.
According to the High Court, while a claim for maintenance simpliciter. was not a right at all, the right to get a share in the husband 's property under the Hindu Women 's Right to, Property Act, 1937 was a pre existing right.
The Madras High Court ap pears to have fallen into an error by misconceiving the scope and extent of a Hindu woman 's right to maintenance.
Secondly, it appears to have interpreted the proviso in such a manner as to destroy the effect of the main provision, namely, section 14(1) and the explanation thereto, for which there can be no warrant in law.
The decision of Natesan, J, in Gurunadham vs Sundrarajulu Chetty (supra) which had been affirmed by this judgment also, appears to have taken the same view and had fallen into the same error.
Furthermore, the view of the learned Judge that on the interpretation given and the view taken by the Bombay High Court which we have accepted, section 14 is intended to override lawful terms in contracts, bargains, bequests or gifts etc.
is not correct, because the scope and area of sub section
(2) of section 14 is quite separate and defined.
Such a sub section applies only to such transactions as confer new right, title.
or interest on the Hindu females.
In such cases the titles created under sub section
(2) are left in tact and section 14(1) does not interfere with the titles so created under those instruments.
Thus, in short, these two, decisions suffer from the following legal infirmities: (i) the Madras High Court has not correctly or properly appreciated the nature and extent of the widow 's right to.
maintenance: and (ii) the distinc tion drawn by the Court regarding the share given to the widow under the Hindu Women 's Right to.
Property Act allot ted to her before the passing of the Act in lieu of mainte nance is based on artificial grounds.
In fact the Act of 1937 did not legislate anything new, but merely gave statu tory recognition to the old Shastric Hindu Law by consoli dating the same and clarifying the right of the widow which she already possessed in matter of succession under the, Hindu Law.
This being the position, the Act of 1937 makes no difference.
so far as the legal status of a widow in regard to her right to maintenance was concerned.
The Act neither took away the: right of maintenance nor conferred the same; (iii) the Court appears to, have given an extended meaning to sub section
(2) of section 14 of the 1956 Act which has been undoubtedly enlarged so as to set at naught the express words in the Explanation to sub section
(1) of section 14 which ex pressly exclude the.
property given to a widow in lieu of maintenance or at a partition from the ambit of sub section
In other words, such a property, according to the Explana tion, is a property in which the widow would have undoubted ly a limited interest which by operation of law i.e. force of section 14(1 ) would be enlarged into an absolute interest if the widow is in possession of the property on the date when the Act was passed; (iv) similarly the Court failed to notice that 5 436 SCI/77 306 sub section
(2) of section 14 would apply only where a new right is created for the first time by virtue of a gift, will etc.
or the like executed in favour of the widow in respect of which she had no prior interest in the property at all.
For instance, a daughter is given a limited interest in presence of the widow.
Here the daughter not being an heir in presence of the widow (before the came into force) she had, no fight or share in the property, and if she was allotted some property under any instrument, a new and fresh right was created in her favour for the first time which she never possessed.
Such a case would be square ly covered by section 14(2) of the Act.
In Ram Jag Misir vs The Director of Consolidation, U.P.(1) the same view has.
been taken as the Madras High Court.
case does not discuss the various aspects which have been pointed out by us and proceeds purely on the basis that as the widow acquired a restricted estate under the compromise., section 14(2) would at once apply.
It has not at all considered the decisions of this Court that a mere description of limited interest in a grant or compromise is not a restriction but may just as well as merely a statement of the law as it stood when the grant was made.
The Court has also, not considered the various incidents and charac teristics of the widow 's right to maintenance under the Hindu Law.
Reliance was also placed by the learned counsel for the responderts on a Division Bench decision of the Patna High Court in Shiv Pujan Rai vs Yamuna Missir (supra) where the High Court held that the property given to a widow under a compromise in lieu of her maintenance was covered by sub section
(2) of section 14.
This decision was.
really based on the pecul iar findings of fact arrived at by the Courts of fact.
The High Court in the first place held that on the facts there was nothing to show that the widow acquired any inter est independent of the compromise under which she was given the property.
In these circumstances, it may be that the widow was given a. fresh or a new title under the compromise in which case the matter would be clearly covered by section 14(2) of the 1956 Act.
Even if this case be treated as an authority for the proposition that any property allotted to.
a widow under a compromise in lieu of maintenance would be covered by section 14(2) of the Act, then we dissent from this view, and for the reasons which we have already given we choose to prefer the view taken by the Patna High Court in a later case in Sumeshwar Mishra vs Swami Nath Tiwari (supra), which lays down the correct law on the subject.
Reliance was also placed on a Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh & Ors.
vs Ram Singh and other.(2) In this case also the various aspects which we have indicated and the nature and extent of the Hindu women 's right to maintenance were not considered at all and the Court proceeded by giving an extended meaning to the provisions of sub section
(2) of section 14 which in that case was sub section
(2) of section 12 of the Jammu & Kashmir Hindu Succes sion Act, 1956.
It is true that the leading Judgment was given by one of us (Fazal Ali, J.,) but I must confess that the important question of law that has been argued before us in all its comprehensive aspects was not presented before me in that case and even the counsel O) (2) A.I.R. 1959 J & K 92.
307 for the respondents did not seriously contend that sub section
(2) of section 14 was not applicable.
For these reasons we are not in a position to approve of the Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh 's case which.
is hereby overruled.
Thus on a careful scrutiny and analysis of the authori ties discussed above, the position seems to be that the view taken by the High Courts of Bombay, Andhra Pradesh, Patna, Mysore, Punjab, Calcutta .and
Kerala to the effect that the widow 's claim to maintenance, even though granted to her subject to certain restrictions, is covered by s.14 (1) and not by sub section
(2) is based on the following premises: (1) That the right of a Hindu widow to claim maintenance is undoubtedly a right against property though not a right to property.
Such a right can mature into a full fledged one if it is charged on the property either by an agreement or by a decree.
Even otherwise, where a family possesses property, the husband, or in case of his.
death, his heirs are burdened with the obligation to maintain the widow and, therefore, the widow 's claim for maintenance is not an empty formality but a pre existing right.
(2) Section 14(2) which is in the nature of a proviso to section 14(1) cannot be interpreted in a way so as to destroy the concept and defeat the purpose which; is sought to, be effectuated by section 14(1) in conferring an absolute interest on the Hindu women and in doing away with what was here tobefore known as the Hindu women 's estate.
The proviso will apply only to such cases which flow beyond the purview of the Explanation to section 14(1).
(3) That the proviso would not apply to any grant or transfer in favour of the widow hedged in by limitation or restrictions, where the grant is merely in recognition or declaration of a pre existing right, it will apply only to such a case where a new right which the female .did not possess at all is sought to be conferred on her under cer tain limitations or exceptions.
In fact in such a case even if a conditional grant is made to a male, he would be bound by the condition imposed.
The proviso wipes out the distinc tion between a male and a female in this respect.
The contrary view taken by the Madras, Orissa, Andhra Pradesh, Allahabad and Jammu & Kashmir High Courts proceeds on the following grounds: (1) That a widow 's claim to maintenance is merely an inchoate or incomplete right having no legal status, unless the widow gets a property in lieu of maintenance or unless a charge is created in a particular property the claim for maintenance cannot be legally enforced.
Thus, where under a grant, compromise, transfer or a decree, a property is allotted to the widow in lieu of maintenance, it is not the recognition of any pre existing right but it amounts to conferment of a new right for the first time which in fact did not exist before the said demise.
This view is really based on the provisions of the Hindu Women 's Right to Property Act, 1937, under which the widow has got the right to get a share of his son in lieu of partition and even 308 otherwise she is entitled to her share in the joint Hindu family property on partition.
These High Courts, therefore, seem to be of the opinion that in view of the provisions of the Hindu Women 's Right to Property Act, the widow in claim ing a share in the property has a pre existing right which is recognised by law, namely, the Act of 1937.
The same, however, cannot be said of a bare claim to maintenance which has not been recognised as a legal right and which can mature into a legally enforceable right only under a grant or demise.
This view suffers from a serious fallacy, which is, based on a misconception of the true position of a Hindu widow 's claim for maintenance.
It has been seen from.
the discussion regarding the widow 's claim for maintenance and her status in family that under the pure Sastric Hindu Law the widow is almost a co owner of the properties with her husband and even before the Act of 1937 she was entitled to the share of a son on the death of her husband after parti tion according to some schools of Hindu Law.
The Act of 1937 did not introduce any new right but merely gave a statutory recognition to the old Sastric Hindu Law on the subject.
In this respect the Act of 1937 is very different from the Act of 1956, the latter of which has made.
a revo lutionary change in the Hindu Law and has changed the entire complexion and concept of Hindu women 's estate.
In these circumstances, therefore, if the widow 's claim for mainte nance or right to get the share of a son existed before the Act of 1937, it is futile to dub this! right as flowing from the Act of 1937.
The second fallacy in this view is that the Court failed to consider that the.
claim for maintenance is an important right which is granted to the widow under the Sastric Hindu Law which enjoins the husband to maintain his wife even if he has no, property.
Where he has a property the widow has to be maintained from that property so much so that after the death of her husband any one who inherits that property takes the property subject to.
the burden of maintaining the widow.
Even where the property is transferred for payment of family debts and the transferee has the notice of the widow 's claim for maintenance, he has to discharge the burden of maintaining the widow from the property sold to him.
Thus the nature and extent of the right of the widow to claim maintenance is undoubtedly a pre existing right and it is wrong to say that such a right comes into existence only if the property is allotted to the widow in lieu of maintenance and not otherwise.
Another reasoning given by the courts taking the con trary view is that sub section
(2) being in the nature of a proviso to section 14(1) all grants with conditions take the case out of section 14(1).
This, as we have already pointed out, is based on a wrong interpretation of the scope: and 'ambit of sub section
(2) of section 14.
Lastly, the contrary view is in direct conflict with the observations made by this Court in the cases referred to above, where a grant in lieu of maintenance.
of the widow has been interpreted as being in recognition of a pre exist ing right ' so.
as to take away the case from the ambit of sub section
For these reasons and those given hereto.
before we choose to prefer the view taken by Palekar, J., in B B. Patil vs Gangabai (supra) which appears to be more in conso nance with the object and spirit of 309 the 1956 Act.
We, therefore, affirm and approve of the decisions of the Bombay High Court in B.B. Patil vs Ganga bai; of the Andhra Pradesh High Court m Gadam Reddayya vs Varapula Venkataraju & Anr.;of the Mysore High Court in H. Venkanagouda vs Hanamanagouda; of the Patna High Court in Sumeshwar Mishra vs Swami Nath Tiwari; of the Punjab High Court in Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr and Cal cutta High Court in Sasadhar Chandra Dev vs Smt.
Tara Sund ari Dasi (supra) and disapprove the decisions of the Orissa High Court in Narayan Patra vs Tara Patrani; Andhra Pradesh High Court in Gopisetty Kondaiah vs Gunda Subbarayudu (supra); Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (supra) and Gurunadham vs Sundararaulu; of the Allahabad High.
Court in Ram Jag Missir vs Director of Consolidation, U.P. and in Ajab Singh & Ors.
vs Ram Singh & Ors.
of the Jammu & Kashmir High Court.
Lastly strong reliance was placed by Mr. Natesan counsel for the respondents on a decision of this Court in Smt.
Naraini Devi vs Smt.
Ramo Devi & others(1) to which one of us (Fazal Ali, J.,) was a party.
This case is no doubt directly in point and this Court by holding that where under an award an interest is created in favour of a widow that she should be entitled to rent out the property for her lifetime, it was held by this Court that this amounted to a restricted estate under section 14(2) of the 1956 Act.
Unfortu nately the various aspects, namely, the nature and extent of the Hindu women 's right to maintenance, the limited scope of sub section
(2) which is a proviso.
sub section
(1 ) of section 14 and the effect of the Explanation etc., to which we have adverted in this judgment, were.
neither brought to our notice nor were argued before us in that case.
Secondly, the ground on which this Court distinguished the earlier decision of this Court in Badri Parshad vs Smt.
Kanso Devi (supra) was that in the aforesaid decision the Hindu widow had a share or interest in the house of her husband under the! Hindu Law as it was applicable then, and, therefore,such a share amounted to a pre existing right.
The attention of this Court, however, was not drawn: to the language of the Explanation to section 14(1) where a property given to a widow at a partition or in lieu of maintenance had been placed in the same category, and, therefore reason given by this Court does not appear to be sound.
For the reasons that we have.
already given, after taking an overall view of the situation, we are satisfied that the Division Bench decision of this Court in Naraini Devi 's case (supra) was not correctly decided and is therefore, overruled.
Indeed, if the contrary view is accepted, it will, in my opinion set at naught the legislative process of a part of Hindu Law ' of the intestate succession and curb the social urges and aspirations of the Hindu women, particularly in the International Year of Women, by reviving a highly detestable legacy which was sought to be buried by the Parliament after independence so.
that the new legislation may march with the times.
We would now like to summarise the legal conclusions which we have reached after an exhaustive considerations of the authorities mentioned above; on the question of law involved in this appeal as to the (1) 1976] 1 s.c.c. 574.
310 interpretation of section 14(1) and (2) of the Act of 1956.
These conclusions may be stated thus: (1) The Hindu female 's right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu.
Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom.
If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one.
At any rate, even without a charge the claim for maintenance is doubtless a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing rights.
(2) Section 14(1) and the Explanation thereto have been.
couched in the widest possible terms.
and must be liberally construed in favour of the females so as to advance the object of the 1956 Act and promote the socio economic ends, sought to be achieved by this long needed legislation.
(3) Sub section (2) of section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially.
The proviso.
should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision.
(4) Sub section (2) of section 14 applies to instruments, decrees, awards, gifts etc.
which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise preexisting rights.
In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere.
Where, however, an instrument merely de clares or recognises a pre existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub section has absolutely no application and the female 's limited interest would automatically be en larged into.
an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored.
Thus where a property is allotted or trans ferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of sub section (2) and would be governed by section 14(1) despite any re strictions placed on the powers of the transferee.
(5) The use of express terms like "property acquired by a female Hindu at a partition", "or in lieu of maintenance" "or arrears of maintenance" etc.
in the Explanation to section 14(1) clearly makes sub section
(2) inapplicable to these catego ries which have been expressly excepted from the operation of sub section
311 (6) The words "possessed by" used by the Legislature in section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same: Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest.
in the property.
It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser with out any right or title.
(7) That the words "restricted estate" used in section 4(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest, but also.
any other kind of limitation that may be placed on the transferee.
Applying the principles enunciated above to the facts of the present case, we find (i) that the properties in suit were allotted to the appellant Tulasumma on July 30, 1949 under a compromise certified by the. Court; (ii) that the appellant had taken only a life interest in the properties and there was a clear restriction prohib iting her from alienating the properties; (iii) that despite these restrictions, she continued to be in possession of the properties till 1956 when the Act of 1956 came into.
force; and (iv) that the alienations which she had made in 1960 and 1961 were after she had acquired an absolute interest in the properties.
It is, therefore, clear that the compromise by which the properties were allotted to the appellant Tulasamma in lieu of her maintenance were merely in recognition of her right to maintenance which was a pre existing right and, there fore, the case of the appellant would be taken out of the ambit of section 14(2) and would fail squarely within section 14 (1) read with the Explanation thereto.
Thus the appellant would acquire an absolute interest when she was in possession of the properties at the time when the 1956.
Act came into force and any restrictions placed under the compromise would have to be completely ignored.
This being the position, the High Court was in error in holding that the appellant Tula samma would have only a limited interest in setting aside the alienations made by her.
We are satisfied that the High Court decreed the suit of the plaintiffs on an erroneous view of the law.
The result is that the appeal is allowed, the judgment and decree of the High Court are set aside, the judgment of the District Judge, Nellore.
is hereby restored and the plaintiffs ' suit is dismissed.
In the peculiar circumstances of this ease and having regard to the, serious divergence of judicial opinion of the various Courts of India, we would make no order as to costs in this Court.
P.B.R. Appeal allowed.
[/INST]The appellant was a lawyer, under whom the complainant (first respondent) was a junior.
The appellant was engaged as counsel in certain cases by the complainant 's father.
The appellant submitted statement of accounts to the complain ant 's father in respect of the sums spent by him in the suits.
After a lapse of three years the complainant filed a complaint against the appellant making allegations under sections 409, 468 and 474 I.P.C. The trial Court acquitted him holding that the prosecution had been launched after inordi nate delay and that there was no clear and conclusive evi dence of criminal intention and dishonest mental act on the appellant 's part.
The High Court, on appeal, set aside the acquittal holding that the appellant 's explanation in regard to the discrepancies was not true and could not be accepted.
Allowing the appeal to this Court, HELD: There was no sufficient ground for the High Court to interfere with the acquittal in this case when the rea sons given by the trial Court were weighty and cogent and there was no compelling justification to take a contrary view.
[112 F] The mere fact that certain amounts were in the hands of the appellant and the accounts submitted were incorrect would not lead to the conclusion that the appellant commit ted criminal breach of trust.
[111 F] In the instant case, the complainant was a junior of the appellant and he could himself easily find out the discrep ancy in the accounts and could have drawn the appellant 's attention to it.
The complainant 's father did not authorise him to file the complaint nor was he examined to corroborate the complainant.
Secondly, in a notice issued to the appel lant by the complainant 's father the latter did not at tribute any dishonest intention or criminal intent on for mer 's part.
The High Court was wrong in holding the charge as proved and in reversing the order of the trial Court.
[111 G; 112 C]
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<s>[INST] Summarize the judgementivil Appeal No. 1351 of 1976.
From the Judgment and Order dated 24.11.
1975 of the Andhra Pradesh High Court in A.S. No. 691 of 1972.
T.V.S.N. Chari for the Appellant.
A. Subba Rao and A.D.N. Rao for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave arises against the Division Bench judgment dated November 24, 1975 in A.S. No. 691 of 1972 of the A.P. High Court fixing the market value @ Rs. I0 per square yard.
The facts lie in a short compass are stated thereunder.
By notification under section 4(1) of the Land Acquisition Act 1894 (in short 'the Act ') was published in the State Gazette on November 21, 1963 to acquire 5 acres 589 1/3 sq. yards in T.S. No. 981, Block No. 34 of Waitair Ward, Vishakapatnam for a housing scheme.
The Collector 475 awarded at Rs. 1.58 per sq. yard and on reference, the Civil Court enhanced the compensation to Rs. 10 per sq. yard with solatium at 15 per cent and interest at 4 per cent.
The respondent claimed @ Rs. 12 per sq. yard.
On appeal and cross appeals the High Court confirmed the award and dis missed the appeal as well as cross objections for enhance ment to Rs. 12 per sq. yard.
Two contentions have been raised by Shri Narsimahachari, the learned counsel for the appellant.
Under exhibit B. 6 dated August 3, 1961; under exhibit B 7 dated Sept. 5, 1961 and exhibit B 8, dated Sept. 8, 1961 the respondent purchased one acre 1936 sq.
yards in each docu ments in the same T.S. No. 981 @ 0.42 p. per sq. yard.
He sold on January 24, 1963 in an extent of one acre under exhibit B. 10 @ Rs.5 per sq. yard.
Therefore, ' the aforesaid sale deeds, exhibit B. 6, B. 7, B. 8 and B. 10 will reflect the prevailing market value of the land in question.
The Trial Court and the High Court committed grievous error in placing reliance on a decision of the High Court in A.S. No. 191 of 1967 dated November 11, 1970 awarding @ Rs. 10 per sq. yard in respect of 6,209 sq. yards in T.S. No. 1008, Block No. 39, Waitair Beach Road which was acquired under a notifica tion dated March 19, 1961 for the purpose of Caltex Oil Refinery.
The price fixed therein does not reflect the correct market value while the bona fide sale deed of pur chase and sale by the respondents relating to the acquired land are available on records and form correct basis.
The courts below committed grave error of law in completely excluding those sale transactions and relying upon that judgment.
We find force in the contention, though Shri Subba Rao, learned counsel for the respondent vehemently resisted, it.
It is settled law by catena of decisions that the market value postulated in section 23(1) of the Act designed to award just and fair compensation for the lands acquired.
The word "market value" would postulate price of the land prevailing on the date of the publication of the notification under section 4(1).
This Court repeatedly laid the acid test that in determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value.
For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price.
The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence.
In its absence the price paid for a land pos sessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the notifica tion would supply the data to assess the market value.
It is not necessary to cite all the decisions suffice to state that in a recent judgment in Periya & Pareekanni Rubbers Ltd. vs State of Kerala, [1990] Supp. 1 SCR 476 362 a bench of this Court, to which one of us K.R.S., J., was a member surveyed all the relevant precedents touching the points.
In the light of the settled legal position let us consider whether the High Court and the Civil Court are justified in excluding the sale deeds completely and to place reliance on another judgment of the Division Bench of the High Court of A.P.
Admittedly, the claimant is a vendee in exhibit B. 6 to B. 8 @ 0.42 paise.
In a span of one year and four months, they sold @ Rs.5 per sq. yard; It is common knowledge that proposal for acquisition would be known to everyone in the neighbourhood, in particular, to the owners of the property and it is not uncommon that sale transac tions would be brought into existence before the publication of section 4(1) notification so as to form the basis to lay higher claim for compensation.
We do assume that exhibit B. 10 is a genuine and bona fide sale transaction.
In respect of one acre of the land in the self same land when sold at Rs.5 per sq. yard, would it fetch in a short period of nine months, double the market value, namely. @ Rs. 10 per sq. yard.
We have no doubt that it would not get that price for 5 acres and odd area.
It is undoubted that in respect of a notification of 1961 in which another T.S. number in the locality, namely, T.S. No. 1008, ultimately, the High Court awarded @ Rs. 10 per sq. yard.
Perhaps had there been no bona fide or genuine sale transaction relating to the self same land, the reliance placed on that judgment may be justified but exclusion of bona fide and genuine sale trans actions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal.
When the claimants themselves sold as a willing seller of an acre of land @ Rs.5 per sq.
yard large extent of five acres and odd under acquisition, if it is offered to be sold as a block, it would not fetch higher rate but surely be negotiated for a lesser rate if not the same market value @ Rs.5 due to time lag of nine months.
No attempt was made by the respondent to explain under what circumstances they came to sell their lands @ Rs.5 per sq. yard when they expect higher value @ Rs. 10 per sq. yard.
May be the payment of Rs. 10 per sq. yard, be wind fall to the owner of the land in T.S. No. 1008 Taking the totality of the facts and circumstance, we hold that the High Court committed grave error to completely ignore the sale transac tions of the lands under acquisition.
In view of the time lag we have no hesitation to conclude that the prevailing market value of the land as on the date of the notification would be Rs.6 per sq. yard.
It is next contended by Shri Narsimahachari that when a large extent of land was acquired for a housing scheme, at least 1/3 of the land should be deducted towards laying the roads, setting up parks, 477 drainage and other amenities.
The High Court committed manifest error in omitting to deduct 1/3 of the land.
Shri Subba Rao, the learned counsel for the respondent contended that the High Court had noted this contention of the appellant and considered that the market value of the land would be Rs. 12 per sq. yard and after giving the deduction of 1/3 it would come to Rs. 10.
The reasoning of the High Court is proper and warrants no interference.
In support thereof he placed reliance in Spl.
Tehsildar, Visha kapatnam vs Rednam Dharma Rao & Ors., C.A. No 4187 of 1982, dated July 17, 1990 wherein this Court had upheld the deduc tion of 1/5 from the market value towards developmental charges.
It is settled law that the High Court and the Reference court when made wrong application of a principle or important points effecting valuation has been over looked or misapplied, this Court would under article 136 correct the same, vide The Spl.
Land Acquisition Officer, Bangalore vs
T. Adinarayan Setty, [1959] Suppl.
1 S.C.R. 404; Dattatrayaya Shankarbhat Ambalgi and Ors.
vs The Collector of Sholapur and Anr., AiR 3 S.C.C. 431; The Dollar Co., Madras vs Collector of Madras, [1975] Supp.
SCC 403 and Padma Uppal Etc.
vs State of Punjab & Ors.
, ; In Tribeni Devi & Ors.
vs Collector of Ranchi, ; at 2 13, this Court held that "in order to devel op that area at least the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities".
On this basis the value of the land at Rs.2,08,135.70 per acre would, after the deduction of 1/3 come to Rs. 1,38,757 per acre.
In Smt.
Kaushalya Devi Bogre & Ors.
vs The Land Acquisition Officer, Aurangabad; , this Court held that deduction of 1/3 was held to be reasonable.
In Vijay Kumar Motilal vs State of Maharashtra, 19 i/3rd was deducted towards developmental charges in undeveloped area.
In Vijaysingh Liladhar vs Special Land Acquisition Officer, the deduction of i/4th by the High Court which was not challenged in this court was upehld.
In Spl.
Land Acquisition Officer, Bangalore vs T. Adinarayan Setty, supra, deduction of 25 per cent was held to be reasonable.
It is to be noted that in building Regula tions, setting apart the lands for development of roads, drainage and other amenties like electricity etc.
are condi tion precedent to approve lay out for building colonies.
Therefore, based upon the situation of the land and the need for development the deduction shall be made.
Where acquired land is in the midst of already developed land with ameni ties of roads, drainage, electricity etc.
then deduction of 1/3 would not be justified.
In the 478 rural areas housing schemes relating to weaker sections deduction 1/4 may be justified.
On that basis, this court in R. Dharma Rao 's case upheld deduction of 1/5 because the owner while obtaining the lay out had already set apart lands for road and drainage.
Therefore, deduction of 1/3 would be reasonable.
In fact in The Tehsildar, Land Acquisi tion, Vishakapatnam vs
P. Narasing Rao & Ors., , a Division Bench of the High Court surveyed judgments of the High Court relating to housing schemes of Vishakapatnam upholding deduction of 1/3 to be reasonable.
Accordingly we hold that 1/3 of the market value should be deducted for development of the lands.
The High Court com mitted greivous error in giving a curious reasoning of valuing at Rs. 12 and upholding Rs. I0 to be the market value after deduction, though *.he market value was deter mined at Rs. 10.
Accordingly the appeal is allowed.
The market value is determined at Rs.6 per sq. yard and after deducting 1/3 the market value is Rs.4 per sq. yard.
The respondents are entitled to 15 per cent Solatium on market value and 4 per cent interest thereon from the date of dispossession.
But in the circumstances parties are directed to pay and receive their own costs.
N.P.V. Appeal al lowed.
[/INST]Rule 2 of the Bombay Prohibition (Manufacture of Spirit) (Gujarat) Rules, 1963, framed by the State Government in exercise of powers conferred under Section 58A of the Bombay Prohibition Act, dealt with grant of licence for working of distillery for the manufacture of spirit.
One of the conditions for grant of licence was that the cost of maintenance of staff, viz. payment of salary and allowances, was to be paid to the Government by the licensees.
This was challenged by the appellant and the High Court upheld the levy as being within the legislative competence of the State.
Aggrieved against the High Court 's order, the appellant has preferred the present appeal.
The appellants contended that since the judgement appealed against proceeded on privilege theory, it cannot withstand the principle laid down in Synthetic & Chemicals, case; and that levy as a fee under Entry 8 of list II of Seventh Schedule or excise duty under Entry 51 is different than the cost of supervision charged under Section 58A of the Bombay Prohibition Act.
Dismissing the appeal, this Court, 392 HELD: 1.1 Even though the power to levy tax or duty on industrial alcohol is vested in the Central Government, the State was till left with power to lay down regulations to ensure that non potable alcohol, that is, industrial alcohol, was not diverted and misused as substitute for potable alcohol.
This is enough to justify a provision like 58A of the Bombay Prohibition Act.
[394 D] 1.2 Principle of occupied field precluded State from trenching on any power which was already covered by Central legislation.
But in absence of any provision in Industries (Development & Regulation) Act touching upon regulation or ensuring that industrial alcohol was not divered, the State was competent to legislate on it under Entry 33 list III of VII Schedule.
[394 F G] 1.3 Trade and commerce and supply and distribution of goods are exclusive state subject under entries 26 and 27 of List II of VII Schedule.
But both are subject to entry 33 of List III.
What is covered in entry 33 is excluded from List II.
And the power to legislate in respect of what is covered by List III is enjoyed both by Central and State legislatures subject to Article 246 of the Constitution.
Since section 58A can be traced to regulatory power of the State exercisable under entry 33 of List III the challenge to its validity is liable to fail.
Thus, Section 58A of the Bomaby Prohibition Act is valid and is not violative of any constitutional provision.
[395 B C].
1.4 It cannot be said that no cost for supervision could be demanded unless the power to issue licence for production was found to exist in State.
[395 d] Synthetics & Chemicals Ltd. & Ors., vs State of U.P & Ors. ; , followed.
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<s>[INST] Summarize the judgementCivil Appeal No. 6009 of 1983.
Appeal by special leave from the Judgment and Order dated the 19th April, 1983 of the Punjab and Haryana High Court in C.W.P. No. 1484 of 1983.
WITH Civil Appeal Nos. 1207 and 1208 of 1980.
Appeals by special leave from the Judgment and Order dated the 30th May, 1980 of the Punjab and Haryana High Court in Civil Writ Petition Nos.
1759 and 1848 of 1980.
J.L. Gupta, D.N. Gupta and V.K. Verma for the Appellant in CA.
No. 6009 of 1983.
J.L. Gupta and C.M.Nayar for the Appellant in CA.
No. 1207 and 1208 and 1980.
Hardev Singh and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA J.
Each of these appeals is by special leave and is directed against the decision of the High Court of Punjab and Haryana in separate writ petitions.
A common question is involved in all the three matters and that relates to a correct interpretation of Rule 27.1(a) in Chapter III of the Punjab University Regulations.
Respondents in each of these appeals was a student of the Punjab University for the Master Degree in Law (LL.M).
Rule 33 7 of the Punjab University Regulations provides: "7.
The minimum marks required to pass Part I/II examination, as the case may be, shall be: (i) 45 per cent in each paper; and (ii) 50 per cent in the aggregate.
" It may be stated that there are eight papers in all each carrying 100 marks and Part I covers four papers while Part II covers the remainder.
Rule 27 reads as follows: "27.1(a).
A candidate who appears in all subjects of an examination and who fails in one or more subject (written, practical, sessional or viva voce) and/or the aggregate (if there is a separate requirement of passing on the aggregate) shall be given grace marks up to maximum of 1 per cent of the total aggregate marks (excluding marks for internal assessment) to make up the deficiency if by such addition the candidate can pass the examination.
While awarding grace marks fraction working to 1/2 or more will be rounded to a whole; Provided that grace marks be also awarded to a candidate if by awarding such marks he can earn exemption or compartment in subject/s and part/s.
(b) A candidate who re appears to clear the compartment or subject/s and part/s in which he has been declared (eligible) to re appear shall be awarded grace marks up to 1% of the total marks of the subject/s and part/s in which he re appears if by such addition the candidate can pass in that subject/s or part/s.
" Each of the respondents failed to satisfy the requirements of Rule 7 and being eligible to clear the subject in which he failed on compartmental basis reappeared in such subject in the next examination.
As on the performance of the subsequent examination each of the respondents was not eligible to pass by complying with the requirements of Rule 7, the need for invoking Rule 27 arose.
The University authorities took the view that Rule 27.1(b) authorised addition of the grace marks of up to 1 per cent on the marks secured in the subject/s in which the candidate reappeared and as with that benefit given the candidates did not pass, they. were found not to have been successful.
That led to each of the 34 respondents filing a separate writ application before the High Court.
The High Court referred to the rule and observed: "The only question to be seen is whether Regulation 27.1(a) in Chapter III of the Punjab University Calendar, Volume II, 1976, relating to Moderation of Question Papers and results of examinations, is applicable or not.
We have gone through clauses (a) and (b) of this Regulation very carefully and we find that clause (b) is not applicable.
We are unable to agree with the contention of Shri Gupta, the learned counsel for the University that the case would fall under clause (b).
This contention is without any merit as it is clear that this clause will only come into play if the candidate is failing in the subject in which he or she reappears.
It is quite clear from the facts that the petitioner has not so far availed advantage as given in clause (b) so that she could get one per cent mark of the total marks in all the subjects The contention of the learned counsel for the University, that clause (a) will only apply if a candidate appears in all the subjects in the examination, is without any merit.
The language of this provision does not show what has been contended before us.
For the reasons recorded above, we allow this writ application and direct the University to make available the benefit of clause (a) of the said Regulation to the petitioner and declare the result of the petitioner accordingly.
" A bare reading of the Rule 27 (referred to as the Regulations by the High Court) makes it clear that clause (a) is applicable where the full examination is taken and clause (b) is attracted where the candidate reappears to clear the compartment or subject and part in which he has been declared eligible to reappear.
In each of these cases the candidate was reappearing to clear the paper in which he or she had failed; clause (b) was clearly attracted and the benefit under clause (a) was not available.
The University had taken that decision and took the same stand before the High Court in answer to the rule nisi.
We are clearly of the opinion that the 35 High Court went wrong in taking the view that when a candidate reappeared to clear a paper or a subject on being found eligible to do so, clause (a) was attracted.
The language of clause (b) is such as would squarely apply to such a situation.
Having taken the view that clause (a) governed the matter, the High Court had no occasion to express any opinion as to if clause (b) applied what benefit the candidate would have got.
The provision in clause (b) is clear and on reappearing the candidate becomes entitled to grace marks of up to one per cent of the total marks of the subject/subjects in which he reappears.
Once clause (b) applies no reference is available to the performance in the regular examination taken earlier and the benefit of grace marks to the extent indicated has to be confined to the performance at the reappearance.
Once this is the position each of the candidates was not eligible to pass.
We, however, find that a direction was given in this Court on 19.6.80 on the concession of the University that the respondents in the two appeals of 1980 would be declared to have passed irrespective of the result of the appeals.
Learned counsel appearing for the University before us reiterated his consent and even agreed that the respondent in the remaining appeal may be given the same advantage as the University did not intend to make any discrimination.
In view of this special feature we do not disturb the declaration of the University that each of the respondents has passed the examination taken by him or her.
We must indicate our disapproval of the position obtaining in the Punjab University that in respect of post graduate degrees grace marks are being awarded.
A master 's degree in any speciality is considered to be the highest qualification in the normal run.
It is very much necessary that such a degree should be conferred only on the deserving students who having studied the subject and taken the appropriate examination conducted by the University at the end of such studies have deserved the degree on the basis of their performance.
There should be no scope for looking for grace marks at such level and the sooner the Punjab University abandons the practice of awarding grace marks in respect of post graduate examinations the better it would be in the interest of higher education in this country.
36 We allow each of these appeals and set aside the judgments of the High Court in each of the writ petitions without any order for costs.
To avoid confusion we reiterate that our vacating the judgments of the High Court do not in any manner affect the declarations made in favour of the respondents by the appellant University in regard to passing of the Master Degree Examinations in law.
S.R. Appeal allowed.
[/INST]Respondents in each of these appeals could not clear the LLM examination in accordance with Regulation 7 of the Punjab University Regulations either in the first attempt or later while taking on compartmental basis even after addition of grace marks as laid down in Rule 27(1)(b) of the University Regulations.
The respondents filed separate writ petitions praying for a direction to give the benefit of moderation grace mark as calculated under Rule 27(1)(a).
The High Court rejected the plea of the Appellant University holding that it was Rule 27(1)(b) that applied and not Rule 27 1(a).
Hence the appeal by Special Leave.
Allowing the appeal, the Court ^ HELD : A bare reading of the Rule 27 (referred to as the Regulations by the High Court) makes it clear that clause (a) is applicable where the full examination is taken and clause (b) is attracted where the candidate reappears to clear the compartment or subject and part in which he has been declared eligible to reappear.
In each of these cases the candidate was reappearing to clear the paper in which he or she had failed; clause (b) was clearly attracted and the benefit under clause (a) was not available.
The language of clause (b) is such as would squarely apply to such a situation.
The provision in clause (b) is clear and on reappearing the candidate becomes entitled to grace marks of up to one per cent of the total marks of the subject/subjects in which he reappears.
Once clause (b) applies no reference is available to the performance in the regular examination taken earlier and the benefit of grace marks to the extent indicated has to be confined to the performance at the reappearance.
Once this is the position each of the candidates was not eligible to pass.
[34GH, 35B C] [In view of the declaration dated 19.6.1980 made before the court, that irrespective of the result of the appeals, the candidates will be declared to have passed, the Court as a special case did not want to disturb the result.] [35D] 32 Observation: The position obtaining in the Punjab University in respect of Post Graduate degrees namely grace marks being awarded is disapproved.
A Master 's degree in any speciality is considered to be the highest qualification in the normal run.
It is very much necessary that such a degree should be conferred only on the deserving students who having studied the subject and taken the appropriate examination conducted by the University at the end of such studies have deserved the degree on the basis of their performance.
There should be no scope for looking for grace marks at such level and the sooner the Punjab University abandons the practice of awarding grace marks in respect of post graduate examinations the better it would be in the interest of higher education in this country.
[35F H]
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<s>[INST] Summarize the judgementivil Appeal Nos.
4339 4341 of 1990.
From the Judgment and Order dated 30.5.90 of the Allaha bad High Court in W.P. No. 1841 of 1990.
Kapil Sibbal, Satish Chandra, Ms. Shobha Dikshit, R.K. Virmani and N.D. Garg for the appearing parties.
The Judgment of the Court was delivered by RANGANATHAN, J.
These three petitions can be disposed of by a common order.
Since we have heard counsel at some length we grant special leave in these petitions and proceed to dispose of the appeals.
In the Moti Lal Nehru Medical College (M.L.N. College) at Allahabad there are 8 seats for a post graduate course in Obstetrics and Gynecology.
Of these, 6 seats are reserved for institutional candidates and two are reserved for exter nal candidates.
The principal of the college has filled up all the 8 seats by admitting institutional candidates and without considering the cases of any external candidate.
Among the institutional candidates Dr. Juhi Jain and Dr. Padma Panjwani, who had obtained the highest percentage of marks, have been admitted and Dr. Vandana Singh, who had applied for admission as an external candidate, was not considered.
Dr. Vandana Singh, therefore, approached the Allahabad High Court, which upheld her contention and held that the two seats in question should have been filled up in accordance with a notification published by the State Gov ernment on 26th April, 1986 (amending a previous notifica tion dated 15.12.
1982) which provided as follows: "In every speciality, seventy five percent seats in a par ticular medical college shall be reserved for the candidates who have passed the M.B.B.S examination from that college and against the remaining twenty five percent seats, candi dates who have passed M.B.B.S. examination from other Medi cal Colleges and are bona .fide resident of Uttar Pradesh.
shall be eligible for admission on the basis of merit along with the candidates who have passed the M.B.B .S. examina tion from that very college.
The court, therefore, set aside the admission of Dr. Juhi Jain and 877 Dr. Padma Panjwani and directed the principal of the Medical College to consider the cases of Dr. Vandana Singh and other external candidates, who were eligible for admission to the "open" twenty five per cent seats on merits and in accord ance with law.
The Principal of the Medical College, Dr. Juhi Jain and Dr. Padma Panjwani have preferred these appeals.
It has been submitted that the High Court has overlooked that the admis sions in question were to the second year or the post gradu ate degree course and were being considered under the terms of a residency scheme dated 22.8.89.
As per the terms of this scheme, 25% of the seats in the course (here, two seats) were to be filled in by candidates on the basis of an examination conducted by the All India Institute of Medical Sciences.
However, no such examination had been conducted by All India Institute and the college instead of leaving the seats vacant, decided to fill them up by internal candidates on the basis of merit.
In doing this, the principal of the college was only complying with the terms of a decision rendered by the Allahabad High Court in the case of Dr. R.P. Pandey, (Writ Petition No. 8181 of 1989) and a precedent approved by the Directorate General of Health Services, Medical Examination Cell, Nirman Bhavan, New Delhi, which in a letter to the principal of an Agra College, had, when unable to recommend candidates on the basis of an All India examination for a particular course released these seats in favour of internal candidates.
It has been submitted on behalf of Dr. Juhi Jain that, even assuming that the appli cation of Dr. Vandana Singh had to be considered, the High Court should have restricted itself to quashing the admis sion to one of the two seats and upheld the admission of Dr. Juhi Jain, who had secured higher marks than Dr. Padma Panjwani.
It is submitted on behalf of Dr. Padma Panjwani that even assuming that Dr. Vandana Singh 's application merited consideration, the interests of all the three candi dates could have been safeguarded by directing the State Government to create one additional seat and accommodate all the three candidates.
Reliance is placed in this respect on certain observations made by this Court in the case of one Mridula Avasthi; , Finally, it has also been submitted, on behalf of the appellants, that Dr. Vanda na Singh was not eligible for admission even on the terms of the notification dated 26.4.86 since she was not a bona fide resident of Uttar Pradesh.
It is stated that she had passed her M.B.B.S. examination from the State of Bihar and had also taken admission in a post Graduate Diploma Course in Gynecology and Obstetrics at Darbhanga Medical College, Laneriasarai, Bihar, a fact which she had concealed from her writ petition.
878 We have today passed a detailed judgment in regard to certain admissions made pending implementation of the resi dency scheme introduced by the State of U.P. in our judgment in a batch of appeals preferred by Dr. Harihar Prasad Singh & Ors.
as well as the State of Uttar Pradesh, [1990] 3 SCR 895 (Civil Appeal, Nos.
and, for reasons that will be appar ent later, the judgment in the present appeals will have to be read along with the judgment in the said appeals for a full and proper understanding of the issues involved.
That other decision 'turned on the interpretation of paragraph 5 of the residency scheme and also pertained to admissions to the second year of the post graduate degree course.
The scheme contained a transitory provision in para 5 in respect of certain persons who were house officers between 1987 and 1989.
the related batch of appeals raised a controversy pertaining to 75% of the seats in the second year of the post graduate courses which were reserved for institutional candidates.
Here the question arises in respect of the remaining 25% of the seats reserved for "external" candi dates.
To understand the point at issue, we shall briefly touch upon those aspects of the residency scheme which we had no occasion to consider in the batches of appeals above referred to but which are material for the purposes of these appeals.
By the notification dated 22.8.89 a scheme called the residency scheme was introduced, which dealt, inter alia, with the question of admission to post graduate specialities in medicinal courses.
These cases, like the other batches, have proceeded on the assumption that, so far as institu tional candidates are concerned, admissions to the second year of a degree course could be granted to persons like Dr. Juhi Jain and Dr. Padma Panjwani who had completed the M.B.B.S. degree examination, done one year of internship and had been working as house officers in the State of U.P. on 22.8.89.
There was a further controversy in those cases as to whether even persons who had been working as house offi cers since 1.8.1987 would be eligible for admission to this course and we have, by our judgment in the connected ap peals, answered this question in the affirmative.
That question would become relevant here only if we do not agree with the view taken by the High Court here.
We shall, there fore, keep that issue aside for the time being and shall deal with it later.
To continue the narration regarding the scheme, it provided for admission, to the three year post graduate course, of candidates who had passed the M.B.B.S. examina tion and completed one year 's internship.
Seventy five per cent of the admission to these courses was 879 to be available to institutional candidates on the basis of an entrance examination; the balance of twenty five per cent of the seats was to be filled up on the basis of an all India entrance examination.
This provision was in tune with certain directions given by this Court from time to time for regulating admission to medical colleges in various parts of the country.
This Court had in particular directed that while 75% seats in each medical college all over the country could be filled in by local or institutional candidates, the balance of 25% should be filled up on an all India basis.
Elaborate directions were also given by this Court to enable the All India Medical Institute (A.I.I.M.S.) to conduct a competitive test for selecting the candidates for these seats reserved on an all India basis.
The scheme obviously referred to the all India competitive entrance examination to be conducted by the A.I.I.M.S. every year.
Indeed such an examination had been held by he A.I.I.M.S. in January Febru ary 1989 and the candidates recommended had been taken into the medical colleges in U.P. as per the regulations then existing.
However, since the new scheme came into being in the middle of the year, there was no possibility of either a local entrance examination nor an all India examination being held to regulate the admissions to the new course.
C1.3(f) however provided that, for the 75 % institutional seats, competitive entrance examination shall be enforced from the fresh batch and that before its enforcement the admission to institutional seats in residency shall be done on the basis of the merit of the M.B.B.S. examination.
It was, however, silent in regard to the balance 25% seats.
The question arose, therefore, as to what was to be done in respect of the remaining 25% seats.
To meet the situation, the Direction of Medical Education issued directions, on 3.10.89, to the following effect: "Since there will be no admission of external students this year against 25 % open seats, therefore, after merging these open seats with 75% additional seats, the admission of students of 1982 supplementary batch and 1983 regular batch should be done against the entire 100% seats by making their combined merit.
" Accordingly, it seems admissions to 100% seats in the first year of the three year post graduate scheme was thrown open fully to internal candidates, the admissions being decided on the basis of their merit in the M.B.B.S. examination.
We are, however, not concerned with that issue here.
We are here concerned with admissions to the second year of the 880 residency scheme.
The scheme made a provision in the second sub para of para 5 for the adjustment of 'persons serving in U.P. as house officers by absorbing them into the second year of the residency scheme.
The provision has been set out and its implications discussed elaborately in our judgment in the allied batches of appeals and need not be repeated here.
It is not quite clear whether the second sub para of para 5 of the scheme covers all the seats in the second year of the course or only 75% thereof.
However, it is apparently understood only as pertaining to the 75% seats reserved for institutional candidates and, as there was no other provi sion in regard to the balance of 25% of the seats, it was decided that those seats should also be filled in only by institutional candidates.
However, in the meanwhile, an advertisement had been issued by the Principal of M.L.N. Medical College, Allahabad on 21.9.89.
This advertisement pertained only to the filling up of the seats comprising the 75% reserved for institutional candidates.
There was no advertisement regarding the rest Dr. Vandana Singh applied for admission to the second year of the degree course.
In this state of affairs it is perhaps possible to dispose of the matter before us by holding that the application of Dr. Vandana Singh can only be treated as one in response to the advertisement of 21st September, 1989 and so could not have been entertained as she was not an institutional candidate and that she has no locus standi, on the basis of that application, to challenge the admission of other institu tional candidates.
It is also possible to interpret the second sub para of para 5 of the scheme as covering the entirety of the seats for the second year of the course and not merely 75% of them.
In this view also, the application of Dr. Vandana Singh would have to be rejected.
It could, however, be argued that as the High Court has proceeded on the footing that para 5 pertains only to 75% of the seats, quite irrespective of the basis of her applica tion, Dr. Vandana Singh has a right to insist that under the scheme 25% of the seats should be thrown open for all India competition and that the admissions based on a different basis were rightly quashed.
If we assume this postulate to be correct and go strictly by the terms of the notification, admissions should be on the basis of an all India examina tion.
There was, however, no immediate possibility of any such examination being held for admission to the course for 1989 90.
In this state of affairs, one possible view which the High Court has taken is that these seats must be kept reserved for external candidates and the college must now take steps to invite external candidates in accordance with the terms contained in the notification dated 26.4.86 if that notification were applicable and select them in the order of merit.
The college, however, 881 took the view that since no all India candidates were avail able on the basis postulated in the scheme, it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In fact the State claims that this course of action has been approved by the decision of the High Court in the case of Dr. R.P. Pandey.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candi dates on the basis of merit.
If this be so, such advertise ment cannot be continued to persons who are residents of U.P. as was envisaged by the notification dated 26th April, 1986.
That notification had been issued at a time when the concept of all India reservation for 25% Of the seats had not been adumbrated by this Court.
Even if we assume that the High Court was right in saying that external candidates were eligible for admission, that eligibility cannot be restricted only to those who had already applied indeed, Dr. Vandana Singh appears to have been the only one who had applied to the course in the M.L.N. College but should be thrown open to all external candidates fulfilling the quali fications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for applica tion from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
In our opinion, the State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an all India examination, and such an examination is conducted by All India Institute of Medical Sciences every year for all medical colleges in India.
In our opinion, the decision taken by the State Government and the college was a practi cal one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a soli tary application from an external candidate.
For the reasons stated above, we are of the opinion that the High Court erred in quashing the admissions made on the grounds given by it, We uphold the rejection of Dr. Vandana Singh 's application.
In the view we have taken it is not necessary to express any opinion as to whether, even on the basis of the notification dated 26.4.86, Dr. Vandana Singh is eligible for consideration for admission to the course or she disqualified from such consideration for the reasons urged on behalf of the State, Dr. Juhi Jain and Dr. Padma Panjwani.
882 For the reasons mentioned above, we set aside the order of the High Court and hold that the application of Dr. Vandana Singh was rightly rejected by the college.
We should, however, like to point out that, in the connected batch of appeals, we have upheld that interpretation by the High Court of Para 5 of the scheme and held that the eligi bility for admission of institutional candidates is not confined to those who were on house jobs as on 22.8.89 but would also extend to those institutional candidates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifica tions and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as of Dr. Juhi Jain and Dr. Padma Panjwani to 25% of the seats had been made by excluding institutional candidates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selections of Dr. Juhi Jain and Dr. Padma Panjwani will be valid only if they come through successfully on merits on such reconsideration.
We have, therefore, to agree with the High Court that the admissions of Dr. Juhi Jain and Dr. Padma Panjwani should also be set aside but direct that the admissions be redone in the light of our observations in these two judgments.
These appeals are disposed of accordingly.
We, however, make no order as to costs.
[/INST]For the academic year 1989 90, the appellant College had 8 seats in the post graduate course in Obsterics and Gyne cology.
Of these, six were reserved for institutional candi dates, and two for external candidates.
The Principal filled up all the eight seats by admitting institutional candidates without considering the case of any external candidate.
One of the external candidates approached the High Court by way of a Writ Petition.
The High Court set aside the admission of two .institutional candidates who were admitted against the quota for external candidates, and directed the Princi pal to consider the case of the petitioner and other exter nal candidates who were eligible for admission to the 'open ' 25% seats on merits, in accordance with law.
Aggrieved, the Principal and the two institutional candidates whose admis sion was set aside by the High Court, have preferred these appeals, by special leave.
Disposing of the appeals, HELD 1.
The appellant College, took the view that since no All India candidates were available on the basis postu lated in the Residency Scheme it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In that the State claims that this course of action has been approved by the decision of the High Court in a case before it.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candidates on the basis of merit.
If this be so, such advertisement cannot be confined to persons who are residents of U.P. as was envisaged by the notifica tion dated 26th April, 1986.
That notification been issued at a time when the 875 concept of All India reservation for 25% of the seats had not been adumbrated by this Court.
Even if it is assumed that the High Court was right in saying that external candi dates were eligible for admission, that eligibility cannot be restricted only to those who had already applied but should be thrown open to all external candidates fulfilling the qualifications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for appli cations from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
The State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an All India examination, and such an examination is conducted by the All India Institute of Medical Sciences every year for all medical colleges in India.
The decision taken by the State Government and the college was a practical one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a solitary application from an external candidate.
[881A F] 2.
On a proper interpretation of Para 5 of the Residency Scheme the eligibility for admission of institutional candi dates is not confirmed to those who were on house jobs as on 22.8.89 but would also extend to these institutional candi dates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifications and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as the admission of the two candidates to 25% of the seats had been made by excluding institutional candi dates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selection of the two institutional candidates in question will be valid only if they come through successfully on merits on such reconsideration.
The High Court was right in holding that their admissions should be set aside.
The admission be redone in the light of the observations in these two judgments.
[882B E] Dr. Harihar Prasad Singh & Ors.
vs Principal, Moti Lal Nehru Medical College & Ors.
, [1990] 3 SCR 895 referred to.
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<s>[INST] Summarize the judgementAppeal No. 1040/63.
C.K. Daphtary, Attorney General, M.S.K. Sastri and R.H. Dhebar, for the appellant.
C.B. Agarwala and A.G. Ratnaparkhi, for the respondent.
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question of law which arises in this appeal is whether the appellant, the State of Bombay (now Maharashtra), shows that its predecessor State of Madhya Pradesh (hereinafter called the Government) had given a reasonable opportunity to.
the respondent, Narul Latif Khan, to defend himself before it passed the final order on June 6, 1952 compulsorily retiring him under Article 353 of the Civil Service Regulations.
By this order, the respondent was compulsorily retired and in relaxation of article 353, the Government was pleased to allow the respondent to draw a compassionate allowance equal to the pension which would have been admissible to him had he been invalidated.
This order was challenged by the respondent by filing a suit in the Court of the first Additional District Judge at Nagpur.
In his plaint, the respondent alleged that the impugned order whereby he was compulsorily retired, was invalid and he claimed a declaration that it was ultra vires and inoperative.
He also asked for a declaration that he was entitled to be restored to the post which he held on July 6, 1950, and that he should be given all pay, allowances.
increments and promotions to which he would have been entitled if he had been permitted to continue in service.
In the result, the respondent asked for a decree for Rs. 62,237 with interest at 6 per cent per annum from the date of the suit till realisation.
This claim was resisted by the appellant on several grounds.
The principal ground on which the appellant challenged the respondent 's claim, however, was that he had been given a reasonable opportunity to defend himself, and so, the impugned order was perfectly valid, and legal.
Several other pleas were also raised by the appellant.
On these pleas, the learned trial Judge framed appropriate issues.
The issue with which we are concerned in the present appeal, however, centered round the question as to whether the Constitutional provision prescribed by article 311 affording protection to the respondent had been contravened.
The trial Judge made a finding against the respondent on this issue.
He also recorded his findings on the other issues with which we are not directly concerned in the present appeal.
In regard to the money claim made by the respondent, the learned trial Judge made a finding that in case he was held entitled to such relief, a decree for Rs. 37,237 may have to be passed in his favour.
In view of his conclusion that the impugned order was valid, no question arose 137 for making such a decree in favour of the respondent.
The respondent 's suit, therefore, failed and was dismissed.
The respondent then took the matter in appeal before the High Court of Judicature at Bombay, Nagpur Bench.
The High Court has, in substance, held that the constitutional provisions prescribed by article 311 have not been complied with by the appellant before it passed the impugned order against the respondent.
It has found that the departmental enquiry which was held suffered from the serious infirmity that the enquiry officer did not hold an oral enquiry and did not allow an opportunity to the respondent to lead his oral evidence.
It has also held that the second notice served by the appellant on the respondent calling upon him to show cause why the report made by the enquiry officer should not be accepted and appropriate punishment should not be inflicted on him, was defective, and that also made the impugned order invalid.
The High Court appears to have taken the view that the impugned order does not show that the appellant had taken into account the explanation offered by the respondent in response to the second notice issued by the appellant.
As a result of these findings, the High Court has reversed the conclusion of the trial Court on the main question and has found that the impugned order is invalid and inoperative.
On that view, the High Court considered the money claim made by the respondent, and it confirmed the finding of the trial Court that the respondent would be entitled to a decree for Rs. 37,237.
In fact, the alternative finding recorded by the trial Court in respect of the amount to which the respondent would be entitled in case he succeeded in challenging the validity of the impugned order, was not questioned before the High Court.
In the result, the High Court allowed the appeal and passed a money decree for Rs. 37,237 in favour of the respondent in terms of prayer (A) of paragraph 31 of the plaint.
The appellant then applied for and obtained a certificate from the High Court and it is with the said certificate that it has brought the present appeal before this Court.
That is how the main question which falls for our decision is whether the constitutional provision prescribed by article 311 has been complied with by the appellant before it passed the impugned order.
At this stage, it may be relevant to refer to some material facts.
The respondent was appointed as Extra Assistant Commissioner in 1926 and since then he had been holding various offices in the State service of the then Madhya Pradesh Government.
In 1950, he was holding the post of a Treasury Officer at Nagpur.
It appears that privilege leave for over a year was due to him and he had applied for four months ' privilege leave.
On June 12, 1950, Government informed him that his request for leave was rejected and he was told that no further application for leave would be entertained in future.
On July 7, 1950, the respondent proceeded 138 on casual leave for two days, and on July 8, 1950 he renewed his application for four months ' leave on medical grounds.
This application was accompanied by a certificate given by Dr. Dange.
Government, therefore, decided to constitute a Medical Board for examining the respondent in order to .decide whether leave on medical grounds should be granted to him.
Accordingly, the respondent appeared before a Special Medical Board on July 22, 1950.
The Medical Board, however, could not come to a decision as to whether the respondent should be granted leave on medical grounds for four months.
It recommended that the respondent should get himself admitted in the Mayo Hospital, Nagpur.
for observation and investigation.
In accordance with this report, Government asked the respondent to get himself admitted in the Mayo Hospital in time, so that the Board could examine him on August 8, 1950.
The respondent refused to, go to the Mayo Hospital and pressed that he should be allowed to go to Calcutta to receive medical treatment from experts.
It appears that on July 26, 1950, the respondent received a telegram from Raipur stating that his daughter was dangerously ill there.
He, therefore, made another application on the same day requesting for ten days ' leave to enable him to go to Raipur and see his ailing daughter.
On July 31, 1950, Government granted the respondent 's request.
Accordingly, the respondent went to Raipur.
From Raipur he renewed his application for four months ' leave on Medical grounds and produced certificates from Dr. Bhalerao and Dr. Kashyap.
That led to a lengthy correspondence between the respondent and the Government which shows that Government insisted on his appearing before the Medical Board and the respondent was not prepared to go to.
Nagpur because he alleged that he was seriously ill and could not undertake a journey to Nagpur.
Ultimately, on September 9, 1950, Government called upon the respondent to resume his duties within three days from the receipt of the said letter failing which he was told that he would be suspended and a departmental enquiry would be started against him.
On October 4, 1950, the respondent wrote a lengthily reply setting forth his contentions in detail.
Since he did not resume his duties, Government decided to suspend him and start a departmental enquiry against him.
Mr. S.N. Mehta, I.C.S., was accordingly appointed to hold the.
enquiry.
On November 29, 1950, Mr. Mehta wrote to the respondent that Government had directed him to conduct the departmental enquiry, and called upon the respondent to attend his office on December 7, 1950, at 11.00 a.m.
The respondent, however.
did not appear before him and wrote to Mr. Mehta that owing to his illness, he was unable to appear before him.
He again pleaded that he was seriously ill.
On January 15, 1951, Mr. Mehta served the respondent with a charge sheet.
Three charges were framed against him.
The first charge was that he had deliberately disobeyed the orders of Government when he was asked to get himself admitted in the Mayo 139 Hospital for observation and investigation.
The second charge was that he had failed to report for duty even though no leave was sanctioned to him by Government and he was specifically ordered by Government to report for duty.
The third charge was that he had persistently disobeyed the orders of Government and he had thereby shown himself unfit to continue as a member of the State Civil Service.
Material allegations on which reliance was placed against the respondent in support of these charges were also specified under the respective charges.
The respondent was, however, not prepared to appear before Mr. Mehta and he raised several technical contentions.
Ultimately, he sent his written statement and denied all the charges.
His case appears to have been that he had not deliberately disobeyed any of the orders issued by Government.
In regard to his getting admitted in the Mayo Hospital, he seems to have taken the plea that when he was allowed to go on casual leave to see his ailing daughter at Raipur, it was clear that he could not have got himself admitted in the Mayo Hospital so as to enable the Medical Board to examine him on August 8, 1950.
In respect of the charge that he had persistently refused to obey the orders of Government, his case was that he was dangerously ill and that he genuinely apprehended that if he undertook a journey to resume his duty, he might even collapse.
He requested the enquiry officer to allow him to appear by a lawyer whom he would instruct to cross examine the witnesses whom the Government would examine against him.
He also stated that he wanted to give evidence of his own doctors who would depose to his ailing condition at the relevant time.
It appears that Mr. Mehta wanted to accommodate the respondent as much as he could and when he found that the respondent was not appearing in person before him, he in fact fixed a date for hearing at Raipur on September 21, 1951 where he happened to be camping.
On that date, the respondent appeared before Mr. Mehta and Mr. Mehta made a note as to what transpired on that date.
The note shows that "the whole case was discussed with the respondent.
His plea was that he should be allowed to appear through a counsel, but it was explained to him in detail that as far as the case can be seen from Government side at present, it does not involve the taking up oral evidence.
He agreed that he would not press for this facility.
He would, however, like to give a detailed answer to the charge sheet.
He also undertook to appear in person regularly in future".
Thereafter, Mr. Mehta required the respondent to file his detailed written statement.
and in fact, the respondent did file his detailed written statement containing the pleas to which we have already referred.
On November 8. 1951, Mr. Mehta wrote to the respondent that he would be glad to hear him in person in case he wished to make an oral statement on November 20, 1951, and when the respondent did not 140 appear on the said date, Mr. Mehta proceeded to examine the documentary evidence showing the failure of the respondent to comply with the orders issued by Government and made his report on November 24, 1951.
He found that the three charges framed against the respondent were proved.
In his report, Mr. Mehta observed that "the conduct of the respondent and the language used by him from time to time in his communications .discloses an attitude of disobedience and insubordination which no Government can tolerate from its subordinate officers".
We may incidentally observe that the comment thus made by Mr. Mehta in regard to the communications addressed by the respondent to him appears to us to be fully justified but, in our opinion, this aspect of the matter cannot have any material bearing on the question with which we are concerned.
The validity of the impugned order must be judged objectively without considering the impropriety of the language used by the respondent or the reluctance shown by him to appear before Mr. Mehta.
In his report, Mr. Mehta has also observed that when the respondent met him, he explained to him that the case did not involve recording of any oral evidence as it was based on documents only.
Mr. Mehta adds that according to the impression he got at that time, the respondent was satisfied that in the circumstances, the assistance of a counsel was unnecessary.
It is, however, plain from the several letters written by the respondent to Mr. Mehta that he was insisting upon an oral enquiry and that he wanted to examine his doctors to show that he was so iII at the relevant time that he could not have resumed his duties.
On March 2, 1951, the respondent wrote to Mr. Mehta stating, inter alia, that he wished to put in the witness box a few high ranking Government officers and the doctors whom he had consulted about his illness.
Earlier on January 20, 1951, he had written to Mr. Mehta requesting him to conduct an oral enquiry as laid down in paragraph 8(iv) G.B. Circular 13.
Similarly, on April 23, 1951, he again informed Mr. Mehta that in his opinion the institution of the departmental enquiry after suspending him was illegal and had caused him grave injury, and he added that oral and documentary evidence will be produced in defence.
It does appear that Mr. Mehta explained to the respondent that so far as Government was concerned, it rested its case merely on documents and did not think it necessary to examine any witnesses, and thereupon the respondent agreed that he need not have the facility of the assistance of a lawyer.
But it is clear from the remarks made by Mr. Mehta in the order sheet on September 21, 1951, and the observations made by him in his report that the only point on which the respondent agreed with Mr. Mehta was that he need not be allowed the assistance of the lawyer in the departmental enquiry.
We have carefully examined the record in 141 this case and we see no justification for assuming that the respondent at any time gave up his demand for an oral enquiry in the sense that he should be given permission to cite his doctors in support of his pica that his failure to resume his duties was due to his ill health.
The charge against him was that he had deliberately disobeyed the Government orders, and it is conceivable that this charge could have been met by the respondent by showing that though he disobeyed the orders, the disobedience was in no sense deliberate because his doctors had advised him to lie in bed; and thus considered, his desire to lead medical evidence cannot be treated as a mere subterfuge to prolong the enquiry.
It is true that the respondent did not give a list of his witnesses; but he had named his doctors in his communications to Mr. Mehta, and in fact Mr. Mehta never fixed any date for taking the evidence of the witnesses whom the respondent wanted to examine.
If Mr. Mehta had told the respondent that he would take the evidence of has witnesses on a specified date and the respondent had failed to appear on the said date with his witnesses, it would have been an entirely different matter.
Therefore, the position is that Mr. Mehta did net hold an oral enquiry and did not give an opportunity to the respondent to examine his witnesses and so, the question which arises for our decision is: does the failure of Mr. Mehta to hold an oral enquiry amount to a failure to give a reasonable opportunity to the respondent within the meaning of article 311 ? The requirements of article 311(2) have been considered by this Court on several occasions.
At the relevant time, article 311(2) provided that no person to whom article 311 applies shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard t9 him.
It is common ground that the impugned order of compulsory retirement attracts the provisions of article 311 (2).
If it appears that the relevant statutory rule regulating the departmental enquiry which was held against the respondent made it obligatory on the enquiry officer to hold an oral enquiry if the respondent so demanded.
then there would be no doubt that the failure of the enquiry officer to hold such an oral enquiry would introduce a serious infirmity in the enquiry and would plainly amount to the failure of the appellant to give a reasonable opportunity to the respondent.
This position is not disputed by the learned Attorney General and is indeed well settled.
So, the narrow question to which we must address ourselves is whether it was obligatory on Mr. Mehta to hold, an oral enquiry and give d reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
We will assume for the purpose of this appeal that in a given case, Government would be justified in placing its case against the charge sheeted officer only on documents and may be under no obligation to examine any witnesses, 142 though we may incidentally Observe that even in such cases, if the officer desires that the persons whose reports or orders are being relied upon against him should be offered for cross examination, it may have to be considered whether such an opportunity ought not to be given to the officer; but that aspect of the matter we will not consider in the present appeal.
Therefore, even if it is assumed that Government could dispense with the examination of witnesses in support of the charges framed against the respondent, does the relevant rule make it obligatory on the Enquiry Officer to hold an oral enquiry and give the respondent a chance to examine his witnesses or not? This question falls to be considered on the construction of rule 55 of the Civil Services (Classification, Control and Appeal) Rules.
This rule reads thus: "Without prejudice to the provisions of the Public Servants Inquiries Act, 1850, no order of dismissal, removal or reduction shall be passed on a member of a service (other than an order based on facts which have led to the conviction in a Criminal Court or by a Court, Martial) unless he has been informed in writing of the grounds on which it is proposed to take action, and. has been afforded an adequate opportunity of defending himself.
The grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the person charged together with a statement of the allegations on which each.
charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case.
He shall be required within a reasonable time, to put in a written statement of his defence and to state whether he desires to be heard in person.
If he so desires or if the authority concerned so direct, an oral enquiry shall be held.
At that enquiry oral evidence shall be heard as to such of the allegations as are not admitted, and the person charged shall be entitled to cross examine the witnesses, to give evidence in person and to have such witnesses called.
as he may wish, provided that the officer conducting the enquiry may, for special and sufficient reason to be recorded in writing.
refuse to call a witness.
The proceedings shall contain a sufficient record of the evidence and a statement of the findings and the grounds thereof.
" It appears that the Government of Madhya Pradesh had issued a Circular explaining this Rule.
The Circular contained Rule 8 which is relevant.
It provides that "particular attention is invited to the provisions regarding oral enquiry.
In case the person charged desires that an oral enquiry should be held, the authority holding the departmental enquiry has no option to refuse it".
The High 143 Court seems to have based its conclusion substantially, if not entirely, on this rule.
We do not propose to adopt that course.
The rule may be no more than a circular issued by Government and we do not propose to examine the question as to whether it has the force of a statutory rule.
Our decision would, therefore, be based on the construction of Rule 55 of the Civil Services Rules which admittedly applied and which admittedly is a statutory rule.
The relevant clause in this Rule provides that the officer charge sheeted shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires to be heard in person.
This clause has been complied with m the present proceedings.
Mr. Mehta gave notice to the respondent to appear before him in person on the 20th November, 1951 and the respondent did net appear on that date.
It is the next clause on which the decision of the present appeal depends.
This clause lays down that if he, that is to say the charge sheeted officer, so desires or if the authority concerned so directs, an oral enquiry shall be held.
In our opinion, it is plain that the. requirement that an oral enquiry shall be held if the authority concerned so directs.
or if the charge sheeted officer so desires is mandatory.
Indeed.
this requirement is plainly based upon considerations of natural justice and fairplay.
If the charge sheeted officer wants to lead his own evidence in support of his plea, it is obviously essential that he should be given an opportunity to lead such evidence.
Therefore.
we feel no hesitation in holding .that once the respondent expressed his desire to Mr. Mehta that he wanted to lead evidence in support of his plea that his alleged disobedience of the Government orders was not deliberate, it was obligatory on Mr. Mehta to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
It is true that the oral enquiry which the enquiry officer is bound to hold can well be regulated by him in his discretion.
If the charge sheeted officer starts cross examining the departmental witnesses in an irrelevant manner, such cross examination can be checked and controlled.
If the officer desires to examine witnesses whose evidence may appear to the enquiry officer to be thoroughly irrelevant, the enquiry officer may refuse to examine such witnesses; but in doing so, he will have to record his special and sufficient reasons.
In other words, the right given to the charges heated officer to cross examine the departmental witnesses or examine his own witnesses can be legitimately examined and controlled by the enquiry officer; he would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged.
But, in our opinion it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence, the enquiry officer can say that having regard to the charges framed against the officer.
he would not hold any oral enquiry.
In the present case, the witnesse. 144 whom the respondent wanted to examine; would undoubtedly have given relevant evidence.
If the doctors who treated the respondent had come and told the enquiry officer that the condition of the respondent was so bad that he could not resume work, that undoubtedly would have been a relevant and material fact to consider in deciding whether the charges framed against the respondent were proved.
Even if we disapprove of the attitude adopted by the respondent in the course of this enquiry and condemn him for using extravagant words and making unreasonable contentions in his communications to the enquiry officer, the fact still remains that he wanted to examine his doctors, and though he intimated to Mr. Mehta that he desired to examine his doctors, Mr. Mehta failed to give him an opportunity to do so.
That, in our opinion, introduces a fatal infirmity in the whole enquiry which means that the respondent has not been given a reasonable opportunity to defend himself within the meaning of article 311(2).
On that view of the matter, it is unnecessary to consider whether the High Court was right in its other conclusions that the second notice served by the appellant on the respondent was defective and that the final order was also defective inasmuch as it did not appear that the appellant had taken into account the representation made by respondent.
It is not disputed by the learned Attorney General that if we hold that the enquiry conducted by Mr. Mehta contravened the mandatory provision of r. 55, the decision of the High Court could be sustained on that ground alone.
In the result.
the appeal fails and is dismissed with cost.
Appeal dismissed.
[/INST]The appellant who was in the service of a State Government asked for long leave which was refused.
Subsequently he asked for ten days ' leave which was granted.
On the expiry of the leave period he did not join duty on the ground that he was seriously ill.
The Government refused to accept the plea and instituted a departmental inquiry against him.
The respondent wanted to produce oral evidence in support of his plea including the evidence of doctors who treated him, but the enquiry officer refused to record oral evidence on the ground that the case against the appellant rested on documents alone and therefore no oral evidence was necessary.
On the report of the enquiry ' officer the State Government ordered the compulsory retirement of the respondent.
The latter filed a suit in which he claimed inter alia that the constitutional provision in article 311 had been contravened.
The trial judge held against him but the High Court decided in his favour.
The State Government appealed to the Supreme Court with certificate.
The narrow question to which the COurt had to address itself was whether it was obligatory on the enquiry officer to give a reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
HELD: (i) The Civil Services (ClassifiCation, Control and Appeal) Rules provide in r. 55 that if the charge sheeted Officer so desires or if the authority concerned so directs an oral enquiry shall be held.
This provision is mandatory and is based on considerations of natural justice and fair play.
Therefore when the respondent expressed his desire to the enquiry officer that he wanted to lead evidence in support of his plea, it was obligatory on the enquiry officer to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
[143 D F] (ii) Though an enquiry officer would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged, it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence the enquiry officer can say that having regard to the charges against the officer he would not hold any oral enquiry [143 H] (iii) In the present case the witnesses whom the respondent wanted to examine would undoubtedly have given relevant evidence.
He wanted to examine his doctors but the enquiry officer failed to give him an opportunity to do so.
That introduced a fatal infirmity in the whole enquiry as the respondent had not been given a reasonable opportunity to de.fend himself within the meeting of article 311 (2).
The appeal of the State Government had therefore to be dismissed.
[144 A, C] 136
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<s>[INST] Summarize the judgementCivil Appeal No. 87 of 1950.
Appeal from the Judgment and Decree dated 8th Febru ary, 1949, of the High Court of Judicature at Patna (Manohar Lall and Mahabir Prasad JJ .) in Appeal No. 38 of 1946 arising out of decree dated the 18th December, 1945, of the Subordinate Judge of Deoghar in Title Suit No. 1 of 1939.
B.C. Dey (S.C. Ghose, with him) for the appellant.
M.C. Setalvad (Kanhaiyaji, with him) for the respondent.
154 1951.
November 29.
The Judgment of Mehr Chand Mahajan and Vivian Bose JJ.
was delivered by Mahajan J. Fazl Ali J. delivered a separate judgment.
MAHAJAN J.
The question involved in the appeal relates to the right of succession to six Birbhum ghatwalis governed by Regulation XXIX of 1814, annexed to Gaddi Pathrol and lying within Tappasarath in the Santhal Parganas.
the genealogy of the contestants appears from the following pedigree table: .
Digbijoy Singh I Gurohari SinghKanhai Singh Bhairo Singh Balram Singh (Ghatwal) I I Pratar Singh I I I I I Banwari Singh Pitambar Katku Singh Bharat Singh (Died (Ghatwal) issueless) I Kharagdhari Singh (Ghatwal) I Ram Chandra Singh (Ghatwal) I I Brijbehari Singh Sarju Prasad Singh (Ghatwal) (Original plaintiff) I I Krishna Prasad Singh Hargobind Prasad Singh (Ghatwal) (Substituted plaintiff) I I Kali Prasad Singh Durga Prasad (Ghatwal) ( Died issueless) I Phaldani Kumari (Defendant) Tikait Kali Prasad Singh, the last gaddidar of Pathrol, died in the year 1935.
He belonged to the Baisi Chaurasi clan.
On the 29th November, 1935, the 155 Commissioner of Bhagalpur Division recognized Smt.
Phaldani Kumari as the next ghatwal and entitled to be maintained in possession of the ghatwali estate on the 30th November, 1936, sarju Prasad Singh brought the suit out of which this appeal arises in forma pauperis in the court of the Subor dinate Judge of Deoghar for possession of the ghatwalis.
In paragraphs 7, 8 and 10 of the plaint it was alleged that the ghatwalis in suit were joint family property and were im partible by custom; that succession to them was governed by the law of lineal primogeniture; that the females and persons claiming through them were altogether excluded from inheritance.
It was claimed that the late Tikait Kali Prasad Singh and the plaintiff were members of a joint Mitakshara family and that he alone as the eldest member of the eldest surviving line of the descendants of the common ancestor was entitled to succeed to them.
The defendant in her written statement denied this claim and contended that Birbhum ghatwalis governed by Regulation XXIX of 1814 are not and cannot be in the nature of joint family property but that the person who succeeds and holds the tenure as ghatwal is the sole proprietor and owner thereof.
It was pleaded that the properties being the exclusive and separate properties of the ghatwal for the time being, the defendant, his widow, was entitled to suc ceed to them in preference to the plaintiff under the Mitak shara school of Hindu law which admittedly governed the family of the parties.
The pleadings of the parties gave rise to the following issues : 1.
Whether succession to the ghatwalis in question is governed by the customs alleged in para 7 of the plaint ? 2.
Did the ghatwalis in question form joint family property of Kali Prasad Singh, his ancestors in the direct line and of Sarju Prasad Singh and the plaintiff? 3.
Did Kali Prasad die in a state of jointness with Sarju Prasad Singh ? 156 4.
Are the ghatwals the sole proprietors of the ghatwalis for the time being as alleged by the defendant ? 5.
Whether the plaintiff or the defendant is entitled to succeed to the properties in suit ? Issues 2, 3 and 4 were found by the trial Judge in favour of the plaintiff and against the defendant.
It was held that Kali Prasad Singh died in a state of jointness with Sarju Prasad Singh and that the ghatwalis in question were their joint family property and that the plaintiff the eldest surviving copartner in the eldest line of Digbijoy Singh 's descendants was entitled to succeed to them in preference to the widow.
It was common ground between the parties that in case the properties were held to be the separate properties of Kali Prasad Singh, the widow was entitled to succeed to them.
As a result of these findings the plaintiff 's suit was decreed with costs.
On appeal by the widow to the High Court, this.
decree was reversed and the plaintiff 's suit was dismissed with costs.
It was held that the character of the ghatwali tenures in question was such that they could not be regarded as joint property of the plaintiff and the last ghatwal and that being so, the defendant was entitled to succeed to them.
The learned counsel for the appellant based his argu ments on the thesis that the ghatwali estates in question were of the same nature and character as joint family im partible estates governed by the Mitakshara law and that the rule of survive applicable to such estates was also applicable to them.
It was contended that the High Court was in error in holding that the suit properties exclusively belonged to Kali Prasad Singh or that there was anything peculiar in these tenures which differentiated them from other ghatwalis in the Santhai Pargangs or from other im partible estates known to Hindu law and which peculiarity incapacitated them from being included within the definition of coparcenary property.
The plea that females were by custom excluded from inheriting ghatwali tenures in Birbhum was 157 dropped in the two courts below and was ' not raised before us; so also the point of custom set out in para.
7 of the plaint and covered by issue 1 was not seriously urged.
The learned Attorney General, while conceding that succession to these tenures was governed by the Mitakshara law, contended that in no sense could they be regarded as joint family property and that their peculiar characteris tics precluded the acquisition of any right by birth by members of a joint Hindu family in them.
He also urged in the alternative that the widow was 'entitled to succeed to them, assuming them to be joint family property under cus tom.
The courts below have given elaborate judgments in the case and reference has been made to a large number of decid ed cases.
In our opinion, the main point that needs decision is whether the suit ghatwalis were to be regarded as joint family or separate properties of the deceased.
For a solu tion of this problem it is necessary to refer first to the nature and main incidents of a ghatwali tenure.
Its origin is now well known.
In Moghul times grants of land were made to selected persons who were appointed guardians of the mountain passes for protecting the countryside against hill invaders and the office held by these persons bore the designation "ghatwal".
These grants were made in some cases directly by the ruling power and in other cases by the zamindar responsible by custom for the maintenance of secu rity and order within the estate as consideration for the performance of the duties.
By efflux of time these grants assumed the form of an actual estate in land, heritable and perpetual, but conditional upon services certain or services to be demanded.
Reference to some of the decided cases relating to Birbhum ghatwali tenures will sufficiently indicate their nature and character.
In Harlal Singh vs Joravan Singh(1), it was held that a ghatwali estate in Birbhum was not divisible (1) 6 Select.
Rep.204.
21 158 on the death of a ghatwal, amongst his heirs but should devolve entirely on the eldest son or the next ghatwal.
It was said that ghatwali lands are grants for particular pur poses, especially of police, and to divide them into small portions amongst the heirs of the ghatwals would defeat the very ends for which the grants were made.
In Satrukchunder Dey vs Bhagat Bharutchunder Singh(1), a decision of the year 1853, it was stated that the ghatwali tenures in Birbhum were not private property of the ghatwals but lands assigned by the State in remuneration for specific police services and were not alienable or attachable for personal debts.
Kustooree Koomaree vs Monohur Deo(2), Loch J. took the view that succession to ghatwalis is regulated by no rule of kulachar or family custom, nor by the Mitakshara law, but solely by the nature of the ghatwali tenure, which descends undivided to the party who succeeds to and holds the tenure as ghatwal and that a female is not incapable of holding a ghatwali tenure.
It was said that "the party who succeeds to and holds the tenure as ghatwal must be, and has always been, looked upon as sole proprietor thereof, and, therefore, the other members of the family cannot claim to be coparceners and entitled to share in the profits of the property, though they may, by the permission and goodwill of the incumbent, derive their support, either from some portion of the property which he may have assigned to them, or directly from himself." In Binode Ram Sein vs Deputy Commissioner of Santhai Pargangs(3), (on review it was held that the rents of a ghatwali tenure are not liable for the debts of the former deceased holder of the tenure.
The reason for the decision was that the tenure was held for the purpose of public services and those who perform the services are entitled to the whole of the remuneration.
(1) 9 S.D.R. 900.
(3) (2) 1864 W.R. (Gap Nos.) 39.
159 In Tekait Durga Pershad Singh vs Teketnee Durga Kuari(1), it was urged that a female 's right to inherit was inconsistent with a ghatwali estate.
This contention was negatived and reference was made to the fact that many ghatwali estates were held by females and it was observed that it was difficult to hold that a ghatwali estate must necessarily be held by male heirs.
This case further sug gests that in a case where it is held proved that the family was joint, succession to Birbhum ghatwali may be regulated by the same rule of Hindu law as is applicable to the devo lution of impartible estates.
In Ram Narain Singh vs Ramoon Paurey(2), another Birbhum ghatwali case, it was held that the ghatwal for the time being was only entitled to interest on the compensation money obtained for compulsory acquisition of a part of the ghatwali interest but that he could not spend the corpus of it which had to devolve on the next heir intact.
So far as Birbhum ghatwalis are concerned, it is only the above mentioned cases to which our attention was drawn.
Reference in this connection is also necessary to the terms of Regulation XXIX of 1814.
Sections I and II of the Regulation which are material to this enquiry are in these terms : I.
Whereas the lands held by the class of persons denom inated Ghautwauls, in the district of Beerbhoom, form a peculiar tenure to which the provisions of the existing Regulations are not expressly applicable; and whereas every ground exists to believe that, according to the former usages and constitution of the country, this class of per sons are entitled to hold their lands, generation after generation, in perpetuity, subject nevertheless to the payment of a fixed and established rent to the zemindar of Beerbhoom, and to the performance of certain duties for the maintenance of the public peace and support of the police; and whereas the rents payable by those tenants have been (1) (2) 160 recently adjusted, after a full and minute inquiry made by the proper officers in the revenue department; and whereas it is essential to give stability to the arrangements now established among the Ghautwauls, the following rules have been adopted, to be in force from the period of their pro mulgation in the district of Beerbhoom.
A settlement having lately been made on the part of the Government with the Ghautwauls in the district of Beerb hoom, it is hereby declared that they and their descendants in perpetuity shall be maintained in possession of the lands, so long as they shall respectively pay the revenue at present assessed upon them,. " The result of the decided cases and of the provisions of the regulation is that the grantee of the tenure and his descendants have to be maintained in possession of the land from generation to generation conditional upon services to be rendered.
The tenure is however liable to forfeiture for misconduct or misbehavior of the ghatwal for the time being.
The succession to it is determined by the rule of lineal primogeniture.
It is neither partible nor alienable (except in exceptional cases with the consent of the government or the zamindar, as the case may be).
These two characteristics are inherent in its very nature and have not been annexed to it by any rule of custom.
The estate in the hands of the last holder is not liable either to attachment or sale in execution of a decree against him; nor is it liable in the hands of his successor for payment of his debts.
When the succession opens out, the heir determined according to law has to execute a muchilika in favour of the grantor guaranteeing the performance of the duties annexed to the office and stipulating that in case of misconduct or misbehaviour or non fulfilment of the obligations attaching to the office, as to which the tenure is in the nature of a remuneration, government will have the right to resume it.
In view of these peculiar characteristics of a ghatwali tenure in Birbhum which are so different from other inheri tances, we find it difficult to apply to it the 161 law of Mitakshara to the full extent.
The essence of a coparcenary under the Mitakshara law is unity of ownership.
As observed in Katama Natchir vs The Raja of Sivaganga(1), there has to be community of interest and unity of posses sion between all the, members of the family, and upon the death of any one of them the others may well take by survi vorship that in which they had during the deceased 's life time a common interest and a common possession.
The inci dents attaching to a Birbhum ghatwali tenure rule out the existence of any notion of community of interest and unity of possession of the members of the family with the holder for the time being.
He is entitled to be maintained in exclusive possession of the ghatwali lands and the devolu tion of the property is to him in the status of a sole heir.
This view finds support from the observations of Lord Fitz gerald in Kali Pershad vs Anand Roy(2), though made in respect of a zamindari ghatwali, yet also appositely ap plicable to a government ghatwali.
His Lordship observed as follows : "Where, however, the Mitakshara governs, each son imme diately on his birth takes a share equal to his father in the ancestral immoveable estate.
Having regard to the origin and nature of ghatwali tenures and their purposes and inci dents as established by decided cases, most of which have been referred to in the course of the argument, it is admit ted that such a tenure is in some particulars distinct from, and cannot be governed by, either the general objects of Hindu inheritance as above stated, or by the before quoted rule of the Mitakshara.
It is admitted that a ghatwali estate is impartable that is to say, not subject to partition; that the eldest son succeeds to the whole to the exclusion of his brothers.
These are propositions that seem to exclude the application of the Mitakshara rule that the sons on birth each take an equal estate with the father and are entitled to partition.
" Similar opinion was expressed in Chhalraclhari Singh vs Saraswati Kumari(3), by a Bench of the (1) (1861 3) 9 M.I.A. 543.
(3) Cal.
(2) Cal.
471. 162 Calcutta High Court.
The following passage from that a decision may be quoted with advantage : "The learned pleader for the appellant has however con tended before us ,that, although this ghatwali tenure is impartible, yet according to the decision of their Lordships of the Privy Council in Chintaman Singh vs Nowlukho Koon wari(1), it is not necessarily separate property, and that as their Lordships observe 'whether the general status of a Hindu family be joint or undivided, property which is joint will follow one and property which is separate will follow another course of succession. ' The decision referred to is no doubt an authority for the proposition that there may be impartible joint family property, such as a raj or other estate similar to a raj, but whether such property is to be regarded as joint or separate would appear to depend generally upon the character of the property at its incep tion, such as the nature of the grant, etc.
creating it.
Having regard however to the view we have already expressed as to the status of the family in the present case, and as to the ghatwali tenure having been the exclusive property of Ananta Narain, we think it is unnecessary to determine what was originally the character of this tenure, although, if we were called upon to decide the question, we should be disposed to say, with reference to the peculiar character of these tenures as described in Regulation XXIX of 1814, that they were intended to be the exclusive property of the ghatwalforthe time being, and not joint family property in the proper sense of the In Raja Durga Prashad Singh vs Tribeni Singh(2), again it was said as follows : "It was certainly an advantage to the whole family that one of their members should hold the office and the tenure.
He could put other members of the family into minor offices and grant them subordinate interests commonly called jotes, and he could and would generally provide for the family in the manner (1) (2) (1918) 45 I.A. 251. 163 expected of its head.
But this is a long way off making him a trustee for the family or treating the ghatwali estate as possessed by the family and reducing the ghatwali to the position of karta or managing head of the family.
Their Lordships do not find that the incidents of ghatwali tenure are such as to give the family any rights over the property while it is in the hands of the ghatwal, and they find themselves upon this point in full agreement with the courts in India.
" In Narayan Singh vs Niranjan Chakravarti(1), Lord Sumner made an exhaustive review of the decided cases and examined the whole position of ghatwali tenures generally and ob served that where the tenure is hereditary, a recognized right to be appointed ghatwal takes the place of a formal appointment and a recognized right in the superior to dis miss the ghatwal if he is no longer able and willing to render the service required by his tenure, and to appoint another to the office and the tenure of the lands, then readily suffices to maintain in perpetuity the incidents of the tenure.
In these circumstances it is not possible to hold that the Mitakshara rule that when a person inherits property from any one of his three immediate paternal ancestors, his sons, grandsons and great grandsons acquire an interest in it by birth can have any application to the case of these grants which are in the nature of a remuneration for the performance of certain services by the holder of that of fice.
A ghatwali has to be regarded as something connected with an office and as observed by Lord Sumner in the above mentioned case, the office cannot except by special custom, grant or other arrangement, either run with lands or be served from them.
In other words, just as primogeniture and impartibility are handmaids, similarly the ghatwal 's office and the ghatwali tenure are two inseparables and cannot be lodged in separate compartments.
If the office cannot be in the nature of coparcenary property, the tenure must follow the same way.
Thus it is not easy to conceive that an inter est (1) (1924) 51 I.A. 37.
164 can be acquired at the birth of a member of a joint family in a tenure which is annexed to an office, even if it has descended from three immediate paternal ancestors.
In certain eventualities the selection of the next heir depends on the choice of the ruling authority and in case of miscon duct or misbehaviour of the holder for the time being the ruling power can not only dismiss the ghatwal but even resume the tenure.
This is a feature which places this heritable property in a class by itself as distinguished from other inheritances governed by the Mitakshara law.
The view that in Birbhum, ghatwali tenures are in the nature of separate property or the exclusive property of the ghatwal finds support from the fact that in many instances, whenever succession has opened out in respect of them, it has been determined according to the Mitakshara rule ap plicable to the devolution of separate property irrespective of the circumstance whether the deceased died in joint or separate status with the other members of the family.
Thirteen instances of such practice in the past amongst members of the Bais Chaurasi clan were proved in the case, in all of which the widow succeeded in preference to a male heir.
The learned trial Judge held that in some of these instances the female succeeded because the agnate nearest in line was separate from her husband; as regards the others though he reached the conclusion that the evidence of sepa ration was weak, he thought that these did not establish a custom superseding in cases of joint family property the rule of survivorship.
The High Court was of a different opinion.
It rightly remarked that while numerous instances of female succession to the estates held by Baisi Chaurasi gaddidar 's had been proved, not a single instance of a female having been excluded from the appointment of a ghat wal on the ground of an agnate being entitled to come in as a coparcener of the last holder by survivorship had been proved, and that in these circumstances there was force in the contention that even if the tenures in question were ancestral joint family property, succession thereto was 165 governed by the Mitakshara rule applicable to separate property.
For the reasons given above we held that the Mitakshara rule that the property inherited by a person from his imme diate paternal ancestors becomes ancestral in his hands and in it his sons, grandsons and great grandsons acquire a right at the moment of the birth has no apposite application to Birbhum ghatwali tenures.
The learned counsel for the appellant in support of his contention placed reliance on a number of decisions of their Lordships of the Privy Council concerning impartible estates governed by the Mitakshara law, wherein it was held that the succession to an impartible estate which is the ancestral property of a joint Hindu family governed by the Mitakshara law is governed by the rule of survivorship subject to the custom of impartibility; the eldest member of the senior branch of the family succeeding in preference to the direct lineal senior descendants of the common ancestor, if the latter is more remote in degree.
Particular reference was made to the remarks of Turner L. I. in the Sivaganga case(1), and to the observations in Baijnath Prasad Singh vs Tej Bali Singh (2) and in the case of Shiba Prasad Singh vs Rani Prayag Kumari Debi(3).
Therein it was said that in the case of ordinary joint family property the members Of the family have (1) the right of partition, (2) the right to restrain alienations by the head, (3) the right of mainte nance, and (4) the right of survivorship.
The first of these rights cannot exist in the case of an impartible estate, though ancestral, from the very nature of the estate.
The second and third are incompatible with the custom of impart ibility.
To this extent the general law of the Mitakshara has been superseded by custom and the impartible estate, though ancestral, is clothed with the incidents of self acquired and separate property.
But the right of survivor ship is not inconsistent with the custom of impartibility.
This right (1) (1861 3) 9 M.I.A. 543.
(3) A.I.R. 1932 P.C. 216.
(2) All.
22 166 therefore still remains and to this extent the estate still retain.s its character of joint family property and its devolution is governed by the general Mitakshara law applicable to such property and that though the other rights which a coparcener acquires by birth in joint family proper ty no longer exist, the birthright of the senior member to take by survivorship still remains.
In our view, these observations have no application to the tenures in suit.
As already indicated, it is not possi ble to concede in their case that a member of a joint family governed by the Mitakshara law acquires any right by birth in them.
The general law of Mitakshara creating that right seems to have been superseded in their case not only by peculiarities inherent in the nature of these tenures but by encroachments of custom on it.
Moreover, it appears that the remarks relied upon were made in cases where the impartible estates were admittedly joint family property or the grants were of such a character that they are intended for the benefit of the family as such.
The ratio of these decisions was that even though certain incidents attaching to joint family property may cease to exist by custom, some others which are not affected by custom may survive.
This reasoning can have no application to property which at no stage what ever could be clothed or was clothed with any of the inci dents of coparcenary property.
The learned counsel for the appellant placed considera ble reliance on the observations of Sir Dawson Miller C.J. in Fulbati Kumari vs Maheshwari Prasad(1).
The learned Chief Justice therein dissented from the View urged before him that all ghatwali property is the exclusive separate property of the holder for the time being and that it de volves according to the rules affecting separate property subject again to the circumstance of impartibility.
He observed that the fact that a raj is impartible does not in a case governed by the Mitakshara law make it separate or self acquired property, that it may be self acquired (1) A. I. R. 1923 Pat.
167 property or it may be the property of a joint undivided family and that in the latter case succession will be regu lated according to the rule of survivorship.
In our opinion, these observations have no application to the case of Birb hum ghatwalis because in express terms these were excluded from consideration in that case.
In the judgment it was said : "In our opinion, the estate in the present case is in no way comparable to the Birbhum ghatwali tenures and Regula tion XXIX of 1814 does not apply to it." The decision in the case proceeded on the assumption that Birbhum ghatwalis stood apart from other ghatwalis which stood on the same footing as impartible estates gov erned by Mitakshara law.
The learned Attorney General challenged the correctness of these decisions and contended that the decisions of the Privy Council on this subject were not uniform.
He drew our attention to the observations made in Sartaj Kuari 's case(1), in the Second Pittapur case(2), and in Tipperah case(3).
There may be a seeming conflict between the view expressed in those decisions and the view expressed in Baijnath Prasad Singh vs Tej Bali Singh(4), and in Shiba Prasad Singh vs Rani Prayag Kurnari Debi(5).
It seems to us however that these latter cases have settled the law ap plicable to joint family impartible estates governed by Mitakshara law and it is rather late in the day to reopen a controversy settled by a series of decisions of the Privy Council.
The contention that on the death of the last holder a ghatwali tenure in Birbhum reverts to the grantor and that notionally there is a resumption of it in favour of govern ment and a re grant to the next heir does not impress us.
On the express terms of the regulation these tenures are heritable from generation to generation and the theory of resumption and re grant is inconsistent with their heritable character.
Inheritance can never remain in abeyance and on the (1) (4) All.
(2) (1918) 45 I.A. 148.
(5) A.I.R. 1932 P.C. 216.
(3) (1867 9) 12 M.I.A. 523.
168 death of the last holder the estate immediately vests in the next heir.
The circumstance that the government may in certain events have the power to dismiss a ghatwal or to forfeit the tenure cannot lead to the inference that it terminates and is re granted at every death.
The argument of the learned counsel for the appellant that a widow not being a descendant of the grantee under the terms of Regulation XXIX of 1814, is not entitled to inherit to Birbhum ghatwali tenures also does not impress us.
The regulation does not enact any rule of succession to these tenures, and the devolution with respect to them is admit tedly determined by personal law or custom.
The expression "descendants" used in the regulation cannot deprive females, like a widow or a mother, from taking the inheritance where they are legal heirs under Mitakshara law or under custom.
Females have invariably been allowed to succeed to these tenures in the past.
The appellant 's counsel conceded that if the property was the separate property of Kali Prasad Singh, the defendant was entitled to inherit to it.
We think that the expression "descendants" has been loosely employed in the regulation for the word "heirs".
On this point we are in agreement with the observations made by a Bench of the Calcutta High Court in Chhatradhari Singh vs Saraswyati Kumari(1).
It may further be pointed out that even if the conten tion of the learned counsel for the appellant is to be accepted, by no process could the trial court have passed a decree in favour of the plaintiff in respect of items 4, 5 and 6 of the schedule Admittedly these were acquired by Krishna Prasad Singh, father of Kali Prasad Singh by a decree of court passed in his favour against his collateral Katku Singh who also claimed these properties as an heir to the last male owner Banwari Singh (vide Exhibit 4).
These pro perties having devolved upon Krishna Prasad Singh by obstructed heritage, were in the nature of separate property in his hands and could not fall within the (1) Cal.
156. 169 definition of ancestral property given in Mitakshara.
Sarju Prasad Singh, uncle of Krishna Prasad Singh, could acquire no right or roterest in these properties by birth enabling him to claim them by survivorship.
Kali Prasad Singh who inherited them on the death of his father got them as his separate property as he had no son who could acquire any interest in them by birth.
With regard to this property the widow was certainly an heir after the death of her husband ' and plaintiff could have no claim whatsoever in respect of these items of the schedule.
This aspect of the case seems to have been lost sight of in the two courts below.
The result, therefore, is that this appeal fails and is dismissed with costs.
FAZL ALI J.
While agreeing generally with my learned brother Mahajan J., I wish to say a few words to indicate the main ground on which I would dismiss this appeal.
There are a number of authoritative decisions dealing with the special features of ghatwali property, one of which is said to be that if the ghatwal is a member of a joint family, the family has no right over the property while it is in his hands.
[See Durga Prashad Singh vs Tribeni Singh(1)].
The logical corollary from this characteristic of ghatwali property would seem to be that it is more in the nature of exclusive property of the ghatwal than of joint family property.
Nevertheless, in some cases, succession to such property has been determined with reference to the rules of Hindu law regarding joint property, where the ghatwal was found to be a member of the joint family.
As at present advised I am not prepared to say that those cases were wrongly decided, but I think it will not be incorrect to say that custom and usage are also important factors governing succession to ghatwali property, and it is con ceivable that while in some cases custom may develop on the lines of Hindu law relating to succession owing to repeated instances of (1) (1918) 45 I.A. 251. 170 tacit and unquestioned application of the law, in other i.a cases succession to ghatwali property may be governed not entirely by Hindu law but by such law as modified in certain respects by usage and custom.
The question with which we are concerned in this case is whether the widow of a deceased ghatwal, who was a member of a joint family and died leaving no issue or direct male descendants, can succeed to the ghatWali property in prefer ence to the nearest male agnate.
On a reference to the plaint, it would appear that what the plaintiff contended was that the clan to which the parties belong was governed by the Mitakshara school of Hindu law "subject to their clan custom", one of which was said to be that females, viz., widow, daughter or mother, and persons claiming through females could not and did not succeed on the death of the ghatwal.
This allegation was controverted in the written statement, and it was claimed that the family was governed by the Mitakshara system of law and "there was no clan custom governing the estate in suit.
" Upon these pleadings, one of the issues framed by the trial court was "whether succession to the ghatwali is governed by custom, as alleged in paragraph 7 of the plaint." In the course of the trial, the plaintiff tried to prove that females were always excluded as alleged by him.
In this, he did not succeed.
The courts below however found that the question which directly affected the present case was a much narrower one, namely, whether females could succeed even when the family was joint.
So far as this question is con cerned, both the courts below are agreed that females cannot be excluded if the property is the separate property of the ghatwal.
But the question which still remains to be decided is what the true legal position would be if the property is deemed to be joint property.
It appears that evidence was adduced at the trial to show that in 13 instances affecting the Baisi Chaurasi clan to whom the Birbhum ghatwals admit tedly belong, the widow of the last ghatwal succeeded in preference to a male agnate.
171 The trial judge however found that in four of these in stances the nearest agnate who claimed the property was separate from the ghatwal or his widow, but, in the other instances, there was no evidence of separation, or "the evidence was weak", which, I take it, is another way of saying that it could not be safely relied on.
It seems to me that these instances lend some support to the view that Hindu law has been modified ' by custom, so far as the Birb hum ghatwalis are concerned, and that among the ghatwals belonging to this class, where the last ghatwal dies leaving a widow but no issue, then she succeeds in preference to the nearest male agnate, even though the family may be joint.
The Birbhum ghatwals form a class by themselves, and they are also subject to a special Regulation Regulation XXIX of 1814.
That Regulation states among other things that this class of ghatwals shall be entitled to hold the ghatwali property generation after generation and that they and their descendants in perpetuity shall be maintained in possession of such property.
Strictly speaking, neither a widow nor a distant agnate will come within the terms of the Regulation, not being a descendant of the last ghatwal, and therefore custom and usage cannot be ruled out in determining succes sion in such cases.
The strongest case which was relied upon by the appellant is Fulbati Kumari vs Maheshwari Pra sad(1) where it was laid down that on the death of a ghat wal, who was a member of a joint family, the ghatwali property would devolve according to the rules of Hindu law affecting joint property, that iS to say, by the rule of survivorship.
But, in this case, Dawson Miller C.J. who delivered the judgment, took care to observe that the ghat wali estate which was the subject of litigation was not comparable to the Birbhum ghatwali 'tenures, which means that the rule laid down in that case may not apply to Birb hum ghatwals.
In the present case, the Commissioner, who represented the Government and who had special means of knowing the usages affecting the Birbhurn ghatwals.
(1) A.I.R. 1923 Pat.
453. 172 appointed the respondent as the ghatwal, stating that he was "following a well established precedent in the case of these ghatwals by recognizing the widow in the absence of a direct heir.
" In my opinion, whatever evidence there is in this case supports the Commissioner 's view, and there is hardly any cogent evidence to rebut it.
In the circumstances, I agree that this appeal ought to be dis missed with costs.
Appeal dismissed.
ADAMJI UMAR DALAL vs THE STATE OF BOMBAY @ November 26, 1951.
[/INST]The appellant who belonged to Scheduled Tribe covered by the Schedule to the Constitution (Dadra and Nagar Haveli) Schedule Tribes Order, 1962, decided to contest the 1984 election from the Dadra and Nagar Haveli Parliamentary Constituency which was a constituency reserved for the members belonging to the Scheduled Tribes.
As he was holding the post of an Investigator as a temporary Government serv ant governed by the Central Civil Services (Temporary Serv ices) Rules, 1965 and also by condition 6 of his appointment order, he wrote a letter on November 21, 1984 to the Collec tor of Dadra and Nagar Haveli, who was his appointing au thority, tendering his resignation and enclosing a demand draft drawn on the State Bank of India for a sum of Rs.1024.05 paise, being one month 's notice pay.
On 24.11.1984 at 10 A.M. he wrote another letter to his immedi ate officer and submitted all the records and files which were with him.
He, thereafter, filed his nomination paper on the same day i.e. two days before the last date for filing the nomination papers.
On 26.11.84, he wrote a letter to the Returning Officer, bringing to his notice each and every fact leading to his resignation and requesting the Returning Officer to note his contention that he ceased to be a gov ernment servant with effect from 21.11.84, while scrutinis ing the nomination paper.
On the same date he received a reply from the office of the Administrator Dadra and Haveli to the effect that his resignation would take effect from 21.12.84 on the expiry of one month 's notice and that 636 his remitting one month 's notice pay was not contemplated under Rule 5(1)(a) of the Central Civil Services (Temporary Services) Rules, 1965, as per the legal opinion obtained.
On 27.11.84, the appellant sent a reply bringing to the Admin istrator 's notice condition No. 6 of his appointment order and also cases of six other officers whose resignations were accepted forthwith accepting one month 's notice pay from them.
The appellant also alleged mala fides and pressure by Respondent No. 1, the then sitting member of the Parliament on the Collector.
In reply to the said letter, the Develop ment and Planning Officer by his letter dated 21.12.84 reiterated the Administrator 's stand and returned the demand draft.
In the meanwhile on 28.11.84, i.e. the date of scrutiny of the nomination papers, the Returning Officer overruled the objection raised by Respondent No. 1 that since the appellant was holding an office of profit under the Govern ment he was disqualified to contest the election.
In the said election, the appellant secured the highest number of votes and he was declared elected.
The election petition filed by Respondent No. 1 was allowed and the appellant 's election was declared null and void.
The appeal preferred by the appellant under section 116 of the Repre sentation of People Act, 1951 was remitted to the High Court for amendment of written statement, framing of fresh issues and further findings of the High Court on them.
All the four additional issues framed were answered against the appellant and thereafter, the said appeal was set for further hearing.
Allowing the appeal, the Court, HELD: 1.
The letter of resignation dated November 21, 1984 cannot be treated as one submitted under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965.
The proviso to Rule 5(1) authorises only the appointing authority to terminate the temporary service of the Govern ment servant forthwith and that on such termination the Government servant becomes entitled to claim a sum equiva lent to the amount of his pay plus allowances for the period of the notice at the same rates at which he was drawing them immediately before the termination of his service, or as the case may be for the period by which such notice fails short of one month.
There is no provision in the CCS Temporary Service Rules which authorises a Government servant to bring about the termination of his temporary service as provided in Rule 5(1) by paying a sum equivalent to the amount of his pay and 637 allowances of the period of notice at the same rates at which he was drawing them immediately before termination of his service or as the case may be for the period by which notice falls short of one month.
If the letter of resigna tion was truly one which had been submitted under Rule 5(1) of the CCS Temporary Service Rules which did not envision tendering of one month 's salary by the employee, there was no necessity to tender a demand draft for Rs.1024.05.
Such payment was contemplated only when the resignation was under condition No. 6 of the letter of appointment issued in favour of the appellant about which the appointing authority could not have been unaware.
If the concerned authority had not realised that it was a resignation pursuant to such conditions the said authority would have returned (instead of retaining) the demand draft at once or at the earliest.
[654D; G H; 655A E] 1.2 The letter of resignation of the appellant was one which was submitted pursuant to Condition No. 6 of his letter of appointment which was one more method adopted and accepted by the Administration to bring about the termina tion of service of a temporary government servant.
The said condition was only supplementary to the modes of termination of temporary service, referred to in Rule 5(1) of the CCS Temporary Service Rules and it was not in any way inconsist ent with the said Rules.
As a matter of fact it was not even suggested or faintly hinted in the High Court that there was any such inconsistency.
[656B C] 1.3.
It is well recognised that a new service condition may be brought into effect by an executive order and such condition would remain in force as long as it is not re pealed either expressly or by necessary implication by another executive order or a rule made under the proviso of Article 309 of the Constitution of India or by a statute.
In the facts and circumstances of the case, the material pro duced in the Court and in the absence of any inconsistency between condition No. 6 and any other order, rule, or law the letter of resignation is one submitted pursuant to condition No. 6 in the letter of appointment issued in the case of the appellant.
[656C E] 2.1 There has been full compliance with condition No. 6 of the letter of appointment as a demand draft was enclosed being a month 's notice pay and allowances.
[656E F] 2.2 The resignation contemplated under Condition No. 6 is not the same as the letter of resignation which may be submitted by a government servant on the acceptance of which he ceases to be a government servant.
In the case of an ordinary resignation which is 638 governed by the Memorandum No. 39/6/57 Ests.
(A) Ministry of Home Affairs dated 6th May, 1958 no question of paying a month 's salary or allowance to the Government would arise.
In the absence of any rule or executive order prescribing the method or manner in which a temporary government servant of the rank of an investigator could be relieved from serv ice under Condition No. 6 of the letter of appointment or any evidence adduced as to what practice had been in vogue as regards relieving such a person, it must be held that it is implicit in such a condition that the nature of his employment is such that he can be relieved forthwith without the need for waiting for a month and that he would be so relieved as was indeed done in the case of others governed by such a condition.
[657A C] 2.3 The appellant should be deemed to have been relieved from his service at 10.00 A.M. on 24.11.1984 and he had ceased to be a Government servant before he submitted his nomination paper on 24.11.1984.
At 10.00 A.M. on 24.11.1984, before the appellant submitted his nomination paper to the Returning Officer, he had handed over all the records, registers, files etc.
which were with him to the head of his office along with a letter, a copy of which was submitted to the Collector, who was the appointing authority.
This cannot be termed as an unilateral act of the appellant.
There was no refusal to accept the records.
There was no order to report for duty and discharge any functions.
The appellant had not, in fact, been paid any salary or allowance for the period subsequent to 20.11.84, that is, the date previous to the date of the letter of resignation.
He had not attended and he was not required to attend his office from 21.11.84 except for handing over the records, files, registers etc.
on 24.11.84.
The appellant was not asked by the Collector to attend the office till 21.12.84 nor grievance was made against him for his absence in the wake of his resignation.
There was no disciplinary proceeding or any other kind of enquiry pending against the appellant which required the appointing authority not to relieve the appellant from his service in the public interest.
And there was no objection raised as a matter of fact on any ground to his being treated as having ceased to be in service eventually till the expiry of one month from the date of his service.
It is not as if for administrative reasons his resignation was not acceptable for any reason.
[657C F] 3.
The Returning Officer had rightly overruled the objection and accepted his nomination paper.
It is not established by the election petitioner on whom the onus rested that the returned candidate held an office of profit on the date of scrutiny or that his nomination paper was Wrongly accepted by the Returning Officer.
He cannot there fore suc 639 cessfully assail the election of the returned candidate, the appellant herein.
[657G H]
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<s>[INST] Summarize the judgementCivil Appeal No. 325 of 1970.
From the Judgment and order dated 28th March 1969 of the Madras High Court in Writ Appeal No. 490/68.
K. section Ramamurthy, K. Jayaram and R. Chandrashekhar for the Appellant.
L. N. Sinha, Solicitor General of India, section N. Prasad and Girish Chandra for the Respondents.
The Judgment of the Court was delivered by RAY J.
This appeal is by certificate from the judgment dated 28 March 1469 of the High Court of Madras.
The question in this appeal is whether the appellant in a writ petition can challenge the telephone rates and charges and obtain any relief in that behalf.
The appellant is a retired District Manager (Telephones), Madras.
He filed a writ petition in the High Court for a writ of prohibition, directing the General Manager (Telephones), Madras to forbear from preferred to the Appellate Tribunal but that too proved abortive.
The Tribunal, however, referred the following question of law for the opinion of the High Court: (1).[1966] 487 enforcing the revised Telephone Tariff as per the Indian Telegraph Amendment Rules, 1966.
Under the rules, the rental and call charges were increased by 50 per cent and Trunk call charges by about 30 to 35 per cent.
The petitioner alleged that the telephone system is a public utility service and not a Revenue earning establishment and the charges can be only in the nature of a fee which must be commensurate with the cost of rendering the service.
The petitioner further alleged that the loss incurred by the Government in another establishment service is not a legitimate ground for raising telephone rates.
The Trial Court held that Telephone Tariff was unjust and unreasonable.
The Trial Court allowed the writ petition.
The High Court on appeal held that the High Court could not interfere with the Tariff.
The High Court said that the principal upon which public utility rates regulation as has developed in the United States is not applicable here in our country.
It should be said at the outset that there was some discussion in the judgment on Article 19 but counsel for the appellant properly abandoned any reference to Article 19.
The appellant 's contentions are three.
First, the expression.
"rates" in section 7(2) of the Indian Telegraph Act means rates which are to be determined should be fair, just and reasonable from the point of view of both the consumer and the producer.
Second, the Court has jurisdiction to determine whether the rates filed by the Government are reasonable.
Third, the rates are increased expressly for the purpose of off setting the E losses in the Post and Telegraph Services.
If a proper allocation.
is made according to proper commercial accounting it will be found that there is a wrongful deduction of crores of rupees as revenue expense and unlawful debit.
These errors in the accounting have resulted in reducing the profits earned by the Telephones.
There are three principal reasons why the writ petition is incompetent and not maintainable and the appeal should fail.
First, when any subscriber to a telephone enters into a contract with the State, the subscriber has the option to enter into a contract or not.
If he does so, he has to pay the rates which are charged by the State for installation.
A subscriber cannot say that the rates are not fair.
No one is compelling one to subscribe.
Second.
Telephone Tariff is subordinate legislation and a legislative process.
Under Indian Telegraph Act, section 7 empowers the Central Government to make rules inter alia for rates.
These rules are laid before each House of Parliament.
The rules take effect when they are passed by the Parliament.
Third, the question of rates is first gone into by the Tariff Enquiry Committee.
The Committee is headed by non officials.
The Tariff rates are placed before the House in the shape of Budget proposals.
The Parliament goes into all the Budget proposals.
The rates are sanctioned by the Parliament.
The rates.
therefore, become a legislative policy as well as a legislative process.
488 The Courts have no jurisdiction under Article 226 to go into reasonableness of rates.
These rates are decided as policy matter in fiscal planning.
There is legislative prescription of rates.
Rates are a matter for legislative judgment and not for judicial determination.
The appeal is dismissed.
There will be no order as to costs.
S.R. Appeal dismissed.
[/INST]The appellant challenged under article 226 the reasonableness of the increase in the telephone rental and call charges brought about by the Indian Telegraph Amendment Rules.
1966 on the ground that (1) The telephone system is a public utility service and the charges can be only in the nature of a fee which must be commensurate with the cost of rendering the service; and (2) The loss incurred by the Government in another establishment service is not a legitimate ground for raising the rates.
The writ petition was accepted and on appeal the judgment was reversed holding that (1) the High Court could not interfere with the tariff.
and (2 ) the principle upon which the public utility rates regulation as developed in the United States is not applicable in our country.
Dismissing the appeal by certificate, the Court, ^ HELD: (I) The courts have no jurisdiction under Article 226 to go into the reasonableness of rates.
These rates are decided as policy matters in fiscal planning.
There is legislative prescription of rates.
Rates are a matter for legislative judgment and not for judicial determination.
[488A]
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<s>[INST] Summarize the judgementminal Appeal No. 155 of 1961.
Appeal by, special leave from the judgment and order date April 10, 1961 of the Kerala High Court in Criminal Appeal No. 143 of 1960.
B. R. L. Iyengar and T. section Venkataraman, for the appellant.
V. Narayana Menon and Sardar Bahadur, for.
the respondent.
December 5.
The judgment of the Court was delivered by SUBBA RAO J.
This appeal by special leave is preferred against the Judgment of the High Court of Kerala, confirming that of the Special judge, ,Trivandrum, convicting the accused under section 5(2), read with section 5(1)(d) of the Prevention of Corruption Act, 1947,(2 of 1947), hereafter called the Act, and sentencing; him; to pay a fine of Rs. 1,0001 , or in default to undergo simple imprisonment for four months.
The appellant was, a Special Revenue Inspector for land assignment at Manantoddy in Wynad Taluk in the old Malabar district.
726 The case of the prosecution was that he, by abusing his position as a public servant,, got 4 acres and 80 cents of Government land in R section No 376/2 of Tavinhal village assigned in the name of his brother in law P. V. Gopinathan Nambiar without revealing the fact that he was his brother in law and by making false entries in the relevant records showing that the said land contained only 97 trees valued at Rs. 165/ , whereas the land had actually 150 trees worth Rs. 1450/ .
The suppression of the fact that the assignee was his brother in law and the underestimate of the value of the land were dishonestly made to circumvent the rules governing the assignment of lands to landless poor.
The Special judge and on appeal the High Court held that the appellant dishonestly underestimated the extent and the value of the trees in the said land with a view to help his brother in law and thereby committed an offence under section 5(2), read with section 1(4) of the Act.
Hence the appeal.
Learned counsel for the appellant raised before us 2 points : (1) Section 5(1)(a) of the Act does not apply to a case of wrongful loss caused to Government by a public servant who by deceit induced it to part with its property : (2) The High Court acted erroneously in relying upon a report dated April 5, 1961, made by the district Forest Officer, Kozhikode, filed by the public prosecutor after the appeal was reserved for judgment without giving an opportunity to the appellant to file objections thereto or contesting the correctness of the valuation given therein.
As the first contention turns upon, the provisions of section 5(1), it will be convenient to read the same, 5.
(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (a) if he habitually accepts or obtains or 727 agrees to accepts to obtain from any person for himself if or for any other person, gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the, Indian Penal Code, or (b) if he habitually accepts or obtains or ' agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he knows to be inadequate, from any person whom he knows to have been or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted.
by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or From any ' person whom he knows to be interested in or related to the person so concerned, of (c) if he dishonestly or fraudulently mis appropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or (d) if he, by, corrupt or illegal means or by otherwise abusing his position as public servant obtains for himself or for any other person any Valuable thing or pecuniary advan tage.
We are concerned in this case with 5(1)(d) of the act Under that" clause it a public servant by corrupt or illegal means or by otherwise abusing his position as public servant obtains for, himself or for any other person valuable thing, or pecuniary advantage, he will be guilty of Criminal misconduct, punishable under section 5(2) of the Act with imprisonment for a term which shall not be less than one year and which may extend to 7 years, and shall also be liable to fine.
728 The learned counsel contends that clause (d) being a penal provision, shall be strictly construed and that if so construed, it would only take in cases of direct benefit obtained by a public servant for himself or for any other person from a third party in the manner described therein and does not cover a case of a wrongful loss caused to the Government by abuse of his power.
This conclusion, the argument proceeds, flows from three circumstances.
(1) The benefit obtained in clause (b) must be similar to that provided for in clauses (a) & (b) 14 e., benefit obtained from a third party; (2) The case of wrongful loss to the Government is provided by clause (c) and any other loss which does not fall within that clause is outside the scope of the section; (3) Though the word "obtains ' has a wide meaning in the setting in which it appears in clause (d) but in view of the fact that the same word used in a limited sense in is used in a limited sense in clauses (a) & (b), it should be given a limited meaning, namely, "gets a benefit from a third party".
It takes colour from the same word used in clauses (a) & (b).
He finally contends that the construction he is seeking to put forward for our acceptance fits in the general scope and scheme of the Act and that the Legislature intended to leave the losses caused to the Government by the deception caused by its public servant to be dealt with in accordance with the provisions of the Indian Penal Code or other appropriate laws.
At the outset we may say that the argument is rather subtle but on a deeper scrutiny of the provisions and the clear phraseology used therein, we find that the contention is not sound.
Before we construe the, relevant provisions of the section in the light of the criticism levelled by the learned counsel, it will be useful and convenient to know briefly the scope and the object of the Act.
The long title of the Act reads: 729 'An Act for the more effective prevention of bribery and corruption '.
The preamble indicates that the Act was passed as it was expedient to make more effective provision for the prevention of bribery and corruption.
The long title as well as the preamble indicate that the Act was passed to put down the said social evil i. e. bribery and corruption by public servant.
Bribery is a form of corruption.
The fact that in addition to the word "bribery" the word " 'corruption" is used shows that the legislation was intended to combat also other evils in addition to bribery.
The existing law i.e. Penal Code was found insufficient to eradicate or even to control the growing evil of bribery and corruption corroding the public service of our country.
The provisions broadly include the existing offences under sections 161 & 165 of the Indian Penal Code committed by public servants and enact a new rule of presumptive evidence against the accused.
The Act also creates a new offence of criminal misconduct by public servants though to some extent it overlaps on the pre existing offences and enacts a rebuttable presumption contrary to the well known principles of Criminal Jurisprudence.
It also aims to protect honest public servants from harassment by prescribing that the investigation against them could be made only by police officials of particular status and by making the sanction of the Government or other appropriate officer a precondition for their prosecution.
As it is a socially useful measure conceived in public interest, it should be liberally construed so as to bring about the desired object.
i.e. to prevent corruption among public servants and to prevent harassment of the honest among them.
A decision of the judicial Committee in Dyke vs Elliot, (1) cited by the learned counsel as an aid for construction neatly states the principle and therefore may be extracted : Lord justice James speaking (1) (1872) L. R. ,191.
730 for the Board observes at P. 191 "No doubt all penal Statutes are to be construed strictly, that is to say, the Court must see that the thing charged as an offence is within the plain meaning of the words used, and must not strain the words on any notion that there has been a slip, that there has been a casus omissus, that the thing is so clearly within, the mischief, that it must have been intended to be included and would have been included if thought of.
On the other hand, the person charged has a right to say that the thing charged, although within the Words, is not within the spirit of the enactment.
But where the thing is brought within the words and within the spirit, there a penal.
enactment to be construed, like any other instrument, according to the fair common sense meaning of the language used, and the Court is not to find or make any doubt or ambiguity in the language of a penal statute, where such doubt or ambiguity would clearly not be found or made in the same language in any other instrument.
" In our view this passage, if we may say so, restates the rule of construction of a penal provision from A correct perspective.
As we will presently show the case of the appellant on the facts found clearly falls not only within the words of clause (d) but also within 'its spirit.
Indeed if his argument be accepted not only we will be doing violence to the language but also to the spirit of the enactment.
First taking the phraseology used inthe clause, the case of a public servantcausing wrongful loss; to the Government be benefiting a thirdparty squarely falls within it.
Let us look at the clause "by otherwise abusing the position of a public servant ', for the argument mainly turns upon the said clause.
The phraseology is very comprehensive.
It covers acts done " 'otherwise" than by corrupt or illegal means by an officer 731 abusing his position.
The gist of the offence under this clause is that a public ' officer abusing his position as _a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage.
"Abuse" means misuse 1.
e. using his position for something for which it is not intended That abuse may be by.
corrupt or illegal means or otherwise than those means.
The word 'otherwise ' has wide connotation and if no limitation is placed on it, the words 'corrupt, 'illegal ', and "otherwise ' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause.
So 'some limitation will have to.
be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say something savouring of dishonest act on his part.
The contention of the learned counsel that if the clause is widely construed even a recommendation made by a public servant for securing a job for another may come within the Clause and that could not have been the intention of the Legislature.
But in our view such innocuous acts will not be covered by the said clause.
The juxtaposition of the word or otherwise ' with the words "corrupt or illegal means" and the dishonesty implicit in the word " 'abuse" indicate the necessity for a dishonest intention on his part to bring him within ,the meaning of the clause.
Whether he abused his position or not depends upon the facts of each case; nor can the word 'obtains ' be sought in aid to limit the express words of the section. 'Obtain ' means acquire or get.
If a corrupt officer by the said means obtains a valuable thing or a pecuniary advantage, he can certainly be said to obtain the said thing or a pecuniary advantage; but it is said that in clauses () & (c) the same word is used and in the context of those clauses it can only mean getting from a third party other than the Government and therefore the game meaning must be given to the said word in clause (d).
"Obtains ' in clause 732 (a) & (b) in the context of those provisions may mean taking a bribe from a third party, but there is no reason why the same meaning shall be given to that word used in a different context when that word is comprehensive enough to fit in the scheme of that provision.
Nor can we agree that as dishonest misappropriation has been (c), the other cases of wrongful loss caused Government by the deceit practiced by a public officer should fall outside the section.
There is no reason why when a comprehensive statute was passed to prevent corruption, this particular category of corruption should have been excluded therefrom because the consequences of such acts are equally harmful to the public as acts of bribery.
On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself, or for any other person, by abusing his position as a public servant falls within the mischief of the said clause.
Coming to the spirit of the provision, there cannot be two views.
As we have expressed earlier, the object of the Act was to make more effective provision for the prevention of bribery and corruption.
Bribery means the conferring of benefit by one upon another, in cash or in kind, to procure an illegal or dishonest action in favour of the giver.
Corruption includes bribery but has a wider connotation.
It may take in the use of all kind of corrupt practices.
The Act.
was brought in to purify public administration.
When the Legislature used comprehensive terminology in section 5(1)(d) to achieve the said purpose, it would be appropriate not to limit the content by construction when particularly the sipirit of the statute is in accord With the words used therein, Two decisions of this court cited at the Bar indicate that a wide construction was placed by this Court ' on the provisions of section 5(1)(d) of the Act.
733 In Ram Krishan vs The State of Delhi, (1) the appellants were prosecuted for offering bribe to a Railway Officer for hushing up the case against them.
In that context, section 5 (1)(d) was construed by this court.
At p. 188 Chandrasekhara Ayyar, J., speaking for the court made the following observation: "Apart from 'corrupt and illegal means ', we have also the words 'or by otherwise abusing his position as a public servant.
If a man obtains a pecuniary advantage by the abuse of his position, he will be guilty under sub clause (d).
Sections 161, 162 & 163 refer to a motive or a reward for doing or forbearing to do something, showing favour or disfavour to any person, or for inducing such conduct by the exercise of personal influence.
It is not necessary for an offence under clause (d) to prove all this.
It is enough if by abusing his position as a public servant a man obtains for himself any pecuniary advantage, entirely irrespective of motive or reward for showing favour or disfavour." This Court again in Dhaneshwar Narain Saxena vs The Delhi Administration.
(2) pointed the wide net cast by this provision in order to put down corruption.
There the appellant was an Upper Division Clerk in the office of the Chief Commissioner of Delhi.
He knew one Ram Nara who was a fireman serving in Delhi FireBrigade, The latter sought the assistance of the aappellant who had nothing to do with the issuing of licences of fire arms which was done by the 'Office of the Deputy Commissioner, Delhi.
The appellant took a bribe in order to get the licence for him.
It was argued that as it was not the duty of the appellant to issue licences or do something in connection therewith, he, did not commit any offence within the meaning of section 5 (1)(d) of the Act.
This (1) ; (2) ; 734 Court rejected his contention.
Sinha, C.J., speaking for the Court observed at p. 198: "The legislature advisedly widened the scope of the crime by giving a who, holding public office and taking advantage of their position obtain any valuable thing or pecuniary advantage.
" The observations made by this Court in the above two cases though made in a different context show the comprehensive nature of the said provision.
We therefore hold that the accused in order to assign the land to his brother in law underestimated the value of the said land to conform with the rules and thereby abused his position as a public servant and obtained for him a valuable thing or a pecuniary advantage within the meaning of the said clause and therefore is guilty of an offence under sub.
section
(2) thereof.
It is next contended that the said finding was vitiated by the fact that the High Court in arriving at the finding relied upon a valuation list prepared by the District Forest Officer and filed into court without giving an opportunity to the appellant to canvass its correctness '.
The admitted facts relevant to the argument may be stated.
The arguments in the appeal were concluded on March 22, 1961.
On April 6, 1961, the Public Prosecutor filed a Valuation list purporting to have been made by the District Forest Officer, Kozhikode.
No notice of this list was given to the appellant and therefore he did not file any objections.
On April 10, 1961, the High Court delivered the judgment basing its finding on the said Valuation list and rejecting the appeal.
Before the Special Leave was granted by this court, a report was called for from the High Court with regard to the said facts.
The report sent by the Registrar is as follows : "The learned Counsel for the appellant contended before the High Court that the 735 method of calculation adopted by P.W. 15 in assessing the value of the timber was not correct and that the following method should have been adopted viz., in the case of timber trees to calculate the value of each tree at the rate given in the Madras Forest Manual for that particular species, and for fuel trees, to calculate the value at the official rate for cart load fixed by the Government. ' Thereupon the Court directed in open court that a statement showing the value of the timber calculated by the above method may be submitted by either of the parties.
No statement was filled by the appellant 's ounsel and on 6 4 1961 the State filed a statement.
Since the statement was meant only to assist the Court in calculating the correct value of the timber along the lines suggested by the appellant 's counsel the matter was not posted for further argument.
" The appellant denied in his affidavit filed before us that any direction was given by the court before the judgment was reserved but the Public Prosecutor filed an affidavit to the effect that such a statement was made in the open court.
We have no reason to reject the report of the Registrar and the affidavit filed by the Public Prosecutor.
Even so, the fact remains that the learned judge acted upon a document filed by the respondent without given an opportunity to the appellant to file objections or to contest its reliability.
We think the principles of natural justice require that no court shall give a finding whether on fact or law and particularly on facts without giving an opportunity to all the con;testing parties.
As that principle has been violated in this case, we have no option but to set aside the finding of the learned judge on the question of the valuation of the trees on the plot assigned to the appellant 's brother in law.
We therefore set aside 736 this finding and request the High Court to submit a revised finding on the said question within two months from the receipt of the record.
The respondent may file a further statement if I e so chooses to explain or even to correct the valuation list already filed by it.
Thereafter an opportunity will be given to the appellant to file his objections.
The objections filed by the appellant in this Court may be also considered by the High Court.
The High Court will submit the finding on the evidence already on record including the said objections and statements.
The parties may file objections to the finding within two weeks from the date the said And is received.
The appeal will be posted as early as possible after objections are filed or after the expiry of the time given for filing the objections.
Case remitted for submission of fresh finding.
[/INST]The respondent, A Central Government servant, who was the Secretary of the Civil Accounts Association of non Gazetted Staff, was departmentally proceeded against under rr.
4(A) and 4(B) of the Central Civil Services (Conduct) Rules, 1955, for participating in demonstrations in preparation of a general strike of Central Government employees and for refusing to dissociate from the Association after the Government had withdrawn its recognition of it.
He impugned, the validity of the said rules on the ground that they infringed his fundamental rights under article 19 of the Constitution.
The High Court held that r. 4(A) was wholly valid but quashed the proceeding under r. 4(B) which it held to be invalid.
Rule 4(A) provided that no Government servant shall participate in any demonstration or resort to any form of strike in connection with any matter pertaining to his conditions of service and r. 4(B) provided that no Government servant shall join or continue to be a member of any services Association which the 790 Government did not recognise or in respect of which recognition had been refused or withdrawn by it.
Held, that in view of the decision of this Court that r. 4(A) of the Central Civil Services (Conduct) Rules, 1955, in so far as it prohibited any form of demonstration was violative of the Government servants ' fundamental rights under article 19(1) (a) and (b), the High Court was in error in holding that the rule was wholly valid.
Kameshwar Parsad vs The State of Bihar, [1962] supp.
3 S.C.R. 369, referred to.
Participation in demonstration organised for a strike and taking active part in preparation for it cannot, either in law or fact, mean participation in the strike.
The respondent could not, therefore, be said to have taken part in a strike as such and the proceeding against him under section 4(A) being based on that part of it which was invalid must also be invalid.
It was clear that r. 4(B) of the said Rules imposed res triction on the undoubted ' right of the Government Servants under article 19 which were neither reasonable nor in the interest of public order tinder article 19(4).
The rules clearly showed that in the granting or withdrawing, of recognition, the Government right be actuated by considerations other than those of efficiency or discipline amongst the services or public order.
The restriction imposed by r.4 (B), therefore, infringed article 19(1) (c) and must be held to be invalid.
The Super tenant, Central Prison, Fatehgarh vs Dr. Ram Manohar Lohia, ; and Rex vs Basudev, , referred to.
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<s>[INST] Summarize the judgementAppeal No. 222 (N) of 1973.
From the Judgment and Order dated 13.3.1972 of the Delhi High Court in Civil Writ No. 731 of 1971.
M.K. Dua, Aman Vachher and S.K. Mehta for the Appellants.
B. Datta, Additional Solicitor General, G.D. Gupta and Mr. C.V. Subba Rao for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
1.
This appeal by certificate is directed against the Judgment of a Division Bench of the Delhi High Court, in C.W. No. 731 of 1971.
The prayer in the Writ Petition is for the issuance of an appropriate writ, order or direction declaring (a) the Police Forces (Restriction of Rights) Act No. 33 of 1966 (for short the Act) as ultra vires the Constitution, (b) the Police Forces (Restriction of Rights) Rules 1966 and Police Forces (Restriction of Rights) Amendment Rules, 1970 (for short the Rules) ultra vires of Act 33 of 1966 and the Constitution of India, (c) that the Circular dated 1st April, 1971 as invalid, illegal, ultra vires, null and void and (d) for a declara tion that the Delhi Police Non Gazetted Karmchari Sangh, petitioner No. 1 in the Writ Petition, is a legally and validly constituted service organisation.
350 2.
The first appellant is the Non Gazetted Karmachari Sangh (for short the 'Sangh ') and the appellant Nos. 2 to 7, its members.
The High Court dismissed the petition holding that the challenge was not sustainable and that neither the Act nor the Rules violated any provisions of the Constitu tion.
The High Court dealt at length with the preliminary objections that a challenge based on the violation of any fundamental right was not permissible in view of the emer gency declared by the President of India, in December, 1977.
This need not detain us now in this Judgment.
The appellants ' case is that the Act referred above violates Article 19(1)(c) of the Constitution of India and that the restrictions imposed by it., being arbitrary, violates Article 14 of the Constitution.
The Non Gazetted members of the Delhi Police Force wanted to form an organi sation of their own and for that purpose constituted the Karmachari Union in 1966 and applied for its registration under the Trade Union Act, 1926.
Initially the registration asked for was declined.
Then Act 33 of 1966 was enacted.
It came into force on 2nd December, 1966.
An application for recognition was again made on 9th December, 1966.
Recogni tion was granted by the Central Government on 12th December, 1966.
The Non Gazetted members of the Delhi Police Force were permitted to become members of the Sangh.
On 12th December, 1966, the Central Government made rules under the Act which were amended in December, 1970.
The Circular in question was issued under these rules.
The Circular attempts to derecognise the Sangh.
This occassioned the filing of the writ petition.
Before considering the rival contentions urged before us, it would be useful to refer to the salient features of the Act to appreciate its ambit and the restrictions imposed by its provisions.
The Act was enacted to delineate the restrictions imposed of the rights conferred by part III of the Constitution, in their application to the members of the forces charged with the maintenance of public order so as to ensure the proper discharge of their duties ' and the mainte nance of discipline among them.
The Parliament obviously has this power under Article 33 of the Constitution of India.
The provisions of the Act seek to place certain restrictions on members of the police force in exercise of their funda mental rights guaranteed by Article 19(1)(c) to form Associ ation or Unions.
Section 3 of the Act reads as follows: "3(1) No member of a police force shall with out the express sanction of the Central Gov ernment or of the prescribed authority (a)be a member of, or be associated in any way with, any trade union, labour union, political association or with any class of trade unions, labour unions or political 351 associations; or (b) be a member of, or be associated in any way with, any other society, institution, association or organisation that is not recognised as part of the force of which he is a member or is not of a purely social, recretional or religious nature; or (c) communicate with the press or publish or cause to be published any book, letter or other document except where such communication or publication is in the bona fide discharge of his duties or is of a purely literary, artistic or scientific character or is of a prescribed nature.
Explanation: If any question arises as to whether any society, institution, association or organisation is of a purely social, recre tional or religious nature under clause (b) of this subsection, the decision of the Central Government thereon shall be final.
(2) No member of a police force shall partici pate in or address, any meeting or take part in any demonstration organised by any body of persons for any political purposes or for such other purposes as may be prescribed.
" Section 4 of the Act provides for penalties if Section 3 is contravened by any person.
Section 5 gives power to the Central Government by notification in the official gazette, to amend the schedule by including therein any other enact ment relating to a force charged with the maintenance of public order or omit therefrom any enactment already speci fied therein.
Section 6 gives the rule making power to the Central Government.
The only contention that now survives is whether the impugned statute, rules and orders are violative of the fights of the appellants guaranteed under Article 19(1)(c) of the Constitution of India.
This appeal could be disposed of by a short Order.
Appellants No. 2 to 7 are no longer in service.
They have been dismissed.
As such they do not have the necessary locus standi to sustain this petition.
But the appellants ' counsel submitted that the first petitioner the Sangh, was still interested in pursuing this appeal and that persuaded us to hear the appeal on merits.
It is true that recognition was given to the Sangh originally.
Subsequently by order dated 1 st April, 1971, the Sangh was derecognized.
This was pursuant to the amended rules.
Rule 3 provided that "no member of the police forces shall participate in, or address, any meeting or take part in any demonstration organised by any body of persons (a)for the purpose of protesting against any of the provisions of the Act or these rules or any other 352 rules made under the Act; or (b)for the purpose of protest ing against any disciplinary action taken proposed to be taken against him or against any other member of a police force; or (c)for any purpose connected with any matter pertaining to his remuneration or other conditions of serv ice or his condition of work or living condition, or the remuneration, other conditions, of any other member or members of a police force. "Provided that nothing contained in clause(c) shall preclude a member of a police force from participating in a meeting convened by an association of which he is a member and which has been accorded sanction under sub section (1) of section3 of the Act, where such meeting is in pursuance of or for the furtherance of, the objects of such associa tion.
" The above rules were amended by a notification dated 19th December, 1970 the material change for our purpose being an amendment in the proviso to clause (c) of rule 3.
The original proviso to clause(c) was substituted by another proviso which reads as follows: "Provided that nothing contained in clause (c) shall preclude a member of a police force from participating in a meeting (i) which is convened by an association of police officers of the the same rank of which he is a member and which has been granted recognition under clause (b) of sub section (1) of section 3 of the Act; (ii) which has been specifically provided for in the articles of association or/and has been, by general or special order, permitted by the Inspector General of Police having regard ' to the object of such meeting and other relevant factors; and (iv) which has been convened to consider the agenda circulated to all concerned according to the relevant provisions of the articles of association, after giving intimation in ad vance to the ' Inspector General of Police or an officer nominated by him." (Emphasis sup plied).
Rule 5 was added to the Rules by virtue of which minutes had to be recorded of the meetings of a recognised associa tion.
The Inspector General of Police could send observers by virtue of rule 6 to such meetings.
Outsiders were prohib ited from attending the meetings of the association without permission of the Inspector General of Police by Rule 7.
Rules 8, 9 & 11 may also be usefully read: 353 "8.
Recognition: Members of police force belonging to the same rank desiring to form an association may make an application for the grant of recognition under clause (b) of sub section (1) of section 3 and such application shall be in writing under the hand of a repre sentation of such association addressed to the Inspector General of Police who shall be the authority to grant, refuse or revoke such recognition; Provided that before refusing or revoking recognition, the Association shall be given a reasonable opportunity of making representation against the proposed action." "9.
Suspension of recognition: The Inspector General of Police may in the interests of the general public or for the maintenance of discipline in the police force and with the prior approval of the Central Government, the State Government or as the ease may be the Administrator of the Union Territory suspend the recognition granted under rule 8 for a period not exceeding three months which may be extended for a further period of three months by the Central Government, State Government or as the case may be the Administrator of the Union Territory so however that the total period for which such recognition may be suspended shall, not, in any case, exceed six months." "11.
Special provision regarding recognition already granted: Recognition granted prior to the commencement of the Police Forces (Restriction of Rights) Amendment Rules, 1970, to any association the articles of association of which are not in conformity with these rules shall, unless the said artides of association are brought in conformity with the provisions of these rules within a period of thirty days, stand revoked on the expiry of the said peri od.
It is the change effected by the new Proviso to Rule 3(c) which has come in for attack at the hands of the appel lants.
Previously all non gazetted officers of the Delhi Police Department could be members of the Sangh.
Now, the amended proviso to rule 3(c) mandates that only members of the Police Force having the same rank could constitute themselves into one Association.
The effect of this amended rule is that the Sangh will have to be composed of various splinter associations consisting of members holding differ ent ranks.
This according to the appellants violates not only Article 19(1)(c) which protects freedom of association, but also the provisions of the Act.
354 The immediate provocation for filing the writ petition was the Circular by which the recognition granted to the Sangh was revoked.
The operative part of the Circular reads as follows: "Rule 11 of the Police Force (Restriction of Rights) Amendment Rules, 1970 published vide extraordinary Gazette of India notifica tion No. GSR 2049 dated 19 12 70 lays down that recognition granted prior to the com mencement of these rules, to any association the articles of which are not in conformity with these rules shall unless the articles are brought in conformity with the provisions of these rules within a period of 30 days, stand revoked on the expiry of the said period.
Whereas the Constitution of the Delhi Police NonGazetted Karmchari Sangh which was granted recognition vide Government of India, Ministry of Home Affairs letter No.8/70/66 P.I., dated 12 12 66 and which contains a number of provisions not in con formity with the above rules, the recognition already granted to the Delhi Police Non Gazet ted Karmachari Sangh, stands revoked.
This may be brought to the notice of a11 ranks.
A copy of this circular may be published in the Delhi Police Gazette.
" The appellants ' counsel Submits that recognition of the association carries with it the right to continue the asso ciation as such.
It is a right flowing from the fact of recognition.
To derecognise the association in effect of fends against the freedom of association.
It is urged that once the Government had granted recognition to the Sangh and approved its constitution neither the Parliament nor any delegated authority can take away that recognition or dic tate to the association who could be its members.
The right available to the members of the association at the commence ment should continue as such without any hindrance.
Before considering the questions of law raised by the appellants ' counsel with reference to the decided cases, it would be useful to bear in mind the fact that this associa tion consists of members of Police Force who by virtue of this fact alone stands on a different footing from other associations.
The Constitution of India has taken care to lay down limitations on such, associations from exercising rights under Article 19(1)(c).
Article 33 read with 355 Article 19(4) of the Constitution offers an effective reply to the contention raised by the appellants.
Article 33 reads as follows: "Parliament may, by law, determine to what extent any of the rights conferred by this Part shall, in their application to the mem bers of the Armed Forces or the Forces charged with the maintenance of public order, be restricted or abroagated so as to ensure the proper discharge of their duties and the maintenance of discipline among them.
" Article 19(4) reads as follows: "Nothing in sub clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order or morality, reasonable restric tions on the exercise of the right conferred by the said sub clause.
" That the Sangh and its members come within the ambit of Article 33 cannot be disputed.
The provisions of the Act and rules taking away or abridging the freedom of association have been made strictly in conformity with Article 33.
The right under Article 19(1)(c) is not absolute.
Article 19(4) specifically empowers the State to make any law to fetter, abridge or abrogate any of the rights under Article 19(1)(c) in the interest of public order and other considerations.
Thus the attack against the Act and rules can be successful ly met with reference to these two Articles as members of the Police Force, like the appellants herein, are at a less advantageous position, curtailment of whose fights under Article 19(1)(c) comes squarely within Article 33 in the interest of discipline and public order.
This conclusion of ours is sufficient to dispose of this appeal.
However, we will deal with the submissions made before us for the com pleteness of the Judgment.
The scope of Article 19(1)(c) came up for considera tion before this Court in Damyanti Naranga vs The Union of India & Ors., ; The question related to the Hindi Sahitya Sammelan, a Society registered under the .
The Parliament enacted the Hindi Sahitya Sammelan Act under which outsiders were per mitted to become members of the Sammelan without the voli tion of the original members.
This was challenged and this Court held that any law altering the composition of the Association compulsorily will be a breach of the right to form the association because it violated the composite right of forming an association and the right to continue it as the original members desired it.
356 10.
Here we have an entirely different situation since we are dealing with a group distinct in its nature and composition from others.
Here we are dealing with a force that is invested with powers to maintain public order.
Article 33 enables Parliament to restrict or abrogate the fundamental rights in their relation to the Armed Forces including Police Force.
In Ous Kutilingal Achudan Nair & Ors., vs Union India & Ors., ; this Court had to consider two questions; whether the employees of the defence establishment such as cooks, barbers and like civil employees were "members of the Armed Forces" and if so whether they could be validly deprived of their right to form unions in violation of Article 19(1)(c).
This Court held that they fell within the category of members of the Armed Forces and that the Central Government was competent by notification to make rules restricting or curtailing their right to form associations, Article 19(1)(c) not withstanding.
In Raghubar Dayal Jai Prakash vs The Union of India and Ors., ; this Court had to deal with this question in relation to the functions of an incorporated body the objects of which were, interalia, to regulate forward transactions in the sale and purchase of various commodities, Freedom of association is a fundamental right.
It was contended that if a law regulated the recognition of an association under certain conditions subject to which alone recognition could be accorded or continued, such conditions were bad.
This Court had to consider whether the freedom of association implied or involved a guaranteed right to recognition also.
The contention was that if the object of an association was lawful, no restriction could be placed upon it except in the interest of public order and that freedom to form an association carried with it the right to determine its internal arrangements also.
Repelling this contention this Court held that restrictions cannot be imposed by statute for the purpose of regulating control of such associations.
While the right to freedom of association is fundamental, recognition of such association is not a fundamental right and the Parliament can by law regulate the working of such associations by imposing conditions and restrictions on such functions.
It cannot be disputed that the fundamental rights guaranteed by Article 19(1)(c) can be claimed by Government servants.
A Government servant may not lose its right by joining Government service.
Article 33 which confers power on the Parliament to abridge or abrogate such rights in their application to the Armed Forces and other similar forces shows that such rights are available to all citizens, including Government servants.
But it is, however, necessary to remember that Article 19 confers fundamental rights which are not absolute but are subject to reasonable restrictions.
What has happened in this case is only to impose reasonable restrictions in the interest of discipline and public order.
357 13.
The validity of the impugned rule has to be judged keeping in mind the character of the employees we are deal ing with.
It is true that the rules impose a restriction on the right to form association.
It virtually compels a Gov ernment servant to withdraw his membership of the associa tion as soon as recognition accorded to the said association is withdrawn or if, after the association is formed, no recognition is accorded to it within six months.
In other words, the right to form an association is conditioned by the existence of the recognition of the said association by the Government.
If the association affairs recognition and continues to enjoy it, Government servants can become mem bers of the said association; if the said association does not secure recognition from the Government or recognition granted to it is withdrawn, Government servants must cease to be members of the said association.
That is the plain effect of the impugned rule.
These rules are protected by Articles 33 and 19(4) of the Constitution.
Besides, it is settled law that the right guaranteed by Article 19(1)(c) to form associations does not involve a guaranteed right to recognition also.
The main grievance of the appellants is that the first appellant Sangh when recognised, comprised of Police Officers of various ranks, the common factor being that all its members were non gazetted police officers.
This composi tion was changed by the impugned rules.
Not only is the composition changed; the entire Sangh stood derecognised for failure to alter its constitution complying with the new rules.
This attack cannot be sustained.
Section 3 of the Act permits the rule making authority to define any group of Police Force that can form an Association.
It also gives power to prescribe the nature of activity that each ' such association of members can indulge in.
It, therefore, fol lows that if rules can be framed defining this aspect, a rule can also be framed enabling the authorities to revoked or cancel recognition once accorded, if the activities offended the rules.
The further grievance of the appellant is that non gazetted officers who once formed one block have been fur ther divided with reference to ranks and that this again is an inroad into their right under Article 19(1)(c).
This submission has been already met.
Besides, this classifica tion based on ranking has its own rationale behind it.
We are dealing with a Force in which discipline is the most important pre requisite.
Non gazetted officers consist of men of all ranks; the lowest cadre and officers who are superior to them.
If all the nongazetted officers are grouped together irrespective of rank, it is bound to affect discipline.
It was perhaps, realising the need to preserve discipline that the changes in the rule were effected.
We are not satisfied that there has been violation of any law in doing so.
358 On a careful consideration of the questions involved in this appeal, we hold that the High Court was right in its decision.
We accordingly dismiss the appeal.
S.R. Appeal dismissed.
[/INST]The non gazetted members of the Delhi police Force wanted to form an association of their own and for that purpose constituted the Karmachari Union in 1966 and applied for its registration under the Trade Union Act, 1926 and this was refused.
After the coming into effect from 2.12.1966 of the Police Force (Restriction of Rights) Act, 33 of 1966 another, application for recognition was again made on 9.12.1966 which was granted on 12.12.1966.
The non gazetted members of the Delhi Police Force were permitted to become members of the Sangh.
The Police Force (Restriction of Rights) Rules, 1966 made by the Central Government on 12.12.1966 were amended by the Amendment Rules of 1970.
Rule 11 thereof provides for revocation of the recognition grant ed to an association, if the said associations articles are not in conformity with the Rules or are not brought in conformity with the provisions of the amended Rules within a period of 30 days.
Since the Articles of Association of the appellant Sangh contained a number of provisions not in conformity with the rules and since the Sangh failed to bring the same in conformity, by a circular dated 1.4.1971 the recognition granted was revoked.
The appellants, there fore, filed a writ petition before the Delhi High Court challenging the constitutional validity of the Act, Rules and the impugned circular.
The writ petition having been rejected the appellants have come by way of special leave.
Dismissing the appeal, the Court, 348 HELD: 1.1 The Police Force (Restriction of Rights) Act (33 of) 1966, the Police Force (Restriction of Rights) Rules 1966 (as amended by the 1970 Rules) and the circular dated 1.4.1971 are all constitutionally valid.
They do not offend the provisions of Articles 14 and 19(1)(c) of the Constitu tion.
[350 C, 355 E F] 1.2 The right under Article 19(1)(c) is not absolute.
Article 19(4) specifically empowers the State to make any law to fetter, abridge or abrogate any of the fights under Article 19(1)(c) in the interest of public order and other considerations.
While the right to freedom of association is fundamental, recognition of such association is not a funda mental fights and the Parliament can by law regulate the working of such associations by imposing conditions and restrictions on such functions.
[355 E, 356 F] 1.3 The fundamental fights guaranteed by Article 19(1)(c) can be claimed by Government servants.
A government servant may not lose his right by joining government serv ice.
Article 33 which confers power on the Parliament to abridge or abrogate such rights in their application to the Armed Forces and other similar forces shows that such fights are available to all citizens, including government serv ants.
What has happened in this case is only to impose reasonable restrictions in the interest of discipline and public order.
[356 G H] 1.4 Rule 11 read with Rule 3(c) of the Amended Police Force (Restriction of Rights) Rules, 1966 has to be judged keeping in mind the character of the employees to whom it applies.
It is true that the rules impose a restriction on the right to form association.
It virtually compels a gov ernment servant to withdraw his membership of the associa tion as soon as recognition accorded to the said association is withdrawn or if, after the association is formed, no recognition is accorded to it within six months.
In other words, the right to form an association is conditioned by the existence of the recognition of the said association by the government.
If the association obtains recognition and continues to enjoy it, government servants can become mem bers of the said association, if the said association does not secure recognition from the government or recognition granted to it is withdrawn, government servants must cease to be members of the said association.
That is the plain effect of the impugned role.
These rules are protected by Articles 33 and 19(4) of the Constitution.
Besides, it is settled law that the right guaranteed by Article 19(1)(c) to form associations does not involve a guaranteed right to recognition also.
[357 A C] 1.5 Section 3 of the Police Force (Restriction of Rights) Act permits the rule making authority to define any group of Police Force that can form an Association.
It also gives power to prescribe the nature of activity that each such association of members can indulge in.
It, therefore, follows that if rules can be 349 framed defining this aspect, a rule can also be framed enabling the authorities to revoke or cancel recognition once accorded, if the activities offended the rules.
Besides the classification based on ranking has its own rationale behind it.
The Court is dealing with a Force in which disci pline is the most important prerequisite.
Non gazetted officers consist of men of all ranks; the lowest cadre and officers who are superior to them.
If all the non gazetted officers are grouped together irrespective of rank, it is bound to affect discipline.
It was perhaps, realising the need to preserve discipline that the changes in the rule were effected.
[357E, G ] Damyanti Naranga vs The Union of India & Ors., ; ; Ous Kutilingal Achudan Nair & Ors., vs Union of India & Ors., ; ; and Raghubar Dayal Jai Prakash vs The Union of India & Ors., ; fol lowed.
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<s>[INST] Summarize the judgementCivil Appeal No. 818 of 1978 Appeal by Special Leave from the Judgment and order dated 10 4 1978 of the Punjab and Haryana High Court in Civil Revision No. 458 of 1978 (O & H) G. L. Sanghi, B. Datta, K. K. Manchanda and Ishwar Chand Jain for the Appellant.
P. Govindan Nair and N. Sudhakaran for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The Holmesian homily that the life of the law is not logic but experience directs our humane attention, in this appeal against an order in execution for eviction of an advocate in Chandigarh, affirmed by court after court, to a reading of the textual definition of 'tenant ' [s.2 (i)] in the context of the broad embargo on ejectment of urban dwellings in section 13 of the East Punjab Rent Restriction Act, 1949 (hereinafter referred to as the Act).
Chandigarh, a blossom in the desert, has served as the capital of two States; and, with explosive expansion, thanks to the marvellous human resources of Punjab & Haryana, become a crowded, though not yet chaotic, city with chronic accommodation scarcity.
Consequently, laissez faire law, in the matter of landlord 's right to evict his tenant, was subject to the act with effect from 4 11 1972.
From then on, tenant could be dispossessed except on the ground set out in section 13.
But if a landlord had already obtained a decree for eviction earlier to this dateline, was he to be restrained by section 13 which forbade even execution of decrees against tenants, or was he free from the statutory fetters because the defendant had ceased to be a tenant on the passing of the decree, having forfeited his status by the destructive effect of a com promise, as in this case? An advocate, under this Act, belongs to a 'scheduled ' class of tenants whose dwellings enjoy special protection.
The appellant advocate tenanted a building belonging to the respondent.
The latter sued for possession and the former, with refreshing realism, entered into a compromise and agreed to vacate by a certain date on certain terms regarding rent which do not bear upon the dispute before us, 143 A decree in terms thereof was passed on 9 10 1972.
Then came the Act, which by extension of its operation, applied to Chandigarh with effect from 4 11 1972.
Had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of section 13.
Had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible.
These mystic 'might have beens ' are gambles of time which spill beyond our jurisdiction and statutory cognisance.
The salvation of the appellant is certain if he be a 'tenant ' within the meaning of the Act.
His eviction is certain if the definition of 'tenant ' does not ensconce him in its amplitude.
Decisions of peripheral relevance, but of different kernel, have been cited on both sides, and the one which has tilted the scales in the Chandigarh jurisdiction in favour of decree holder landlord is Subudhi 's case.
Precedents are law 's device to hold the Present prisoner of the Past and must bind only if squarely covered.
Subudhi 's case decided under the Orissa House Rent Control Act, 1958, is not one such.
The key word is 'tenant ' and if under the Act the appellant fills the bill definitionally he is immune from eviction when read with section 13.
Subudhi (supra) turns on a significantly different definition which cuts down the wide connotation by a tail end qualification.
The semantic sweep of section 2 (i) in our Act, by clear contrast takes in a wider group and we have no indication in that judgment whether a provision like section 13 which makes the restriction applicable also to decrees was present in the Act there debated.
Therefore, we side step those rulings and go straight to the two provisions and their meaning in the statutory setting.
It is too platitudinous to preach and too entrenched to shake, the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whose construction must be liberal enough to fulfil the statutory purpose and not frustrate it.
So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction.
That intendment must, by interpretation, be effectuated.
This is the essence of rent control jurisprudence.
Section 2(i) reads: "tenant" means any person by whom or on whose account rent is payable for a building or rented land and included a tenant continuing in possession after the termina 144 tion of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the land lord, or a person to whom the collection of rent or fees in a public market, cart stand or slaughter house or of rents for shops has been farmed out or leased by a municipal, town or notified area committee: (emphasis added) In this context, we may also read section 13 (1) which is integral to and makes impact upon the meaning of section 2(i) even if there be any marginal obscurity.
Eviction of tenants (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this Section, or in pursuance of an order made under section 13 of the Punjab Urban Rent Restriction Act, 1947, at subsequently amended.
(emphasis added) The expression 'tenant ' includes 'a tenant continuing in possession after the termination of the tenancy in his favour '.
It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession.
The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.
Even here, we may mention by way of contrast that Subudh 's case (supra) related to a statute where the definition in section 2 (5) of that Act expressly included "any per son against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court.
" We feel no difficulty in holding that the text, rein forced by the context, especially section 13, convincingly includes ex tenants against whom decrees or eviction might have been passed, whether on compromise or otherwise.
The effect of the compromise decree, in counsel 's submission, is that the tenancy has been terminated.
No body has a case that the appellant is not continuously in possession.
The conclusion is inevitable that he remains a tenant and enjoys immunity under section 13(1).
The execution proceedings must, there fore, fail because the statutory road block cannot be removed.
Indeed, an application under the Act was filed by the landlord defendant which 145 was dismissed because the ground required by the Act was not made out.
We have been told by counsel, and supporting citations have been brought to our notice, that the High Court at Chandigarh has taken the contrary view for some time.
It is better to be ultimately right rather than consistency wrong.
The interpretation we have given in section 2(i) is strengthened by our conviction that a beneficial statute intended to quieten a burning issue affecting the economics of the human condition in India should be so interpreted as to subserve the social justice purpose and not to subvert it.
Even apart from this value vision, the construction we have adopted is sustainable.
We have laid down the law on the disputed questions raised before us, but we are not called upon to make any decree pursuant to our decision because, taking the clue from certain observations of the court in the course of the arguments, the parties have come together and reached a fair solution of the problem revolving round the house property.
A conflict is best resolved by the parties pursuading themselves to see the ability of continued dispute and enlightened by the law settled the controversy in a manner that promotes the interests of both.
We find that both sides in the present case have produced an enlighten settlement and put in the court an agreement to sell the property covered by the appeal by the landlord to the tenant.
A copy of the agreement has been put in the record which is annexed as appendix to this Judgment.
In this view we dispose of the appeal by formally dismissing it because there is no longer any relief needed in this appeal.
ORDER The Judgment having been delivered counsel for the respondent represented that the Agreement, which has been made and appendixed to the Judgment be treated as an undertaking mutually between the parties to the Court.
Counsel on both sides have no objection to this course and so we record the Agreement incorporated in the judgment as an undertaking to the Court made by the parties in regard to their respective obligations.
[/INST]The appellant, an Advocate, tenanted a ' building belonging to tho respondent.
The respondent sued the appellant for possession of the premises and by a compromise, the Appellant agreed to vacate the premises by a certain date.
A decree in terms thereof was passed.
Then the Act came into being which by extension of its operation applied to Chandigrah with effect from 4 11 1972.
It was contended that (i) had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of Section 13 thereof; and had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible.
The salvation of the appellant is certain if he be a "tenant" within the meaning of the Act and his eviction is certain if the definition of tenant does not cover him in its amplitude and (ii) that the effect of compromise decree is that the tenancy of the appellant has been terminated.
Accepting the appeal, ^ HELD: An advocate, under this Act, enjoys special protection.
lt is too platitudinous to preach and too entrenched to shake the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whoso construction must be liberal enough to fulfil the statutory purpose and met frustrate it.
So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction.
That intendment must, by interpretation, be effectuated.
This is the essence of rent control jurisprudence.
[143 E G] The expression 'tenant includes a 'tenant ' continuing in possession after the termination of the tenancy in his favour '.
It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession.
The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.
Subudhi 's case ; related to a statute where the definition in section 2(5) of that Act expressly included "any person against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court." [144 E G] (ii) The text, reinforced by the context, especially of section 13, convincingly includes ex tenants against whom decrees for eviction might have been passed, 142 whether on compromise or otherwise.
Nobody has a case that the appellant is not continuously in possession.
The conclusion is inevitable that he remains tenant and enjoys immunity under section 13 (1) of the Act.
The execution proceedings, must therefore fall, because the statutory road block cannot be removed.
[A conflict is best resolved by the parties as both sides in the present case have produced an enlightened settlement by an agreement to sell the property in dispute by the respondent to the appellant.
[144 G H]
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<s>[INST] Summarize the judgementON: Civil Appeal Nos.
2406/77 and 356/ 78.
Appeals by Special Leave from the Judgment and order dated 1 9 77 of the Bombay High Court in SCA No. l/77.
A. P. Deshpande and M. section Gupta for the Appellant in CA No. 2406/77 and Respondent in CA No. 356/78.
H.W. Dhabe and A. G. Ratnaparkhi for the Appellant in CA No. 356/78 and for the Respondent in CA No. 2406/77.
The following Judgments of the Court were delivered: KRISHNA IYER, J. A tricky issue of statutory construction, beset with semantic ambiguity and pervasive possibility, and a prickly provision which, if interpreted literally, leads to absurdity and if construed liberally, leads to rationality, confront the court in these dual appeals by special leave spinning around the eligibility for candidature of an employee under the Life Insurance Corporation and the declaration of his rival, 1st respondent, as duly returned in a City Corporation election A tremendous trifle in one sense, since almost the whole term has run out.
And yet, divergent decisions of Division Benches of Madras and Calcutta and a recent unanimous ruling of a Bench of five judges of Punjab and Haryana together with the Bombay High Court 's decision under appeal have made the precedential erudition sufficiently conflicting for this Court to intervene and declare the law, guided by the legislative text but informed by the imperatives of our constitutional order.
The sister appeal filed by the respondent relates to that part of the judgment of the High Court reverses the declaration grated by the trial judge that he be deemed the returned candidate.
1085 This little preface leads us on to a brief narration of the admitted facts.
The appellant (in C.A. 2406 of 1977) was d candidate for election to the Corporation of the City of Nagpur from Ward 34 and his nearest rival was the 1st respondent, although there were other candidates also.
Judged by the plurality cf votes, the appellant secured a large lead over his opponents and was declared elected.
The and of the poll process is often the beginning of the forensic process at the instance of the defeated candidates with its protracted trial and appeals upon appeals, thus making elections doubly expensive and terribly traumatic.
the habit of accepting defeat with grace, save in gross cases, is a sign of country 's democratic maturity.
Anyway, in the present case, when the appellant was declared the returned candidate the respondent.
challenged the verdict in court on a simple legal ground of ineligibility of the former who was, during the election, a development officer under the Life Insurance Corporation (for short, the LIC) .
The lethal legal infirmity, pressed with success, by the respondent was that under Regulation 25 of the Life Insurance Corporation of India (Staff) Regulations, 1960 (briefly, the Regulations framed by the LIC, all its employees were under an embargo on taking part in municipal elections, save with the permission of the Chairman.
Therefore, the appellant who was such an employee and had not sought or got the Chairman 's permission laboured under a legal ineligibility as contemplated in l, ' ' section 15(g) of the City of Nagpur Corporation Act, 1948 (hereinafter referred to as the Act '.
Both the Courts below shot down the poll verdict with this statutory projectile and the aggrieved appellant urges before us the futility of this invalidatory argument.
Section 15(g) is seemingly simple and reads: 15.
No person shall be eligible for election as a Councillor if he xx xx xx (g) is under the provisions of any law for the time being in force, ineligible to be a member of any local authority; G So, the search is for any provision of law rendering the returned candidate ineligible to be a member.
The fatal discovery of ineligibility made by the respondent consists in the incontestable fact that the appellant was at the relevant time an LIC employee bound by the Regulations, which have the force of Law? having been framed under section 49 of the LIC Act, 1956.
The concerned clause is Regulation 25(4) which reads thus: 1086 "25 (4) No employee shall canvass or otherwise interfere or use his influence, in connection with or take part in an election to any legislature or local authority.
Provided that xx xx xx (iii) the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of this regulation.
xx xx xx A complementary regulation arming the Management with power to take action for breach of this ban is found in Regulation 39 which states: 39(1).
Without prejudice to the provisions of other regulations, any one or more of the following penalties for good and sufficient reasons, and as hereinafter provided be imposed by the disciplinary authority specified in Schedule on an employee who commits a breach of regulations of the Corporation, or. " The crucial issue is whether this taboo in Regulation 25(4) spells electoral ineligibility or merely sets rules of conduct and discipline for employees, violation of which will be visited with punishment but does not spill over into the area of election law.
Two decisions, one of Calcutta Sarafatulla Sarkar vs Surja Kumar Mondal(1) and the other of Punjab & Haryana Uttam Singh vs section Kirpal Singh (Z) support the appellant 's position that mere rules regulating service discipline and conduct, even though they have the force of law, cannot operationally be expanded into an interdict on candidature or amount to ineligibility for standing for election.
Chakravarthi, C.J., speaking for a Bench of the Calcutta High Court upheld the stand (1) "it appears to me to be 'abundantly ' clear that in so far as the Government Servants ' Conduct Rules provide tor discipline and document (conduct?) and, in doing so, forbid conduct of certain varieties their aim is merely regulation of the conduct of Government servants, as such (l) A.I.R. 1955 Cal. 382.
(2) A. I. R. 1976 P. &.
H. 176.
1087 servants, and that aim is sought to be attained by prescribing certain rules of correct conduct and laying down penal ties for their breach.
If a Government servant disregards any of the Rules which bear upon discipline and conduct and conducts himself in a manner not approved by the Rules or forbidden by them, he may incur the penalties for which the Rules provide.
It cannot, however, be that any of his other rights as a citizen will be affected.
Taking the present case, if a Government servant violates the prohibition against offering himself as a candidate for election to one or another of the bodies mentioned in Rule 23, he May incur dismissal or such other penalty as the authorities may consider called for, but the breach of the conditions of service committed by him cannot disenfranchise or take away from him any of the rights which he has in the capacity of the holder of franchise.
While, therefore, a Government servant offering him ' self for election to one of the bodies mentioned in Rule 23, may bring upon himself disciplinary action, which may go as far as dismissal, the consequence cannot also be that his election will be invalid or.
that the validity of his election will be affected by the breach.
The disqualification imposed by Rule 23 is of the nature of a personal bar which can be overstepped only at the Government servant 's peril as regards his membership, of a service under the Government.
It is not and cannot be an absolute disqualification in the nature of ineligibility.
What the Rule enjoins is that a Government servant shall not take part in any election and that he shall also not take part in the form of offering himself as a candidate The prohibition is directed at personal conduct and not at rights owned by the Government servant concerned.
Illustrations of an absolute prohibition of the nature of a real disqualification or ineligibility will be found in Sections 63 E(l) and 80 B, Government of India Act 1915 19 and Article 102 and 1901 of the present Constitution which deal, in both cases with qualification for election, to the Central or the State Legislature In his view, the core purpose of Regulation 25(4) is not to clamp down disqualifications regarding elections but to lay down disciplinary forbiddance on conduct of Government servants qua 1088 government servants contravention of which would invite punishment.
If we may say so, this is a purpose oriented interpretation.
A Five Judge Bench of the Punjab & Haryana High Court adopted this reasoning in a situation akin to ours and repelled the further submission that the disqualification was founded on the policy that an employee of the Corporation, if he became a member of the Legislature or City Corporation would not be able to carry out his functions.
The court also dissented from a Division Bench decision of the Madras High Court which took a contrary view.
It is fair to notice the Madras ruling before we discuss the fundamentals and declare the law as we read it to be.
In the Madras case Narayanaswamy vs Krishnamurth,(1) which related to an Assembly seat) the court felt that the point was not free from difficulty but reached the conclusion that the Regulation made by the LIC was perhaps intended to ensure undivided attention upon their duties as such employees but it also operated as a disqualification.
The contention before the court was somewhat different.
The question posed was whether the concerned Regulation could be treated as law which fulfilled the requirements of article 191(1) (e) of the Constitution.
The major consideration of the court was as to whether a regulation to ensure proper performance of duties by the employees of the Corporation could also be treated as a law imposing disqualification.
Even so, making a liberal approach to the line of reasoning of the court we may consider the observation as striking a contrary note.
We do not examine, not having been invited to do so, whether Parliament or its delegate could enact a law relating to elections to local bodies, cl topic which falls within the State List.
We confine ourselves to the sole question debated at the Bar as to the ambit and limit, the import and interpretation of Regulation 25(4) of the LIC Regulations, vis a vis section IS(g) of the Act.
The Regulations have been framed under s.49 of the LIC Act and a conspectus of the various chapters convincingly brings home the purpose thereof.
All the Regulations and the Schedules exclusively devote themselves to defining the terms and conditions of service of the staff.
Regulation 25 comes within chapter III dealing with conduct and discipline of the employees.
Regulation 39 deals with penalties for misconduct and Regulation 40 deals with appeals.
The inference is irresistible that the sole and whole object of Regulation 25, read with Regulation 39, is to lay down a rule of conduct for the I .R. 1089 LIC employees.
Among the many things forbidden are, for instance, prohibition of acceptance of gifts or speculation in stocks and shares.
Obviously we cannot read Regulation 32 as invalidating a gift to an LIC employee under the law of gifts, or Regulation 33 as nullifying transfer of stocks and shares speculatively purchased by an LIC employee.
Likewise.
Regulation 25 while it does mandate that the employee shall not participate in an election to a local authority cannot be read as nullifying the election or disqualifying the candidate.
The contravention of the Regulation invites disciplinary action, which may range from censure to dismissal.
Section 15(g) relates to the realm of election law and eligibility Cr to be a member of a local authority.
Ineligibility must flow from a specific provision of law designed to deny eligibility or to lay down disqualification.
If a rule or conduct makes it undesirable, objectionable or punishable for an employe to participate in elections to a local authority it is a distortion, even an exaggeration out of proportion, of that provision to extract out of it a prohibition of a citizen`s franchise to be member in the shape of a disqualification from becoming a member of a local authority.
The thrust of Regulation 25 is disciplinary not disqualification.
Its intent imposes its limit, language used by a legislature being only a means of communicating its will in the given environment.
This is obvious from the fact that the Chairman is given the power to permit such participation by an employee 15 depending on the circumstance of each case.
Even the range of punishments is variable.
No ground rooted in public policy compels us to magnify the disciplinary prescription into a disenfranchising taboo.
To revere the word to reverse the sense is to do justice to the art of interpretation.
Reed Dickeron quotes a passage from an American case to highlight the guideline :( ') F "The meaning of some words in a statute may be enlarged or restricted in order to harmonize them with the legislative intent of the entire statute.
It is the spirit. of the statute which should govern over the literal meaning There is a further difficulty in construing the Regulation as stipulating an ineligibility for candidature because there is a proviso therein for the Chairman to grant permission to the employee to participate in elections Permission is a word of wide import and may even survive the death of the person Who permits (Kally vs Cornhill Insurance Co. (1) The Interpretation and Application of Statutes by Reed Dickerson, pr 199.
1090 Ltd.(1) Equally clearly, where a statute does not necessarily insist on previous permission it may be granted even later to have retrospective effect.
Or permission once granted may be retracted.
These legal possibilities will create puzzlesome anomalies if we treat the Regulations a ban on participation in election.
An employee may stand as a candidate after securing permission, but in the course of the election the Chairman may withdraw the permission.
What happens then ? An employee may be refused permission in the beginning and if he still contests and wins it is conceivable that the Chairman may grant him permission which may remove the disability.
In such a case, one who was ineligible at one stage becomes eligible at a later state.
Other odd consequences may also be conceived of, although it is not necessary to figure them out.
The rationale of the Regulation rather, its thrust, is disciplinary not disqualificatory.
It is quite conceivable, if the legislature so expresses itself unequivocally, that even in a law dealing with disciplinary control, to enforce electoral disqualifications provided the legislature has competence.
The present provision docs not go so far.
Even assuming that literality in construction has tenability in given circumstances, the doctrinal development in the nature of judicial interpretation takes us to other methods like the teleological.
the textual, the contextual and the functional.
The strictly literal may rot often be logical if the context indicates a contrary legislative intent.
Courts are not victims of verbalism but are agents of the functional success of legislation, given flexibility of meaning, if the law will thereby hit the target intended by the law maker.
Here the emphasis lies on the function, utility aim and purpose which the provision has to fulfil.
A policy oriented understanding of a legal provision which does not do violence to the text or the context gains preference as against a narrow reading of the words used.
Indeed, this approach is a version of the plain meaning rule,(2) and has judicial sanction.
In Hutton vs Phillips the Supreme Court of Delaware said:(1) (Interpretation) involves far more than picking out dictionary definitions of words or expressions used Consideration of the context and the setting is indispensable properly to ascertain a meaning .
In saying that a verbal expression is plain or unambiguous, we mean little more than that we are convinced that virtually anyone competent to (1)[1964] , H.L. per Lord Dilhorne, L. C. at p. 323.
(2)The Interpretation and Application of Statutes by Reed Dickerson p. 231.
(3)45 Del .156,160, 70 A. 2nd IS, 17 (1949) .
1091 understand it,and desiring fairly and impartially to ascertain its signification would attribute to the expression in its context a meaning such as the one we derive rather than any other and would consider any different meaning by comparison or far fetched, or unusual, or unlikely." This perceptive process leaves us in no doubt the soundness of the interpretation which has appealed to the Full Bench of the Punjab and Haryana High Court.
There is a broader constitutional principle which supports this semantic attribution.
The success of our democracy to 'tourniquet ' zenry indifferent to the political process an enemy of the Republic 's vitality.
Indeed absolutism thrives on inaction of the members of the polity.
Therefore activist involvement in various aspects of publics affairs by as many citizens as can be persuaded to interest themselves is as sign of the health and strength of our democratic system.
Local self government and adult franchise give constitutional impetus to the citizens to take part in public administration.
Of course this does not mean that where a plain conflict of interest between holding an office and talking part in in the political affairs of government exists, a disqualification can not be imposed in public interest.
The rule is participation the exception exclusion.
Viewed from that angle if a government servant or an employee of the LIC participate in local administration of other election it may well be that he may well be that he may forfeit his position as government servant or employment if dual devotion is destructive of efficiency as employee and be subject to disciplinary action a matter which depends on a given milieu and potential public mischief.
I am not resting my decision on this general consideration but mention this persuasive factor as broadly supportive our conclusion.
I hold that the impact of Regulation 25(4) is not to impose ineligibility on an LIC employee to be a member of a municipal corporation.
Its effect is not on the candidature but on the employment itself.
In the present case, I am told that the appellant has since resigned his post.
The ultimate result of the reasoning that appeals to us is that the judgement of the High Court must be reversed and the appellant restored to the poll verdict and be regarded as validly returned member of the Nagpur City Corporation.
1092 In this view, the next appeal by the first respondent does not fall to be considered although counsel has pressed his contention that the High Court was wrong.
I do not think it necessary to discuss elaborately the legal issue except to state that the view taken by the Bombay High Court in pyare Saheb 's case (1) is correct.
I am constrained to state that the draftsmanship of the provision is dubious and court in this decision has had to salvage sense out of alternative absurdity flowing from fidelity to pedantry.
It is clear in election law,that a defeated candidate cannot claim a seat through an election petition merely out of speculative possibilities of success.
The reasoning of the Bombay High Court not merely accords with the well known criteria incorporated in the Representation of the people Act, 1951 as well as in the rulings thereon by this Court but also is in consonance with the election sense.
It is true that there is no common law rule applicable in this area and election statutes have to be strictly construed but that does not doctrinally drive the Court to surrender to bizarre verbalism when a different construction may inject reasonableness i n to the provision.
Section 428 of the Corporation Act aims at sense and when a plurality of contestants are in the run other than the one whose election is set aside, predictability of the next highest becomes a misty venture.
The rule in s.428 contains the corrective in such situation s and the pregnant expression against whose election no cause or objection is found gives jurisdiction to the Court to deny the declaration by the next highest and to direct a fresh election when the constituency will speak.
We concur in the reasoning of Masodkar, j in the said ruling.(2) The reliance of Sukh Dev s case (3) by the counsel is inept.
I am satisfied that the view of the High Court on this branch of the case is correct.
I would therefore appeal No. 2406 of 1977 and dismiss appeal no 356 to 1978.
parties will bear their costs at this late when long litigation has kept in suspended animation the constituency 's right to representation.
Tulzapurkar, J I have had the benefit of reading the judgement of my esteemed brother Krishna Iyer in these appeals whereby he proposes to allow the returned candidates appeal (CA No 2406 of 1977) and dismiss the election petitioner 's appeal (C.A.NO.356 (1) Pyare Saheb Gulzar Chhotumiya Sawazi vs Dashrath Wasudeo Doff & Others (2) (3) Sukhdev Singh vs Bhagatram ; 1 S.C.C. 421 1093 of 1978) but I regret my inability to agree with him as in my view both the appeals deserve to be dismissed.
Judges and lawyers always clamour for legislative simplicity and when, as is the case here, legislative simplicity is writ large on the concerned provision and the text of the provision is unambiguous and not susceptible to dual interpretation, it would not be permissible for a Court by indulging i nuances semantics and interpretative acrobatics, to reach the opposite conclusion than is warranted by its plain text and make it plausible or justify it by spacious references to the object purpose or scheme of the legislation or in the name of judicial activism.
Election of Councillors to the Municipal Corporation of city of Nagpur was held on January 29 1975 whereat form ward no 34 Manohar Samarth (Appellant in Civil Appeal NO Marotrao Jadhav and three others (being respondent 1 to 4 in the said Civil Appeal) were the contesting candidates.
After the polling was over Manohar Samarth (hereinafter called the returned candidate was declared successful he having secured 1428 votes as against 943 secured by Marotrao Jadhav, 849 by respondent no 2 572 by respondent No 3 and 748 by respondent No 4.
Marotrao Jadhav (hereinafter referred to as the election petitioner ) challenged the election of the returned candidate from the said ward by filling an election petition (being Election petition No 6 of 1975) before the District Judge, Nagpur under section 428 of 'the Corporation Act.) principally on the ground that the returned candidate being a Development officer and a salaried employee in the Life Insurance Corporation (for short the L.I.C.) had neither sought nor obtained the Chairman s permission for offering his candidature and as such was disqualified from standing at the election under section 15 (g) of the Corporation 1960.
The election was also challenged on ground of corrupt practices, communal propaganda and distribution of malicious and defamatory hand bills on the part of the returned candidate.
In his written statement the returned candidate refuted all the grounds on which his election was challenged.
On the evidence and materials produced by the parties the learned Assistant Judge.
who heard the matter came to the conclusion that he returned candidate who was working as a Development officer in the L.I.C. was its whole time salaried employee and since he had contested the election without seeking or obtaining the permission of the Chairman of the L.I.C. he suffered a disqualification under section 15(g) of the 10 1094 Corporation Act read with Regulation 25 (4) of the L.I.C. (staff) Regulations, 1960 which vitiated his election.
On the other ground of challenge namely commission of corrupt practices and indulgence in communal propaganda and distribution of malicious and defamatory hand bills a finding was recorded in favour of the returned candidate and against the election petitioner.
In the result by her order dated December 21 1976 ,the learned Assistant Judge set aside the election of the returned candidate as being null and void and acting under s.428 (2) granted a further declaration that since the election petitioner had secured second highest votes, he shall be deemed to have been elected as a Councillor from that ward.
The decision of the learned Assistant Judge was challenged by the returned candidate by filing a writ petition (Special Civil Application No. 1 of 1977) before the Nagpur Bench of the Bombay High Court.
The High Court confirmed the view of the learned Assistant Judge that the returned candidate suffered a disqualification which vitiated his election but quashed the declaration granted in favour of the election petitioner on the ground that though he had secured the next highest votes there was no material on record from which it could be inferred that had the disqualification of the returned candidate been known to the voters they (the voters) would have definitely returned him as their Councillor to the Municipal Corporation from Ward No. 34.
The High Court, therefore, directed that a fresh election to fill the vacancy be held in accordance with law.
Civil Appeal No. 2406/77 has been preferred by the returned candidate challenging the High Court 's view on his disqualification while Civil Appeal No. 356/78 has been filed by the election petitioner against that part of the decision which has gone against him.
Dealing first with Civil Appeal No. 2406/1977 counsel for the returned candidate (the appellant) pressed only one contention in support of the appeal.
He contended that Regulation 25(4) framed under section 49(b) & (bb) of the L.I.C. Act, 1956, upon proper construction was 2 mere prohibition and not a measure laying down any disqualification.
According to him the L.I.C. (Staff) Regulations 1960 merely laid down the terms and conditions of service of the staff of the L.I.C. and Regulation 25(4) prescribes a code of conduct for the staff, a breach whereof would entail any of the penalties specified in Regulation.
39 and since in the instant case the returned candidate had offered his candidature without seeking or obtaining permission of the Chairman he could be said to have committed a breach of one of the terms or conditions of his service for which any penalty ranging 1095 from censure to dismissal could be imposed upon him but the purpose A of Regulation 25 (4) was not the enactment of any disqualification and as such the terms of s.15(g) of the Corporation Act were not answered by the mere fact that the returned candidate was an employee of the L.I.C. and was subject to Regulation 25(4).
Reference was also made to Regulation 2 and provision (iii) to Regulation 25(4) B, to lend support to the said contention.
It was pointed out that Regulation No. 2 made the Staff Regulations applicable to every wholetime salaried employee of the L.I.C. in India "unless otherwise provided by the terms of any contract.
agreement or letter of appointment" which Clearly suggested that certain whole time salaried employees of the L.I.C. whose terms and conditions of service were other wise governed by a contract, agreement or letter of appointment would outside the purview of these Regulations and the prohibition contained in Regulation 25(4) would not apply to such employees; similarly, it was pointed out that the prohibition under Regulation 25(4) itself was not absolute inasmuch as under proviso (iii) thereto the employee could offer himself as a candidate for election to a local authority with the permission of the Chairman.
It was contended that these aspects also showed that the prohibition under Regulation 25(4) did not amount to a disqualification.
In support of the construction sought to be placed on Regulation 25(4) counsel relied upon two decisions one of the Calcutta High Court in Md. Sarfatulla Sarkar vs Surja Kumar Mondal and ors.(l) and the other a Full Bench decision of the Punjab & Haryana High Court in Uttam Singh vs section Kripal Singh & Anr.(2) on the other hand, counsel for the election petitioner (first respondent) supported the view of the High Court that Regulation 25(4) read with section 15(g) of the Corporation Act clearly amounted to a disqualification or ineligibility which vitiated the election of the returned candidate.
He relied upon the Madras High Court 's decision in G. Narayanaswamy Naidu vs C. Krishnamurthi & Anr.(3) and urged that the Calcutta decision was clearly distinguishable and as against the Full Bench decision of Punjab and Haryana High Court which merely followed the Calcutta decision he pressed the Madras High Court 's view for our acceptance.
According to him the aspects emerging from Regulation 2 and proviso (iii) to Regulation 25(4) had no relevance to the issue of the proper construction of Regulation 25(4) read with section 15(g) of the Corporation Act.
He pointed out that cases falling within the two aspects emerging from Regulation 2 and proviso (iii) to Regulation 25(4) were (l) A. T. R. (2) A. 1.
R. (3) r. L. R. 1096 completely outside the prohibition, while the real issue was whether or not a case properly falling within the prohibition contained in Regulation 25(4) would entail a disqualification or ineligibility.
Since the question turns upon the proper construction of Regulation 25(4) of the L.I.C. (Staff) Regulation 1960 read with section 15(g) of the Corporation Act it will be desirable to set out the material provisions.
Section 15 of the Corporation Act enumerates in cls.
(a) to (i) the several ' disqualifications of candidates for election and section 15(g), which is by way of a residuary provision, runs thus: "15.
No person shall be eligible for election, selection, or or appointment as a Councillor if he (g) is under the provisions of any law for the time being in force, ineligible to be a member of any local authority, Provided that a disqualification under clause (e), (f), (g) or (i) may be removed by an order of The Provincial Government in this behalf.
" Regulation 25(4) together with proviso (iii) runs thus: "25.
Prohibition against participation in Politics and standing for Elections: (4) No employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election to any legislature or local authority Provided that (iii) the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the pro visions of this regulation.
" It may be stated that Regulation 39 provides for imposition of several penalties ranging from censure to dismissal upon an employee if he were to commit a breach of any of the Staff Regulations.
The simple question is whether Regulation 25(4) read with section 15(g) constitutes or amounts to an ineligibility or disqualification for a whole time salaried employee of L.I.C. to become a member of any local authority.
In other words, is Regulation 25(4) a provision of law for the time being in force that renders a whole time salaried 1097 employee of L.I.C. ineligible to be a member of the Municipal Corporation within the meaning of section 15(g) of the Corporation Act? Before I consider this question of construction certain positions which were not disputed during the course of the arguments may be stated.
It was not disputed that at the relevant time, that is, at the time of the nomination as well as the time of election the returned candidate was a whole time salaried employee of the L.I.C. working as its Development officer and as such he was subject to the Staff Regulations.
It was also not disputed that under proviso (iii) to Regulation '25(4) he did not obtain the permission from the Chairman of the L.I.C. for the purpose of offering himself as a candidate at the election of the Municipal Corporation.
It was further not disputed that Regulation 25(4) being a statutory regulation framed under section 49(2) of the L.I.C. Act.
1956 had the force of law.
Further, though before the High Court a contention was strenuously urged that the words "any lay for the time being in force" occurring in section 15(g) must in the law which ought to have been in existence at the commencement date of the Corporation Act, such a contention was not pressed before us and it was conceded by the counsel for the returned candidate that the said words would include Regulation 25(4) as being the law for the time being in force.
Indeed, the concession, in my view, was rightly made by counsel for the returned candidate for the words "any law for the time being in force" occurring in section 15(g) Must in the context refer to the law in force at the relevant time, that is, at the time of nomination or election when the question of disqualification or ineligibility arises for consideration.
It is in light of these undisputed position that the question set out above will have to be considered.
The contention is that on proper construction Regulation 25(4) merely creates a prohibition but does not amount to a disqualification or ineligibility because the Staff Regulations were and are intended to define the terms and conditions of service of the employees of the L.I.C. it is not possible to accept such construction for more than one reason.
Tn the first place the heading of the Regulation clearly shows that it deals with the topic and intends to provide a prohibition against standing for election.
Secondly, cl.
(4) of the said Regulation in plain and express terms provides, "No employee shall. r . take part in an election to any local authority".
In other words, by using negative language it puts a complete embargo (subject to proviso (iii) upon every employee from taking part in an election to any local authority.
How else could a disqualification or ineligibility be worded ? To say that Regulation 25(4) merely creates a prohibition against standing for election but does not create any ineligibility or disqualification to stand for an election is merely to quibble at words.
14 409 SCI/79 1098 In my view, there is no distinction between a legal prohibition against a person standing for election and the imposition of an ineligibility or disqualification upon him so to stand.
It is true that the purpose of framing Staff Regulations was and is to define the terms and conditions of service of the employees of the L.I.C. and that being the purpose it is bu.
natural that a provision for imposition of penalties for breach of such Regulations would also be made therein.
In fact the validity of such prohibition contained in the concerned Regulation rests upon the postulate that it prescribes a code of conduct for the employees and as such it would be within the Regulation making power conferred on the L.I.C. under section 49 of the L.I.C. Act, 1956 but while prescribing a code of conduct the Regulation simultaneously creates a disqualification or ineligibility for the employee to stand for election to any local authority.
Moreover, to construe Regulation 25(4) as merely prescribing a code of conduct breach whereof is made punishable under Regulation 39 and not imposing a disqualification or ineligibility upon the employee to stand for election to a local authority would amount to rendering a residuary provision like section 15(g) in the Corporation Act otiose.
In my view, therefore, on proper construction Regulation 25(4) read with section 15(g) of the Corporation Act imposes a disqualification or creates an ineligibility for the employee of L.I.C. to stand for election to any local authority.
Reliance on the aspects emerging from Regulation 2 and proviso S (iii) to Regulation 25(4) cannot avail the returned candidate at all, for it is obvious that cases falling within those aspects are completely taken out of the prohibition contained in Regulation 25(4) while the real issue is whether a case properly falling within the prohibition contained in Regulation 25(4) on its proper construction entails a disqualification/ineligibility or not ? In fact, proviso (iii) to Regulation 25(4) is similar to the proviso to section 15 of the Corporation Act under which a disqualification under cls.
(e), (f), (g) or (i) could be removed by an order of the Provincial Government in that behalf and obviously when any one of those disqualifications is removed by an order of the Provincial Government under the proviso the case would clearly be outside section 15.
In other words, the two aspects (i) that certain employees under Regulation 2 would not be governed by the Staff Regulations at all and would not, therefore, be hit by the prohibition and (ii) that upon permission being obtained from the Chairman under proviso, (iii) the employee would be outside the prohibition have no bearing on the question of proper construction of Regulation 25(4).
Turning to the decided cases, it may be observed that a construction similar to the one which I have placed on Regulation 25(4) of 1099 L.I.C. (Staff) Regulations 1960 was placed by the Madras High Court in a similar L.I.C. Staff Regulation No. 29 read with Article 191(1) (e) of the Constitution in G. Narayanaswamy Naidu 's case (supra) and the very argument that Regulation 29 was merely a rule of conduct prescribed for the employees of the L.I.C., the breach of which might result in disciplinary action being taken against them but it did not render the employees disqualified For standing for election was in terms negatived.
At page 549 of the report the relevant observations run thus: "Though the point is not free from difficulty, we have reached the conclusion that this argument of the respondents must be rejected.
We see no distinction between a legal prohibition against a person standing for election, and the imposition of a disqualification on him so to stand.
It might be that the object of the regulation was to ensure that the employees of the Corporation bestowed undivided attention upon their duties as such employees, but this does not militate against the prohibition operating as a disqualification.
If a person is disabled by a lawful command of the Legislature, issued directly or mediately, from standing for election, it is tantamount to disqualifying him from so standing.
We, therefore, hold that regulation 29 framed by the Life Insurance Corporation constituted a law which disqualification C. Krishnamurthi (?) from standing for election under Article 191(1)(e) of the Constitution." Though the observations have been prefaced by the words "though the point is not free from difficulty", it seems to me clear that those words were used out of deference to the arguments advanced by learn ed counsel for the respondents in that case but the Court construed the Regulation as imposing a disqualification because its plain language warranted it without getting boggled by the object or purpose of the staff Regulation that had been framed under section 49(2) of the L.I.C. Act 1956.
The Calcutta decision in Md. Sarafatulla Sarkar 's case (supra) relied on by the counsel for the returned candidate is clearly distinguishable.
It was a case dealing with an election to Union Board under the Bengal Village Self Government Act (5 of 1919) and the question was whether Rule 23 of the Government Servants ' Conduct ,Rules, 1926 made under Rule 48 of the Civil Services (Classification.
1100 Control and Appeal) Rules framed by the Secretary of State under section 96B of the Government of India Act, 1915 19, imposed a disqualification or.
a Government servant against offering himself for an election to one of the bodies mentioned in Rule 23 and the Calcutta High Court took the view that it did not so as to render his election invalid but that the prohibition contained therein was of a nature of a personal bar which could be overstepped by the Government servant at his own peril as regards his membership of a service under the Government must be pointed out that section 10 A of the Bengal Village Self Government Act (S of 1919) which provided disqualifications ,for candidates from being a member of Union Board did not contain either a specific disqualification for a Government servant or any residuary provision similar to section 15(g) of the Corporation Act, 1948 or Article 191(1)(e) of the Constitution and it was in the absence of any such provision, either specific or residuary that the Calcutta High Court considered the impact of the prohibition contained in Rule 23 of the Government Servants ' Conduct Rules.
In fact, this aspect of the matter has been emphasised by the learned Chief Justice in para 5 of his judgment where he observed: "The learned Single Judge considered it immaterial that the holding of a post under the Government had not mentioned as one of the disqualifications for election in section 10A, Bengal Village Self Government Act, 1919 because in his view, the enumeration of disabilities in that section was not exhaustive.
" In other words, it is clear that had section 10A of the Bengal Village Self Government Act, contained either a specific disqualification or a residuary provision of the type that is to be found in section 15(g) of the Corporation Act, 1948 or Article 191(1) (e) of the Constitution Rule 23, it appears, might have been differently construed.
Construing Rule 23 by itself the learned Chief Justice came to the conclusion that the prohibition therein was directed at personal conduct and not at right owned by the Government servant concerned.
In the instant case Regulation 25(4) has to be read with section 15(g) of the Corporation Act, 1948.
The learned Chief Justice referred to Rule 8 of the said Rules, which forbade a Gazetted officer to lend money to any person possessing land within the local limits of his authority and pointed out that even so if a Gazetted officer were to lend money to a person of the specified category, none could say that the officer shall not be entitled to recover the amount of the loan.
The test so suggested by the learned Chief Justice may hold good if Rule 8 sim 1101 pliciter were to be construed.
But, if in addition to Rule 8 there A was simultaneously in operation a usury law which made certain loans irrecoverable including a loan prohibited by any law for the time being in force then obviously Rule 8 read with such usury law would render the loan given by the Gazetted officer irrecoverable.
Similar would be the position regarding the two Regulations No. 32 and No. 33 referred to by my learned brother Krishna Iyer, J. in his judgment.
Therefore, the Calcutta decision is clearly distinguishable mainly on the ground that Rule 23 of the Government Servants ' Conduct Rules standing by itself came up for construction before that Court in the absence of any specific disqualification or a general disqualification of a residuary nature being enacted in section 10A of the Bengal Village Self Government, Act, 1919.
The Full Bench decision of the Punjab & Haryana High Court, in my view, merely follows the reasoning of the Calcutta decision without considering The distinction indicated above and, therefore, it is clear to me that the construction placed by that High Court on Regulation 25(4) of the L.I.C. (Staff) Regulations (1960) read with Article ]91(1)(e) of the Constitution should be rejected as an erroneous one and the construction placed by the Madras High Court deserves to be approved.
Having regard to the above discussion I am clearly of the view that the returned candidate suffered a disqualification or rather was under an ineligibility under Regulation 25(4) read with s; 15(g) of the Corporation Act, 1948 which vitiated his election; if he were keen on active participation in the democratic process it was open to him to do so by either resigning his post or obtaining the Chairman 's permission before offering his candidature but his right as a citizen to keep up the Republic 's vitality by active participation in the political process cannot be secured to him by a purpose oriented construction of the relevant Regulation.
His appeal, therefore, deserves to be dismissed.
Before parting with this appeal I feel constrained, as a part of my duty, to give vent to my feelings of discomfiture and distress over one thing which is exercising my mind for a considerable time in this Court.
In all humility I would like to point out that prefaces and exordial exercises, perorations and sermons as also theses and philosophies (political or social), whether couched in flowery language or language that needs simplification, have ordinarily no proper place in judicial pronouncements.
In any case, day in and day out indulgence in these in almost every judgment, irrespective of whether the subject or the context or the occasion demands it or not, serves little purpose, and surely such indulgence becomes indefensible when matters are to be disposed of in terms of settlement arrived at between 1102 the parties or for the sake of expounding the law while rejecting the approach to the Court at the threshold on preliminary grounds such as non maintainability, laches and the like.
I am conscious that judicial activism in many cases is the result of legislative inactivity and the role of a Judge as a lawmaker has been applauded but it has been criticised also lauded when it is played within the common law tradition but criticised when it is carried to extremes.
Lord Radcliffe in his address titled 'The Lawyer and His Times ' delivered at the Sesquicentennial Convocation of the Harvard Law School observed thus: "do not believe that it was ever an important discovery that judges are in some sense lawmakers.
It is much more important to analyse the relative truth of an idea so far reaching; because, unless the analysis is strict and its limitations observed, there is real danger in its elaboration.
We cannot run the risk of finding the archetypal image of the judge confused in men 's minds with the very different image of the legislator.
" And the risk involved is the possible destruction of the image of the judge as "objective, impartial, erudite and experienced declarer of the law That is" which "lies deeper in the consciousness of civilization than the image of the lawmaker, propounding what are avowedly.
new rules of human conduct.
Personally I think that judges will serve the public interest better if they Keep quiet about their legislative function.
No doubt they will discreetly contribute to changes in the law, because as I have said, they cannot do otherwise, even if they would.
But the judge who shows his hand, who advertises what he is about, may indeed show that he is a strong spirit, unfettered by the past; but I doubt very much whether he is not doing more harm to the general confidence in the law as a constant, safe in the hands of the judges, than he is doing good to the law 's credit as a set of rules nicely attuned to the sentiment of the day.
" Turning to the election petitioner 's appeal (C.A. No. 356 of 1978) I am in complete agreement with the view expressed by the High Court that the declaration granted to him by the learned Assistant Judge under section 428(2) of the Corporation Act, 1948 should never have been granted.
It is true that the election petitioner secured the next highest number of votes but that by itself would not entitle him to get a declaration in his favour that he be deemed to leave been duly elected as a Councillor from Ward No. 34.
I may point out 1103 that section 428(2) is not that absolute as was suggested by counsel for the election petitioner, for, the relevant part of sub section
(2) provides that if the election of the returned candidate is either declared to be null and void or is set aside the District Court "shall direct that the candidate, if any, in whose favour next highest number of valid votes is recorded after the said person or after all the persons who have returned at the said election and against whose election no cause or objection is found shall be deemed to have been elected.
" The underlined words give jurisdiction to the District Court to deny the declaration to the candidate who has secured the next best votes The High Court has rightly taken the view that there was no material on record to show how the voters, who had voted for the returned candidate, would have cast their votes had they known about the disqualification.
Therefore, this appeal also deserves to be dismissed.
In the result I propose that both the appeals should be dismissed with no order as to costs in each.
PATHAK, J. Manohar Nathurao Samrath was a Development officer in the service of the Life Insurance corporation of India.
His employment was governed by the Life Insurance Corporation of India (Staff) Regulations, 1960 [shortly referred to as the "(Staff) Regulations]" Desirous of being a Councillor in the Corporation of the City of Nagpur (to which I shall refer as the "Nagpur Corporation"), he stood for election to that office, and was elected.
But Regulation 25(4) of the (Staff) Regulations forbade him from taking part in any election to a local authority.
He could have taken part in the election if he had sought and obtained the permission of the Chairman of the Life Insurance Corporation of India under the third proviso to Regulation 25(4).
He did not obtain permission.
His election as Councillor was challenged by an election petition filed by an unsuccessful candidate Marotrao.
It was said that Samrath was ineligible to stand for election because of section 15(g) of the City of Nagpur corporation Act, 1948 (to be referred hereinafter as the "Nagpur Corporation Act" 5) read with Regulation 25(4) of the (Staff) Regulations The ground found favour with the learned Assistant Judge trying the election petition, and she declared the election void.
She also granted a declaration that Marotrao was the duly elected candidate.
Samrath filed a writ petition in the Bombay High Court.
The High Court agreed with the learned Assistant Judge that Samrath was not eligible for election and that his election was void.
But it also set aside the declaration granted in favour of Marotrao, and directed a fresh election.
The Judgment of the High Court has been challenged by these two appeals, one by Samrath and the other by Marotrao.
1104 The central question is whether Samrath is ineligible for election as a Councillor of the Nagpur Corporation because of Section 15(g) of the Nagpur Corporation Act read with Regulation 25(4) of the (Staff) Regulations.
Section 15(g) of the Nagpur Corporation Act provides: "15.
No person shall be eligible for election as a Councillor if he . . . . (g) is, under the provisions of any law for the time being in force, ineligible to be a member of any local authority: . . . .
And Regulation 25(4) of the Staff Regulations declares: "(25) (1) . . . (2) . . . (3). . . . (4) No employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election to any legislature or local authority.
Provided that (i). . . . (ii). . . (iii) the Chairman may permit an employee to offer him self as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of this regulation".
The Nagpur Corporation Act contains a number of provisions concerned with holding elections to the Nagpur Corporation.
Sections 9 to 22 deal with various matters, electoral roll, the qualification of candidates, disqualification of candidates, term of office, filling up of casual vacancies, and so on.
There is an entire Code of election law.
And Section 15 is one of its provisions.
Now, section 15 of the Nagpur Corporation Act declares a person ineligible for election as a Councillor on any one of several grounds.
He may be ineligible be cause he is not a citizen of India, that is to say, he lacks in point of legal status.
He may also be ineligible in point of lack of capacity defined by reference to disqualifying circumstances, for example, he may have been adjudged by a competent court to be of unsound mind.
` 1105 The disqualification may be found, by nature of clause (g), under the provisions of any subsisting law.
But the law must provide that he is ineligible to be a member of any local authority.
The law must deal with ineligibility for membership, and in the context of section 15, that must be ineligibility for election.
It must be a law concerned with elections.
Clause (g) is a residual clause, not uncommonly found wherever a provision of an election law sets forth specified category of disqualified or ineligible person and thereafter includes a residual clause leaving the definition of remaining categories of two other laws.
These other laws must also be election laws.
An example is the Representation OF the People Act, 1951 which is relevant to Article 102(1)(e) and Article 191(l)(e) of the Constitution.
Since Section 15 of the Nagpur Corporation Act is a provision of the election law, clause (g) must be so construed that the law providing for ineligibility contemplated therein must also be of the same nature, that is to say, election law.
Regulation 25(4) of the (Staff) Regulations is not a law, dealing with elections.
Chapter III of the (Staff) Regulations, in which Regulation 25 is found, deals with "conduct, discipline and appeals" in regard to employees of the Life Insurance Corporation of India.
A conspectus of the provisions contained in the Chapter, from sections 20 to SO, shows that it deals with nothing else.
This is a body of provisions defining and controlling the conduct of employees in order to ensure efficiency and discipline in the Corporation, and providing for penalties (Section 39) against erring employees.
Regulation 25 prohibits participation in politics and standing for elections.
Regulation 25(4) forbids an employee not only from taking part in an election to any legislature or local authority, but also from canvassing or otherwise interfering, or using his influence, in connection with such an election.
If he does, he will be guilty of a breach of discipline, punishable under Regulation 39.
Regulation 25(4) is a norm of service discipline.
In substance, it is nothing else.
Tn substance, it is not a provision of election law.
It cannot be construed as defined a ground of electoral ineligibility.
All that it says to the employee is: "While you may be eligible for election to a legislature or local authority, by virtue of your legal status or capacity, you shall not exercise that right if you wish to conform to the discipline of your service." The right to stand for election flows from the election law.
Regulation 25(4) does not take away or abrogate the right; it merely seeks to restrain the employee from exercising it in the interests of service discipline.
If in fact the employee exercises the right, he may be punished under Regulation 39 with any of the penalties visited on an employee a penalty which takes its colour from the relevance of em 1106 ployment, and has nothing to do with the election law.
No penalty under Chapter III of the (Staff) Regulations can provide for invalidating the election of all employee to a legislature or a local authority.
That would be a matter for the election law.
It is significant that when the restraint on standing for election imposed by Regulation 25(4) has to be removed, it is by the Chairman of the Life Insurance Corporation of India under the third proviso.
When he does so, it is as a superior in the hierarchy of service concerned with service discipline.
He does not do so as an authority concerned with elections.
Therefore, in my judgment, Regulation 25(4) of the (Staff) Regulation is not a law within the contemplation of section 15(g) of the Nagpur Corporation Act.
In reaching that view, I find myself, with regret, unable to sub scribe to what has been observed by the Madras High Court in Narayanaswamy vs Krishnamurthi.(l) I would say that the Calcutta High Court in Sarafatulla Sarkar vs Surja Kumar Mondal( ') and the Punjab and Haryana High Court ill Uttam Singh vs section Kirpal Singh(3 appear to have come a more accurate conclusion.
Samrath must, therefore, succeed in his appeal.
That being so, Marotrao must fail in his.
Samrath having been duly elected to the office of Councillor, Marotrao cannot claim the same office for himself.
In the result, Civil Appeal No. 2406 of 1977 is allowed and Civil Appeal No. 356 of 1978 is dismissed.
The judgment of the Bombay High Court is set aside and the election petition filed by Marotrao is dismissed.
In the circumstances of the case, the parties will bear their costs.
ORDER By majority Civil Appeal No. 2406 of 1977 is allowed.
Civil Appeal No. 356/78 is dismissed unanimously.
There will be no order as to costs in each of the appeals.
V.D.K. Ordered accordingly (1) I. L. R (2) A. I. R. (3) A. I. R. 1976 Pb. & Haryana.
[/INST]Rule 10, Chapter II, Part 6 of the Rules framed by the Bar Council of India for professional mis conduct provides that an advocate shall not stand a surety, or certify the soundness of a surety, for his client required for the purposes of any legal proceedings.
The appellant, a practising advocate, was suspended for one month by the Disciplinary Tribunal of the Bar Council of India on the ground that in violation of the rules, he had certified the solvency of a surety in a bailable offence in which the accused was his client.
The appellate body dismissed his appeal.
On the question whether a reprimand would meet the ends of justice, Allowing the appeal in part, ^ HELD: (1) Section 35 of the Advocates Act permits reprimand provided the ends of public justice are met by this leniency.
Ordinarily this Court does not interfere with a punishment imposed by the Disciplinary Tribunal except where strong circumstances involving principle are present.
Censure has a better deterrent value on the errant brethren in the profession in some situations than suspension for a month from professional practice.
In the present case the lawyer was young, the offence was not tainted with turpitude and the surety whose solvency he certified was found to be good.
These circumstances are amelioratory and hardly warrant codign punishment.
Public admonition is an appropriate sentence in the present case.
p, Public professions which enjoy a monopoly of public audience have statutorily enforced social accountability for purity, probity and people conscious service.
In our country bail has become a logy and an instrument of unjust incarceration.
This harasses the poor and leads to corruption.
A smart lawyer who appears for an indigent accused may commiserate and enquire whether the surety is solvent.
If he is satisfied that the surety is sufficiently solvent, he may certify the solvency of the surety.
In some cases the detainee may be a close relation or close friend or a poor servant of his.
In that capacity, not as a lawyer, he may know the surety and his solvency or may offer himself as a surety.
In such cases he violates the rule all the same.
The degree of culpability in such cases depends on the total circumstances and the social milieu.
The rule under consideration is a wholesome one in the sense that lawyers should not misuse their role for making extra perquisites by standing surety for their clients or certifying the solvency of such sureties.
The Court may not 206 frown upon a lawyer who helps out the person, not by false pretences, but on the strength of factual certitude and proven inability to substantiate solvency.
The Court reprimanded the appellant and directed that he shall not violate the norm of professional conduct and shall uphold the purity and probity of the profession generally.
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<s>[INST] Summarize the judgementON: criminal Appeal No. 184 of 1956.
Appeal. from the judgment and order dated October 15, 1956, of the former Nagpur High Court in Criminal Appeal No. 205 of 1956 and Criminal Reference No. 15 of 1956, arising out of the judgment and order dated July 10, 1956, of the First Additional District Judge, Nagpur in Sessions Trial No. 34 of 1956.
554 J. N. Banerjee and P. C. Agarwala, for the appellant.
Jindra Lal and R.H.Dhebdr, for the respondent.
September 25.
The following Judgment of the Court was delivered by SINHA J.
This appeal on a certificate of fitness under article 134(1)(c), granted by the High Court at Nagpur (as it then was), is directed against the concurrent judgment and orders of the courts below, so far as the appellant Khushal is concerned, convicting and sentencing him to death under section 302, Indian Penal Code, for the pre meditated murder of Baboolal on the night of February 12, 1956, in one of the quarters of the city of Nagpur.
It appears that there are two rival factions in what has been called the Mill area in Nagpur.
The appellant and Tukaram who has been acquitted by the High Court, are the leaders of one of the factions, and Ramgopal, P.W. 4, Inaya tullah, P.W. 1, and Tantu, P.W. 5, are said to be the lead ers of the opposite faction.
Before the time and date of the occurrence, there had been a number of incidents between the two rival factions in respect of some of which Inayatul lah and Tantu aforesaid had been prosecuted.
Even on the date of the occurrence, apart from the one leading to the murder of Baboolal, which is the subject matter of the present appeal, Tantu and Inayatullah had made two separate reports about the attacks on them by Khushal 's party.
There was another report lodged by Sampat one of the four persons placed on trial along with the appellant, for the murder of Baboolal.
That report was lodged at Ganeshpeth police station at about 9.30 p.m. on the same date February 12, 1956 against Inayatullah alias Kalia and Tantu, that they had attacked the former with sharp edged weapons (exhibit P 26).
The prosecution case is that the appellant Khushal was on bad terms with Baboolal who was on very friendly terms with the leaders of the opposite faction aforesaid.
Being infuriated by the conduct of Baboolal in associating with the enemies of the party of the accused, Sampat, Mahadeo, Khushal and Tukaram 555 suddenly attacked Baboolal with swords and spears and in flicted injuries on different parts of his body.
The occur rence took place in a narrow lane of Nagpur at about 9 p.m. Baboolal was taken by his father and other persons to the Mayo hospital where he reached at about 925 p.m.
The doctor in attendance Dr. Kanikdale (P.W. 14) at once questioned him about the incident and Baboolat is said to have made a statement to the doctor which the latter noted in the bed head ticket (exhibit P 17) that he had been assaulted by Khu shal and Tukaram with swords and spears.
After noting the statement aforesaid, of Baboolal, the doctor telephoned to the Ganeshpeth police station where the information was noted at 9.45 p.m.
On receiving the information, Sub Inspec tor A. K. Khan recorded 'exhibit P 1) and registered an offence under section 307, Indian Penal Code, and immediately went to the Mayo hospital along with a head constable and several con stables.
He found Baboolal in a serious condition and suspecting that he might not survive and apprebending that it might take time for the magistrate to be informed and to be at the spot, to record the dying declaration, he consult ed Dr. Ingle, the attending doctor, whether Baboolal was in a fit condition to make a statement.
The doctor advised him to have the dying declaration recorded by a magistrate.
The Sub Inspector decided that it would be more advisable for him to record the dying declaration without any delay.
Hence, he actually recorded Baboolal 's statement in answer to the questions put by him (exhibit P 2) at 10 15 p.m.
In the meantime, Shri M. section Khetkar, a magistrate, first class, was called in, and he recorded the dying declaration (exhibit P 16) between 11 15 and 11 35 p.m. in the presence of Dr. Ingle who certified that he had examined Baboolal and had found him mentally in a fit condition to make his dying declara tion.
Besides these three dying declarations recorded in quick succession, as aforesaid, by responsible public serv ants, Baboolal is said to have made oral statements to a number of persons, which it is not necessary to set out because the High Court has not acted upon those oral dying declarations.
We 71 556 shall have to advert, later, to the recorded dying declara tions in some detail, in the course of this judgment.
It is enough to say at this stage that the courts below have founded their orders of conviction of the appellant mainly on those dying declarations.
Baboolal died the next morning at about 10 a.m. in hospital.
Having come to know the names of two of the alleged assail ants of Baboolal from his recorded dying declarations, the police became busy apprehending those persons.
They could not be found at their respective houses.
The appellant was arrested four days later in an out house locked from out side, of a bungalow on Seminary Hill in Nagpur.
The other person named as one of the assailants, Tukaram, was arrested much later.
The prosecution case is that these persons were absconding and keeping out of the way of the police.
After investigation and the necessary inquiry, four persons were placed on trial and the appellant was one of them.
The Additional Sessions Judge acquitted two of them and convict ed the remaining two the appellant and Tukaram under section 302.
Indian Penal Code, or in the alternative, tinder section 302, read with section 34, Indian Penal Code.
He sentenced the appel lant to death because in his opinion, he had caused Baboolal 's death intentionally, and there were no extenuat ing circumstances.
He sentenced Tukaram to imprisonment for life, because in the learned Judge 's view of the case, Tukaram had acted under the instigation of the appellant.
Accordingly, the learned Additional Sessions Judge made a reference to the High Court for confirmation of the sentence of death.
That reference was heard along with the appeal filed by the condemned prisoner.
The reference, the appeal by the convicted accused persons, as also the appeal by the Government of Madhya Pradesh, against the two accused per sons who had been acquitted by the learned trial Judge, and the revisional application for enhancement of sentence passed upon Tukaram, also filed by the State Government, were all heard together and disposed of by one judgment, 557 by a Bench consisting of Hidayatullah C. J. and Mangalmurti J. The High Court, apparently with a view to understanding the evidence adduced in the case on behalf of the parties, made a local inspection on September 17, 1956, and recorded their impressions in a note which forms part of the record of the High Court.
In a very well considered judgment, the High Court, by its judgment and orders dated October 13, 1956, acquitted Tukaram, giving him the benefit of the doubt caused chiefly by the fact that in the dying declaration (exhibit P 16) recorded by the magistrate as aforesaid, he has been described as a Teli, whereas Tukaram before the Court is a Kolhi, as stated in the charge sheet.
The doubt was further accentuated by the fact that there were three or four persons of the name of Tukaram, residing in the neigh bourhood and some of them are Telis.
The High Court exam ined, in meticulous details, the evidence of the eye wit nesses Inayatullah, P.W. 1, and Sadashiv, P.W. 3, and agreed with the trial Judge in his estimate of their testimony that those witnesses being partisan, their evidence could not be relied upon, to base a conviction.
The High Court went further and came to the. conclusion that their evidence being suspect, could not be used even as corroboration, if corroboration was needed of the three dying declarations made by Baboolal, as aforesaid.
They upheld the conviction and sentence of the appellant on the ground that the dying declarations were corroborated by the fact that the appel lant had been absconding and keeping out of the way of the police, and had been arrested under very suspicious circum stances.
These circumstances and the alleged absconding by Tukaram were not so suspicious.
as to afford corroboration against him.
In that view, the High Court " very reluctant ly " gave the benefit of the doubt to Tukaram and allowed his appeal.
The High Court also agreed with the trial Judge in acquitting the other two accused persons Sampat and Maha deo because these two persons had not been named in the dying declarations, and the oral testimony was not of such a character as to justify conviction.
Accordingly, the Gov ernment appeal and 558 application in revision were dismissed.
As against the appellant, the reference made by the learned trial judge was accepted and his appeal dismissed.
Thus, under the orders of the High Court, only the appellant stood convicted on the charge of murder with a sentence of death against him.
He moved the High Court for a certificate under article 134(1)(c) of the Constitution, and the High Court granted a " certifi cate of fitness ".
Hence, this appeal.
At the outset, we must repeat what this Court has observed in a number of appeals coming up to this Court on certifi cates of fitness granted by High Courts, mainly on questions of fact.
The main ground for the grant of the certificate may be reproduced in the words of the High Court itself: "The main ground is that there is not enough evidence against the accused and that there is an error in our judg ment in holding that there was no evidence to show that Khushal whose absconding has been held to corroborate the dying declaration, was involved in a liquor case.
During the course of the argument neither side drew our attention to the documents which were in the record; nor was any point made of it, though we questioned why the absconding should not be taken into consideration.
Now it seems that there are one or two defence exhibits in which it has been shown that Khushal was not found in his house when he was wanted in a liquor case after a search on 5th February, 1956.
In view of the fact that there is this error and the sufficien cy of the evidence might be a matter for consideration in the light of this additional evidence, we think this is a fit case for a special certificate under article 134(1)(c) of the Constitution.
" It is clear that the High Court granted the certificate of fitness under article 134(1)(c) of the Constitution not on any difficult question of law or procedure which it thought required to be settled by this Court, but on a question which is essentially one of fact, namely, whether there was sufficient evidence of the guilt of the accused.
The latest reported case of this Court, bearing on this aspect of this appeal, is Haripada 559 Dey vs The State of West Bengal(1), to the effect that a High Court exceeds its power of granting a certificate of fitness under that article if the certificate discloses that the main ground on which it was based related to a question of fact, and that the High Court is not justified in sending up such a case for further consideration by this Court which does not, ordinarily, concern itself with deciding mere questions of fact unless such questions arise on a certifi cate granted under cls.
(a) or (b) of article 134 (1) of the Constitution.
In other words, this Court does not function ' ordinarily, as a Court of Criminal Appeal.
Under the Con stitution, it has the power, and it is its duty, to hear appeals, as a Regular Court of Appeal, on facts involved in cases coming up to this Court on a certificate under article 134(1)(a) or (b).
To the same effect are the other deci sions of this Court, referred to in the reported decision aforesaid, for example, Narsingh vs The State of Uttar Pradesh (2) Baladin vs The State of Uttar Pradesh(3) sunder Singh vs State of Uttar Pradesh(4) It is, therefore, incumbent upon the High Courts to be vigilant in cases coming up before them, by way of an appli cation for a certificate of fitness under article 134(1) (c) of the Constitution.
In view of these considerations, it has got to be held that the certificate of fitness granted by the High Court does not satisfy the requirements of article 134(1)(c) of the Con stitution.
The appeal on such a certificate has, therefore, to be dismissed in limine; but we have to satisfy ourselves whether there are such grounds as would justify this Court in granting special leave to appeal to this Court, if the appellant had approached this Court in that behalf.
We have, therefore, examined the record of this case from that point of view.
It appears from the judgments of the courts below that the prosecution case rests mainly upon the three dying declarations of Baboolal who died shortly after making those statements as to his assailants, in quick succession within about two and a half hours of the (1) [I956] S.C.R. 639.
(2) [1955] i S.C.R. 238.
(3) A.I.R. 1956 S.C. 181.
(4) A.I.R. 1956 S.C.411.
560 occurrence indeed, the first one to the doctor, was made within half an hour; as also upon the evidence of two per sons Inayatullah, P.W. I and Sadashiv, P.W. 3, who figure as eye witnesses, and Trimbak, P.W. 2 and Ramgopal, P.W. 4, who claimed to have turned up in the nick of time, to witness the last stages of the occurrence.
Though the trial Judge did not disbelieve the oral testimony of the witnesses aforesaid, and only insisted upon corroboration, the High Court was more pronounced in its view that the testimony of those four witnesses was not trustworthy.
The High Court has discussed their evidence in great detail, and was not prepared to accept any part of their testimony on the ground that they were strongly partisan witnesses and that they did not come to the rescue of the victim of the murderous as sault if they were really in the neighbourhood of the place of the occurrence, as claimed by them.
If we had to assess the value of that body of oral evidence, we may not have come to the same conclusion, but we proceed on the assump tion that the High Court is right in its estimate of the oral testimony adduced on behalf of the prosecution.
After discussing all that evidence, the High Court took the view that it could not place any reliance on the oral testimony of what Baboolal had spoken to P.Ws. 2 and 19 when they deposed that Baboolal had named two of his assailants, namely, the appellant and Tukaram.
The High Court reiied upon the three dying declarations recorded at the hospital first, by the attending doctor, second, by the Sub Inspector of police and the third, by the magistrate, first class, between 9 25 and 11 35 p. m.
As regards authenticity of the record of those three statements of the deceased, the High Court had no doubt, nor has any doubt been cast upon them by counsel for the appellant.
The High Court then considered the question whether the conviction of the accused could be based on those dying declarations alone.
It pointed out that in that High Court as also in other High Courts, con victions on dying declarations alone had been rested if the Court was satisfied that the dying declaration was true and, therefore, could be acted upon.
But the decision of 561 this Court in Ram Nath Madhoprasad vs State of Madhya Pra desh (1) was brought to their notice, and in view of that decision, the High Court looked for corroboration of the dying declarations aforesaid.
It found that corroboration in the subsequent conduct of the appellant in that, as deposed to by prosecution witness 31 the Sub Inspector in charge of Ganeshpetli police station the appellant could not be traced till February 16, 1956, on which day, the police obtained information to the effect that the accused had been concealing himself in the premises of Ganesh dhobi at Hazari Pahar.
He went there and found the appellant sitting in a room which had been locked from the front side.
He arrested the accused.
The High Court did not believe the defence suggestion that the appellant bad been concealing himself for fear of the police in connection with an excise case in which be had been suspected.
The records in connection with that case have been placed before us, and, after examining those records, we do not find any good reasons for differing from the High Court in its appreciation of the circumstances connected with the absconding of the accused.
The High Court took the view that the circumstance of the appellant 's conduct in concealing himself and evading the police for a number of days was consistent with the prosecution case that he was concerned in the crime which was the subject matter of the charge against him.
Thus, in effect, the High Court found corroboration which, according to the ruling of this Court referred to above, was necessary in order to base the conviction upon the dying declarations of Baboolal.
The question whether the circumstances of the appellant 's alleged keeping out of the way of the police, for a number of days after the occurrence, can be used as corroboration of the dying declarations, is not free from doubt and diffi culty.
The argument on behalf of the accused that he had been keeping out of the way of the police because he was suspected in the excise case is not entirely unfounded.
He had not left the city of Nagpur and gone out of the juris diction of the local police.
In those circumstances we are not (1) A.I.R. 1953 S.C. 420. 562 prepared to say that the alleged absconding of the accused could afford sufficient corroboration, if corroboration of the dying declarations was needed.
In this Court, a good deal of argument was addressed to us, to the effect that the ruling of this Court lays down a sound proposition of law which should have been followed by the High Court, and that the alleged fact of the accused absconding and keeping out of the way of the police could not be used as corroboration of the dying declaration.
The decision of this Court in Ram Nath Madhoprasad vs State of Madhya Pradesh (1), contains the following observations, at p. 423, which have been very strongly relied upon, on behalf of the appellant, as having a great bearing upon the value to be placed upon the dying declarations: "It is settled law that it is not safe to convict an accused person merely on the evidence furnished by a dying declara tion without further corroboration because such a statement is not made on oath and is not subject to cross examination and because the maker of it might be mentally and physically in a state of confusion and might well be drawing upon his imagination while he was making the declaration.
It is in this light that the different dying declarations made by the deceased and sought to be proved in the case have to be considered. .
We have, therefore, to examine the legal position whether it is settled law that a dying declaration by itself can, in no circumstances, be the basis of a conviction.
In the first place, we have to examine the decision aforesaid of this Court from this point of view.
This Court examined the evidence in detail with a view to satisfying itself that the dying declarations relied upon in that case were true.
In that case, apart from the dying declarations, there was the evidence of the approver.
This Court found that the evi dence of the approver and other oral testimony had been rightly rejected by the High Court.
In that case also, the Court had mainly relied upon the dying declarations for basing the conviction under section 302, (i) A.I.R. 1953 S.C. 420.
563 read with section 34, Indian Penal Code.
This Court examined for itself, the dying declarations and the other evidence bear ing upon the truth and reliability of the dying declara tions, and after an elaborate discussion of all that evi dence, came to the conclusion that the dying declarations did not contain "a truthful version of what actually hap pened".
Thus after a very careful and cautious examination of the facts of the case, connected with the recording of the dying declaration, and of the other evidence in the case and of the fact that it was a dark night without any lights available at the place of occurrence, this Court distinctly came to the conclusion that the dying declaration was not true and could not be relied upon to base, upon that alone, the conviction of the appellants.
It is, thus ' clear that the observations quoted above, of this Court, are in the nature of obiter dicta.
But as it was insisted that those observations were binding upon the courts in India and upon us, we have to examine them with the care and caution they rightly deserve.
The Legislature in its wisdom has enacted in section 32(1) of the Evidence Act that "When the statement is made by a person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in cases in which the cause of that person 's death comes into question", such a statement written or verbal made by a person who is dead (omitting the unnecessary words) is itself a relevant fact.
This provision has been made by the Legislature, advisedly, as a matter of sheer necessity by way of an exception to the general rule that hearsay is no evidence and that evidence, which has not been tested by cross exami nation, is not admissible.
The purpose of cross examination is to test the veracity of the statements made by a witness.
In the view of the Legislature, that test is supplied by the solemn occasion when it was made, namely, at a time when the person making the statement was in danger of losing his life.
At such a serious and solemn moment, that person is not expected to tell lies; and secondly, the test of cross examination would not be available.
In such a case, the necessity of oath also has been 72 564 dispensed with for the same reasons.
Thus, a statement made by a dying person as to the cause of death has been accorded by the Legislature a special sanctity which should, on first principles, be respected unless there are clear circum stances brought out in the evidence to show that the person making the statement was not in expectation of death, not that that circumstance would affect the admissibility of the statement, but only its weight.
It may also be shown by evidence that a dying declaration is not reliable because it was not made at the earliest opportunity, and, thus, there was a reasonable ground to believe its having been put into the mouth of the dying man, when his power of resistance against telling a falsehood was ebbing away; or because the statement has not been properly recorded, for example, the statement bad been recorded as a result of prompting by some interested parties or was in answer to leading questions put by the recording officer, or, by the person purporting to reproduce that statement.
These may be some of the circum stances which can be said to detract from the value of a dying declaration.
But in our opinion, there is no absolute rule of law, or even a rule of prudence which has ripened into a rule of law, that a dying declaration unless corrobo rated by other independent evidence, is Dot fit to be acted upon, and made the basis of a conviction.
No decision of this Court, apart from the decision already noticed, has been pointed out to us as an authority for the proposition that a dying declaration, in order to be acted upon by a court, must be corroborated by independent evidence.
On the other hand, the different High Courts in India (including Burma) have taken conflicting views as to the value of a dying declaration in part or in its entirety, without any independent corroboration.
For example, a Division Bench of the Bombay High Court, presided over by Sir John Beaumont C.J., has laid down in the case of Emperor vs Akbarali Karimbhai (I), that a statement which is covered by section 32(1) of the Evidence Act is relevant evidence and has to be judged on the same principles as other evidence, bearing in mind that such a (i) I.L.R. 565 declaration was not made on oath and was not subject to cross examination, and is, therefore, a weaker type ,of evidence than that given by a witness on oath.
Therefore, if a part of a dying declaration is deliberately false, it will not be safe to act upon the other part of the declara tion without very definite corroboration, That Bench also ruled that it is not correct to postulate that because some part of the dying declaration is false, the whole declara tion must necessarily be disregarded.
The Bombay High Court, thus, did not agree with the observations of the Calcutta High Court in the case of Emperor vs Premananda Dutt (1) to the effect that it is not permissible to accept a dying declaration in part and to reject the other part and that a dying declaration stood on a widely different footing from the testimony of a witness given in court.
On the other hand, we have the decision of the Rangoon High Court, reported in the case of the King vs Maung Po Thi (2).
In that case, the positive evidence led on behalf of the prose cution was found to have been tampered with and unreliable.
The Court set aside the order of acquittal passed by the trial judge, and recorded an order of conviction for murder, practically on the dying declaration of the victim of the crime.
The Court observed that there was.
no such rule of prudence as had been invoked in aid of the accused by the trial judge who had observed that an accusation by a dying man, without corroboration from an independent source, could not be the sole basis for conviction.
The learned Judges of the High Court further observed that in order to found on a dying declaration alone, a judgment of conviction of an accused person, the Court must be fully satisfied that the dying declaration has the impress of truth on it, after examining all the circumstances in which the dying person made his statement ex parte and without the accused having the opportunity of cross examining him.
If, on such an examination, the Court was satisfied that the dying declara tion was the true version of the occurrence, conviction could be based solely upon it.
(1) Cal.
(2) A.I.R. 1938 Rang.
282 566 In the High Court of Madras, there was a difference of judicial opinion, as expressed in certain unreported cases, which resulted in a reference to a Full Bench.
Sir Lionel Leach C. J. presiding over the Full Bench (In re, Guruswami Tevar (1) ), delivered the unanimous opinion of the Court after examining the decisions of that High Court and of other High Courts in India.
His conclusions are expressed in the penultimate paragraph of his judgment, thus: " In my judgment it is not possible to lay down any hard and fast rule when a dying declaration should be accepted, beyond saying that each case must be decided in the light of the other facts and the surrounding circumstances, but if the Court, after taking everything into consideration, is convinced that the statement is true, it is its duty to convict, notwithstanding that there is no corroboration in the true sense.
The Court must, of course, be fully con vinced of the truth of the statement and, naturally, it could not be fully convinced if there were anything in the other evidence or in the surrounding circumstances to raise suspicion as to its credibility.
" To the same effect are the decisions of the Patna High Court in the case of Mohamad Arif vs Emperor(2), and of the Nag pur.
High Court in Gulabrao Krishnajee Maratha vs King Emperor(3).
The Judicial Committee of the Privy Council had to consider, in the case of Chandrasekera alias Alisandiri vs The King(4), the question whether mere signs made by the victim of a murderous attack which had resulted in the cutting of the throat, thus, disabling her from speaking out, could come within the meaning of section 32 of the Ceylon Evidence Ordinance, which was analogous to section 32(1) of the Indian Evidence Act.
The Pi ivy Council affirmed the decision of the Supreme Court of Ceylon, and made the following observa tions in the course of their judgment, which would suggest that a dying declaration, if found reliable by a jury, may, by itself, sustain a conviction: (1) I.L.R. ,170.
(2) A.I.R. 1941 Patna 409.
(3) I.L.R. [1945] Nag. 613; A.I.R. 1945 Nag.
(4) [I937] A.C. 220, 229.
567 ".
Apart from the evidence proceeding from the deceased woman, the other evidence was not sufficient to warrant a conviction, but at the same time that other evidence was not merely consistent with the deceased 's statement but pointed in the same direction. ' It was.% case in which, if the deceased 's statement was received, and was believed, as it evidently was by the jury, to be clear and unmistakable in its effect, then a conviction was abundantly justified and, indeed, inevitable.
" In 'Phipson on Evidence ', 9th ed., p. 335, the author has discussed the question Whether, a dying declaration without other evidence in corroboration, could be sufficient for a conviction, and has made the following observations which are pertinent to this case : ".
The deceased then signed a statement implicating the prisoner, but which was not elicited by question and answer, and died on March 20.
It was objected that being begun in that form, it was inadmissible: Held (1) the questions and answers as to his state of mind were no part of the dying declaration; (2) that even if they were, they only affected its weight, not its admissibility ; and (3) that the decla ration was sufficient, without other evidence, for convic tion (R. vs Fitzpatrick (1910) 46 Ir.
L.T.R. 173, C.C.R).
" Sometimes, attempts have been made to equate a dying decla ration with the evidence of an accomplice or the evidence furnished by a confession as against the maker, if it is retracted, and as against others, even though not retracted.
But,,in our opinion, it is not right in principle to do so.
Though under section 133 of the Evidence Act, it is not illegal to convict a person on the uncorroborated testimony of an accomplice, illustration (b) to section 114 of the Act lays down as a rule of prudence based on experience, that an accom plice is unworthy of credit unless his evidence is corrobo rated in material particulars and this has now been accepted as a rule of law.
The same cannot be said of a dying decla ration because a dying declaration may not, unlike a confes sion, or the testimony of an approver, come from a tainted source.
If a dying 568 declaration has been made by a person whose antecedents are as doubtful as in the other cases, that may be a ground for looking upon it with suspicion, but generally speaking, the maker of a dying declaration cannot be tarnished with the same brush as the maker of a confession or an approver.
On a review of the relevant provisions of the Evidence Act and of the decided cases in the different High Courts in India and in this Court, we have come to the conclusion, in agreement with the opinion of the Full Bench of the Madras High Court, aforesaid, (1) that it cannot be laid down as an absolute rule of law that a dying declaration cannot form the sole basis of conviction unless it is corroborated; (2) that each case must be determined on its own facts keeping in view the circumstances in which the dying decla ration was made ; (3) that it cannot be laid down as a general proposition that a dying declaration is a weaker kind of evidence than other pieces of evidence; (4) that a dying declaration stands on the same footing as another piece of evidence and has to be judged in the light of surrounding circumstances and with reference to the princi ples governing the weighing of evidence; (5) that a dying declaration which has been recorded by a competent magis trate in the proper manner, that is to say, in the form of questions and answers, and, as far as practicable, in the words of the maker of the declaration, stands on a much higher footing than a dying declaration which depends upon oral testimony which may suffer from all the infirmities of human, memory and human character, and (6) that in order to test the reliability of a dying declaration, the Court has to keep in view the.
circumstances like the opportunity of the dying man for observation, for example, whether there was sufficient light if the crime was committed at night; whether the capacity of the man to remember the facts stated had not been impaired at the time he was making the state ment, by circumstances beyond his control; that the state ment has been consistent throughout if he had several oppor tunities of making a dying declaration apart from the offi cial record of it ; and that the statement had been made at the 569 earliest opportunity and was not the result of tutoring by interested parties.
Hence, in order to pass the test of reliability, a dying declaration has to be subjected to a very close scrutiny, keeping in view the fact that the statement has been made in the absence of the accused who had no opportunity of testing the veracity of the statement by cross examination.
But once the court has come to the conclusion that the dying declaration was the truthful version as to the circumstances of the, death and the assailants of the victim, there is no question of further corroboration.
If, on the other hand, the court, after examining the dying declaration in all its aspects, and testing its veracity has come to the conclusion that it is not reliable by itself, and that it suffers from an infirmity, then, without corroboration it cannot form the basis of a conviction.
Thus, the necessity for corrobora tion arises not from any inherent weakness of a dying decla ration as a piece of evidence, as held in some of the re ported cases, but from the fact that the court, in a given case, has come to the conclusion that that particular dying declaration was not free from the infirmities referred to above or from such other infirmities as may be disclosed in evidence in that case.
Having made the general observations bearing on the question of the legality of basing a conviction on a dying declara tion alone, and keeping in view the tests set out above, let us examine the dying declarations now in question before us.
The most remarkable fact which emerges from an examination of the three successive dying declarations made in the course of about two hours, by the deceased, is that he con sistently named the appellant and Tukaram as the persons who had assaulted him with sword and spear.
The injuries found on his person, namely, the punctured wounds and the incised wounds on different parts, of his body, are entirely con sistent with his statement that he was attacked by a number of persons with cutting and piercing weapons.
No part of his dying declarations has been shown to be false.
Of the two assailants named by him, Tukaram was convicted by the learned trial judge, but acquitted 570 by the High Court which very reluctantly gave him the bene fit of the doubt created by the similarity of names in that locality, as already stated.
There was no such confusion in the case of the appellant.
The deceased indicated that there were two more persons concerned in the crime, but he could not name them.
The other two accused persons who were acquitted by the courts below had not been named in the dying declarations and, therefore, their acquittal did not, in any way militate against the truth of the dying declara tions.
The courts below also agreed in holding that Babool al was in a position to see his assailants and to identify them in the light of the electric lamp nearby.
They have also pointed out that there was no "coaching".
There is no doubt, therefore, that Baboolal had been consistent through out in naming the appellant as one of his assailants, and he named him within less than half an hour of the occurrence and as soon as he reached the Mayo Hospital.
There was, thus, no opportunity or time to tutor the dying man to tell a lie.
At all material times, he was in a proper state of mind in spite of multiple injuries on his person, to remem ber the names of his assailants.
Hence, we have no reasons to doubt the truth of the dying declarations and their reliability.
We have also no doubt that from the legal and from the practical points of view, the dying declarations of the deceased Baboolal are sufficient to sustain the appellant 's conviction for murder.
The only other question that remains to be considered is whether there are any extenuating circumstances in favour of the accused justify ing the lesser of the two sentences prescribed by law.
In our opinion, there are none.
It was a case of a deliberate cold blooded murder.
For the reasons given above, we uphold the judgment and order of the High Court convicting the appellant of murder and sentencing him to death.
The appeal is, accordingly, dismissed.
Appeal dismissed.
[/INST]The Supreme Court does not ordinarily function as a Court of criminal appeal, and it is not competent for a High Court under article 134(1)(c) of the Constitution to grant a certifi cate of fitness for appeal to this Court on a ground which is essentially one of fact.
Haripada Dey vs The State of West Bengal" (1956) S.C.R. 639, followed.
There is no absolute rule of law, not even a rule of pru dence that has ripened into a: rule of law that a dying declaration in order that it may sustain an order of convic tion must be corroborated by, other independent evidence.
The observations made 553 by this Court in Madhoprasad vs The State of Madhya Pradesh are in the nature of obiter dicta and do not lay down the law.
Madhoprasad vs The State of Madhya Pradesh, A.I.R. (1953) S.C. 420, considered.
In re Guruswami Tevar, I.L.R. , approved.
Case law reviewed.
The provision of section 32(I) of the Indian Evidence Act " which makes the statement in a dying declaration as to the cause of death and the circumstances that brought it about rele vant, is an exception to the general rule of exclusion of hearsay evidence and evidence untested by cross examination.
The special sanctity which the Legislature attaches to such a declaration must be respected unless such declaration can be shown not to have been made in expectation of death or to be otherwise unreliable and any evidence adduced for this purpose can only detract from its value but not affect its admissibility.
Although a dying declaration has to be very closely scruti nised, and tested as any other piece of evidence, once the Court comes to the conclusion, in any particular case, that it is true, no question of corroboration arises.
A dying declaration cannot be placed in the same category as the evidence of an accomplice or a confession.
Consequently, in a case where the trial judge as also the High Court founded their orders of conviction of an accused person under section 302 Of the Indian Penal Code mainly on three dying declarations made by the murdered person in quick succession one after the other, and the High Court, relying on a decision of this Court, sought for corroboration of such dying declarations in the fact that the accused person had absconded and was arrested in suspicious circumstances, but was in doubt as to the sufficiency of such evidence of corroboration and granted the certificate of fitness under article I34(I)(c): Held, that the certificate granted by the High Court was incompetent and as the case disclosed no grounds on which this Court could possibly grant special leave to appeal under article 136 of the Constitution, the appeal must be dismissed.
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<s>[INST] Summarize the judgementION: Civil Appeal No.1014 of 1988.
From the Judgment and Order dated 25.1.1988 of the Madras High Court in C.P.P. No. 215 of 1986.
Mrs. Nalini Chidambaram, Ms. Setia Vaidalingam, N. Thiagarajan and Ms. Radha for the Appellant.
section Srinivasan for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question which arises for consideration in this case is whether a landlord who seeks eviction of a tenant from a non residential building (other than a non residential building which is used for keeping a vehicle or adapted for such use) under section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as 'the Act ') is required to prove that he requires the said building for his own use or for the use of any member of his family bona fide in the proceedings instituted before the Controller.
The appellant is a partnership firm represented by its partner, 5.
Peer Mohammed.
The respondent 's brother was carrying on business in hardware in the front portion of the ground floor of the premises bearing No. 157, Kutcheri Road, Mylapore, Madras 4.
The appellant purchased the said running business from the brother of the respon dent on 5.7.1974.
The said building, however, belonged to the father 389 of the respondent.
After purchasing the business, the appellant became a tenant under the father of the respondent by paying an advance of Rs.1,500 and agreeing to pay a rent at the rate of Rs.450 per month for the portion in which it commenced to carry on the business.
In the rear portion of the ground floor of the premises one Mrs. Janaki Ammal was residing as a tenant.
Mrs. Janaki Ammal vacated the said residential portion in October, 1974.
With effect from 5.10.1974 the appellant took the portion vacated by Mrs. Janaki Ammal also on rent from the father of the respondent by paying Rs.525 as advance and agreeing to pay a monthly rent of Rs.175.
The rent of this portion was increased subsequently to Rs.315 per month.
On 25.11.1980 the appellant received a notice from an advocate, who was acting on behalf of the father of the respondent terminating the tenancy of the appellant in respect of both the portions with effect from 31.12.1980 and requiring the appellant to deliver possession of the two portions of the ground floor of the premises in question to the father of the respondent on the ground that he needed the premises for the occupation of his son.
The appellant sent a reply denying the right of the respondent 's father to evict the appellant from the premises.
Thereafter it is stated that the ownership of the premises in question was transferred in favour of the respondent by his father.
Thereafter the respondent asked the appellant to increase the rent payable for the premises.
In order to avoid litigation, the appellant agreed to pay a consolidated amount of Rs.1,000 per month by way of rent for both the portions in the year 1981 and also paid a sum of Rs.7,500 as advance.
On 9.6.1982 an agreement was entered into in respect of both the portions specifying that the lease should remain in force till 8.5.1983.
After the expiry of the said period, it is stated, the respondent again demanded enhanced rent.
On the appellant not complying with the said demand the respondent instituted a petition for eviction of the appellant in the Court of the Controller at Madras under section 10(3)(a)(iii) of the Act on the ground that the premises in question were needed by his wife for carrying on pawn broker business which she was carrying on elsewhere.
The appellant resisted the petition.
It was inter alia contended by the appellant that the requirement of the wife of the respondent was not bona fide and the petition was liable to be dismissed.
After trial, the Controller dismissed the petition holding that the tenancy in question was in respect of both the residential and non residential portions and that the respondent could not seek eviction of the appellant as the major portion of the demised premises was of residential character.
Aggrieved by the decision of the Controller the respondent preferred an appeal before the Appellate Authority.
The Appellate Authority dismissed the appeal.
Thereupon the respon 390 dent preferred a revision petition before the High Court of Madras inCivil Revision Petition No. 215 of 1986.
That petition was allowed by the High Court holding that it was not necessary for the respondent to establish that his requirement was bona fide as the question of bona fides of a landlord 's requirement did not arise for consideration at all in case falling under secti10 10(3)(a)(iii) of the Act.
It, however, held that the claim of the respondent was bona fide.
Accordingly, the High Court allowed the revision petition and directed the appellant to quit and deliver vacant possession of the premises in question to the respondent.
This appeal by special leave is filed against the judgment of the High Court of Madras.
The crucial question which arises for consideration in this case is whether it is necessary for a landlord, who institutes a petition under section 10(3)(a)(iii) of the Act, to establish that his requirement is bona fide or not.
As can be seen from the long title of the Act it was enacted by the State Legislature to amend and consolidate the law relating to the regulation of the letting of residential and non residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the State of Tamil Nadu.
Section 10 of the Act provides that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of section 10 or sections 14 to 16 of the Act.
The material portion of sub section 3(a) of section 10 of the Act, which is relevant for purposes of this case reads thus: "10(3)(a).
A landlord may, subject to the provisions of clause (d), apply to the Controller for an order directing the tenant to put the landlord in possession of the building.
(i) in case it is a residential building, if the landlord required it for his own occupation or for the occupation of any member of his family and if he or any member of his family is not occupying a residential building of his own in the city, town or village concerned; (ii) in case it is a non residential building which is used for the purpose of keeping a vehicle or adapted for such use, if the landlord required it for his own use or for the use of any member of his family and if he or any member of his family is not occupying any such building in the city, town or village concerned which is his own; 391 (iii) in case it is any other non residential building, if the landlord or any member of his family is not occupying for purposes of a business which he or any member of his family is carrying on, a non residential building in the city, town or village concerned which is his own; . . . . . . . . (e) The Controller shall, if he is satisfied that the claim of the landlord is bona fide, make an order directing the tenant to put the landlord in possession of the building on such date as may be specified by the Controller and if the Controller is not so satisfied he shall make an order rejecting the application.
" For purposes of sub section (3) of section 10 of the Act the buildings are classified into two categories by the Act, namely, residential buildings and non residential buildings.
Sub clause (i) of clause (a) of sub section (3) of section 10 of the Act provides that a landlord may subject to the provisions of clause (d) apply to the Controller for an order directing the tenant to put the landlord in possession of a residential building, if the landlord required it for his own occupation or for the occupation of any member of his family and if he or any member of his family is not occupying a residential building of his own in the city, town or village concerned.
Sub clause (ii) of clause (a) of sub section (3) of section 10 of the Act relates to eviction from a non residential building which is used for the purpose of keeping a vehicle or adapted for such use.
If the landlord required such a building for his own use or for the use of any member of his family and if he or any member of his family is not occupying any such building in the city, town or village concerned which is his own he can apply for the eviction of the tenant therefrom.
Sub clause (iii) of clause (a) of sub section (3) of section 10 of the Act deals with other kinds of non residential buildings.
If the landlord or any member of his family is not occupying for purposes of a business which he or any member of his family is carrying on, a non residential building in the city, town or village concerned which is his own, a landlord may, subject to the provisions of clause (d), apply to the Controller for an order directing the tenant to put the landlord in possession of such a building.
It may be stated here that the words 'if the landlord required it for his own use or for the use of any member of his family ' are not to be found in sub clause (iii) of section 10(3)(a) of the Act.
Clause (e) of section 10(3) of the Act, however, provides that the Controller shall, if he is 392 satisfied that the claim of the landlord is bona fide make an order directing the tenant to put the landlord in possession of the building on such date as may be specified by the Controller and if the Controller is not so satisfied he shall make an order rejecting the application.
Clause (e) of section 10(3) applies to all cases of eviction falling under section 10(3) of the Act.
The decision in this case depends upon the effect of the omission of the words 'if the landlord required it for his own use or for the use of any member of his family ' in sub clause (iii) of section 10(3)(a) of the Act.
It is argued on behalf of the appellant that reading sub clause (ii) and (iii) of section 10(3)(a) of the Act together, which relate to the eviction from non residential buildings, the words 'if the landlord required it for his own use or for the use of any member of his family ' which are found in sub clause (ii) of section 10(3)(a) should be read into sub clause (iii) of section 10(3)(a) also and that a landlord should establish in order to succeed in a petition for eviction filed under section 10(3)(a)(iii) of the Act that his requirement or the requirement of a member of his family is bona fide.
It is also argued in the alternative that the word 'claim ' in the words 'that the claim of the landlord is bona fide ' in clause (e) of section 10(3) of the Act refers only to the requirement of the landlord and to nothing else.
On the other hand it is urged on behalf of the respondent relying upon three decisions of the High Court of Madras in (i) M/s. Mahalakshmi Metal Industries vs K. Suseeladevi, ; (ii) M. Abdul Rahman vs section Sadasivam, and (iii) A. Khan Mohammed vs P. Narayanan Nambiar & Others, 99 Law Weekly 966 that there was no need for a landlord to establish the bona fides of his requirement or the requirement of a member of his family when a petition is filed under section 10(3)(a)(iii) of the Act and it is enough if his claim is proved to be bona fide.
The High Court has upheld the said plea of the respondent relying upon the said three decisions.
The correctness of these three decisions is questioned before us by the appellant.
We have already noticed that the object of the Act was to prevent unreasonable evictions of tenants from buildings.
The Act is an ameliorating piece of legislation.
Similar acts are in force in almost all the States in India.
The provision in question has to be construed against this background.
The Act has been in force from 1960.
In Moti Ram vs Suraj Bhan & Other, ; this Court was required to construe section 13(3)(a)(iii) of the East Punjab Urban Rent Restriction Act, 1949 which at the relevant time provided that a landlord might apply to the Controller for directing a tenant to 393 put the landlord in possession of the building in question if he required it for the re construction of that building or for its replacement by another building or for the erection of other buildings.
In that case the Rent Controller and the Appellate Authority had rejected the claim of the landlord on the ground that the landlord had not established that the premises in question were required by him bona fide.
The High Court while accepting that the requirement in question must be shown to be bona fide held that on the evidence the findings of the Courts below that the landlord 's requirement was not bona fide were not correct.
The High Court accordingly directed the eviction of the tenant in question.
This Court while affirming the decision of the High Court held that the landlord had, in fact, made out that he required the premises bona fide for purposes of re construction.
Thus it is seen that in the context of a law enacted for preventing unreasonable evictions this Court read into a ground on which a landlord could seek the eviction of his tenant that the landlord should establish that his requirement was bona fide.
A mere desire on the part of the landlord to re construct a building was not sufficient to evict a tenant from the premises.
He had to establish that he needed the premises bona fide for re construction it.
In a later case, i.e., Neta Ram vs Jiwan Lal, [1962] 2 Supp.
S.C.R. 623 which arose under the provisions of the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, one of the grounds on which the landlord sought the eviction of the tenants in occupation of the premises involved in that case was that the premises were in a state of disrepair and were dilapidated and, therefore, the landlord wished to rebuild on the premises after dismantling the structure.
On the said issue the Rent Controller held that in deciding whether the tenant should be ordered to hand over the possession to the landlord the Courts must have regard to the bona fide requirement of the landlord which meant that the desire to rebuild the premises should be honestly held by the landlord but that the condition of the building also played an important part in determining whether the landlord had the intention genuinely and the landlord was not using the said excuse as a device to get rid of the tenants.
In that connection the Rent Controller observed that the state of the building, the means of the landlord and the possibility of the better yield by way of rent should be kept in mind.
The Controller, holding that the claim of the landlord was not bona fide, decided the said issue against him.
On appeal the Appellate Authority held that the shops and chobaras were in good condition and that the landlord was not, in good faith, wanting to replace the building, when he had no means to build it.
The High Court, however, allowed the revision petition filed before it holding that upon the evidence on record it had been established 394 beyond doubt that the landlord genuinely and bona fide required the premises for re building.
On appeal by special leave to this Court, this Court observed that the very purpose of the Rent Restriction Act would be defeated if the landlords were to come forward and to get tenants turned out, on the bare plea that they wanted to reconstruct the house without first establishing, that the plea was bona fide with regard to all circumstances, viz. that the houses needed reconstruction or that they had means to reconstruct them.
Accordingly, the judgment of the High Court was reversed and the petitions for eviction were dismissed.
Following the observations made in the above decisions in Nathella Sampathu Chetty vs Sha Vajingjee Bapulal, a Division Bench of the High Court of Madras construed section 10(3)(a)(iii) of the Act thus: "Section 10 of the Madras Buildings (Lease and Rent Control) Act, 1960, provides for eviction of tenants in certain circumstances.
Sub section 3(a)(iii) of the section allows a landlord to apply to the Controller for an order directing a tenant to put him in possession of the building if the landlord is not occupying for purposes of business which he is carrying on, a non residential building in the city, town or village concerned which is his own.
The second proviso to this clause is to the effect that where a landlord has already obtained possession of a building under this provision, he shall not be entitled to apply again for possession of another non residential building of his own.
If the conditions of these provisions are satisfied, the Controller may make an order as asked for by the landlord provided he is further satisfied that the claim of the landlord is bona fide.
(underlining by us) In the Madras District Central Co operative Bank Limited, Mylapore Branch, Madras 4 vs A. Venkatesh, 99 Law weekly 714 a single Judge of the High Court disagreed with the views expressed by another single Judge in Abdul Rahman 's case (supra) and observed thus: "The question now is whether an order directing the tenant to put the landlord in possession should be made.
It is pointed out by the learned counsel for the respondent landlord following a ruling of this Court in Abdul Rahman vs section Sadasivam, that there is no jurisdiction for the Rent Controller to go into the question of bona fide requirement 395 in a claim under section 10(3)(a)(iii) of the Act.
Ramanujam, J. took the view that a distinction has to be made between the two sections, section 10(3)(a)(i) and section 10(3)(a)(iii) in view of the word 'require ', occurring in section 10(3)(a)(i) and in the absence of that word, in section 10(3)(a)(iii) in other words, what the learned Judge points out is that the Rent Controller has no jurisdiction to go into the question whether the requirement of the landlord is bona fide, as the Rent Controller has to pass an order of eviction in case the landlord is not occupying for the purpose of business which he is carrying on, any non residential building in the city which is his own.
The learned Judge further pointed out that when the provisions of section 10(3)(a)(i) and section 10(3)(a)(iii) use different expressions, it should be taken that the Legislature intended these provisions to have different operations.
With respect to the learned Judge, I may point out that the mere absence of the word 'require ' in section 10(3)(a)(iii) would not necessarily lead to the inference that the Legislature did not intend that the Rent Controller should go into the question of bona fides of the requirement of the landlord in respect of the requirement of a non residential premises under section 10(3)(a)(iii) of the Act.
My reasons for holding so are as follows: section 10 enumerates certain grounds for the eviction of the tenant.
In other words eviction under the Rent Control Act can be effected only on the grounds mentioned in section 10.
The landlord may have a right to evict the tenant under the general law.
section 10(3)(a) says that the landlord may, subject to the provisions of Cl.
(d), apply to the Controller for an order directing the tenant to put the landlord in possession of the buildings.
section 10(3)(a)(i) deals with residential buildings.
section 10(3)(a)(ii) deals with non residential buildings used for purpose of keeping vehicles.
section 10(3)(a)(iii) is in respect of non residential buildings.
section 10(3)(b) gives a right to religious, charitable, educational or other public institutions, to institute proceedings before the Controller if the institution requires the building.
section 10(3)(c) is for additional accommodation.
section 10(3)(d) speaks of tenancy for specified period agreed between the landlord and the tenant and it prohibits the landlord from applying, before the expiry of such period.
Now after these sections, section 10(3)(e) runs thus: 'The Controller shall, if he is satisfied that the claim 396 of the landlord is bona fide make an order directing the tenant to put the landlord in possession of the building on such date as may be specified by the Controller and if the Controller is not so satisfied he shall make an order rejecting the application. ' I find in the judgment of Ramanujam, J. this section 10(3)(e) has not been adverted to.
section 10(3)(e) applies to Ss. 10(3)(a)(i), 10(3)(a)(ii) and 10(3)(a)(iii) and also to Ss. 10(3)(b) and 10(3)(c).
If the Legislature intended that the provisions of section 10(3)(a)(i) and section 10(3)(a)(iii) to have different operations, the Legislature would not have stated in section 10(3)(e) that the Controller should be satisfied that the claim of the landlord is bona fide, before he makes an order directing the tenant to put the landlord in possession, and the further words 'if the Controller is not so satisfied, he shall make an order rejecting the application ' very clearly show that the Controller should, before passing an order for eviction, be satisfied with the bona fide of the claim, or else he should dismiss it.
" The main ground on which the learned Judge who decided the above case disagreed with the decision in Abdul Rahman 's case (supra) is that in Abdul Rahman 's case (supra) section 10(3)(e) of the Act, which applied to all the three sub clauses, namely (i), (ii) and (iii) in section 10(3)(a) of the Act had not been adverted to.
The learned Judge also held that the mere absence of the word 'require ' in section 10(3)(a)(iii) of the Act did not necessarily lead to the inference that the Legislature did not intend that the Controller should not go into the question of bona fides of the requirement of the landlord in a petition for eviction filed under that provision.
Another learned Judge of the Madras High Court has taken the same view in M/s. Thilagaraj Match Works, through its partner section Chidambaram vs C. Sundaresan, [1985] 1 Mad.
Law J. 106.
It is observed in that case thus: "In the present case, the Appellate Authority has not adverted to these features at all and in one place he observes that the bona fide of the claim of the landlord is extraneous and it should not be tested too severely.
This exposes his wrong approach to the question of bona fide which is a relevant one.
The very ingredient of section 10(3)(e) of the Act requires that the question of bona fide has got to be tested and it has got a due place while 397 adjudicating a petition for eviction by the landlord under the concerned provisions.
It is not the desire of the landlord, but there must be an element of need for the landlord before it could be stated that he requires the premises for his own occupation.
The features referred to above, cannot be eschewed as irrelevant, for after all bona fide will have to be proved in an ordinary manner like any other fact in issue, and the entire gamut of facts and circumstances has to be adverted to on this question.
As already stated, I am not expressing any opinion over these features on merits, and it is for the Appellate Authority to advert to them and adjudicate upon the question afresh one way or the other.
The discussions above oblige me to interfere in revision and accordingly the revision is allowed and the matter stands remitted to the Appellate Authority for him to consider it afresh taking note of all the relevant features and factors of the case on the question of bona fides, and pass appropriate orders.
Both the counsel represent that for the purpose of comprehensive adjudication of the matter, further evidence has to be adduced.
I take note of the request of both the counsel and I direct that the Appellate Authority will permit the parties to place further evidence and he will decide the matter afresh after such evidence is placed, the Appellate Authority will do well to dispose of the matter expeditiously and in any event within a period of three months from the date of receipt of the copy of this order." In P. Thanneermalai Chettiar vs S.J. Dhanraj, another learned Judge of the High Court of Madras has construed section 10(3)(e) of the Act thus: "It is not disputed that section 10(3)(e) of Act 18 of 1960 is applicable to the case of residential building as well as non residential building and it is provided therein that if the Controller is satisfied that the claim of the landlord is bona fide, he shall make an order directing the tenant to put the landlord in possession of the building; otherwise, he has to reject the application.
In the instant case, considering the various circumstances and also the fact that the petitioner was residing in a house of his own at Devakottai where he has got vast extent of properties and was carrying on business along with other members of his family, the 398 claim of the petitioner that he required the premises for his own use and occupation is not proved and in any event there is no bona fide in the same" The main ground on which the learned Judge who decided Abdul Rahman 's case (supra) held that it was not necessary to establish the bona fide equipment of the landlord when he made an application for eviction under section 13(3)(a)(iii) of the Act was that, the word 'require ' was not to be found in section 10(3)(a)(iii) of the Act.
We are of the view that having regard to the pattern in which clause (a) of sub section (3) of section 10 of the Act is enacted and also the context, the words 'if the landlord required it for his own use or for the use of his any member of the family ' which are found in sub clause (ii) of section 10(3)(a) of the Act have to be read also into sub clause (iii) of section 10(3)(a) of the Act.
Sub clause (ii) and (iii) both deal with the non residential buildings.
They could have been enacted as one sub clause by adding a conjunction 'and ' between the said two sub clause, in which event the clause would have read thus: 'in case it is a non residential building which is used for the purpose of keeping a vehicle or adapted for such use, if the landlord required it for his own use or for the use of any member of his family and if he or any member of his family is not occupying any such building in the city, town or village concerned which is his own; and in case it is any other non residential building, if the landlord or any member of his family is not occupying for purposes of a business which he or any member of his family is carrying on, a non residential building in the city, town or village concerned which is his own. ' If the two sub clauses are not so read, it would lead to an absurd result.
The non residential building referred to in sub clause (ii) is a building which is used for the purpose of keeping a vehicle or adapted for such use and all other non residential buildings fall under sub clause (iii).
The State Legislature cannot be attributed with the intention that it required a more stringent proof by insisting upon proof of bona fides of his requirement or need also when a landlord is seeking eviction of a tenant from a garage than in the case of a non residential building which is occupied by large commercial house for carrying on business.
The learned counsel for the respondent was not able to explain as to why the State Legislature gave greater protection to tenants occupying premises used for keeping vehicles or adapted for such use than to tenants occupying other types of non residential buildings.
It is no doubt true that the Court while construing a provision should not easily read into it words which have not been expressly enacted but having regard to the context in which a provision appears and the object of the statute in which the said provision is 399 enacted the court should construe it in a harmoneous way to make it meaningful.
In Seaford Court Estates Ltd. vs Asher, [1949] 2 All.
E.R. 155 at 164.
Lord Denning L.J. said: "When a defect appears, a judge cannot simply fold his hands and blame the draftsman.
He must set to work on the constructive task of finding the intention of Parliament . . and then he must supplement the written word so as to give 'force and life ' to the intention of the legislature . .
A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they should have straightened it out? He must then do as they would have done.
A judge must not alter the material of which the Act is woven but he can and should iron out the creases.
" This rule of construction is quoted with approval by this Court in M. Pentiah and Ors.
vs Muddala Veeramallappa and Ors., ; at 314 and it is also referred to by Beg, C.J. in Bangalore Water Supply & Sewerage Board, etc.
vs R. Rajappa & Ors., ; In the present case by insisting on the proof of the bona fides of the requirement of the landlord, the Court is not doing any violence to the statute nor embarking upon any legislative action.
The Court is only construing the words of the statute in a reasonable way having regard to the context.
We are of the view that by merely proving that the premises in question is a non residential building and that the landlord or any member of his family is not occupying for the purpose of a business which he or any member of his family is carrying on any residential building in the city, town or village concerned which is his own, the landlord cannot in the context in which section 10(3)(a)(iii) appears get a tenant evicted.
He must show in view of clause (e) of section 10(3) that his claim is bona fide.
The word 'claim ' means "a demand for something as due" or "to seek or ask or for on the ground of right" etc.
In the context of Rent Control Law which is enacted for the purpose of giving protection to tenants against unreasonable evictions and for the purpose of making equitable distribution of buildings amongst persons who are in need of them in order to prove that his claim is bona fide a landlord should establish that he deserves to be put in possession of the premises which is in the occupation of a tenant.
Any decision on 400 the question whether a landlord deserves to be put in possession of a premises in the occupation of a tenant should naturally depend upon the bona fides of the landlord 's requirement or need.
The word 'claim ' in clause (e) of section 10(3) of the Act should, therefore, he construed as 'the requirement ' of the landlord or his deservedness. 'Deserve ' means 'to have a rightful claim ' or 'a just claim '.
Since clause (e) of section 10(3) of the Act is also applicable to a petition filed under sub clause (iii) of section 10(3)(a) of the Act it becomes necessary to examine whether the requirement of the landlord is bona fide.
Otherwise a landlord will be able to evict a tenant to satisfy his whim by merely proving the ingredients mentioned in section 10(3)(a)(iii) of the Act.
Take a case where a landlord for some oblique reason wishes to get rid of his tenant from a non residential building of the category mentioned in section 10(3)(a)(iii) and to achieve his aim fakes to start money lending business (for which indeed no specified separate portion in a building may be needed) in a building not belonging to him and to create evidence even actually lends money to some of his friends or relatives and a week thereafter applies for eviction of the tenant on the ground that he is carrying on business and has no non residential building of his own in his occupation in the city, town or village concerned.
Apparently, the conditions prescribed in the aforesaid sub clause (iii) are fulfilled.
If the requirement of "claim" being "bona fide" as contained in section 10(3)(e) is construed to mean that genuineness of the need of the landlord for the non residential building is not to be considered and the circumstances that the landlord on the date of making the application is factually carrying on business and has no non residential building of his own in his occupation in the city, town or village concerned is to be construed sufficient to make his claim bona fide, the tenancy of no non residential building will be secure.
It will be preposterous to attribute such an intention to the legislature.
Such a contingency should be avoided as it would be against the very object of the Act itself.
The need of the landlord should be genuine.
That is the object of enacting clause (e) of section 10(3) of the Act.
When once we reach the above conclusion it is not enough that the landlord should merely desire to use or occupy the premises.
What is necessary is that he should bona fide need them for his own use and occupation or for occupation by any of the members of his family as held by this Court in Phiroze Bamanji Desai vs Chandrakant M. Patel & Ors., ; and Mattulal vs Radhe Lal, ; The learned Judge who decided the case out of which this appeal arises was, therefore, in error in holding that the landlord need not prove that his requirement was bona fide but that his claim was bona fide as provided in clause (e) of section 10(3) of the 401 Act.
The learned Judge has made a distinction between `requirement ' and `claim ' in the present case without there being a difference.
In the circumstances we are of the view that M/s. Mahalakshmi 's case (supra), M. Abdul Rahman 's case (supra) and A. Khan Mohammed 's case (supra) have been wrongly decided.
They are liable to be overruled.
We accordingly overrule them.
We hold that a landlord seeking eviction of a tenant from a non residential premises under section 10(3)(a)(iii) of the Act in order to succeed in his petition should establish that he bona fide requires the premises in addition to proving the other ingredients referred to therein.
The judgment of the High Court which has proceeded on a wrong basis has, therefore, to be set aside.
Since the High Court while allowing the revision petition has approached the case from a wrong angle, it is necessary to direct the High Court to decide it afresh in the light of what we have stated above.
We, therefore, set aside the judgment of the High Court and remand it to the High Court again to decide it afresh.
If the High Court finds that the case should be remanded to the Trial Court to enable any of the parties to lead evidence on the question of the bona fide requirement of the landlord it may remit the case to the Trial Court.
The appeal is accordingly allowed.
There shall be no order as to costs.
S.L. Appeal allowed.
[/INST]% The respondent 's brother was carrying on his business in the front portion of the ground floor of the premises in question, which belonged to the father of the respondent.
The appellant purchased the said running business from the brother of the respondent.
After purchasing the business, the appellant became a tenant under the father of the respondent.
In the rear portion of the ground floor of the premises, one Mrs. Janaki Ammal was residing as a tenant.
Mrs. Janaki Ammal vacated the said residential portion and the appellant took that portion also on rent from the father of the respondent.
The ownership of the premises in question was transferred in favour of the respondent by his father.
On 9.6.1982, an agreement was entered into in respect of both the portions specifying that the lease should remain in force till 8.5.1983.
After the expiry of the said period, the respondent instituted a petition for eviction of the appellant in the Court of the Controller under section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, on the ground that the premises in question were needed by his wife for carrying on her business which she was carrying on somewhere else.
The appellant contended inter alia that the requirement of the wife of the respondent was not bona fide.
The Controller dismissed the petition, holding that the tenancy in question was in respect of both the residential and non residential portions and the respondents could not seek eviction of the appellant as the major portion of the demised premises was of residential character.
Aggrieved by the decision of the Controller, the respondent preferred an appeal before the Appellate Authority.
The Appellate Authority dismissed the appeal.
The respondent filed a revision petition before the High Court.
The High Court allowed the revision petition holding that it was not necessary for the respondent to establish that his requirement was bona fide as the question of the bona fides of a landlord 's requirement did not 385 arise in a case under section 10 (3)(a)(iii) of the Act.
It, however, held the claim of the respondent to be bona fide.
Aggrieved by the decision of the High Court, the appellant filed this appeal before this Court for relief by special leave.
Allowing the appeal, the Court, ^ HELD: The crucial question which arose for consideration in this case was whether a landlord, who sought eviction of a tenant from a non residential building (other than a non residential building used for keeping a vehicle or adapted for such use) under section 10 (3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (the Act) was required to prove that he required the said building for his own use or for the use of any member of his family bona fide.
[390C D] The Act was enacted to amend and consolidate the law relating to the regulation of the letting of residential and non residential buildings and the control of the rents of such buildings and the prevention of unreasonable eviction of the tenants therefrom in the State of Tamil Nadu.
The Act is an ameliorating piece of legislation.
Similar Acts are in force in almost all the States in India.
The provision in question section 10(3)(a)(iii) has to be examined against this background.
[390D;392G] Having regard to the pattern in which clause (a) of sub section (3) of section 10 of the Act is enacted and also the context, the words "if the landlord required it for his own use or for the use of any member of his family", found in sub clause (ii) of section 10 (3)(a) of the Act, have to be read also into sub clause (iii) of section 10 (3)(a) of the Act.
Subclauses (ii) and (iii) both deal with the non residential buildings.
They could have been enacted as one sub clause by adding a conjunction 'and ' between the said two sub clauses, in which event the clause would have read thus: 'in case it is a non residential building which is used for the purpose of keeping a vehicle or adapted for such use, if the landlord required it for his own use or for the use of any member of his family and if he or any member of his family is not occupying any such building in the city, town or village concerned which is his own, and in case it is any other non residential building, if the landlord or any member of his family is not occupying for purposes of a business which he or any member of his family is carrying on, a non residential building in the city, town or village concerned which is his own. ' If the two sub clauses are not so read, it would lead to an absurd result.
The non residential building referred to in sub clause (ii) is a building used for the purpose of keeping a vehicle or adapted for such use, and all other non 386 residential buildings fall under sub clause (iii).
The State legislature cannot be attributed with the intention that it required a more stringent proof by insisting upon proof of bona fides of his requirement or need also when a landlord is seeking eviction of a tenant from a garage than in the case of a non residential building occupied by a large commercial house for carrying on business.
It is no doubt true that the Court, while construing a provision should not easily read into it words not expressly enacted, but having regard to the context in which a provision appears and the object of the statute in which the said provision is enacted, the Court should construe it in a harmonious way to make it meaningful.
[398C H; 399A] In the present case, by insisting on the proof of the bona fide of the requirement of the landlord, the Court is not doing any violence to the statute nor embarking upon any legislative action.
The Court is only construing the words of the statute in a reasonable way having regard to the context.
[399E] By merely proving that the premises in question is a non residential building and that the landlord or any member of his family is not occupying, for the purpose of a business which he or any member of his family is carrying on, any residential building in the city,town or village concerned which is his own, the landlord cannot in the context in which section 10 (3)(a)(iii) appears, get a tenant evicted.
He must show in view of clause (e) of section 10 (3) that his claim is bona fide.
The word 'claim ' means "a demand for something as due", or "to seek or ask for on the ground of right", etc.
In the context of the Rent Control Law, which is enacted for the purpose of giving protection to the tenants against unreasonable evictions and for the purpose of making equitable distribution of buildings amongst persons who are in need of them, in order to prove that his claim is bona fide, a landlord should establish that he deserves to be put in possession of the premises which is in the occupation of a tenant.
Any decision on the question whether a landlord deserves to be put in possession of a premises in the occupation of a tenant should naturally depend upon the bona fides of the landlord 's requirement or need.
The word 'claim ' in clause (e) of section 10(3) of the Act should, therefore, be construed as 'the requirement ' of the landlord or his deservedness.
Since clause (e) of section 10(3) of the Act is also applicable to a petition filed under sub clause (iii) of section 10(3)(a) of the Act, it becomes necessary to examine whether the requirement of the landlord is bona fide; otherwise, a landlord will be able to evict a tenant to satisfy his whim by merely proving the ingredients mentioned in section 10(3)(a)(iii) of the Act.
If the requirement of "claim" being "bona fide" as contained in section 10(3)(e) is construed 387 to mean that genuineness of the need of the landlord for the non residential building is not to be considered and the circumstances that the landlord on the date of making the application is factually carrying on business and has no non residential building of his own in his occupation in the city, town or village concerned, is to be construed sufficient to make his claim bona fide, the tenancy of no non residential building will be secure.
It will be preposterous to attribute such an intention to the legislature.
The need of the landlord should be genuine.
The landlord should bona fide need the premises for his own use and occupation or for the occupation by any of the members of his family, as held by this Court in Phiroze Bamanji Desai vs Chandra Kant M. Patel and Ors., ; and Mattulal vs Radhe Lal; , [399F H; 400A G] The High Court was in error in this case in holding that the landlord need not prove that his requirement was bona fide but that his claim was bona fide as provided in clause (e) of section 10(3) of the Act.
The High Court made a distinction between 'requirement ' and 'claim ' without there being a difference.
[400H; 401A] The Court was of the view that M/s. Mahalakshmi Metal Industries vs K. Suseeladevi, ; M. Abdul Rahman vs section Sadasivam, 'and A. Khan Mohammed vs P. Narayanan Nambiar & Ors., 99 Law Weekly 965, relied upon by the respondent, were wrongly decided and were liable to be over ruled.
The Court overruled them.
A landlord seeking eviction of a tenant from a non residential premises under section 10(3)(a)(iii) of the Act should in order to succeed in his petition, establish that he bona fide requires the premises in addition to proving the other ingredients referred to therein.
The judgment of the High Court set aside.
Since the High Court had approached the case from a wrong angle, the Court directed the High Court to decide the case afresh in the light of what the Court had said in this appeal.
Case remanded to the High Court to decide it afresh.
If the High Court found that the case should be remanded to the Trial Court to enable any of the parties to lead evidence on the question of bona fide requirement of the landlord, it might remit the case to the Trial Court.
[401B D] Mahalakshmi Metal Industries vs K.Suseeladevi, ; M. Abdul Rahman vs section Sadasivam, , and A. Khan Mohammed vs P.Narayanan Nambiar and others, 99 Law Weekly 965, overruled.
388 Moti Ram vs Suraj Bhan and Others, ; ; Neta Ram vs Jiman Lal, [1962] 2 Supp.
S.C.R. 623; Nathala Sampathu Chetty vs Sha Vajingjee Bapulal, [1967] 1 Mad.
L.J. 289; Madras District Central Co operative Bank Limited, Mylapore Branch, Madras 4 vs A. Venkatesh, 99 Law Weekly 714; M/s. Thilagaraj Match Works, through its partner section Chidambaram vs C. Sundresan, [1985] 1 Mad, Law J. 106; P. Thanneer Malai Chettiar vs S.J. Dhanraj and another, ; Seaford Court Estates Ltd. vs Asher, at 164; M. Pentiah and Ors.
vs Muddala Veeramallappa and Ors., at 314; Bangalore Water Supply & Sewerage Board, etc.
vs R. Rajappa Chandrakant M. Patel & Ors., [1974] 3 S.C.R.267 and Mattulal vs Radhe Lal, [1975] 1 S.C.R.127,referred to.
</s>
|
<s>[INST] Summarize the judgementminal Appeal No. 143 of 1957.
Appeal from the judgment and order dated the 8th May, 1957, of the Allahabad High Court, in Criminal Reference No. 149 of 1956, arising out of the judgment and order dated the 14th January, 1956, of the First Additional Sessions Judge, Agra, in Sessions Trial No. 141 of 1954 and Criminal Misc.
No. 1 of 1956.
G. section Pathak and Mohan Behari Lal, for the appellants.
G. C. Mathur, C. P. Lal and G. N. Dikshit, for the respondent No. 1.
Janardan Sharma, for respondent No. 2. 1959.
September 14.
The Judgment of the Court was delivered by WANCHOO J.
This is an appeal oil a certificate granted by the Allahabad High Court in a criminal matter.
The facts of the case may be set out in some 738 detail to bring out the point raised in this appeal.
A complaint was filed by Rajendra Kumar Jain against the four appellants and three others under sections 409, 465, 467, 471 and 477A of the Indian Penal Code.
It is not necessary for present purposes to set out the details of the complaint.
Suffice it to say that after the statement of the complainant under section 200 of the Code of Criminal Procedure hereinafter referred to as the Code) summonses were issued to the accused persons requiring them to answer a charge under section 406 of the Penal Code.
Prosecution witnesses were then examined and cross examined and the statements of the accused persons recorded.
The Magistrate then heard argu ments on the question of framing of charges which were concluded on September 23, 1954.
It was then ordered that the case should be put up on September 30, 1954, for orders.
On that date the Magistrate framed charges against the four appellants under sections 409 and 465 read with section 471 and 477A of the Penal Code.
On the same date the Magistrate ordered commitment of the four appellants to the Court of Session on these charges.
The remaining three accused were discharged.
There was then a revision petition by Rajendra Kumar Jain against the discharge of one of the three accused, namely, Bhajan Lal.
When the matter came up before the First Additional Sessions Judge Agra, he ordered suo motu on April 9, 1955, after a perusal of the commitment order that Bhajan Lal be committed to the Court of Session to stand his trial.
In view of this order he dismissed the revision petition as infructuous.
Thereupon Bhajan Lal went in revision to the High Court.
That petition was heard by Roy, J., and he set aside the order of commitment of Bhajan Lal and one of the reasons given by him for doing so was that a Magistrate was not empowered to frame a charge and make an order of commitment until he had taken all such evidence as the accused might produce before him.
As Bhajan Lal had not been called upon to produce evidence in defence the order of commitment made by the Sessions Judge was held to be not in accordance with law.
This order was passed on 739 October 6, 1955.
Thereupon on January 7, 1956, the four appellants filed a revision petition before the Sessions Judge praying that the order of commitment passed against them be quashed and the main reason advanced in support of this petition was that the learned Magistrate had not observed the mandatory provisions of law laid down in sections 208 to 213 of the Code which were essential for a valid commitment.
This petition came up before the same First Additional Sessions Judge and he made a reference to the High Court that as the procedure followed by the Magistrate was irregular the order of commitment, dated September 30, 1954, was bad in law, and should be quashed.
This reference came up for bearing before another learned Judge of the High Court, namely, Chowdhry, J., and he took the view that the Magistrate had not failed to comply with the provisions of section 208 and that non compliance with the provisions of sections 211 and 212 was curable under section 537 of the Code.
He, therefore, rejected the reference.
There was then an application for a certificate to appeal to this Court which was allowed, particularly, as the view taken by Chowdhry, J., was in conflict with the view taken by Roy, J., already referred to.
The main contention of the appellants before us is that as the case began before the Magistrate as a warrant case under section 406 of the Penal Code, it was incumbent upon the Magistrate, when he decided, in view of the provisions of section 347 (1) of the Code, that the case should be committed to the Court of Session, to follow the procedure provided in Ch.
XVIII of the Code and inasmuch as he had failed to comply with sections 208 to 213 of the Code the commitment was bad in law and should be quashed.
The first question that falls for consideration, therefore, is whether the Magistrate when he began this case, was proceeding in the manner provided for the trial of warrant cases.
Section 347 (1) of the Code comes into play when at any stage of the proceedings in any trial before a Magistrate, it appears to him that the ease ought to be tried by the Court of 740 Session; he has then to commit the accused under the provisions herein before contained.
The Sessions Judge who made the reference held that the case before the Magistrate proceeded from the beginning as if it was a trial of a warrant case.
It was on that basis that the Sessions Judge held that when the Magistrate made up his mind that the case ought to be committed to the Court of Sessions in view of the provisions of section 347(1) of the Code it was his duty to observe the procedure laid down in Ch.
XVIII, particularly, under sections 208, 211 and 212 of the Code.
The order of reference was sent to the Magistrate for explanation, if any, and the Magistrate replied that he had no explanation to submit.
He did not say in his explanation that he was not proceeding as in a warrant case and that the proceedings before him throughout were proceedings in the nature of an inquiry under Ch.
XVIII.
When, however, the matter came up before the High Court, Chowdhry, J., was of opinion that though the Magistrate was competent to try the case as summonses has been issued under section 406 1.
P. C. only, it was open to him to hold an inquiry under Ch.
XVIII from the very beginning in view of the provisions of section 207 which empower a Magistrate to follow the procedure provided in Ch.
XVIII in cases exclusively triable by a Court of Session and also in cases which are not exclusively triable by the Court of Session but which in the opinion of the Magistrate ought to be tried by such Court.
The High Court was further of the view that the offence mentioned in the summons should be deemed to have given notice to the accused that it was optional with the Magistrate to hold an inquiry with a view to commit them to the Court of Session or to try them himself as in a warrant case because column 8 of Schedule 11 of the Code says that a case under section 406 is triable by a Court of Session, Presidency Magistrate or Magistrate of the first or second class.
Therefore, according to the High Court the matter was at large whether the Magistrate was going to adopt one procedure or the other despite the issue of summonses under section 406 of the Penal Code and that 741 nothing had happened to induce the belief in the accused that they would be tried as in a warrant case.
The High Court, therefore, held that the case was proceeded with from the beginning as if it was an inquiry under Ch.
XVIII and on that view it held that there was no non compliance with section 208 of the Code.
As for non compliance with sections 211 and 213, the High Court was of the view that it was curable under section 537 of the Code as no prejudice was caused.
We must say with respect that this view of the nature of the proceedings before the Magistrate is not correct.
It is true that it is open to a Magistrate to hold an inquiry from the beginning under Chapter XVIII in a case not exclusively triable by the Court of Session.
But the mere fact that the Magistrate has such power does not necessarily indicate to the accused that he is holding an inquiry under Ch.
XVIII rather than a trial before himself.
Where the case is not exclusively triable by the Court of Session, the accused would naturally conclude that the proceedings before the Magistrate are in nature of a trial and not an inquiry under Ch.
XVIII.
If the Magistrate intends to use his powers under section 207 and hold an inquiry from the beginning in a case not exclusively triable by the Court of Session, the only way in which the accused 'Can know that he is holding an inquiry and not a trial is by the Magistrate informing the accused that he is holding an inquiry under Ch.
XVIII and not trial.
If he fails to do so, the accused can reasonably conclude that a trial is being held.
In this case undoubtedly the Magistrate did not indicate to the accused from the beginning that his proceedings were in the nature of an inquiry under Ch.
XVIII.
Therefore the accused would naturally conclude that the proceedings before him were in the nature of a trial of a warrant case as the summonses that they had received were under section 406 of the Penal Code only.
The fact that in the complaint section 467, which is exclusively triable by a Court of Session, was mentioned is of no consequence for the summonses.
to the accused were only for a trial under section 406 of the Penal Code.
It must, therefore, be held that the proceedings before 742 the Magistrate began as in the trial of a warrant case and if the Magistrate at a subsequent stage of the proceedings was of the view that the case should be committed to the Court of Session, he would have to act under section 347 (1) of the Code.
We have been at pains to refer to this aspect of the matter for considerations would be different if the case was exclusively triable by the Court of Session and began from the outset as an inquiry under Ch.
XVIII.
What we shall say hereafter must, therefore, be taken to apply only to a case which began as a proceeding in a warrant or summons case and in which the Magistrate at a later stage takes action under section 347 (1).
This brings us to a consideration of the duty of the Magistrate who takes action under section 347 (1) of the Code.
That section reads as follows: " If in any inquiry before a Magistrate or in any trial before a Magistrate, before signing judgment, it appears to him at any stage of the proceedings that the case is one which ought to be tried by the Court of Session or High Court, and if he his empowered to commit for trial, he shall commit the accused under the provisions hereinbefore contained.
" The first question that has to be decided is the meaning of the words " under the provisions hereinbefore contained ".
These words have been the subject of decision by a number of High Courts and the High Courts are unanimous that they mean that if the Magistrate decides at some stage of the trial to commit the accused, he has to follow the provisions contained in Ch.
XVIII.
It is not necessary to refer to those decisions for the words themselves are quite clear.
They lay down that if the Magistrate comes to the conclusion that the accused ought to be committed for trial, he shall commit in accordance with the provisions contained in the earlier part of the Code, namely, in Ch.
XVIII.
This of course does not mean that the Magistrate must begin over again from the beginning.
All that he has to do when he decides that the case ought to be committed is to inform the accused and see that the provisions of Ch.
XVIII are complied with so far as they have not been complied 743 with up to the stage at which he decides that there ought to be a commitment.
Now the procedure under, Ch.
XVIII is laid down in sections 208 to 213 of ' the Code.
The Magistrate begins by hearing the complainant, if any, and takes all evidence that may be produced in support of the prosecution or on behalf of the accused or as the Magistrate may call himself.
The Magistrate is also required to issue process to compel the attendance of any witness or the production of any document or other thing if the complainant or officer conducting the prosecution of the accused applies to him.
After the evidence under section 208 has been taken the Magistrate then examines the accused for the purpose of enabling him to explain any circumstances appearing in evidence against him under section 209.
Thereafter if he is of opinion that there are not sufficient grounds for committing the accused for trial, lie can discharge him unless it appears to him ' that such person should be tried before himself or some other Magistrate in which case he has to proceed accordingly.
On the other hand, if the Magistrate is of opinion after taking the evidence and examining the accused that there are sufficient grounds for committing the accused for trial, he has to frame a charge under section 210 declaring with what offence the accused is charged.
The charge is then read over and explained to the accused and a copy thereof, if he so requires, is furnished to him free of cost.
After the charge is framed the Magistrate calls upon the accused under section 211 to furnish a list of persons orally or in writing whom he wishes to be summoned to give evidence on his trial.
The Magistrate may also allow the accused to furnish a further list at a later stage in his discretion.
Section 212 gives power to the Magistrate in his discretion to summon and examine any witness named in any list under section 211.
Then comes section 213 which lays down that if the accused has refused to give a list as required by section 211 or if he has given one and the witnesses, if any, included therein whom the Magistrate desires to examine, have been summoned and examined under section 212 the Magistrate may make an order committing the accused for trial by the High Court or the 744 Court of Session and shall also briefly record the reasons for such commitment.
On the other hand, if he is satisfied after hearing the witnesses for the defence that there are not sufficient grounds for committing the accused, he may cancel the charge and discharge the accused.
It will be seen from this analysis of the provisions relating to commitment that section 208 gives a right to the accused to produce evidence in defence before the Magistrate examines him under section 209 and proceeds to frame a charge under section 210.
Now when a Magistrate makes up his mind to commit a case not exclusively triable by the Court of Session under the power given to him under section 347 (1) of the Code, he has to follow this procedure.
But as we have said earlier it is not necessary that the Magistrate should begin from the beginning again when he so makes up his mind.
The Magistrate may make up his mind at any stage of the trial before him and generally speaking four contingencies may arise.
Firstly, he may make up his mind after the trial is practically over and the witnesses for the prosecution have been examined and crossexamined after the charge, the accused has be en examined both under sections 253 and 342 of the Code and and all the defence evidence has been taken.
In such a 'case sections 208, 209 and 210 have been complied with and all that the Magistrate has to do is to intimate to the accused that he intends to commit him for trial and ask him to give the list of witnesses under section 211 and proceed thereafter as provided in Ch.
XVIII.
Secondly, the Magistrate may make up his mind after all the witnesses for the prosecution have been examined and cross examined and the charge has been framed but no defence has been taken.
In such a case that part of section 208 which lays down that all the evidence for the prosecution shall be taken, has been complied with and the Magistrate may then proceed to comply with the rest of section 208 and take the defence evidence and then proceed further under sections 209 to 213 and amend the charge so as to make it conformable to a charge in an inquiry under Ch.
XVIII or cancel it.
Thirdly, the Magistrate may make up his mind after 745 some of the prosecution witnesses have been examined and cross examined and a charge has been framed.
In such a case he has to examine the rest of the prosecution witnesses under section 208 and take the defence evidence, if any, produced by the accused and then proceed under sections 209 to 213 amending or cancelling the charge already framed as indicated earlier.
Lastly, the Magistrate may have only just begun taking evidence for the prosecution and may not have framed a charge.
In such a case he takes the rest of the prosecution evidence and complies with the provisions from sections 208 to 213.
But in each of these four contingencies it is the duty of the Magistrate to intimate to the accused that he has made up his mind to commit in view of the provisions of section 347(1) and then proceed in the manner indicated above.
It is necessary that the accused should know when the Magistrate makes up his mind to commit so that their right under section 208 to produce defence, if any, before commitment is made is safeguarded.
Now what happened in this case was this.
The Magistrate had apparently taken all the prosecution evidence and the prosecution witnesses had been examined and cross examined; the Magistrate had framed no charges upto September 30, 1954.
He had heard arguments on the question whether any charges should be framed and had fixed September 30,1954, for orders in this respect.
When, therefore, he decided on September 30,1954, that the case ought to be committed to the Court of Session, the proper course for him was to refrain from framing any charges and intimate to the accused that he intended to commit them for trial.
He then should have called upon them to produce defence evidence, if any, under section 208 and then proceeded further under Ch.
XVIII.
The Magistrate, however, failed to inform the accused that he had made up his mind to proceed under section 347 (1) and to commit them for trial.
What he did on September 30, 1954, was to frame charges forthwith and record an order committing the accused to the Court of Session under section 213 of the Code.
He thus deprived them of their right to lead defence evidence, if any, under section 208.
It may be that if he had told them that he was 746 going to proceed under section 347 (1) and commit them for trial and asked them if there was any defence evidence to be produced, they might have said that they did not wish to produce any defence before him at that stage.
But what the accused would have said if the Magistrate had proceeded in this manner is irrelevant in considering the question whether the commitment in this case was bad in law inasmuch as it did not comply with section 208 so far as giving the accused an opportunity to lead defence evidence, if any, was concerned.
The fact remains, therefore, that in this case the Magistrate when he decided to act under section 347 (1) did not intimate that decision to the accused and proceeded forthwith to commit them for trial under section 213, thus depriving them of the right to produce defence evidence, if any, under section 208.
The next question which falls for consideration is the effect of this non compliance with section 208 of the Code and whether it is curable under section 537 of the Code.
The effect of Don compliance with various provisions of the Code and whether such non compliance is curable under section 537 have been the subject of a large number of cases before various High Courts and also before their Lordships of the Judicial Committee of the Privy Council.
It is not necessary to refer to this mass of authorities.
One of the earliest of these case decided by the Privy Council is Subramania Iyer vs King Emperor (1), while one of the latest is Pulukuri Kotayya vs King Emperor(2).
The law was summed up by their Lordships of the Judicial Committee in Pulukuri Kotayya 's case (2 ) at p. 75 in these words: When a trial is conducted in a maner different from that prescribed by the Code (as in N.A. Subramania Iyer 's case (1), the trial is bad, and no question of curing an irregularity arises; but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the " course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves ' as must nearly always be the case, a breach of one or more of the very comprehensive provisions of the code.
The distinction (1) (1901) L.R. 28 I.A. 257.
(2) (1948) L.R. 74 I.A. 65.
747 drawn in many of the cases in India between an illegality and an irregularity is one of degree rather than of kind.
This view finds support in the decision of their Lordships ' Board in Abdul Rehman vs The King Emperor(1) where failure to comply with sections 360 of the Code of Criminal Procedure was held to be cured by section 535 and 537.
" These observations were quoted with approval by this Court in Narain Rao vs The State of Andhra Pradesh(2).
It seems, therefore, fruitless to consider whether the non compliance with section 208 in this case is an illegality which cannot be cured under section 537 or an irregularity which is curable thereunder.
As the stage of trial has not been reached in this case, no question arises of considering whether the trial has been conducted in a manner different from that prescribed by the Code.
What we have to see is whether the breach of section 208 which has occurred in this case is such that the Court will presume prejudice to the accused by the mere fact of the breach.
If such presumption can be made, the breach would obviously be not curable under section 537 of the Code, even assuming that that section applies.
The question, therefore which eventually emerges is whether this breach of section 208 is of such a character that the Court will presume that there has been prejudice to the accused by the mere fact of the breach.
Now the accused has a right under section 208 to produce evidence in defence, if any, before the Magistrate proceeds to decide whether a charge should be framed or not.
The Magistrate 's decision whether the charge should be framed or not is bound to be affected one way or the other if evidence is produced by the accused, for the Magistrate 'Would then be bound to consider the effect of that evidence on the question of framing the charge.
If the accused is denied the opportunity of leading that evidence which he has a right to do under section 208, it seems to us that the denial of such right is sufficient to cause prejudice to the accused and section 537 would have no application to a case of this kind.
The possibility that the accused may not have produced defence if asked by the Magistrate whether he would do so, (1) (1926) L.R. 54 I.A. 96, (2) 748 is of no consequence, so far as this conclusion is concerned.
If this is the reply expected, it makes it all the more incumbent on the Magistrate to inform the accused that he was intending to commit the case and ask him if he wished to produce evidence.
If the accused did not want to do so, the Magistrate would have done his duty and his way would be clear to proceed further with his intention to commit the accused.
But when the Magistrate did not intimate to the appellants in this case that he was intending to commit them for trial and proceeded to frame charges and pass the order of commitment forthwith on September 30, he was denying to them their right to produce defence under section 208 of the Code.
The denial of that right is in our opinion in itself sufficient to cause prejudice to the accused and failure of justice inasmuch as the accused were prevented from leading evidence which might have induced the Magistrate not to frame a charge against them or cancel it.
We are, therefore, of opinion that the breach of section 208 which took place in this case was such as was bound to cause a failure of justice and there is, therefore, no question of the application of section 537 in these circumstances.
The commitment is, therefore, bad in law and must be quashed on this ground alone.
In the petition of appeal the appellants have referred also to breach of provisions of sections 211, 212 and 213 of the Code.
As we have come to the conclusion that the breach 'of section 208 in this case is sufficient to invalidate the commitment it is not necessary to consider the effect of the further breach of sections 211, 212 and 213.
What we have said in this case wit respect to the effect of the breach of section 208 may not be taken as applying to the breach of sections 211, 212 and 213 for the considerations arising out of those breaches may be different.
We, therefore, allow the appeal, quash the order of commitment as well as the charges framed and send the case back to the Magistrate to proceed in the manner indicated above according to law.
Appeal allowed.
[/INST]Although it is well settled that a court of appeal should not lightly disturb a finding of fact arrived at by the trial judge who had the opportunity of observing the demeanour of the witnesses and hearing them, that does not mean that an appellate court hearing an appeal on facts can never reverse such a finding.
Where the decision on a question of fact depends on a fair consideration of matters on record, and it appears to the Appeal Court that important considerations have not been taken into account and properly weighed by the trial judge, and such considerations clearly indicate that the view taken by the trial judge is wrong, it is its duty to reverse the finding even if it involves the disbelieving of witnesses believed by the trial court.
Where again the trial judge omits to properly weigh or take into account 664 important considerations bearing on the credibility of witnesses or the probability of their version, which point the other way, it is the duty of the court of appeal to reverse the findings of the trial Court.
If the question of fact does not solely depend on the credibility of witnesses for its determination, but is one of inference from proved facts, on a consideration of probabilities, the court of appeal stands in the same position as the trial court and is free to reverse its findings.
Shunmugayoya Mudaliay vs Manikka Mudaliar, (1909) L.R. 36 I.A. 185; Coghlan vs Cumberland, (1898) i Ch.
704; Wall (Thomas) vs Thomas, (1947) i All E.R. 582; Bonmax vs Austin Motor Co. Ltd. (1955) i All E.R. 326; Sayju Pershad vs Raja jwaleshwari Pratap Narain Singh, (195I) I.L.R. and Laljee Mohomet vs Girlder, , referred to.
Consequently, where, as in the present case, the plaintiff brought a suit for pre emption and the question for determination was one of fact, namely, whether the plaintiff had performed the essential ceremonies of Talab E Mowasibat and Talab E Ishtashad, and the trial court believed his witnesses, not because it had been impressed by their demearour, and the High Court in appeal disbelieved them in the light of the probabilities of the case and reversed the decision of the trial court.
Held, that it was not correct to contend that the way in which the High Court had approached the case was wrong or that its decision was not justified.
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<s>[INST] Summarize the judgement217 of 1955.
Under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
N. C. Chatterjee, (Vir Sen Sawhney and Ganpat Rai, with him), for the petitioners.
Lal Narain Sinha, (Bajrang Sahai and section P. Verma, with him), for respondent No. 2. 1955.
October 28.
The Judgment of the Court was delivered by IMAM J.
The petitioners have filed this application under article 32 of the Constitution claiming that the buildings and lands as set out in the Schedule annexed to the petition and marked "A" (hereinafter referred to as the disputed properties) did not vest in the State of Bihar under the provisions of the 990 Bihar Land Reforms Act 1950 (hereinafter referred to as the Act).
Petitioner No. I in his individual capacity was at one time the owner, of the disputed properties which lie within Touzi No. 28 of the Collectorate of Hazaribagh.
On the 29th of December, 1947 petitioner No. I as owner leased out the disputed properties to a Company known as Mineral Development Ltd. (hereinafter referred to as the Company).
The Company took possession of the disputed properties and has been paying rent.
On the 7th of April, 1949 petitioner No. I in his individual capacity executed a deed of settlement whereby he transferred the disputed properties to three trustees, namely, himself and petitioners 2 and 3.
The Company has been paying rent to the trustees since then.
The Act came into force on the 25th of September, 1950.
On the 3rd of November, 1951 the State Government issued a notification under section 3(1) of the Act declaring that the estate of petitioner No. I in his individual capacity specified therein had passed to and become vested in the State.
On the 26th of October, 1953 a notice under section 4(h) of the Act was issued by the Collector to the Company, and on the 4th of March, 1954 the State Government issued a notification under section 3(1) of the Act purporting to vest in the State the properties covered by the above mentioned deed of settlement and another deed of settlement with which we are ' not concerned.
The Company instituted a title suit No. 33 of 1951 against the State of Bihar in the Court of the Subordinate Judge, Hazaribagh basing its claim on a mining lease executed by petitioner No. I in his individual capacity the genuineness of which was challenged by the State.
Petitioner No. I in his individual capacity was made a party to this suit.
The Company also instituted a title suit No. 9 of 1954 against the State of Bihar to which petitioner No. I in his individual capacity was made a party challenging the legality of the issue of notice dated 26 10 1953 under section 4(h) of the Act.
On the 11th of November, 1954 the State of Bihar filed title suit No, 53 of 1954 to which the Company, 991 petitioner No. I in his individual capacity, the three trustees and others were made parties.
By this suit the State of Bihar challenged the genuineness of the lease in favour of the Company and the deed of settlement in favour of the trustees.
The real question for determination is, what vested in the State on the publication of the notification under section 3 and by virtue of the provisions of section 4(a) of the Act? According to Mr. Chatterjee the disputed properties did not vest in the State, whatever else may have.
Having regard to the definition of "estate" in the Act, if anything vested in the State on the publication of a notification it was the land comprised in the notified estate.
Although the disputed properties stood on the land in the notified estate, they did not vest in the State, because the definition of "estate" speaks of land only and not of any building on it.
The notification under section 3 was a mere declaration and actual vesting took place under section 4(a).
On the date of vesting the disputed properties were not used as office or cutchery for the collection of rent of the notified estate of petitioner No. 1, who had parted with his right, title, and interest therein long before the Act was enacted and the publication of the notification under section: 3.
Mr. Sinha on behalf of the State of Bihar, on the other hand, contended that on a perusal of the provi sions of sections 4, 5 and 7 of the Act, it would appear that the Act contemplated something more than the ' land in an estate vesting in the State and the disputed ' properties could and did vest in the State on the publication of the notification under section 3.
In our opinion, it is of little consequence in the present case whether the notified estate vested in the State by reason of the publication of the notification under section 3 or by virtue of the provisions of section 4 of the Act, because in either case a vesting did take place.
Although the word land is used in the definition of "estate", the provisions of sections 4, 5 and 7 show the necessary intention to include something more than the land when an estate vests in the State.
Under section 4(a) it is not only the 992 estate but also buildings of a certain description and other things which vest in the State absolutely on the publication of a notification under section 3.
Under sections 5 and 7 the buildings mentioned therein also vest in the State, because the buildings in question are deemed to be settled by the State with the intermediary in possession.
This could only be on the supposition that these buildings vested in the State and the person in possession held the same as settlee under the State.
In the present case on the date of the publication of the notification under section 3 the disputed properties were said to be in the possession of the Company as lessee and the petitioner No. I had no right, title or interest therein as he had transferred his lessor 's reversion to trustees by a deed of settlement.
We may assume, therefore, that on the date of publication of the notification the disputed properties were not used primarily as office or cutchery for the collection of rent of the notified estate of petitioner No. 1 It.
becomes, therefore, necessary to interpret the word "used" occurring in section 4(a).
It is to be noticed that this clause of section 4 does not expressly state that a building used primarily as office or cutchery for the collection of rent must be so used at the date of the publication of the notification.
In this clause the words "used primarily as office or cutchery for the collection of rent of such estate" must be read in the light.
of the provisions of section 4(h) where similar words are employed.
Under section 4(h) the Collector has the power to make inquiries in respect of any transfer of any kind of interest in any building used primarily as office or cutchery for the collection of rent of such estate, if the transfer had been made at any time after the first day of January, 1946.
If on due inquiry the Collector is satisfied that such transfer was made with the object of defeating he provisions of the Act or causing loss to the State or obtaining higher compensation, then the Collector may, after giving notice to the parties concerned and hearing them and with the previous sanction of she State Government, annul the transfer and dis 993 possess the person claiming under it.
These provisions clearly indicate that if any building was used primarily as office or cutchery for the collection of rent and such building had been transferred after the first day of January, 1946, the transfer could be annulled if the circumstances mentioned in section 4(h) had been established.
That is to say, under. ' these provisions the use to which the building was put previous to its transfer after the first day of January, 1946 and not thereafter was what the Collector was concerned with and not to what use it had been put after its transfer after the first day of January, 1946.
To hold otherwise would be to make the provisions of section 4(h) meaningless.
When a proprietor transfers any such building ' it necessarily follows that the building thereafter was not used by him as office or cutchery for the collection of rent of his estate.
If the transfer was made before the first day of January, 1946 the provisions of section 4(h) would not apply and such a transfer would not be liable to be annulled and the building so transferred would not vest in the State on the date of the publication of the notification covering the estate on which such building stands.
If, on the other hand, this transfer was made after the first day of January, 1946, a building comprised in a notified estate, which was used immediately previous to the date of the transfer primarily as office or cutchery for the collection of rent of such estate the transfer would be liable to be annulled under section 4(h) and it would vest absolutely in the State on the publication of the notification and the provisions of section 4(a) must be read accordingly.
It would be unreasonable to construe the provisions of section 4(a) in the way suggested by Mr. Chatterjee.
The scheme of the Act has to be borne in mind and the provisions of sections 4(a) and 4(h) have to be read together.
The petitioners had not asserted in their petition that the disputed properties were not used as office or cutchery for the collection of rent of the notified estate of petitioner No. I before the first of January, 1946 or before the lease in favour of the Company.
On behalf 994 of the State, on affidavit, it has been stated that the disputed properties were all along used as cutchery before the creation of the lease and that they were not being used in connection with any mining operation.
In our opinion, if as a result of the inquiry under section 4(h) the transfer of the disputed properties by the petitioner No. I is annulled the disputed properties must be regarded as having vested in the State, because they were used as office or cutchery for the collection of rent previous to the transfers made by the petitioner No. 1.
It was next contended that section 4(h) is ultra vires the Constitution, because it imposed an unreasonable restriction on the fundamental right of the petitioners to realize rent from the Company, as the transfer in its favour was imperilled by the notice issued to it under section 4(h).
No appeal or review was provided in the Act against the order of the Collector issuing notice or an order of annulment made by him.
The Collector was left with absolute power to annul a transfer and to dispossess a person in possession thereunder.
Section 4(b), however, does direct the Collector to give reasonable notice to the parties concerned and to bear them.
Such annulment or dispossession which he may order, must be with the previous sanction of the State Government and he is compelled to do so on terms which may appear to him fair and equitable.
The power is, therefore, not quite so absolute or arbitrary as suggested.
Assuming, however, that the Collector has very wide powers, it is to be remembered that section 4(h) is a part of the law of acquisition of estates as enacted by the Act and is an integral part of the machinery by which acquisition of an estate takes place.
The Act is a valid law of acquisition and its whole purpose may be defeated unless there was some such provision as contained in section 4(b).
The Act being a law for acquisition of estates the question of it or section 4(h) of it imposing any unreasonable restriction on the fundamental rights of the petitioners does not arise.
In any event the Act including sect ton 4(h) is protected by article 31 A of the Constitution.
The petition is accordingly dismissed with costs.
[/INST]The proviso to section 3(1)(vii) of the Kerala Land Reforms Act, 1964.
provided that nothing in clauses (i) to (vii) of section 3(1) shall affect the rights of persons who are entitled to the fixity of tenure immediately before 21 January 1961 under any law then in force.
The law prevailing immediate ly before 21 January 1961, was the Malabar Tenancy Act, 1929.
Under section 23 of that Act a tenant would be liable to be evicted from his holding at the instance of h/s landlord if he intentionally committed acts of waste or defaulted in the payment of rent for more than 3 months.
The proviso was amended by 1969 Amendment Act which came into force on January 1; 1970.
The amending Act also.
inserted in the Act new Ss.
50A. 52 and 73.
Section 50A provided that a tenant entitled to fixity of tenure shall have the right to use his holding in any manner he thinks fit.
Section 52 pro vided that a cultivating tenant shall have a right to cut .trees and section 73 is to the effect that the maximum amount that could be claimed by way of arrears of rent is only for 3 years.
Section 108(2) was also amended and it provided that any decree passed before the commencement of the section for the dispossession of a person from the land in his possession may on the application.
of such person be reopened and disposed of in accordance with the provi sions of the 1964 Act as amended by the 1969 Act provided dispossession has not been affected.
Section 125(3) provid ed that if in any suit or proceeding questions regarding the rights of a tenant arose, the civil court shall stay such proceedings and refer the question to the Land Tribunal having jurisdiction over the area.
Section 132(3) provided that any decree pursuant to which eviction has not been effected may, on the application of the tenant or the land lord be reopened and the matter disposed of in accordance with the provisions of the Act.
The respondent owned about 550 acres out of which more than half was Coffee planted area.
He leased the plantation and the remaining unplanted area to the appellant in 1950 for 12 years.
Clause (4) of the lease provided that if the rent was in arrears for 30 days after it became due it was lawful for the lessor to forfeit the lease and re enter on the land.
Alleging_ that since 1953 the 'appellant had neglected to pay the rent, the respondent filed the suit claiming possession of the land, arrears of rent, and dam ages for waste.
The trial court decreed the suit in.
1966 and the decree was confirmed by the 'High Court with the enhanced damages in February 1969.
In appeal to this Court the appellant contended that he was entitled to fixity of tenure; that the unplanted area was not a plantation and 'so he was entitled to fixity of tenure therein; ,hat the pro ceedings were to be disposed of in accordance with the provisions of the 1964 Act as amended by 1969 Amendment Act.
that is.
that all questions regarding rights of tenants and landlords could be decided only by the Land Tribunal; and that the damages were awarded contrary to the 'provisions of the Act as amended.
He, therefore.
filed an application praying for reopening of the decree passed by the High Court and also contended that in view of the amendments in 1971 the appeal is to be disposed of in accordance with the provisions of the Act, as amended in 1969 and 1971.
Dismissing the appeal to this COurt,.
HELD: In the present case, the decree was passed by the trial court as ' well as by the High Court after the 1964 Act came into force but before the, 1027 1969 amendment.
The decree was correctly passed in ac cordance with the provisions of the 1964 Act, since the amendments were prospective and not retrospective.
[1036 E F] .rm60 (1) A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied.
In that connection the former state of law is to be considered and also the legislative changes contemplated by the statute.
Words not requiring retrospective operation so as to affect an existing statutory provision prejudicially ought not to be so construed.
It is a general rule that when the legislature alters the rights of the parties by taking away or conferring any right of action, its enactments.unless in express terms they apply to pending actions, do not affect them.
If however, a statute deals merely with procedure in an action and does not affect the rights of the parties, it will be held to apply prima facie to all actions pending as well as future.
[1033 E G] Gardner vs Lucas (1878) 3 Appeals Cases 582; Moon vs
Durden (1948) 2 Exch.22 and Smithies vs National Union of Operative Plasterers , referred to.
(2) The entire land leased out does not come within the definition of plantation, because.
the extent of coffee cultivated area has been found to have dwindled to about 100 acres out of the total extent of about 550 acres by reason of the acts of waste committed by the appellant and ceased to be a plantation even before 1 January 1970.
The appel lant, however, is disentitled to take advantage of his own wrongs so as to claim statutory benefits which were also not available to him.
[1033 A B, E G] (3) The appellant had been found to be habitual defaulter since 1952 in the payment of rent and to be guilty of wilful acts of waste before and after the institution of the suit.
He had denuded the entire tree growth in morethan one half of the area and destroyed more than one half of the coffee planted area, and the remaining part was in an utterly neglected condition.
Therefore.
under section 23.
Malabar Tenan cy Act, the appellant had no fixity of tenure on 21 Janu ary 1961, and hence was not entitled to the benefit of proviso to section 3(1) either under the 1964 Act or the 1969 Act.
[1032 G H, 1034.B D)] (4) The respondent was a Government company.
Under section 3(1)(i) of the 1964 Act, leases of lands owned by Government companies are exempted from the provisions of Chap.
Section 13, which is in Chap.
II and which provides for fixity of tenure cannot therefore be invoiced.
by the appel lant for claiming 'fixity, of tenure under the 1964 Act.
[1033 C D] (5) The appellant is disentitled from invoking sections 50A, 52 and 73 of the 1964 Act as amended in 1969 because, Chap ter 1I of the 1964 Act is not applicable to the lease since the respondent lessor iS a Government Company.
More over, these sections came into effect on 1st January 1970 and were not retrospective, but were.
prospective in.
opera tion.
[1032 A D, 1033 H, 1036 A B] (6) Sect.ion 108(3) of the Act as amended in 1971 will permit the opening of the decree only if a person has claims to a right benefit or remedy which has been conferred on him under the Act.
In the present case neither under the 1964 Act nor under the 1969 Amendment the.
appellant can claim the benefit of section 50A because he wilfully misused the hold ing and caused acts of waste causing loss to the lessor and damage and destruction to the holding.
[1033 H, 1034 A B] (7) Section 125(1) of the Act which came into force on 1 January 1970, creates bar against the civil court deciding questions required to be settled by the Land Board.
This provision is prospective.
and the proviso expressly states that the section shall not apply to proceedings pending in any court at the commencement of the 1969 amending Act.
It, therefore, follows that the proceedings in the present case which were pending at the commencement of the 1969 Amendment Act are saved from the operation of section 125(1).
Section 125(3) is equally prospective.
It will be applied with regard to the provisions contained in section 125(1) of the Act.
Matters which will be within the mischief of section 125(1) are matters which will arise in suits or proceedings initiated or originated after the commencement of the Act.
It is unsound to 1028 suggest that pending proceedings which are exempt from the application of section 125(1) will yet fall within that sub section by reference to section 125(3).
Therefore, the provisions contained in section 125 are not applicable in the present case.
[1034 G H, 1035 A E] Anantha Narayana Iyer vs Pran , over ruled.
</s>
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<s>[INST] Summarize the judgementvil Appeals Nos.
2403 & 2404 of 1966.
Appeals from the judgment and order dated April 4, 1963 of the Assam and Nagaland High Court in Civil Rule Nos. 90 of 1960 and 382 of 1961.
D.N. Mukherjee, for the appellant.
Naunit Lal and B.P. Singh, for the respondents.
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by certificate from the judgment of the High Court of Assam and Nagaland dated April 4, 1963, in Civil Rule No. 90 of 1960 and Civil Rule No. 382 of 1961, whereby the High Court dismissed the petitions under articles 226 and 227 of the Constitution filed by the appellant.
Messrs. Hardeo Das Jagan Nath (hereinafter called the 'appellant ') is a partnership firm carrying on business at Mawk 263 har, Shillong in the District of United Khasi and Jaintia Hills.
By a notification issued under Rule 6 of the Assam Sales Tax Rules 1947, the Commissioner of Taxes, Assam fixed May 20, 1948 as the date by which the dealers of Shillong administered area had to make applications for registration under the Assam Sales Tax Act, 1947 ( 17 of 1947 ), hereinafter called the 'Act '.
By notification dated April 15, 1948, the Government of India had extended the provisions of the Act with slight modifications to the administered area in Shillong under section 4 of the Extra Provincial Jurisdiction Act, 1947.
The appellant got itself registered under the Act.
Upto the half yearly return periods ending September 30, 1957, the appellant was assessed to sales tax and the tax was realised by the Sales Tax Authorities.
On March 6, 1959, the Superintendent of Taxes, Shillong, respondent No. 4 raided the business premises of the appellant and seized the account books etc.
The appellant filed a petition under article 226 of the Constitution in the High Court.
By its order dated June 3, 1960, the High Court directed the Deputy Commissioner of Taxes, Assam to return the seized books and documents within three weeks of the date of the order to.
the appellant.
As directed by the High Court, the documents were returned to the appellant but on the basis of the information received from the account books the Superintendent of Taxes issued notices dated April 4, 1959 under section 19A of the Act for reassessment of the appellant in respect of the half yearly return periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
Thereafter, ex parte reassessment was made for the return period ending September 30, 1956 by an order dated July 8, 1959 and for return periods ending March 31, 1957 and September 30, 1957 by orders dated July 24, 1959 and tax amounting to Rs. 1,22,933/ was levied for these three periods.
A further sum of Rs. 47,504.70 was levied in respect of the return period ending March 31, 1958 by an ex parte assessment order dated March 23, 1959.
For the other return period ending September 30, 1958; a sum of Rs. 49,427.90 was levied by an ex parte assessment order dated April 8, 1959.
For these two return periods a penalty of Rs. 1,000/ in respect of each return was also levied by two separate orders dated June 27, 1959.
Thus the total amount of salestax and penalty amounting to Rs. 2,19,865.60 in respect of the five return periods was levied.
The appellant paid Rs. 20,074.68 at the time of original assessments in respect of the periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant thereafter filed appeals against all the seven ex parte orders before the Assistant Commissioner of Taxes, Assam.
Along with the memoranda of appeals for the periods ending March 31, 1958 and September 30, 1958, two separate applications were made by the appellant alleging that it was not 264 necessary to pay the assessed tax since the provisions of section 30 of the Act as amended did not apply to the case and it was prayed that appeals should be admitted without payment of the assessed tax.
The contention of the appellant was rejected by the Assist.ant Commissioner though he reduced the amount of deposit for the periods ending March 31, 1958 and September 30, 1958.
The .appellant moved the Commissioner of Taxes in revision, but the order of the Assistant Commissioner was affirmed by the Commissioner of Taxes though he reduced the amount further.
On the application of the appellant the matter was referred to the High Court which held that the amended section 30 of the Act was intravires.
In the meantime, the appellant also applied in respect of the appeals relating to the periods ending September 30, 1956, March 31, 1957 and September 30, 1957 as well as the penalty appeals of periods ending on March 31, 1958 and September 30, 1958 and prayed for admission of these appeals without payment of the assessed tax.
In this case also the amount was reduced by the Assistant Commissioner of Taxes but the matter was kept pending till the disposal of the reference by the High Court.
On May 21, 1960, the appellant filed separate petitions before the Assistant Commissioner praying that as the financial condition of the appellant was not good the appellant may be allowed to furnish reasonable security in lieu of cash and the appeals may be admitted on such security.
By his order dated May 23, 1960 the Assistant Commissioner of Taxes fixed June 8, 1960 f, or payment of the amount required for admission of the appeals, failing which the appeals were ordered to be dismissed.
The appellant then moved the Commissioner praying that in view of his financial difficulty he should be .allowed to furnish reasonable security in lieu of cash to be paid.
The application was rejected by the Commissioner on June 21, 1960.
Thereafter all the five appeals were rejected by a common order dated June 22, 1960 and the two appeals against the imposition of penalty were also summarily rejected by an order dated June 22, 1960.
The appellant was further asked to show cause why penalty should not have been imposed in respect of the periods ending September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant filed a petition to the High Court under article 226 of the Constitution, being Civil Rule No. 90 of 1960 praying for a writ to quash the order of the Commissioner dismissing the appeals in respect of the five periods and for further reliefs.
The appellant also filed another petition under article 226, being Civil Rule No. 382 of 1961 asking for similar reliefs with regard to the periods ending March 31, 1959, September 30, 1959, March 31, 1960, September 30, 1960 and March 31, 1961.
The writ petitions were dismissed by the High Court by a common judgment dated April 4, 1963.
The first question to be considered in these appeals is whether the provisions of the Act were validly extended to the Shillong 265 Administered Areas.
By a notification dated April 15, 1948 the Central Government extended the provisions of the Act to the Shillong Administered Areas including Bara Bazar in exercise of powers conferred by section 4 of the Extra Provincial Jurisdiction Act, 1947.
It was argued on behalf of the appellant that on April 15, 1948 when the notification was issued, the Extra Provincial Jurisdiction Act, 1947 (Act XLVII of 1947) was not applicable to the Shillong Administered Areas as the instrument of accession by which the administration of the State of Mylliem was transferred to the Central Government was accepted by the GovernorGeneral of India on August 17, 1948.
The preamble to the Extra Provincial Jurisdiction Act, 1947 (hereinafter called the Act of 1947) provides: "Whereas by treaty, agreement, grant, usage, sufferance and other lawful means, the Central Government has, and may hereafter acquire, jurisdiction in and in relation to areas outside the Provinces of India; It is hereby enacted as follows : " The expression "extra provincial jurisdiction" has been defined under section 2 of the Act of 1947 as meaning "any jurisdiction which by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time being in or in relation to any area outside the Provinces".
Section 3 states: "3.
(1) It shall be lawful for the Central Government to exercise extra provincial jurisdiction in such manner as it thinks fit.
(2) The Central Government may delegate any such jurisdiction as aforesaid to any officer or authority in such manner and to such extent as it thinks fit.
" Section 4 provides as follows: "4.
(1) The Central Government may, by notification in the official Gazette, make such orders, as may seem to it expedient for the effective exercise of any extra provincial jurisdiction of the Central Government.
(2) Without prejudice to the generality of the powers conferred by sub section (1 ), any order made under that sub section may provide (a) for determining the law and procedure to be observed, whether by applying with or without modifications all or any of the provisions of any enactment in force in any Province or otherwise; (b) for determining the persons who are to exercise jurisdiction, either generally or in particular 2 Sup.
C1/69 18 266 cases or classes of cases, and the powers to be exercised by them; (c) for determining the courts, judges, magistrates and authorities by whom, and for regulating the manner in which, any jurisdiction auxiliary or incidental to or consequential on the jurisdiction exercised under this Act is to be exercised within any Province; and (d) for regulating the amount, collection and application of fees.
" Section 5 is to the following effect: "Every act and thing done, whether before or after the commencement of this Act, in pursuance of any extra provincial jurisdiction of the Central Government in an area outside the Provinces shall be as valid as if it had been done according to the local law then in force in that area.
" The argument was stressed on behalf of the appellant that the extra provincial jurisdiction could only be exercised by the Central Government if by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time 'being in or in relation to any area outside.
the provinces exercised such jurisdiction.
It was contended that after the declaration independence on August 15, 1947 the paramountcy lapsed and the State of Mylliem became an independent State and the Central Government could not exercise any extra provincial jurisdiction till the instrument of accession was signed by the GovernorGeneral.
It was pointed out that the notification by which the Act was applied to Shillong Administered Areas was issued after the lapse of paramountcy and before the instrument of accession was signed by the Governor General.
It was therefore argued that the notification dated April 15, 1948 was not validly issued and the provisions of the Act were not operative in the Shillong Administered Areas.
It was said that before the State of Mylliem became an independent State on August 15, 1947 there was no treaty, grant, usage or arrangement whereby the British Crown enjoyed any rights to levy taxes on the sale of goods within the Mylliem State or any right to extend to that area any such Act without the express consent or approval of the ruler of that State.
The opposite view point was put forward on behalf of the respondents.
It was said that before August 15, 1947 the relations of the Crown Representative with Khasi Hills States were conducted through the Governor of Assam.
In practice the administration of the Hill States was in great measure assimilated to that of the Province of Assam partly by the application of the British Indian Laws under the Indian (Foreign Jurisdiction) Order in Council 267 and partly by administrative measures.
It was argued that by virtue of the instrument of accession all previous existing arrangements between Khasi Hills States and the Government of India in the Assam Province were continued and the Central Government could therefore exercise extra provincial jurisdiction by usage.
To put it differently, the argument of the respondents was that though the instrument of accession was accepted by the Governor General on August 17, 1948, it recognised the fact that there was a certain existing arrangement regulating relations between the Government of India and the Chiefs of the Khasi Hills States.
The Central Government therefore exercised extra provincial jurisdiction by agreement or usage and it cannot therefore be said that the notification of the Central Government dated April 15, 1948 was invalid.
When the appeals were originally heard we considered that the material on the record was not sufficient to enable us to determine the disputed question, namely whether the Dominion of India was entitled to exercise extra provincial .jurisdiction over the Shillong Administered Areas on April 15, 1948 which was the material date.
The question at issue is not purely a question of fact but a question relating to a "fact of State" which is peculiarly within the cognizance of the Central Government (For expression "Fact of State" see Halsbury Laws of England, 3rd edn.
Vol. 7, p. 285).
In view of the insufficiency of material we thought it proper to avail ourselves of the procedure indicated by section 6 of the Act of 1947 which enacts: "6.
(1) If in any proceeding, civil or criminal in a Court established in India or by the authority of the Central Government outside India, any question arises as to the existence or extent of any foreign Jurisdiction of the Central Government, the Secretary to the Government of India in the appropriate department shall, on the application of the Court, send to the Court the decision of the Central Government on the question, and ' that decision shall for the purposes of the proceeding be final.
(2) The Court shall send to the said Secretary, in a document under the seal of the Court or signed by a judge of the Court, questions framed so as properly to raise the question, and sufficient answers to those questions shall be returned to the Court by the Secretary and those answers shall on production thereof be conclusive evidence of the matters therein contained.
" By an order of this Court dated September 21, 1967 the following two questions were forwarded to the Union of India under the seal of this Court for submission of their answers: 268 "(1) Whether the Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including Bara Bazar, which also included Mawkhar, a part of the erstwhile Mylliem State, on April 15, 1948; (2) Whether the Dominion of India had extra provincial jurisdiction on April 15, 1948 to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Bara Bazar under section 4 of Extra Provincial Jurisdiction Act (Act 47 of 1947) .
" In compliance of that order the Union of India have submitted their answers on January 12, 1968 in the following terms: "Ministry of Home Affairs.
Replies to the questions mentioned in the order dated September 21,1967 passed by the Supreme Court of India in Civil AppeaLs Nos. 2403 and 2404/1966.
(1) The British Government in India had by treaty, grant.
usage, sufferance and other means acquired jurisdiction over certain territories of the erstwhile State of Mylliem.
The jurisdiction was exercised under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian (Foreign jurisdiction).
Order in Council, 1937.
Mawkhar was a part of the territories of Mylliem jurisdiction over which had been agreed to be given by the Siem of Mylliem to the British Government.
It was included in those parts of Shillong which came, in course of time, to, be called the Shillong Administered Area.
It has been reported that on actual survey the small area known as Bara Bazar area comes partly under Mawkhar proper and partly under South East Mawk har and Garikhana.
Bara Bazar area was thus a part of the area belonging to the erstwhile Mylliem State in which the British Government in India exercised jurisdiction under the Indian (Foreign jurisdiction) Order in Council.
On the withdrawal of British Rule the jurisdiction over the territories of the erstwhile Mylliem State which had been included in the Shillong Administered Area continued to be exercised with the consent of the Siem and the jurisdiction which was until then exercised in those areas by the British Government in India was assumed by the Dominion of India and it was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem 269 and the agreement annexed thereto.
The Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including the Barra Bazar which also included Mawkhar a part of the Mylliem State on April 15, 1948.
(2) The jurisdiction exercised by the British Government in India over the Shillong Administered Area was quite extensive.
In exercise of that jurisdiction that Government had extended, with appropriate reservations, a number of Acts Central as well as Provincial to the Shillong Administered Area e.g. the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of British rule the Dominion of India acquired the same jurisdiction over the Shillong Administered Area by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
The Dominion of India therefore had on April 15, 1948 extra provincial jurisdiction in terms of the Extra Provincial Jurisdiction Act, 1947 (Act 47 of 1947) to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Barra Bazar.
The Assam Sales Tax Act was actually extended to the Shillong Administered Area including Barra Bazar, .after obtaining the consent of the Siem of Mylliem, in the Ministry.
of States Notification No. 186 IB dated the 15th April,1948.
L.P. SINGH, Secretary to the Govt.
of India.
New Delhi, January 12, 1968.
" It is clear from the letter of the Union Government that it was entitled to exercise extra provincial jurisdiction over Shillong Administered Area on April 15, 1948.
The reason is that prior to that date the British Government had exercised that jurisdiction under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian .(Foreign Jurisdiction) Order in Council, 1937.
On the withdrawal of British rule the jurisdiction over the territory of Mylliem State continued to be exercised with the consent of the ruler by the Dominion of India and the jurisdiction was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
It is also manifest that the jurisdiction exercised by the British Government over the Shillong Administered Area was quite exten 270 sive and in exercise of that jurisdiction a number of Acts Central & Provincial were extended to the Shillong Administered Area, for example, the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of the British rule the Dominion of India acquired the same jurisdiction which included the extension of the Act to the Shillong Administered Area.
Under section 6(2) of the Act of 1947 the answers of the Central Government to the questions forwarded by this Court shall be treated as conclusive evidence of the matter therein contained.
We accordingly hold that the argument of the appellant on this aspect of the case should be rejected.
It was then contended on behalf of the appellant that section 30 of the Act after the amendment was not applicable and the Assistant Commissioner of Taxes had no authority to ask the appellant to deposit the amount of tax assessed before hearing the appeal.
Section 30 of the Act, as it originally stood, was to the following effect: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assess ment or penalty; Provided that no appeal shall be entertained by the said authority unless he is satisfied that such amount of tax as the appellant may admit to be due from him has been paid; Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time. . . . . . " After the amending Act of 1958 the section reads as follows: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assessment or penalty; ' Provided that no appeal shall be entertained by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid; 271 Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time.
. . . . . . . ." It was contended that the amendment came into force with effect from April 1, 1958 and it cannot be given retrospective effect so as to apply to assessment periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
We are unable to accept this argument as correct because the assessments for these three periods were completed after the amending Act came into force i.e., after April 1, 1958.
The appeals against the assessments were also filed after the amendment.
It is therefore not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was there.fore right in asking the appellant to comply with the provisions of the amended section 30 of the Act before dealing with the appeals.
It was lastly contended on behalf of the appellant that the Sales Tax Authorities were not right in holding that there was no provision under the Act by which security can be accepted in lieu of cash payment.
Reliance was placed upon the phrase "otherwise directed" in the amended section 30 of the Act.
In our opinion, there is no substance in this argument.
The expression "otherwise directed" only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole, but the section gives no power to the appellate authority to permit the assessee to.
furnish security in lieu of cash amount of tax.
We accordingly reject the argument of the appellant on this point.
For the reasons expressed we hold that the High Court was right in dismissing the writ petitions and these appeals must be dismissed with costs there will be one set of hearing fees.
V.P.S. Appeals dismissed.
[/INST]By a notification dated April 15, 1948 .the
Government of India extended the Assam Sales Tax Act, 1947 to the Administered Area in Shillong under section 4 of the Extra Provincial Jurisdiction.
Act, 1947.
The instrument of accession by which the administration of the Indian Princely State, of Mylliem in the Shillong Administered Area was transferred to the Central Government was accepted by the Governor General of India on August 17, 1948.
Under section 30 of the Assam Sales Tax Act, as amended by Act 6 of 1958, a dealer may appeal against an order of assessment or penalty, but the appeal shall not be entertained by the appellate authority unless he was satisfied that the amount of tax assessed or penalty levied, if not otherwise directed by him, had been paid.
The sales 'tax authorities assessed the appellant to sales tax and imposed penalties for Various periods.
Though some of the; assessment periods were before April 1, 1958 when the Amending Act 6 of 1958 came into force, all the orders of assessment and penalty were passed after April 1, 1958.
The appellant did not pay the tax assessed or the penalty but filed petitions along with its appeals praying that it may be allowed to furnish security in lieu of payment of cash on account of its financial condition.
The petitions were rejected and the appeals were consequently dismissed.
Writ petitions flied by the 'appellant in the High Court, to quash the orders of dismissal of the appeals, were also dismissed.
In appeal to this Court, it was contended that; (1) After August 15, 1947 the State of Mylliem became an independent State and since the Central Government could exercise extra provincial jurisdiction under the Extra Provincial Jurisdiction Act, only if the Central Government exercised ' such jurisdiction under a treaty, agreement, or by other lawful means, the Central Government in the present case, could not exercise such jurisdiction till August 17, 1948 when the instrument of accession was acCepted; and therefore, the notification dated April 15, 1948 was not validly issued and hence the Assam sales Tax Act was not operative in the Shillong Administered Area; (2) As the Amending Act of 1958 came into force on April 1, 1958 it could not be given retrospective effect so as to apply to assessment periods anterior to that date; and (3.) The authorities were not right in holding that there was no provision in the Act empowering them to accept security in lieu of cash payment.
262 As the material on the record was not sufficient to enable the Court to determine the question whether the Dominion of India was entitled to exercise extra provincial jurisdiction over the Shillong Administered Area on April 15, 1948 this Court under section 6 of the Extra Provincial Jurisdiction Act, forwarded to the Union Government the questions: (a) whether the Dominion of India exercised such jurisdiction on April 15, 1948, and (b) whether the Dominion of India had such jurisdiction to extend the Assam Sales Tax Act to, the Area After receiving the answers, HELD: (1) The answers submitted by the Union Government showed that prior to April 15, 1948, the British Government had exercised jurisdiction over the Area under the Indian (Foreign Jurisdiction) Order in Council, 1902, as amended by the Order in Council of 1937 that on the withdrawal of British rule the jurisdiction continued to be exercised with the consent of the Siem (ruler) of Mylliem State by the Dominion of India, that the Jurisdiction was retained thereafter by the instrument of accession signed by the Siem, and that the exercise of the jurisdiction by the British Government and the Dominion of India several Acts were extended to the Shillong Administered Area.
Since under section 6(2) of the Extra Provincial Jurisdiction Act the answer of the Central Government is conclusive evidence of the matter therein the Union Government was entitled to exercise such jurisdiction over the Shillong Administered Area on April 15, 1948 and therefore, the Assam Sales Tax Act was properly extended to the Area.
[269 F H, 270 B C] (2) The assessments for periods anterior to April 1, 1958 were completed after the Amending Act came into force and the appeals were also filed thereafter.
Therefore the Amending Act of 1958 was applicable to the appeals before the appellate authority and was not given retrospective effect.
[271 C D] (3) The expression 'otherwise directed ' only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole but the section gives no power to the appellate authority to permit the assessed to furnish security in lieu of the cash amount of tax.
[271 D E]
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 4460 Of 1988.
From the Order dated 15.4.
1988 of the Customs Excise and Gold (Control) Appellate Tribunal New Delhi in Appeal No. E/Appeal No. 2225 of 1986 A. 3 V. Sreedharan, V.J. Francis and N.M. Popli for the Appel lant.
Ashok H. Desai, Solicitor General, Dalip Tandon and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This is an appeal under section 35L of the .
The appeal is di rected against the order dated 15.4.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.
The appellant is the manufacturer of Hacksaw blades and Bandsaw Blades failing under Tariff Item No. 51 A(iv) of the Central Excise Tariff.
The appellant filed a classification list as per Rule 173B of the Central Excise Rules 1944 on 26.3.1985 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effec tive rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The aggregate value of the clearance in the preceding year i.e. 1984 85 did not exceed Rs.75 lakhs.
In the case of first clearance upto an aggregate value not exceeding Rs.7.5 lakhs, the effective rates of duty is nil and in the case of next clearance of Rs.7.5 lakhs, the duty is 3.75% Ad valorem.
The Assistant Collector of Central Excise, Hyderabad, approved the Tariff rate 15% Ad valorem on 3.6.1985 instead of the above effective rates as the appellant did not claim the exemption as per Notification No.85/85 CE dated 17.3.1985 due to ignorance.
A revised classification list with the effective rates in respect of the products with retrospective effect from 26.3.1985 was filed on 31.10.1985.
The revised classification list was approved.
The appellant claimed that they had paid excess Rs.2,55,172.55 from 1.4.1985 to 31.8.1985 as excise duty.
They made an application for refund as per rule under sec tion 11B of the on 30.10.1985.
The Assistant Collector of Central Excise by his order dated 13.12.1985 sanctioned the refund claim only partly.
For the period from 1.4.1985 to 27.4.1985, the refund claim was rejected on the ground that the same was time barred.
The Assistant Collector held that the refund claim for the period 1.4.1985 to 27.4.1985 was time barred for the reason that under section 11B, the 'relevant date ' for preferring the claim for a case such as that of the appellant was the date of payment of duty and, according to him, the duty had been paid by adjustment in the personal ledger account as and when goods were removed.
The plea of the appellant is that mere debiting in the personal ledger account should not be taken as the starting point for 4 limitation and the relevant date should be the date on which RT 12 Returns which are filed on a monthly basis are as sessed.
The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
The further appeal to the Tribunal was also unsuccessful.
The question that arises for decision in the appeal is as to the starting point of limitation for filing an appli cation under section 11B of the .
Section 11B so far as it is material reads as under: "11B. Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation For the purposes of this section (B) "relevant date" means, (a) to (d) . . . . . . . . (e) in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty.
" The appellant 's contention before the authorities was that the date of assessment would be the date of payment of duty within the meaning of clause (f) above.
We agree with the learned Solicitor General that this argument is not tenable.
Where an assessee maintains a personal ledger account, duty is paid by way of debit therein and goes to reduce the amount of deposit paid by the assessee.
It is 5 not a mere adjustment entry; it is effective payment.
Before us, however, learned counsel for the assessee has raised an alternative contention.
According to the appellant it is clause (e) which is applicable in the case whereas the contention of the respondent is that clause (f) is attract ed.
To understand this argument, it is necessary to refer to 'Self removal ' procedure under which the appellant cleared the goods.
Chapter VII A of the Rules relates to removal of excise goods on determination of duty by producers, manufacturers of private warehouse licensees.
Under Rule 173B, every assessee shall file with the Proper Officer for approval a list in prescribed form showing full description of all excisable goods or products manufactured, the rate of duty leviable on such goods and such other particulars as the Collector may direct.
The Proper Officer shall, after such enquiry as he deems fit, approve the list with such modifi cations as are considered necessary and return one copy of the approved list to the assessee who shall unless otherwise directed by the Proper Officer determine the duty payable on the goods intended to be removed in accordance with such list.
All clearance shall be made only after the approval of the list by the Proper Officer.
Sub rule (2 A) of Rule 173B provides as under: "(2 A) All clearances shall, subject to the provisions of rule 173CC, be made only after the approval of the list by the proper officer.
If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under rule 9B for provisional assess ment of the goods.
" Where the assessee disputes rate of duty approved by the Proper Officer in respect of goods, he may have to give an intimation to that effect to such officer and to pay duty under protest at the rate approved by such officer.
When the dispute about the rate of duty has been finalised or for any other reason affecting rates of duty, a modification of the rate or rates of duty is necessitated, the Proper Officer shall make such modification and inform the assessee accord ingly.
Under Rule 173C, the assessee shall file with the Proper Officer a price list in prescribed form.
Prior ap proval of the price list by the 6 Proper Officer is necessary in the specified cases.
Here also, sub rule (5) of rule 173C provides: "(5) Subject to the provisions of rule 173CC, an assessee specified in sub rule (2) shall not clear any goods from a factory, warehouse or other approved place of storage unless the price list has been approved by the proper officer.
In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or for any other rea sons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assessee or of his own accord allow such asses see to avail himself of the procedure prescribed under rule 9B for provisional assessment of the goods." Under Rule 173CC, assessee may remove goods in certain cases pending approval by the Proper Officer of the classi fication or price list.
Rule 173F provides that where the assessee has complied with the provisions of Rules 173B, 173D, and where applicable 173C, 173CC, he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as other wise expressly provided, remove such goods unless he has paid the duty as determined.
Under Rule 173G, every assessee shall keep an account current with the Collector.
This rule lays down the procedure which is to be followed by the assessee for payment of duty.
According to sub rule (3) of Rule 173G, within five days after the close of each month every assessee shall file with the Proper Officer a monthly return in the prescribed form showing the quantity of the excisable goods manufactured, duty paid on such quantity and other particulars.
The Proper Officer makes an assessment as provided under Rule 1731 on the basis of the information contained in the return and after such further enquiry as he may consider necessary assess the duty due on the goods removed and the assessment is completed.
The duty determined and paid by the assessee under Rule 173F shall be adjusted against the duty assessed and where the duty so assessed is more than the duty determined and paid, the assessee shall pay the deficiency by making a debit in the current account within 10 days of the receipt of copy of the return and where such duty is less, the assessee shall take credit in the account current for the excess.
This is the scheme for the payment of duty for clearance of goods by the manufacturers.
This procedure is known as self removal procedure.
There will be no time bar for refund if the duty is paid under 7 protest.
The period of 6 months is prescribed in other cases.
As we have already seen, section 1 1B says that the period of 6 months "in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof".
In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985.
From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure pre scribed under Rule 9B for provisional assessment of the goods.
In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
This is the procedure prescribed under Rule 9B except for the circum stance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time.
In these circumstances, the clearances of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11B will be attracted.
In this case the RT 12 Returns for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11B will operate.
In the present case the refund application had been filed on the 30th of October, 1985.
It cannot, therefore, said to be time barred.
We, therefore, accept this contention of the appellant.
The appeal has therefore to be allowed holding the appellant is entitled to the full amount and there is no bar of limi tation as found by the Tribunal.
We, therefore, allow the appeal.
In the facts and circumstances of the case there will be no order as to costs.
T.N.A. Appeal allowed.
[/INST]A group of Block Level Extension Officers rendered surplus in their parent department were appointed as Sales Tax Inspectors, Class III (Executive) posts, in the respond ent State between 13th February, 1967 and 28th September, 1970.
By an order dated 29th March, 1967, they were exempted from the requirement of going through competitive examina tion for the purpose of absorption.
By memorandum dated 22nd May, 1967 it was provided that seniority of surplus Class III ministerial employees of the development blocks on their absorption in other departments shall be determined with regard to the completed years of service counted for fixa tion of initial pay.
By a subsequent memorandum dated 8th November, 1967 this facility was also extended to employees absorbed in Class III executive posts.
Another order issued on 19th July, 1973 on the subject maintained the provision with regard to seniority as contained in the memorandum dated 22nd May, 1967.
Subsequently these Sales Tax Inspec tors were made permanent to that post retrospectively with effect from 31st March, 1967 by an order dated 15th Febru ary, 1980.
In the combined seniority list prepared accord ingly some of the directly recruited Sales Tax Inspectors were shown junior to the absorbed Sales Tax Inspectors.
On cross petitions being filed by the existing Sales Tax Inspectors and the absorbed Sales Tax Inspectors assailing the seniority list the High Court quashed the order dated 15th February, 1980 and seniority was directed to be fixed in accordance with the Recruitment Rules and general condi tions of Service Rules.
In these appeals by special leave, it was contended for the existing Inspectors that the absorbed Inspectors could not be confirmed on 15th February, 1980 retrospectively with effect from a presumed date, namely, 31st March, 1967; that the determination of seniority taking 155 confirmation as the basis was erroneous as they were enti tled to have the entire period between their actual appoint ment and confirmation taken into consideration, and that the appointment of the absorbed Inspectors was illegal having been made not in conformity with the relevant rules and without the recommendations of the Public Service Commis sion.
For the absorbed Inspectors it was contended that since they had been working in another department of the State Government from various dates between 13th November, 1956 and the actual date of their absorption they were entitled to have the entire period of their service in that department taken into consideration and the fixation of their seniority on the basis of their having been confirmed from the presumed date of 31st March, 1967 was erroneous, that none of the rules relied on by the existing 'Inspectors was applicable to them, and that it was the executive in structions issued in this behalf particularly dated 29th March, 1967, 22nd May, 1967, 8th November, 1967 which ap plied to their absorption.
Allowing the appeals, the Court, HELD: 1.
The order of the State Government dated 15th February, 1980 giving retrospective confirmation to the absorbed Sales tax Inspectors from a presumed date and determination of inter se seniority on the basis of the dates of confirmation was valid.
[159H] 2.1 Once an incumbent is appointed to a post according to rule, his seniority shall be counted from the date of his appointment and not according to the date of his confirma tion.
His transfer to the same or an equivalent post in another Government department cannot wipe out his pre exist ing length of service in the parent department.
[162D; 164G] Direct Recruit Class II Engineering Officers ' Associa tion vs State of Maharashtra & Ors., ; ; Wing Commander J. Kurnar vs Union of India & Ors., ; and K. Madhavan & Anr.
vs Union of India & Ors.
, , referred to.
2.2 It is, however, perfectly within the power of the Government to have a rationalisation of the entire situation and determine with objectivity and fairness what rules should govern the inter se seniority and ranking of the personnel working in the concerned department.
The Courts will only insist that the rules so formulated should be reasonable, just and equitable.
[165E; 166E] R.S. Makashi vs I.M. Menon, ; ; K.C. Vasudeva 156 S.G. Jai Singhghani vs Union of India, ; , referred to. 2.3 In the instant case, if the period between the dates of appointment and confirmation of the existing Inspectors was counted for fixing their seniority but the period during which absorbed Inspectors worked in their parent department was ignored, the former would have obviously been placed on a more advantageous position but only to the prejudice of the latter as it would have amounted to sacrificing their interest.
If, on the other hand, the periods of continuous service of both the sets of Inspectors was taken into ac count it would have resulted in granting benefit to the absorbed Inspectors at the cost of existing ones and presum ably including those who had already been promoted as As sistant Sales Tax Officers, even prior to 22nd May, 1967, inasmuch as the period during which they had served in their parent department was much longer than the period of offici ation of existing Inspectors.
This was the situation with which the State Government was faced and it was its duty to evolve some policy or equitable formula which did justice, as far as possible, to the competing claims of both the sets of officers.
The decision taken by the Government in the peculiar facts and circumstances of the case could not be said to be either arbitrary or discriminatory.
No statutory rule has been brought to Court 's notice which could run counter to it.
[165H; 166A D] 3.
The services of the absorbed Inspectors have not been shown to have ever been factually terminated in their parent department.
Again, though the nature of appointment of these officers in the Sales Tax Department was temporary they were allowed to uninterruptedly continue to hold the said post and were subsequently not only confirmed on that post but were also given ad hoc promotion as Assistant Sales Tax Officers.
Furthermore, no relief for the quashing of their appointment was sought for by the direct recruits before the High Court nor was any such relief pressed there.
In fact, even the fixation of their pay as Inspectors consequent upon their absorption, which was done in accordance with the executive instructions does not seem to have been ever challenged.
The validity of their appointment in the Sales Tax Department, therefore, could not be assailed.
[160G;
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<s>[INST] Summarize the judgementminal Appeal No. 645 of 1989.
From the Judgment and Order dated 17.3.89 of the Delhi High Court in Criminal Appeal No. 270/85.
AND Criminal Appeal No. 534 of 1989.
A.P. Mohanty and S.K. Sabharwal for the Appellants.
K. Lahri, V.C. Mahajan, Mrs. Indra Sawhney and B.K. Prasad for the Respondent.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Sardar Singh, his wife Saraswati and his brother 's wife Savitri were charged under Sections 302/34 and 201/34, Indian Penal Code (IPC) for the murder of one Charanjit.
The trial Court convicted Sardar Singh and his wife Saraswati on both the counts and sentenced them to imprisonment for life on the first count and for five years on the second count.
Accused Savitri was, however, acquitted by the trial Court.
The High Court dismissed the appeal filed by Sardar Singh.
Saraswati was acquitted of the charge under Sections 302/34, IPC but her conviction and sentence Under Section 201/34 IPC was maintained by the High Court.
These two appeals are by Sardar Singh and Saraswati against the judgment of the High Court.
67 Sardar Singh, appellant and one Tara Chand are real brothers.
Both the them were residing in village Jhatikara.
They were living in adjoining houses.
Deceased Charanjit was living in a house adjacent to their houses.
Charanjit 's wife had died about ten years ago and he was living in the house by himself.
Deceased Charanjit had developed illicit relation with Savitri wife of Tara Chand and also with appellant Saraswati.
The prosecution case in a nut shell is that deceased Charanjit was having illicit relations with both Saraswati and Savitri and used to visit them during night for the last so many years.
On March 31, 1983 the deceased had gone to sleep in his house in the evening and did not appear thereafter.
On April 4, 1983 Lakhmi Chand, brother of the deceased, lodged report with the police expressing suspicion against the appellants and Savitri.
It is alleged that during the course of interrogation Sardar Singh appellant made a disclosure statement and consequently led the policy party to his sitting room where he pointed out a spot covered by a cot.
Sardar Singh, thereafter, dug the floor and the dead body of the deceased was recovered from a five feet deep grave.
Thereafter, at the pointing out of the appellant Sardar Singh, the police also seized doe (wood cutter) and knife contained in a canvas bag hanging in the adjacent room.
The dead body was tied with a rope and was wrapped in three gunny bags.
The recovered knife had no blood stained while the doe was found stained with blood.
On examination by the Serologist the blood stains on the doe were found to be human and of the same group as that of the deceased.
The entire case of the prosecution is based on circumstantial evidence.
The circumstances relied upon by the prosecution are as under: (1) The deceased had illicit relations with Saraswati and Savitri, wife and brother 's wife of appellant Sardar Singh.
(2) The deceased was last seen on the night of March 31, 1983 when he went to sleep in his house and thereafter his dead body was found buried in the appellants ' house.
(3) Sardar Singh appellant, on interrogation made a disclosure statement leading to the recovery of the dead body from a five feet deep pit in the sitting room of the appellants.
(4) Recovery of doe from the possession of the appellant which was 68 found to bear the same human blood group as that of the deceased.
Relying upon the above mentioned circumstances the trial Court and the High Court have convicted the appellants.
So far as appellant Sardar Singh is concerned, the chain of circumstances relied upon by the prosecution and accepted by the courts below leaves no manner of doubt that it was he who committed the murder of Charanjit.
We have been taken through the judgments of the trial Court and that of the High Court.
We agree with the reasoning and the conclusions reached therein.
We, therefore, uphold the conviction and sentenced of appellant Sardar Singh and dismiss his appeal.
So far as appellant Saraswati is concerned the High Court dealt with her case in the following manner: "Before we part with this order, there is one more fact which needs our consideration.
In this case, the disclosure that led to the recovery of the dead body has been made by Sardar Singh appellant.
There is no evidence direct or indirect to connect the appellant Saraswati with the commission of murder, though it can safely be said that she being the inmate of the house was in know of the fact that the dead body was buried in the house with a view to cause the disappearance of evidence.
In our view, the process of digging a grave of 5 feet deep and of the size of the deceased in length, the filling of the grave and then erasing the traces of the same is a long process and she must have been necessarily involved in the same.
since, in our view, there is no evidence to connect her with the commission of murder we acquit the appellant Saraswati of the charge under Section 302/34 IPC but maintain her conviction and sentence under Section 201/34 IPC.
" We are of the view that the reasoning adopted by the High Court in acquitting Saraswati of the charge under Section 302/34 IPC is equally applicable to the charge against her under Section 201/34 IPC.
It may be correct that the process of digging a grave of five feet deep, the filling of the grave and then erasing the traces etc.
may not have been done by Sardar Singh alone but there is not an iota of evidence on the record not even a whisper to the effect that it was Saraswati who helped him in 69 concealing or causing the evidence of the commission of the offence to disappear.
Simply because she is the wife of appellant Sardar Singh and as such is supposed to be living in the same house, it cannot be assumed that she was guilty of the offence under Section 201/34 of the Indian Penal Code.
According to the Prosecution Saraswati was having illicit relation with the deceased for several years.
Sardar Singh may or may not have taken her help in concealing the dead body.
Her being wife of Sardar Singh by itself is not sufficient to prove the charge under Section 201/34 IPC against her.
We, therefore, give benefit of doubt to Saraswati, allow her appeal and acquit her of the charge under Section 201/34, Indian Penal Code.
She is already on bail.
Her bail bonds are cancelled.
T.N.A. Crl.
A. No.645/89 dismissed.
Criminal Appeal No. 534/89 allowed.
[/INST]The petitioner In his Writ Petition Under Article 32 of the Constitution of India, challenged the constitutional validity of the Representation of the People (Amendment) Ordinance, 1992 (Ordinance No. 1 of 1992), and the Representation of the People (Second Amendment) Ordinance, 1992 (Ordinance No.2 of 1992) on the grounds of violation of Articles 14, 19 and 21 of the Constitution of India.
The provisions of Section 52 of the Representation of the People Act, 1951 as they stood before amendment provided for countermanding the election In either of two contingencies: (1) If a candidate whose nomination was found valid on scrutiny under section 36 or who has not withdrawn his candidature under section 37 died and a report of his death was received before the publication of the list of contesting candidates under section 38, (II) If a contesting candidate died and a report of his death was received before the commencement of the poll.
By Ordinance No. 1 of 1992, the area attracting the provisions of countermanding in section 52 had been narrowed down by confining the provisions only to such cases where a candidate of a recognized political party dies.
787 Section 30 of the Representation of People Act, 1951 dealt with appointment of dates for nomination, scrutiny and the holding of poll, and in clause (d) it was provided that the date of poll shall not be earlier than the twentieth day after the last date for the withdrawal of candidatures.
With a view of expedite the whole process, the words 'twentieth day ' have been substituted by the words 'fourteenth day ' in clause (d) of Section 30 by the Second Ordinary viz. Ordinance No. 2 of 1992.
On behalf of the petitioner it was contended that the distinction made by the impugned amendment between a candidate set up by a recognised political party and any other candidate is artificial, inconsistent with the spirit of the election law and discriminatory, that the Con stitution does not confer on a candidate set up by a registered political party any special right, and treats all candidates similarly, and does not any categorisation, that the difference being introduced by the impugned amendment was contrary to the scheme of the Constitution and violative of the equality clause in Article 14, and that it also infringed the guarantee under Article 19(1) (a).
In respect of the Second Ordinance the objection was that the period of 14 days substituted by the amendment was too short, and the reduction from the period of 20 days was arbitrary and prejudicial to the larger interest for which elections are held.
The Petition was contested on behalf of Union of India by stating that on account of increase in terrorism and physical violence in several parts of the Country combined with the phenomenal increase in the number of independent candidates, the danger of disruption of the election process had been fast growing and the problem was, therefore, taken up, examined and it was considered that the amendments were essential to curb the danger of disruption of the election process.
Dismissing the Writ Petition, this Court, HELD : 1.
The right to vote or to stand as a candidate for election is neither a fundamental right nor a civil right In England also it has never been recognised as a common law right [791D] Jyoti Basu & Ors.
vs Debi Ghosal & Ors, ; and 986, referred to. 2.
The Cabinet system of Government has been envisaged by our 788 Constitution, and the same is on the British pattern.
In England, where democracy has prevailed for longer than in any other country in recent times, the Cabinet system of Government has been found to be most effective.
In other democratic countries also the party system has been adopted with success.
[792C D] Shamser Singh vs State of Punjab, ; at 827, referred to.
3.For a strong vibrant democratic Government, it is necessary to have a parliamentary majority as well as a parliamentary minority, so that the different points of view on controversial issues are brought out and debated on 'he floor of the Parliament.
This can be best achieved by the party system, so that the problems of the nation may be discussed, considered and resolved in a constructive spirit.
To abolish or ignore the party system would be to permit a chorus of discordant notes to replace an organised discussion.
[792E] Sir Ivor Jennings 'Cabinet Government 2nd Edn.
p.16, referred to.
4.Our Constitution has dearly recognised the importance of the party system, which was further emphasized by the addition of the 10th Schedule to it The Election Symbols (Reservation and Allotment) Order is also a step in that very direction.
[792F] 5.That candidates set up by political parties constitute a class separate from other candidates has been recognised in numerous cases by this Court which has also emphasized the vital role of political parties in a parliamentary form of democracy and expressed anxiety about the growing number of independent candidates.
[792H, 793C] Dr. P.N. Thampy Terah vs Union of India ; and D.M.L. Agarwal vs Rajiv Gandhi, ; , referred to.
6.The Representation of the People (Amendment) Ordinance, 1992 and theRepresentation of the People (Second Amendment) Ordinance, 1992 are constitutionally valid.
[789C]
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<s>[INST] Summarize the judgementAppeal No. 251 of 1982.
From the Judgment and Order dated 24.10.81 of the Disciplinary Committee of the Bar Council of India, Delhi in B.C.I.T R. Case No. 28 of 1979.
B.Singh, S.K.Gambhir and Davinder Singh for the Appellant.
R.P.Kapur and Rajiv Kapur for the Respondents.
The Judgment of the Court was delivered by 491 KULDIP SINGH, J.
D.S. Dalal was a practising advocate in Delhi.
The Bar Council of India by its order dated October 24, 1981, removed his name from the rolls of advocates of the Bar Council of Delhi and the sanad granted to him has been withdrawn.
This appeal under Section 30 of the is against the order of the Bar Council of India.
The State Bank of India lodged a complaint before the Bar Council of Delhi on September 4, 1978.
It was alleged in the complaint that the appellant along with two other advocates was practising under the name and style of "M/s Singh and Company" a firm of advocates and solicitors having their office at 2670, Subzi Mandi, Delhi.
It was alleged that the advocates were duly engaged by the Asaf Ali Road branch of the State Bank of India to file a recovery suit against M/s Delhi Flooring (Pvt) Ltd. for the recovery of Rs. 6,12,164.10.
"Singh and Company" (the firm) at that time was represented by Mr. D.S. Dalal, Mr. B. Singh and Ms V.Singh, Advocates, who were the partners of the said firm and were conducting cases for and on behalf of the firm.
It is the case of the complainant that in the year 1975, the file relating to the case which was to be filed against m/s Delhi Flooring (Pvt) Ltd., containing original and valuable documents, was handed over to the Firm by the complainant.
Thereafter, the Firm submitted a bill for filing the recovery suit which included the professional fees and other miscellaneous charges.
An amount of Rs. 11,475 was paid to the Firm on November 15, 1975, for filing the suit which included 1/3rd of the professional fee plus the miscellaneous charges.
This was acknowledged by the Firm under a receipt which was placed on the record.
Till December 19, 1975, the Firm did not inform the bank as to whether the suit was filed and if so what was the stage of the proceedings.
The bank wrote a letter dated December 05, 1975 to the Firm asking it to send a copy of the plaint before December 8, 1975, for signatures and verification failing which the bank would be compelled to withdraw the case from the firm.
At that stage Mr. B. Singh, Advocate, one of the partners of the Firm, in his letter dated December 15, 1975 informed the bank that the suit had been filed on December 15, 1975 in the High Court of Delhi.
Thereafter, the bank appears to have received no communication from the said advocates despite repeated reminders oral and other ,vise and the bank was kept in the dark about the fate of the case entrusted to the appellant and his associates.
492 As there was no response from the appellant, the bank engaged the services of Mr. R.P. Arora, Advocate, in order to find out as to what happened to the suit filed by the appellant and his associates on behalf of the bank.
R.P. Arora in his letter dated March 2, 1977, informed the bank that the suit which had been filed on December 15, 1975 was returned by the original Branch on January 31, 1976 to the Registry of the High Court with objections.
Mr. Arora in his letter dated March 31, 1977 further informed the bank that the entire suit paper book had been returned to Mr. B. Singh, Advocate on July 27, 1976 for removing the objection and thereafter the suit has not been re filed in the Registry of the High Court of Delhi.
The complainant, therefore, claimed that the appellant and his associates were guilty of serious professional misconduct as they failed to discharge their professional duties and responsibilities entrusted to them by the bank in its capacity as a client.
It was further claimed by the bank that the appellant and his associates had misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee.
The complainant further stated that even the documents and other papers handed over to the appellant and his associates for filing the suit were not returned.
The complainant was originally registered with the Bar Council of Delhi.
On September 19, 1979, the Disciplinary Committee of the Bar Council of Delhi transferred the case to the Bar Council of India on the ground that the case had been pending for more than one year.
The Bar Council of India issued notices returnable on November 2, 1980.
On that date the respondents were not present and as such fresh notices were issued for December 20, 1980.
Mr. D.S. Dalal, though served was not present on December 20, 1980 and as such ex parte proceedings were ordered.
Notice to Mr. B. Singh, Advocate was returned with the postal endorsement "refused".
He was also ordered to be proceeded ex parte.
The case was posted for January 23, 1981 for the evidence of the complainant.
On that day the appellant moved an application for setting aside the ex parte order dated December 20, 1980.
The ex parte order was set aside conditionally permitting the appellant to participate in the proceedings and the case was adjourned to February 27, 1981.
On February 27, 1981, three witnesses were examined in the presence of the appellant and he cross examined them.
Thereafter the case was adjourned from time to time and finally fixed for evidence on August 22, 1981.
The appellant again sent an application for adjournment which was rejected.
The evidence was con 493 cluded, arguments were heard and the order reserved.
The Bar Council of India in the impugned order observed as under : "From a perusal of the order sheet of the Disciplinary Committee of the Bar Council of Delhi and also of the order sheet before us, it reveals that the respondents have throughout adopted the tactics of non cooperation purposely with a view to protract the proceedings unnecessarily '.
It may be mentioned that the complainant had given up its case against Ms. V. Singh, Advocate and as such the Bar Council of India ultimately did not proceed against her.
So far as Mr. B. Singh and Mr. D.S. Dalal are concerned, the case against them was proved beyond reasonable doubt and their names were removed from the rolls of advocates of Bar Council of Delhi and the sanads granted to them were ordered to be withdrawn.
The appeal before us is by D.S. Dalal.
We have been informed that Mr. B. Singh Advocate filed a review petition before the Bar Council of India on October 22,1989 which is still pending.
The Bar Council has also granted stay of the order dated October 24, 1981 with the result that Mr.B. Singh is continuing with his legal practise.
This appeal was argued before us by Mr.
B.Singh, Advocate.
It is not disputed before us that Mr.B.Singh and Mr. D.S.Dalal were the main partners of the Firm.
It is also not disputed that an amount of Rs.11,475 was received by these advocates towards the filing of the suit and further that the connected documents and papers were received by them.
B.Singh, learned counsel for the appellant primarily argued that the suit was filed by the appellant in the Delhi High Court on December 15, 19 '/5 but the record of the suit file was misplaced/lost by the High Court registry.
He further stated that by his letter dated August 20, 1977, he informed the bank about the suit file being not traceable and further that the record of the suit was to be re structured and refiled.
We have been taken through the copy of the letter dated August 20, 1977, written by Mr.B.Singh on behalf of the Firm to the Regional Manager, State Bank of India, Parliament Street, New Delhi.
The relevant paragraph is as under 494 "However, as already intimated two bank cases one of Delhi Flooring (P) Ltd. of Asaf Ali Road branch and second of J.M.A.I.E. Corporation of Jungpura branch filed by the undersigned in Delhi High Court have been misplaced/lost by High Court Registry and the record reconstruction petitions have already been given to the branches in March, 1976 itself.
In case the said suits have not already been got restored through some other learned counsel and the assistance the undersigned is required for the restoration/reconstruction then he is willing to cooperate fully without charging any fee and without insisting on the payment of his outstanding bills first.
The undersigned can work only when he is allowed to work in terms of his approved schedule of fees and the payment is made of all his bill, forthwith.
" The letter dated August 20, 1977, quoted above was not produced before the Bar Council of India.
It has been placed before us for the first time.
Apart from the ipse dixit of the appellant and Mr.B. Singh in the above letter, there is no evidence on the record to show that the suit file was misplaced or lost by the High Court Registry.
On the other hand, there is cogent and reliable evidence on the record to show that the Delhi High .
Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it.
Mr. R.P. Arora, Advocate, appeared as a witness before the Bar Council of India.
The relevant part of his evidence is as under "I know the respondents in the case.
I was instructed by the complainant in case to find out as to whether the respondents had filed the suit against the Delhi Flooring (P) Ltd. in the High Court of Delhi which was entrusted by the complainant with the respondents.
Accordingly I went to Delhi High Court and made enquiries to find out whether such a suit has been filed.
On enquiry I came to know from the registers of the High Court that the suit had been filed on behalf of the complainant against Delhi Flooring (P) Ltd. on 15th December, 1975.
1 found from the records that the office has not registered the suit 495 because of certain objections raised by the office.
I also came to know that the entire suit filed had been returned to the respondents for complying with the objections and to refile the suit.
This was so returned on 27.7.76.
The enquiries that were made by me in the High Court office was during March 1977 and till that date the suit had not been refiled by the respondents." Mr. R.P. Arora, Advocate, after examining the records of the Delhi High Court had sent two reports to the State Bank of India.
In his report dated March 2, 1977 he stated as under : "As desired by you, to know the whereabouts of the above noted case, I contacted the concern clerk in the Original Branch of High Court of Delhi at New Delhi and also inspected the registers of the Original suits.
The above noted case was filed by M/s Singh & Co. on 15.12.1975, but there were certain objections by the original branch and on 31.1.76 the said case (file) was returned to the registree by the original branch.
The register of the registree in respect of the period from 31.1.1976 is not available and I shall let you know the upto date information, when the said case was returned to M/s. Singh & Co. within a short period.
" Subsequently in his report dated March 31, 1977, Mr. R.P.Arora, Advocate gave the following information to the bank: "I have enquired from the Original section of High Court of Delhi at New Delhi, that the file of the above stated case was returned to Shri B.Singh on 27.7.1976 as the said case was under objections.
So far he has not again filed the said case in High Court.
" Both the above quoted reports have been proved on the record of the Bar Council of India as evidence.
The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B. Singh was proved beyond doubt.
The Bar Council of India concluded as under: 496 ".
After having gone through the evidence and the documents produced in the case carefully, we have come to the conclusion that the complainant had entrusted the suit to be filed against M/s Delhi Flooring (Pvt) Ltd. with the necessary papers and Rs. 11,400.74 for expenses etc.
to the respondent advocates.
It is also established that the respondents have filed the suit on 15.12.1975 with some objections deliberately and when the papers were returned by the High Court, they had not refiled the suit for a pretty long time and as is established tiff this day.
So, we have no hesitation to conclude that the respondents, have misappropriated the amount realised by them from the Bank without filing the suit in a proper manner.
" We have given our thoughtful consideration to the evidence on the record against the appellant.
We see no ground to interfere with the order of the Bar Council of India.
We agree with the reasoning and the conclusions reached therein.
We, therefore, dismiss the appeal.
No costs.
V.P.R. Appeal dismissed.
[/INST]The prosecution alleged that the appellant borrowed a sum of Rs. 450 from the deceased and had executed two hand notes exhibit 7 and exhibit 8, promising to repay the amount on 21.3.1976.
On the said date the deceased accompanied by his nephew, PW.3 proceeded to the village of the appellant and as he was getting late, PW.3 carried with him a torch light.
The distance of the house of the deceased from that of the appellant was about one furlong.
The appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money, he asked them to wait there and proceeded towards his house When the appellant did not return for some time, the deceased alongwith PW.3 proceeded towards the house of the appellant when they found him and his two brothers coming towards them variously armed, one had a crowbar while the others had a crooked dao and a kupi dao with them.
PW.3 apprehended some danger from the appellant and his brothers, but his uncle told him that since they had done no wrong, they need not be afraid of any assault.
On coming near the deceased and PW.3, one of the brothers gave a blow with a crowbar, while the other two brothers assaulted the deceased thereafter.
PW.3 pulled the deceased towards his house and implored the accused not to assault him.
At the asking of his uncle PW3 ran away to his house and gave the information to the wife of the deceased and also narrated the occurrence to PW.4.
The wife of the deceased went to PW.6, and after telling him as to what had been told to 390 her by PW3 she requested him to accompany her to the place of occurrence.
On reaching the place of occurrence, they found him lying on the spot with injuries on his person but he was still alive.
Two of the PWs brought a bullock cart and PW.7 after lifting the body with some difficulty brought it to his house and kept it in the verandah.
However, before any medical aid could be provided, the deceased succumbed to the injuries at night.
The first information report was lodged at the police station at 12.30 p.m. by PW.2.
During the investigation, some weapons including an axe were seized from the house of the accused and on the same day one of the brothers was arrested at 6.45 p.m. and the other two brothers surrendered subsequently in the court.
The Investigation Officer prepared a sketch of the place of occurrence and sent the body for postmortem examination.
The appellant alongwith his brothers were tried for offences under section 302/34 IPC for the murder of the deceased, and the Sessions Judge convicted all the three brothers for the said offence and sentenced them for life.
On appeal by the three brothers the Division Bench of the High Court upheld the conviction and sentence of all the three.
The instant SLP was admitted as regards one petitioner only and notice was issued.
The S.L.P. of the second petitioner was dismissed while the third brother did not file any appeal.
Allowing the appeal and acquitting the appellant, this court, HELD: 1.
Conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole eye witness passes the test of reliability.
So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone.
However, where the single eye witness is not found to be a wholly reliable witness, in the sense that there are some circumstances which may show that he could have an interest in the prosecution, then the courts generally insist upon some independent corroboration of his testimony, In material particulars, before recording conviction.
It is only when the courts find that the single eye witness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect.
[393E F] 391 2.
The instant case, the medical evidence is consistent with the theory that the deceased had been assaulted only by one person and not by all the three brothers as alleged by the prosecution.
The possibility, therefore, that Mahendra accused alone had caused injuries on the deceased cannot be ruled 'Out.
May be on account of the recovery of the two bonds Ext.
7 and Ext 8, from the house of Anil, he was also implicated.
[395G] 3.
The origin of the fight is totally obscure, and the prosecution has not explained the genesis of the origin of the fight either.
It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words or abuses had been exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan.
[395H, 396A] 4.
In view of the infirmities of the prosecution evidence it would not be safe to rely upon the testimony of Ajoy PW.3, the sole eye witness, without looking for independent corroboration and as already noticed, the corroboration furnished by the prosecution, unlike in the case of Mahendra the appellant 's brother, is negative in character in so far as the involvement of Anil appellant is concerned.
[396B] 5.
The appellant, was held entitled to the benefit of doubt and granting him that benefit, his conviction and sentence for the offence under Section 302/34 IPC were set aside.
[396C]
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 2434 of 1977.
Appeal by Special Leave from the Judgment and Order dated 4/5th November, 1976 of the Gujrat High Court in S.A. No. 685/69.
U. R. Lalit (A.C.),1.
N. Shroff and H. section Parihar for the Appellant.
section T. Desai, Vimal Dave and Miss K. Mehta for the Respondent.
The Judgment of the Court was delivered by, KOSHAL, J.
The facts giving rise to this appeal by special leave against a decree dated November 5, 1976 of the High Court of Gujarat 294 may be better appreciated with reference to the following pedigreetable: NARANJI | | Dahyabhai Haribhai | | | | Ranchhodji | | | | Bhimbhai Mohanbhai (died childless in | 1913) | | | Parvatiben=Dayalji Dahyabhai (Plaintiff 8 (Plaintiff 7 | | | | | Bhikhubhai Thakorbhai Nirmalben Padmaben (Plaintiff 5) (Plaintiff 6) (Plaintiff 7) (Plaintiff 10) NARANJI (contd. ) | | Gulabhai Vallabhhai | | Motabhai | | | Nichhabhai= Surbhai | Amba Bai Bai Vijia | (Defendant 1) | | | | | Ghelabhai Lallubhai Chhotubhai Manibhai | (Plaintiff 3) (Plaintiff 4) | | Thakorbhai Ramanbhai (Plaintiff 1) (Plaintiff 2) 2.
In the year 1908 Ranchhodji son of Dahyabhai instituted Civil Suit No. 403 of 1908 against Bhimbhai son of Haribhai, Dayalji and Dahyabhai sons of Mohanbhai, Motabhai son of Gulabbhai, Bai Amba widow of Nichhabhai and Bai Vajia widow of Surbhai, for a partition of the joint Hindu family properties belonging to the parties.
The suit resulted in a decree dated August 18, 1909 which provided, inter alia, that Dayalji and Dahyabhai sons of Mohanbhai, and Motabhai son of Gulabbhai would be full owners of Survey Nos. 31 and 403 and also owners of a half share in Survey Nos. 591, 611, 288 295 and 659/3.
These persons were burdened by the decree with the responsibility to pay an yearly maintenance allowance of Rs. 42/ to Bai Vajia on Magsher Sud 2 of every year and the decree further provided that in the event of default in payment of such allowance continuing for a period of a month after the due date, Bai Vajia would be entitled to take possession of the land above mentioned in lieu of the maintenance awarded to her and would enjoy the income thereof without however being competent to sell, mortgage, bequeath, gift or otherwise transfer the same.
The decree declared that any alienation made by Bai Vajia in contravention of the direction given by the decree in that behalf would be void.
By clause 8 of the decree sons of Mohanbhai as well as Motabhai were also deprived of the right of alienation of the land during the lifetime of Bai Vajia.
Default having been made in the payment of maintenance to Bai Vajia according to the terms of the decree, she took out execution and obtained possession of the land above detailed.
Thereafter Dayalji and Dahyabhai sons of Mohanbhai deposited in court the arrears of maintenance and filed an application with a prayer that the land of which possession had been given to Bai Vajia in execution of the decree be restored to them.
That application was dismissed on the 8th March 1912 and more than 2 1/2 years later, i.e., on 27th October 1914, Dahyabhai son of Mohanbhai instituted Civil Suit No. 576 of 1914 in the court of the Additional Sub Judge, Valsal, for a declaration that the dismissal of his application was null and void and for recovery of possession of the land which Bai Vajia had taken in execution of the decree.
The suit was decreed by the trial court but was dismissed in first appeal on the 13th March 1918.
Bai Vajia continued to enjoy the land till the 21st October 1963 when she made a sale of Survey No. 31 in favour of one Dhirubhai Paragji Desai.
The sale was challenged in Civil Suit No. 110 of 1966 by 10 persons being the heirs of Mohanbhai and Motabhai as shown in the pedigree table above, the defendants being Bai Vajia and the said Dhirubhai Paragji Desai.
It was claimed by the plaintiffs that Bai Vajia had no right to alienate in any manner the land obtained by her in execution as per the terms of the decree, that sub section (1) of section 14 of the (hereinafter referred to as the Act) had no application to her case which was covered by sub section (2) of that section and that the sale by her in favour of defendant No. 2 was null and void.
Bai Vajia contested the suit and contended that the sale was good in view of the provisions of subsection (1) abovementioned which enlarged her limited ownership 296 into full and absolute ownership and that sub section (2) aforesaid did not cover her case.
The suit was decreed by the trial court and Bai Vajia remained unsuccessful in the appeal which she instituted in the court of the District Judge, Bulsar.
A second appeal was filed by her before the High Court of Gujarat and during the pendency thereof she expired when one Dhirubhai Dayalji Desai was substituted for her as her sole heir and legal representative.
The appeal came up for hearing before a learned Single Judge of the High Court who by its judgment dated 5th November, 1976 dismissed it holding that the decree passed in Civil Suit No. 403 of 1908 did not recognise any "pre existing" right of Bai Vajia in the property in dispute.
In coming to this conclusion, the learned Judge followed Naraini Devi vs Smt.
Ramo Devi and others.(1) The legal representative of Bai Vajia is the sole appellant in the appeal before us, the respondents thereto being nine of the plaintiffs and six legal representatives of plaintiff No. 5 as also the purchaser from Bai Vajia who is arraigned as respondent No. 11.
At the outset it was pointed out by Mr. I. N. Shroff, learned counsel for the appellant, that Naraini Devi 's case (supra) has since been over ruled by the decision of this Court in V. Tulasamma & others vs V. Sesha Reddi(2) and we find that this is so.
In the case last mentioned, the facts were these.
The husband of Tulasamma died in the year 1931 in a state of jointness with his step brother V. Sesha Reddi.
A decree for maintenance was passed in favour of Tulasamma against V. Sesha Reddi on June 29, 1946.
On the 30th July 1949, a compromise between the contending parties was certified by the Court executing that decree.
Under the compromise, Tulasamma was allotted certain properties in lieu of maintenance, her right being limited to enjoyment thereof coupled with the specific condition that she would not have any right of alienation whatsoever.
Tulasamma took possession of those properties and continued to enjoy them till the early sixties.
On 12th of April 1960 she leased out some of the properties to two persons and on the 26th of May 1961 made a sale of some others to another person.
V. Sesha Reddi filed a suit on July 31, 1961 for a declaration that the alienations made by Tulasamma were not binding on him and could remain valid only so long as she was alive.
The basis of the action was that Tulasamma acquired a restricted estate under the terms of the compromise and that her interest could not be enlarged under sub section (1) of section 14 of the Act in view of sub section (2) of that section.
The 297 suit was decreed by the trial court whose decision however was reversed in appeal by the District Judge, with a finding that the allotment of properties to Tulasamma by the terms of the compromise had been made in recognition of a "pre existing" right a finding which was reversed by the High Court, who restored the decree passed by the trial court.
The matter came up to this Court in appeal by special leave and Fazal Ali, J., who wrote an exhaustive judgment thus formulated the two points falling for determination: (1) Whether the instrument of compromise under which the properties were given to the appellant Tulasamma before the in lieu of maintenance falls within section 14(1) or is covered by section 14(2) of that Act.
(2) Whether a Hindu widow has a right to property in lieu of her maintenance, and if such a right is conferred on her subsequently by way of maintenance it would amount to mere recognition of a pre existing right or a conferment of new title so as to fall squarely within section 14(2) of the .
Fazal Ali, J., was of the opinion that the resolution of the dispute made it necessary that the real legal nature of the incidents of a Hindu widow 's right to maintenance be considered.
He referred to various works by celebrated authors on Hindu Law and in doing so cited passages from 'Digest of Hindu Law ' by Colebrooke, 'Hindu Law ' by G. section Sastri, 'Hindu Law and Usage ' by Mayne and 'Principles of Hindu Law ' by Mulla and came to the conclusion that the widow 's right to maintenance, though not an indefeasible right to property, is undoubtedly a "pre existing" right.
A survey of various judicial pronouncements was then undertaken by Fazal Ali, J., and as a consideration thereof he arrived at the following propositions : "(1) A Hindu woman 's right to maintenance is a personal obligation so far as the husband is concerned, and it is his duty to maintain her even if he has no property.
If the husband has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obligation to maintain the widow.
298 (2) Though the widow 's right to maintenance is not a right to property but it is undoubtedly a pre existing right in property, i.e., it is a jus ad rem, not jus in rem, and it can be enforced by the widow who can get a charge created for her maintenance on the property either by an agreement or by obtaining a decree from the civil court.
(3) The right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchaser has notice of the widow 's right to maintenance, the purchaser is legally bound to provide for her maintenance.
(4) The right to maintenance is undoubtedly a pre existing right which existed in the Hindu Law long before the passing of the Act of 1937(1) or the Act of 1946,(2) and is therefore, a pre existing right.
(5) The right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort of co owner in the property of her husband, though her co ownership is of a subordinate nature.
(6) Where a Hindu widow is in possession of the property of her husband, she is entitled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make arrangements for her maintenance.
" Fazal Ali, J., then embarked on a consideration of the scope and meaning of section 14 of the Act in the light of various pronouncements made by this Court as also of the decisions rendered by various High Courts in relation to the points in dispute.
During the course of the discussion he made the following pertinent observations: "It is true that a widow 's claim for maintenance does not ripen into a full fledged right to property, but nevertheless it is undoubtedly right which in certain cases can amount to a right to property where it is charged.
It cannot be said that where a property is given to a widow in lieu of 299 maintenance, it is given to her for the first time and not in lieu of a pre existing right.
The claim to maintenance, as also the right to claim property in order to maintain herself, is an inherent right conferred by the Hindu Law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before.
It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document the widow had no vestige of a claim or right at all.
Once it is established that the instrument merely recognised the pre existing right, the widow would acquire absolute interest.
Secondly, the Explanation to section 14(1) merely mentions the various modes by which a widow can acquire a property and the property given in lieu of maintenance is one of the modes mentioned in the Explanation.
Subsection (2) is merely a proviso to section 14(1) and it cannot be interpreted in such a manner as to destroy the very concept of the right conferred on a Hindu woman under section 14(1).
Sub section (2) is limited only to those cases where by virtue of a certain grant or disposition a right is conferred on the widow for the first time and the said right is restricted by certain conditions.
In other words, even if by a grant or disposition a property is conferred on a Hindu male under certain conditions, the same are binding on the male.
The effect of sub section (2) is merely to equate male and female in respect of grant conferring a restricted estate.
" Finally, Fazal Ali, J., made a reference to Naraini Devi 's case (supra) to which he himself was a party (apart from Sarkaria, J., who delivered the judgment of the Court) and in relation thereto made the following observations: "This case is no doubt directly in point and this Court by holding that where under an award an interest is created in favour of a widow that she should be entitled to rent out the property for her life time, it was held by this Court that this amounted to a restricted estate under section 14(2) of the 1956 Act.
Unfortunately the various aspects, namely, the nature and extent of the Hindu women 's right to maintenance, the limited scope of sub section (2) which 300 is a proviso to sub section (1) of section 14 and the effect of the Explanation, etc., to which we have adverted in this Judgment, were neither brought to our notice nor were argued before us in that case.
Secondly, the ground on which this Court distinguished the earlier decision of this Court in Badri Parshad vs Smt.
Kanso Devi(1) was that in the aforesaid decision the Hindu widow had a share or interest in the house of her husband under the Hindu Law as it was applicable then, and, therefore, such a share amounted to a pre existing right.
The attention of this Court however, was not drawn to the language of the Explanation to section 14(1) where a property given to a widow at a partition or in lieu of maintenance had been placed in the same category, and therefore, the reason given by this Court does not appear to be sound.
For the reasons that we have already given, after taking an overall view of the situation, we are satisfied that the Division Bench decision of this Court in Naraini Devi 's case (supra) was not correctly decided and is therefore overruled.
" Summarising the conclusions of law which Fazal Ali, J., reached after an exhaustive consideration of the texts and authorities mentioned by him, he enumerated them thus: "(1) The Hindu female 's right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu.
Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom.
If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one.
At any rate, even without a charge the claim for maintenance is doubtless a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing right.
301 "(2) Section 14(1) and the Explanation thereto have been couched in the widest possible terms and must be liberally construed in favour of females so as to advance the object of the 1956 Act and promote the socio economic ends sought to be achieved by this long needed legislation. "(3) Sub section (2) of section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially.
The proviso should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision. "(4) Sub section (2) of section 14 supplies to instruments, decrees, awards, gifts, etc., which create independent and new titles in favour of females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise pre existing rights.
In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere.
Where, however, an instrument merely declares or recognises a pre existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub section has absolutely no application and the female 's limited interest would automatically be enlarged into an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored.
Thus where a property is allotted or transferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of subsection (2) and would be governed by section 14(1) despite any restrictions placed on the powers of the transferee.
"(5) The use of express terms like "property acquired by a female Hindu at a partition", "or in lieu of maintenance" "or arrears of maintenance", etc., in the Explanation to section 14(1) clearly makes sub section (2) inapplicable to these categories which have been expressly excepted from the operation of sub section (2). "(6) The words "possessed by" used by the Legislature in section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same.
302 Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest in the property.
It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser without any right or title. "(7) That the words "restricted estate" used in section 14(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest, but also any other kind of limitation that may be placed on the transferee".
Applying these principles Fazal Ali J., held: "(i) that the properties in suit were allotted to the appellant Tulasamma on July 30, 1949 under a compromise certified by the Court; (ii) that the appellant had taken only a life interest in the properties and there was a clear restriction prohibiting her from alienating the properties; (iii) that despite these restrictions, she continued to be in possession of the properties till 1956 when the Act of 1956 came into force; and (iv) that the alienations which she had made in 1960 and 1961 were after she had acquired an absolute interest in the properties.
" In this view of the matter Fazal Ali, J., allowed the appeal of Tulasamma 's legal representatives.
Bhagwati, J., wrote a separate judgment in Tulasamma 's case and A. C. Gupta, J., agreed with him.
He also allowed the appeal substantially for the same reasons as had weighed with Fazal Ali, J., and in doing so observed: "Now, sub section (2) of section 14 provides that nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other 303 instrument or the decree, order or award prescribe a restricted estate in such property.
This provision is more in the nature of a proviso or exception to sub section (1) and it was regarded as such by this Court in Badri Pershad vs Smt.
Kanso Devi.(1) It excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section (1) and being in the nature of an exception to a provision which is calculated to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society, it must be construed strictly so as to impinge as little as possible on the broad sweep of the ameliorative provision contained in sub section (1).
It cannot be interpreted in a manner which would rob sub section (1) of its efficacy and deprive a Hindu female of the protection sought to be given to her by sub section (1).
The language of sub section (2) is apparently wide enough to include acquisition of property by a Hindu female under an instrument or a decree or order or award where the instrument, decree, order or award prescribes a restricted estate for her in the property and this would apparently cover a case where property is given to a Hindu female at a partition or in lieu of maintenance and the instrument, decree, order or award giving such property prescribes limited interest for her in the property.
But that would virtually emasculate sub section (1), for in that event, a large number of cases where property is given to a Hindu female at a partition or in lieu of maintenance under an instrument, order or award would be excluded from the operation of the beneficent provision enacted in sub section (1), since in most of such cases, where property is allotted to the Hindu female prior to the enactment of the Act, there would be a provision, in consonance with the old Sastric law then prevailing, prescribing limited interest in the property and where property is given to the Hindu female subsequent to the enactment of the Act, it would be the easiest thing for the dominant male to provide that the Hindu female shall have only a restricted interest in the property and thus make a mockery of subsection (1).
The Explanation to sub section (1) which includes within the scope of that sub section property acquired by a female Hindu at a partition or in lieu of maintenance would also be rendered meaningless, because there 304 would hardly be a few cases where the instrument, decree, order or award giving property to a Hindu female at a partition or in lieu of maintenance would not contain a provision prescribing restricted estate in the property The social purpose of the law would be frustrated and the reformist zeal underlying the statutory provision would be chilled.
That surely could never have been the intention of the Legislature in enacting sub section (2).
" Bhagwati, J., laid down the nature of the right which a Hindu widow has to be maintained out of the joint family estate in the following terms: "It is settled law that a widow is entitled to maintenance out of her deceased husband 's estate, irrespective whether that estate may be in the hands of his male issue or it may be in the hands of his coparceners.
The joint family estate in which her deceased husband had a share is liable for her maintenance and she has a right to be maintained out of the joint family properties and though, as pointed out by this Court in Rani Bai vs Shri Yadunandan Ram(1) her claim for maintenance is not a charge upon any joint family property until she has got her maintenance determined and made a specific charge either by agreement or a decree or order of a Court, her right is "not liable to be defeated except by transfer to a bonafide purchaser for value without notice of her claim or even with notice of the claim unless the transfer was made with the intention of defeating her right".
The widow can for the purpose of her maintenance follow the joint family property "into the hands of any one who takes it as a volunteer or with notice of her having set up a claim for maintenance".
The courts have even gone to the length of taking the view that where a widow is in possession of any specific property for the purpose of her maintenance, a purchaser buying with notice of her claim is not entitled to possession of that property without first securing proper maintenance for her, vide Rachawa & Ors.
vs Shivayanappa(2) cited with approval in Ranibai 's case (supra).
It is, therefore, clear that under 305 the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow takes the necessary steps for having her maintenance ascertained and specifically charged in the joint family property and even if no specific charge is created, this right would be enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim.
The right of the widow to be maintained is of course not a jus in rem, since it does not give her any interest in the joint family property but it is certainly jus ad rem, i.e., a right against the family property.
Therefore, when specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfaction of her jus ad rem, namely, the right to be maintained out of the joint family property.
It would not be a grant for the first time without any pre existing right in the widow.
The widow would be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right and not making a grant of the property to her for the first time without any antecedent right or title.
There is also another consideration which is very relevant to this issue and it is that, even if the instrument were silent as to the nature of the interest given to the widow in the property and did not, in so many terms, prescribe that she would have a limited interest, she would have no more than a limited interest in the property under the Hindu Law as it stood prior to the enactment of the Act and hence a provision in the instrument prescribing that she would have only a limited interest in the property would be, to quote the words of this Court in Nirmal Chand 's case (supra), "merely recording the true legal position" and that would not attract the applicability of sub section (2) but would be governed by sub section (1) of section 14.
All the three Judges were thus unanimous in accepting the appeal on the ground that Tulasamma 's right to maintenance was a pre existing right, that it was in recognition of such a right that she obtained property under the compromise and that the compromise there fore did not fall within the ambit of sub section (2) of section 14 of the Act but would attract the provisions of sub section (1) thereof coupled with the Explanation thereto.
With respect we find our selves in complete agreement with the conclusions arrived at by 306 Bhagwati and Fazal Ali, JJ., as also the reasons which weighed with them in coming to those conclusions.
Mr. section T. Desai, learned counsel for the plaintiffs respondents, and Mr. U. R. Lalit who very ably assisted the Court at its request, contended that for a Hindu female to be given the benefit of subsection (1) of section 14 of the Act she must first be an owner, albeit a limited owner, of the property in question and that Tulasamma not being an owner at all, the Bench presided over by Bhagwati, J., did not reach a correct decision in holding that the sub section aforesaid covered her case.
We find that only that part of this argument which is interpretative of sub section (1) is correct, namely, that it is only some kind of "limited ownership" that would get enlarged into full ownership and that where no ownership at all vested in the concerned Hindu female, no question of the applicability of the sub section would arise.
We may here reproduce in extenso section 14 of the Act with advantage: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
"Explanation: In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what so ever, and also any such property held by her as "Stridhana" immediately before the commencement of this Act. "(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil Court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribed a restricted estate in such property." A plain reading of sub section (1) makes it clear that the concerned Hindu female must have limited ownership in property, which limited ownership would get enlarged by the operation of that sub section.
If it was intended to enlarge any sort of a right which could 307 in no sense be described as ownership, the expression "and not as a limited owner" would not have been used at all and becomes redundant, which is against the well recognised principle of interpretation of statutes that the Legislature does not employ meaningless language.
Reference may also be made in this connection to Eramma vs Verrupanna & others(1) where in Ramaswami, J., speaking on behalf of himself, Gajendragadkar, C.J., and Hidayatullah, J., interpreted the sub section thus: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or after the commencement of the Act.
It may be noticed that the Explanation to section 14(1) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be.
The words "as full owner thereof and not as a limited owner" as given in the last portion of sub section (1) of section 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership.
In other words, section 14(1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section.
The object of the section is to extinguish the estate called 'limited estate ' or 'widow 's estate ' in Hindu Law and to make a Hindu woman, who under the old law would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title.
It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser.
In other words, the provisions of section 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession 308 of the property of the last male holder on the date of the commencement of the Act when she is only a trespasser with out any right to property." This interpretation of sub section (1) was cited with approval in Mangal Singh and Others vs Shrimati Rattno & Another(1) by Bhargava, J., who delivered the judgment of the Court and observed: "This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for cases where the Hindu female possesses the right of ownership of the property in question.
Even mere physical possession of the property without the right of ownership will not attract the provisions of this section.
This case also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the rights of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.
The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could, in no manner, exercise her rights of ownership in that property any longer." Limited ownership in the concerned Hindu female is thus a sine qua non for the applicability of sub section (1) of section 14 of the Act but then this condition was fully satisfied in the case of Tulasamma to whom the property was made over in lieu of maintenance with full rights of enjoyment thereof minus the power of alienation.
These are precisely the incidents of limited ownership.
In such a case the Hindu female represents the estate completely and the reversioners of her husband have only a spes successionis, i.e., a mere chance of succession, which is not a vested interest and a transfer of which is a nullity.
The widow is competent to protect the property from all kinds of trespass and to sue and be sued for all purposes in relation thereto so long as she is alive.
Ownership in the fullest sense is a sum total of all the rights which may possibly flow from title to property, while limited ownership in its very nature must be a bundle of rights constituting in their totality not full ownership but something less.
When a widow holds the property for her enjoyment as long as she lives, nobody is entitled to deprive her of it or to deal with the property in any manner to her detriment.
The 309 property is for the time being beneficially vested in her and she has the occupation, control and usufruct of it to the exclusion of all others.
Such a relationship to property in our opinion falls squarely within the meaning of the expression "limited owner" as used in sub section (1) of section 14 of the Act.
In this view of the matter the argument that the said sub section did not apply to Tulasammas 's case (supra) for the reason that she did not fulfil the condition precedent of being a limited owner is repelled.
The next contention raised by Mr. Desai and Mr. Lalit also challenged the correctness of the decision in Tulasamma 's case.
They argued that in any case the only right which Tulasamma had prior to the compromise dated July 30, 1949 was a right to maintenance simpliciter and not at all a right to or in property.
For the reasons which weighed with Bhagwati and Fazal Ali, JJ., in rejecting this argument we find no substance in it as we are in full agreement with these reasons and the same may not be reiterated here.
However we may emphasize one aspect of the matter which flows from a scrutiny of subsection (1) of section 14 of the Act and the explanation appended thereto.
For the applicability of sub section (1) two conditions must co exist, namely: (1) the concerned female Hindu must be possessed of property and (2) such property must be possessed by her as a limited owner.
If these two conditions are fulfilled, the sub section gives her the right to hold the property as a full owner irrespective of the fact whether she acquired it before or after the commencement of the Act.
The Explanation declares that the property mentioned in sub section (1) includes both movable and immovable property and then proceeds to enumerate the modes of acquisition of various kinds of property which the sub section would embrace.
Such modes of acquisition are: (a) by inheritance, (b) by devise, (c) at a partition, (d) in lieu of maintenance or arrears of maintenance, (e) by gift from any person, whether a relative or not, before, at or after her marriage, (f) by her own skill or exertion, 310 (g) by purchase, (h) by prescription, (i) in any other manner what so ever, and (j) any such property held by her as "stridhana" immediately before the commencement of this Act.
A reference to the Hindu law as it prevailed immediately before the commencement of the Act would lead one to the conclusion that the object of the Explanation was to make it clear beyond doubt that all kinds of property which fell within the ambit of the term "stridhana" would be held by the owner thereof as a full owner and not as a limited owner.
Reference may in this connection be made to the following enumeration of "Stridhana" in paragraph 125 of Mulla 's Hindu law: (1) Gifts and bequests from relations.
(2) Gifts and bequests from strangers.
(3) Property obtained on partition.
(4) Property given in lieu of maintenance.
(5) Property acquired by inheritance.
(6) Property acquired by mechanical arts (7) Property obtained by compromise.
(8) Property acquired by adverse possession.
(9) Property purchased with stridhana or with savings of income of stridhana.
(10) Property acquired from sources other than those mentioned above.
These heads of property are then dealt with at length by Mulla in paragraphs 126 to 135 of his treatise.
Prior to the commencement of the Act, the Hindu female did not enjoy full ownership in respect of all kinds of "Stridhana" and her powers to deal with it further varied from school to school.
There was a sharp difference in this behalf between Mitakshara and Dayabhaga.
And then the Bombay, Benaras, Madras and Mithila schools also differed from each other on the point.
Succession to different kinds of "Stridhana" did not follow a uniform pattern.
The rights of the Hindu female over "Stridhana" varied according to her status as a maiden, a married woman and a widow.
The source and nature of the property acquired also placed limitations on her ownership and made a difference to the mode of succession thereto.
A comparison of the contents of the Explanation with those of paragraph 125 of Mulla 's Hindu Law would show that 311 the two are practically identical.
It follows that the Legislature in its wisdom took pains to enumerate specifically all kinds of "Stridhana" in the Explanation and declared that the same would form "property" within the meaning of that word as used in sub section (1).
This was done, in the words of Bhagwati, J, "to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society".
It was a step in the direction of practical recognition of equality of the sexes and was meant to elevate women from a subservient position in the economic field to a pedestal where they could exercise full powers of enjoyment and disposal of the property held by them as owners, untrammelled by artificial limitations placed on their right of ownership by a society in which the will of the dominant male prevailed to bring about a subjugation of the opposite sex.
It was also a step calculated to ensure uniformity in the law relating to the nature of ownership of "Stridhana".
This dual purpose underlying the Explanation must be borne in mind and given effect to when the section is subjected to analysis and interpretation, and sub section (2) is not to be given a meaning which would defeat that purpose and negative the legislative intent, if the language used so warrants.
A Combined reading of the two sub sections and the Explanation leaves no doubt in our minds that sub section (2) does not operate to take property acquired by a Hindu female in lieu of maintenance or arrears of maintenance (which is property specifically included in the enumeration contained in the Explanation) out of the purview of sub section (1).
Tulasamma 's case (supra) having, in our opinion been decided correctly, the appeal in hand must succeed as the facts in the latter are on all fours with those in the former.
Mr. Desai did vehemently argue that this was not so inasmuch as by the decree dated August 18, 1909 the ownership of the land in dispute was vested in Dayalji and Dayabhai sons of Mohanbhai and Motabhai son of Gulabbhai while Bai Vajia was only given the right to possess it for her life the ownership remaining all along in the said three persons, but this argument does not find favour with us.
It has to be noted that so long as she lived, Bai Vajia was to have full enjoyment of and complete control over the land, barring any right to alienate it.
Such a right was also taken away from the said three persons.
The arrangement meant that whatever rights existed in relation to the land during the life time of Bai Vajia, were exercisable by her alone and by nobody else.
Not even the said three persons could deal with the land in any manner whatsoever, and if they did, Bai Vajia had the right to have their acts declared null and void during her life time.
After the land 312 was made over to her she became its owner for life although with a limited right and therefore only as a limited owner.
Under the decree the land vested in the said three persons only so long as they were not dispossessed of it at the instance of Bai Vajia in accordance with the terms stated therein.
As soon as Bai Vajia took possession of the land, no rights of any kind whatsoever in relation thereto remained with them and thus they ceased to be the owners for the span of Bai Vajia 's life.
Following Tulsamma 's case we hold that Bai Vajia became a full owner of the land in dispute under the provisions of sub section (1) of section 14 of the Act and that sub section (2) thereof has no application to her case, the land having been given to her as a limited owner and in recognition of her pre existing right against property.
In the result therefore, the appeal succeeds and is accepted.
The judgment and the decree of the High Court are set aside and the suit giving rise to this appeal is dismissed.
In the circumstances of the case, however, we leave the parties to bear their own costs throughout.
S.R. Appeal allowed.
[/INST]As per the decree in a partition suit dated August, 18, 1909 Motabhai and two sons of Mohanbhai being two predecessors in interest of the plaintiffs respondents were burdened with the responsibility of paying an yearly maintenance allowance of Rs. 42/ to Bai Vajia appellant on Magsher Sud 2 of every year.
The decree further provided that in the event of default in payment of such allowance continuing for a period of a month after the due date, Bai Vajia would be entitled to take possession of the land allotted to them under the decree viz. Survey Nos. 31, 403, 591, 611, 288 and 659/3 in lieu of the maintenance awarded to her and would enjoy the income thereof without however being competent to sell, mortgage, bequeath, gift or otherwise transfer the same.
The decree declared that any alienation made by Bai Vajia in contravention of the direction given by the decree in that behalf would be void.
By clause 8 of the decree Motabhai and sons of Mohanbhai were also deprived of the right of alienation of the land during the lifetime of Bai Vajia.
Default having been made in the payment of maintenance to her according to the terms of the decree, the appellant, took out execution and obtained possession of the lands in question, which she continued to enjoy till October 21, 1963 when she made a sale of Survey No. 31 in favour of one D. P. Desai.
The sale was challenged by the plaintiffs in Civil Suit No. 110/66 which was decreed by the trial Court.
The District Court in first appeal confirmed it and the High Court in second appeal upheld the decree of Bai Vajia.
Allowing the appeal of the Legal Representative by special leave.
the Court.
^ HELD: 1.
A combined reading of sub sections (1) and (2) of Section 14 of the and the Explanation following sub section (1) makes it clear, that sub section (2) does not operate to take property acquired by a Hindu female in lieu of maintenance or arrears of maintenance (which is property specifically included in the enumeration contained in this Explanation) out of the purview of sub section (1).
[311 D E] 2.
For the applicability of sub section (1) of Section 14 two conditions must coexist namely.
(1) the concerned female Hindu must be possessed of property; and 292 (2) such property must be possessed by her as a "limited owner".
If these two conditions are fulfilled, the sub section gives her the right to hold the property as a full owner irrespective of the fact whether she acquired it before or after the commencement of the Act.
[309 D F] The Explanation declares that the property mentioned in sub section (1) includes both movable and immovable property and then proceeds to enumerate the modes of acquisition of various kinds of property which the sub section would embrace.
Two such modes are "in lieu of maintenance or arrears of maintenance", and "any such property held by her as Stridhana" immediately before the commencement of the Act.
It, therefore, follows that the Legislature in its wisdom took pains to specify all kinds of "Stridhana" in the Explanation and declared that the same would form "property" within the meaning of that word as used in sub section (i).
This was done "to achieve a social purpose by bringing about change in the social and economic position of women in Hindu Society".
It was a step in the direction of practical recognition of equality of the sexes and was meant to elevate women from a subservient position in the economic field to a pedestal where they could exercise full powers of enjoyment and disposal of the property held by them as owners, untrammelled by artificial limitations placed on their right of ownership by a society in which the will of the dominant male prevailed to bring about a subjugation of the opposite sex.
It was also a step calculated to ensure uniformity in the law relating to the nature of ownership of 'Stridhana '.
This dual purpose underlying the Explanation must be borne in mind and given effect to when the section is subjected to analysis and interpretation, and sub section (2) is not to be given a meaning which would defeat that purpose and negative the legislative intent, if the language used so warrants.
A D] 3.
It is true that it is only some kind of "limited ownership" that would get enlarged into full ownership and that where no ownership at all vested in the concerned Hindu Female, no question of the applicability of subsection (1) of section 14 of the Act, would arise.
[306 B C] 4.
A plain reading of sub section (1) of section 14 of the Act makes it clear that the concerned Hindu female must have limited ownership in property, which limited ownership would get enlarged by the operation of that sub section.
If it was intended to enlarge any sort of a right which could in no sense be described as ownership, the expression "and not as a limited owners", would not have been used at all and becomes redundant, which is against the well known principle of interpretation of statutes that the Legislature does not employ meaningless language.
[306 H, 307 A] Eramma vs Veerappanna and Ors., ; Mangal Singh and Ors.
vs Srimati Rattno & Anr., ; ; reiterated.
Limited ownership in the concerned Hindu female is thus a sine qua non for the applicability of sub section (1) of section 14 of the Act.
In a case where this condition is fulfilled the Hindu female represents the estate completely and the reversioners of her husband have only a spes succession is i.e. a mere chance of 293 succession which is not a vested interest and a transfer of which is a nullity.
The widow is competent to protect the property from all kinds of trespass and to sue and be sued for all purposes in relation thereto so long as she is alive.
Ownership in the fullest sense is a sum total of all the rights which may possibly flow from title to property, while limited ownership in its very nature must be a bundle of rights constituting in their totality not full ownership but something less.
[308 E H] When a widow holds the property for her enjoyment as long as she lives, nobody is entitled to deprive her of it or to deal with the property in any manner to her detriment.
The property is for the time being beneficially vested in her and she has the occupation, control and usufruct of it to the exclusion of all others.
Such a relationship to property falls squarely within the meaning of the expression "limited owner" as used in sub section (1) of Section 14 of the Act.
[308 H, 309A] 6.
In the instant case: Bai Vajia became a full owner of the land in dispute under the provisions of sub section (1) of section 14 of the Act and that sub section (2) thereof has no application to her case, the land having been given to her as a limited owner and in recognition of her pre existing right against property.
So long as she lived, she was to have full enjoyment of and complete control over the land, barring any right to alienate it.
Such a right was also taken away from Motabhai and two sons of Mohanbhai.
The arrangement meant that whatever rights existed in relation to the land during the life time of Bai Vajia were exercisable by her alone and by nobody else.
Not even the said three persons could deal with the land in any manner whatsoever, and if they did, Bai Vajia had the right to have their acts declared null and void during her life time.
After the land was made over to her she became its owner for life although with a limited right and therefore only as a limited owner.
Under the decree the land vested in Motabhai and sons of Mohanbhai only so long as they were not dispossessed of it at the instance of Bai Vajia in accordance with the terms stated therein.
As soon as Bai Vajia took possession of the land, no rights of any kind whatsoever in relation thereto remained with them and thus they ceased to be the owners for the span of Bai Vajia 's life.
[311 G H, 312 A D] V. Tulasamma and Ors.
vs Sesha Reddy, [1977] 3 S.C.R. 261; discussed in extenso and followed.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 342 of 1956.
Appeal from the judgment and order dated September 14,1956, of the Bombay High Court, in Special Civil Application No. 2496 of 1956.
R. V. section Mani, for the appellant.
C. K. Daphtary, Solicitor General of India, B. Sen, and R. H. Dhebar, for the respondents.
August 28.
The Judgment of the Court was delivered by section K. DAS J.
This is an appeal on a certificate granted by the High Court of Bombay under article 132 (1) of the Constitution, and the question involved in the appeal is the true scope and effect of article 3 of the Constitution, particularly of the proviso thereto as it stands after the Constitution (Fifth Amendment) Act, 1955, 607 On December 22, 1953, the Prime Minister of India made a statement in Parliament to the effect that a Commission would be appointed to examine " objectively and dispassionately ' ' the question of the reorganisation of the States of the Indian Union " so that the welfare of the people of each constituent unit as well as the nation as a whole is promoted ".
This was followed by the appointment of a Commission under a resolution of the Union Government in.
the Ministry of Home Affairs, dated December 29, 1953.
The Commission submitted its report in due course and on April 18, 1956; a Bill was introduced in the House of the People (Lok Sabha) entitled The States Reorganisation Bill (No. 30 of 1956).
Clauses 8, 9 and 10 of the said Bill contained a proposal for the formation of three separate units, namely, (1) Union territory of Bombay ; (2) State of Maharashtra including Marathawada and Vidharbha; and (3) State of Gujurat including Saurashtra and Cutch.
The Bill was introduced in the House of the People on the recommendation of the President, as required by the proviso to article 3 of the Constitution.
It was then referred to a Joint Select Committee of the House of the People (Lok Sabha) and the Council of State (Rajya Sabha).
The Joint Select Committee made its report on July 16, 1956.
Some of the clauses of the Bill were amended in Parliament and on being passed by both Houses, it received the President 's assent on August 31, 1956, and became known as the (37 of 1956) hereinafter called the Act.
It is necessary to read here section 8(1) of the Act which instead of constituting three separate units as originally proposed in the Bill constituted a composite State of Bombay as stated therein.
" S.8 (1): As from the appointed day, there shall be formed a new Part A State to be known as the State of Bombay comprising the following territories, namely : (a) the territories of the existing State of Bombay, excluding 608 (i) Bijapur, Dharwar and Kanara districts and.
Belgaum district except Chandgad taluka; and (ii) Abu Road taluka of Banaskantha district; (b) Aurangabad, Parbhani, Bhir and Osmanabad districts, Ahmadpur, Nilanga, and Udgir taluks of Bidar district, Nanded district (except Bichkonda and Jukkal circles of Deglur taluk and Modhol, Bhiansa and Kuber circles of Modhol taluk) and Islapur circle of Boath taluk, Kinwat taluk and Rajura taluk of Adilabad district, in the existing State of Hyderabad, (c) Buldana, Akola, Amaravati, Yeotmal, Wardha, Nagpur, Bhandara and Chanda districts in the existing State of Madhya Pradesh; (d) the territories of the existing State of Saurashtra; and (e) the territories of the existing State of Kutch; and thereupon the said territories shall cease to form part of the existing States of Bombay, Hyderabad, Madhya Pradesh, Saurashtra and Kutch, respectively.
" The appointed day from which the new State of Bombay came into existence was defined in the Act as meaning November 1, 1956.
But before that date, to wit, on September 12, 1956, the appellant herein filed a petition under article 226 of the Constitution in the High Court of Judicature at Bombay in which he alleged, in substance, that the formation of the composite State of Bombay as one unit instead of the three separate units as originally proposed in the Bill contravened article 3 of the Constitution, inasmuch as the Legislature of the State of Bombay had no opportunity of expressing its views on the formation of such a composite State.
The appellant asked for a declaration that section 8 and other consequential provisions of the Act were null and void and prayed for an appropriate writ directing the State Government of Bombay and the Union Government not to enforce and implement the same.
This writ petition was heard by the Bombay High Court on September 14, 1956, and by its judgment of even date, the High 609 Court dismissed the petition, holding that there was no violation or contravention of article 3 of the Constitution.
The appellant then obtained the necessary certificate under article 132(1) of the Constitution, and filed his appeal in this Court on October 18, 1956 on the strength of that certificate.
Now, it is both convenient and advisable to read at this stage article 3 of the Constitution, as amended by the Constitution (Fifth Amendment) Act, 1955, the alleged violation of which is the main ground of attack by learned counsel for the appellant.
" article 3: Parliament may by law (a) form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State ; (b) increase the area of any State; (c) diminish the area of any State; (d) alter the boundaries of any State; and (e) alter the name of any State ; Provided that no Bill for the purpose shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States the Bill has been referred by the President to the Legislature of that State for expressing its views thereon within such period as may be specified in the reference or within such further period as the President may allow and the period so specified or allowed has expired.
" It is clear that by its substantive part the Article gives a certain power to Parliament, viz., the power to make a law in respect of any of the five matters mentioned in cls.
(a) to (e) thereof.
This power includes the making of a law to increase the area of any State; diminish the area of any State; and alter the name of any State.
The substantive part is followed by a proviso, which lays down certain conditions for the exercise of the Power.
It states that no Bill for the purpose (the word " purpose " obviously has reference 610 to the power of making law in respect of the matters mentioned in the substantive part) shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill has been referred by the President to the Legislature of that State for expressing its views thereon.
Thus, the proviso lays down two conditions: one is that no Bill shall be introduced except on the recommendation of the President, and the second condition is that where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill has to be referred by the President to the Legislature of the State for expressing its views thereon.
The period within which the State Legislature must express its views has to be specified by the President; but the President may extend the period so specified.
If, however, the period specified or extended expires and no views of the State Legislature are received, the second condition laid down in the proviso is fulfilled in spite of the fact that the views of the State Legislature have not been expressed.
The intention seems to be to give an opportunity to the State Legislature to express its views within the time allowed; if the State Legislature fails to avail itself of that opportunity, such failure does not invalidate the introduction of the Bill.
Nor is there anything in the proviso to indicate that Parliament must accept or act upon the views of the State Legislature.
Indeed, two State Legislatures may express totally divergent views.
All that is contemplated is that Parliament should have before it the views of the State Legislatures as to the proposals contained in the Bill and then be free to deal with the Bill in any manner it thinks fit, following the usual practice and procedure prescribed by and under the rules of business.
Thus the essential content of the second condition is a reference by the President of the proposal contained in the bill to the State Legislature to express its views.
thereon within the time allowed.
It is worthy of note, and this has been properly emphasised in the judgment of the High 611 Court, that what has to be referred to the State Legislature by the President is the proposal contained in the Bill.
The proviso does not say that if and when a proposal contained in the Bill is modified subsequently by an amendment properly moved and accepted in Parliament, there must be a fresh reference to the State Legislature and a fresh bill must be introduced.
It was pointed out in the course of arguments that if the second condition required a fresh reference and a fresh bill for every amendment, it might result in an interminable process; because any and every amendment of the original proposal contained in the Bill would then necessitate a fresh Bill and a fresh reference to the State Legislature.
Other difficulties might also arise if such a construction were put on the proviso; for example, in a case where two or three States were involved, different views might be expressed by the Legislatures of different States.
If Parliament were to accept the views of one of the Legislatures and not of the other, a fresh reference would still be necessary by reason of any amendment in the original proposal contained in the Bill.
We are referring to these difficulties not because we think that a forced meaning should be given to the words of the proviso to avoid certain difficulties which may arise.
We are of the view that the words of the proviso are clear enough and bear their ordinary plain meaning.
According to the accepted connotation of the words used in the proviso, the second condition means what it states and what has to be referred to the State Legislature is the proposal contained in the Bill; it has no such drastic effect as to require a fresh reference every time an amendment of the proposal contained in the Bill is moved and accepted in accordance with the rules of procedure of Parliament.
That in the present case the States Reorganisation Bill was introduced on the recommendation of the President has not been disputed; nor has it been disputed that the proposal contained in the Bill was referred to the State Legislatures concerned and their views were received, According to learned counsel for 612 the appellant, however, this was not enough compliance with the second condition of the proviso.
He has put his argument in several ways.
Firstly, he has contended that the word " State " in article 3 should be given a larger connotation so as to mean and include not merely the geographical entity called the State, but its people as well: this, according to learned counsel for the appellant, is the " democratic process " incorporated in article 3 and according to this democratic process, so learned counsel has argued, the representatives of the people of the State of Bombay assembled in the State Legislature should have been given an opportunity of expressing their views not merely on the proposal originally contained in the Bill, but on any substantial modification thereof.
Secondly and following the same line of argument, he has contended that the word " Bill " should be given an extended meaning so as to include any amendment, at least any substantial amendment, of the proposal contained in the Bill; and thirdly, he has contended that in the present case the formation of a new Bombay State as one unit was so different from the three units originally proposed in the Bill that it was not really an amendment of the original proposal but a new I proposal altogether for which a fresh Bill and a fresh reference were necessary.
We proceed now to consider these contentions.
It is necessary to state at the outset that our task is to determine on a proper construction the true scope and effect of article 3 of the Constitution, with particular reference to the second condition laid down by the proviso thereto.
We bring to our task such considerations as are germane to the interpretation of an organic instrument like the Constitution; but it will be improper to import into the question of construction doctrines of democratic theory and practice obtaining in other countries, unrelated to the tenor, scheme and words of the provisions which we have to construe.
In plain and unambiguous language, the proviso to article 3 of the Constitution states that where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill must be referred by the 613 President to the Legislature of the State for expressing its views.
It does not appear to us that any special or recondite doctrine of " democratic process " is involved therein.
Learned counsel for the appellant has invited our attention to article IV, section 3, of the American Constitution which says inter alia that " no new State shall be formed or erected within the jurisdiction of any other State, nor any State be formed by the junction of two or more States or parts of States without the consent of the Legislatures of the State concerned as well as of the Congress.
" That provision is quite different from the proviso we are considering: the former requires the consent of the State Legislature whereas the essential requirement of our proviso is a, reference by the President of the proposal contained in the Bill for the expression of its views by the State Legislature.
For this reason we do not think that the decisions relied on by learned counsel for the appellant (State of Louisiana vs State of Mississipi (1), and State of Washington vs State of Oregon(1)) are in point.
The expression I State ' occurs in article 3, and as has been observed in the State of Texas vs George W. White (3), that expression may have different meanings: it may mean a territorial region, or people united in political relation living in that region or it may refer to the government under which the people live or it may even convey the combined idea of territory, people and government.
Article 1 of our Constitution says that India is a Union of States and the States and the territories thereof are specified in a Schedule.
There is, therefore, no difficulty in understanding what is meant by the expression 'State ' in article 3.
It obviously refers to the States in the First Schedule and the I Legislature of the State ' refers to the Legislature which each State has under the Constitution.
That being the position we see no reasons for importing into the Construction of article 3 any doctrinaire consideration of the sanctity of the rights of States or even for giving an extended meaning to the expression I State ' occurring therein.
None of the constituent units of the (1) ; (2) ; (3) (i869) ; 78 614 Indian Union was sovereign and independent in the sense the American colonies or the Swiss Cantons were before they formed their federal unions.
The Constituent Assembly of India, deriving its power from the sovereign people, was unfettered by any previous commitment in evolving a constitutional pattern suitable to the genius and requirements of the Indian people as a whole.
Unlike some other federal legislatures, Parliament, representing the people of India as a whole, has been vested with the exclusive power of admitting or establishing new States, increasing or diminishing the area of an existing State or altering its boundaries, the Legislature or Legislatures of the States concerned having only the right to an expression of views on the proposals.
It is significant that for making such territorial adjustments it is not necessary even to invoke the provisions governing constitutional amendments.
The second line of argument presented on behalf of the appellant is that the word I Bill ' in the proviso must be interpreted to include an amendment of any of the clauses of the Bill, at least any substantial amendment thereof, and any proposal contained in such amendment must be referred to the State Legislature for expression of its views.
We do not think that this interpretation is correct.
Wherever the introduction of an amendment is subject to a condition precedent, as in the case of financial bills, the Consti tution has used the expression I A bill or amendments ', e.g. in article 117.
No such expression occurs in art 3.
Secondly, under article 118 Parliament has power to make rules of its own procedure and conduct of business, including the moving of amendments etc.
Rule 80 of the rules of procedure of the House of the People (Lok Sabha) lays down the conditions which govern the admissibility of amendments to clauses or schedules of a Bill, and one of the conditions is that an amendment shall be within the scope of the Bill and relevant to the subject matter of the clause to which it relates.
Article 122 (1) of the Constitution says that the validity of any proceedings in Parliament shall not be called in question on the ground of any alleged 615 irregularity of procedure.
In view of these provisions, we cannot accept an interpretation of article 3 which may nullify the effect of article 122, an interpretation moreover which is based not on the words used therein but on certain abstract and somewhat illusory ideas of what learned counsel for the appellant has characterised as the democratic process.
We recognise that the formation of a new composite State of Bombay as in section 8 of the Act was a substantial modification of the original proposal of three units contained in the Bill.
That, however, does not mean that it was not a proper amendment of the original proposal or that the State Legislature had no opportunity of expressing its views on all aspects of the subject matter of the proposal.
The High Court rightly pointed out that in the debates in the State Legislature several members spoke in favour of a composite State of Bombay.
The point to note is that many different views were expressed in respect of the subject matter of the original proposal of three units, and as a matter of fact it cannot be said that the State Legislature had no opportunity of expressing its views in favour of one composite unit instead of three units if it so desired.
It cannot be said that the proposal of one unit instead of three was not relevant or pertinent to the subject matter of the original proposal.
ID T. H. Vakil vs Bombay Presidency Radio Club Ltd. (1), a decision on which learned counsel for the appellant has relied, the question arose of the power of the chairman of a club to rule an amendment out of order.
It was said therein that (1) an amendment must be germane to the subject matter of the original proposition and (2) it must not be a direct negative thereof.
Judged by these two conditions, it cannot be said that the proposal of one unit instead of three was not germane to the subject matter of the original proposal or was a direct negative thereof.
We are unable, therefore, to accept the third contention of learned counsel for the appellant to the effect that the formation of a new Bombay State as envisaged in section 8 of the Act was so completely divorced from the proposal contained in (1) 616 the Bill that it was in reality a new bill and therefore a fresh reference was necessary.
It is advisable, perhaps, to add a few more words about article 122(1) of the Constitution.
Learned counsel for the appellant has posed before us the question as to what would be the effect of that Article.
if in any Bill completely unrelated to any of the matters referred to in Cls.
(a) to (e) of article 3 an amendment was to be proposed and accepted changing (for example) the name of a State.
We do not think that we need answer such a hypothetical question except merely to say that if an amendment is of such a character that it is not really an amendment and is clearly violative of article the question then will be not the validity of proceedings in Parliament but the violation of a constitutional provision.
That, however, is not the position in the present case.
For these reasons, we hold that there was no violation of article 3 and the Act or any of its provisions are not invalid on that ground.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
[/INST]A Bill introduced in the House of the People on the report of the States Reorganisation Commission and as recommended by the President under the proviso to article 3 Of the Constitution, contained a proposal for the formation of three separate units, viz., (1) Union territory of Bombay, (2) Maharashtra, including Marathawada and Vidarbha and (3) Gujrat, including Saurashtra and Cutch.
This Bill was referred by the President to the State Legislatures concerned and their views obtained.
The joint Select Committee of the House of the People (Lok Sabha) and the Council of States (Rajya Sabha) considered the Bill and made its report.
Subsequently, Parliament amended some of the clauses and passed the Bill which came to be known as the .
That Act by section 8(1) constituted a composite State of Bombay instead of the three separate units as originally proposed in the Bill.
The petition , out of which the present appeal has arisen, was filed by the appellant under article 226 of the Constitution in the High Court of Bombay.
His contention was that the said Act was passed in contravention of the provisions of article 3 of the Constitution, since the Legislature of Bombay had not been given an opportunity of expressing its views on the formation of the composite State.
The High Court dismissed the petition.
Held, that the proviso to article 3 lays down two conditions and under the second condition therein stated, what the President has to refer to the State Legislature for its opinion is the proposal contained in the Bill.
On a true construction, the proviso does not contemplate that if Parliament subsequently modifies that proposal, there must be a fresh bill or a fresh reference to the State Legislature.
The word 'State ' in article 3 of the Constitution has obvious reference to article i and the States mentioned in the First Schedule to the Constitution, and the expression 'Legislature of the State ' means the Legislature of such a State.
There are, therefore, no reasons for the application of any special doctrine of democratic theory or practice prevalent in other countries in interpreting those words; nor any justification for giving an extended meaning to the word 'State ' in determining the true scope and effect of the proviso.
77 606 The requirements of article IV, section 3 of the American Constitu tion are materially different from those of the second proviso to article 3 Of the Indian Constitution and, consequently, decisions based on the former are not in point.
State of Louisiana vs State Of Mississipi, (1905) 202 U.S.
I and State of Washington vs State of Oregon, (19O8) 2II U.S. 127, held inapplicable.
State of 'Texas vs George W. White; , referred to.
It is not correct to contend that the word 'Bill ' in the proviso must be interpreted to include an amendment of any of the clauses of the Bill or at least a substantial amendment thereof, and that any proposal contained in such amendment must be referred back to the State Legislature.
Such an interpretation of article 3 will nullify the effect of article 122(1) and is untenable in view of the provisions in articles 117 and 118 of the Constitution.
Although the formation of a composite State in terms of section 8 of the Act was without doubt a substantial modification of the proposal as originally contained in the Bill, it could not be said that the said modification was not germane to the subject matter of the original proposal or was a direct negative thereof, so as to be beyond the scope of an amendment.
T. H. Vakil vs Bombay Presidency Radio Club Ltd., (1944) 47 Bom.
L.R 428, applied.
Therefore, the Act could not be held to have been enacted in violation of article 3 Of the Constitution.
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<s>[INST] Summarize the judgementCivil Appeal No. 491 of 1985 From the Judgment and Order dated 26th July, 1984 of the Allahabad High Court in W.P. No. 4899 of 1983.
81 Pankaj Kalra for the Appellant.
Rameshwar Dial and Sarv Mitter for the Respondents.
2.9.1983 reverting the appellant from the post of Commercial Officer to that of Superintendent.
The appellant joined service in Kisan Sahkari Chini Mills Ltd., Bisalpur District Pilibhit, a sugar factory run and managed by the Uttar Pradesh Co operative Mills Federation.
While the appellant was working as Office Surperintendent, he was selected for promotion to the post of Commercial Officer and by Order dt.
August 29, 1980 appointed on probation for one year against a regular vacancy with a condition that his probationary period may be extended further and during the period of probation he could be reverted to the post of Office Superintendent without any notice.
On 2.7.1981 the appellant was transferred from Bisalpur to Majohla Sugar Factory where he continued to work as Commercial Officer.
By an Order dt.
2.10.1981 the appellant 's probationary period was extended for one year till 4.9.1982, the period so extended expired on 4.9.82 but no further order either extending the probationary period or confirming him on the post was issued, and the appellant continued to work as Commercial Officer.
The Managing Director of the U.P. Co operative Sugar Mill Federation Ltd. a "Co operative society" registered under the U.P.
Co operative Societies Act, 1965, which runs and manages a number of sugar factories in the State of Uttar Pradesh issued order on 2.9.83 reverting the appellant to the post of Office Superintendent.
The appellant challenged the validity of the reversion order before the High Court on the sole ground that on the expiry of the probationary period he stood confirmed, and he could not be reverted treating him on probation.
The High Court held that on the expiry of the probationary period the appellant could not be deemed to be confirmed as there was no rule prohibiting the extension of probationary period.
The U.P. Co operative Institutional Service Board constituted by the State of Uttar Pradesh in accordance with sub sec.
(2) of sec.
122 of the U.P. Co operative Societies Act, 1965 has framed the U.P. 82 Co operative Societies Employees Service Regulations 1975 which regulate the condition of service of employees of all the co operative societies placed under the purview of the Institutional Service Board by the Government Notification No. 366 C/XIIC 3 36 71 dt.
March 4, 1972.
These regulations contain provisions for recruitment, probation, confirmation, seniority and disciplinary control.
Regulation 17 provides for probation, it lays down that all persons on appointment against regular vacancies shall be placed on probation for a period of one year.
Proviso to the Regulation lays down that the appointing authority may, in individual cases, extend the period of probation in writing for further period not exceeding one year, as it may deem fit.
Clause (ii) of the Regulation provides that if, at any time, during or at the end of the period of probation or the extended period of probation, it appears to the appointing authority that the employee placed on probation, has not made sufficient use of the opportunity offered to him or has otherwise failed to give satisfaction, he may be discharged from service, or reverted to the post held by him substantively, if any, immediately before such appointment.
Regulation 18 provides for confirmation of an employee on the satisfactory completion of the probationary period.
Regulation 17 and 18 read together, provide that appointment against a regular vacancy is to be made on probation for a period of one year, this probationary period can be extended for a period of one year more.
The proviso to Regulation 17 restricts the power of the appointing authority in extending period of probation beyond the period of one year.
An employee appointed against a regular vacancy cannot be placed on probation for a period more than two years and if during the period of probation the appointing authority is of the opinion that the employee has not made use of opportunity afforded to him he may discharage him from service or revert him to his substantive post but he has no power to extend the period of probation beyond the period of two years.
Regulation 18 stipulates confirmation of an employee by an express order on the completion of the probationary period.
The regulations do not expressly lay down as to what would be the status of an employee on the expiry of maximum period of probation where no order of confirmation is issued and the employee is allowed to continue in service.
Since Regulation 17 does not permit continuation of an employee on probation for a period more than two years the necessary result would follow that after the expiry of two years probationary period, the employee stands confirmed by implication.
This is implicit in the scheme of Regulation 17 and 18.
In State of Punjab vs Dharam Singh ; , a Constitution Bench of this Court held, 83 "Where, as in the present case, the service rules fix a certain period of time beyond which the probationary period cannot be extended, and an employee appointed or promoted to a post on probation is allowed to continue in that post after completion of the maximum period of probation without an express order of confirmation, he cannot be deemed to continue in that post as a probationer by implication.
The reason is that such an implication is negatived by the service rule forbidding extension of the probationary period beyond the maximum period fixed by it.
In scuh a case, it is permissible to draw the inference that the employee allowed to continue in the post on completion of the maximum period of probation has been confirmed in the post by implication.
" In the instant case the order of appointment promoting the appellant on the post of Commercial Officer merely indicated that his probationary period could be extended and he could be reverted to the post of Office Superintendent without any notice.
Stipulation for extension of probationary period in the appointment order must be considered in accordance with the proviso to Regulation 17(1) which means that the probationary period could be extended for a period of one year more.
Undisputably on the expiry of the appellant 's initial probationary period of one year, the appointing authority extended the same for another period of one year which also expired on 4.9.82.
During the period of probation appellant 's services were neither terminated nor was he reverted to his substantive post instead he was allowed to continue on the post of Commercial Officer.
On the expiry of the maximum probationary period of two years, the appellant could not be deemed to continue on probation, instead he stood confirmed in the post by implication.
The appellant acquired the status of a confirmed employee on the post of Commercial Officer and the appointing authority could not legally revert him to the lower post of Superintendent.
Learned Counsel appearing for the U.P. Co operative Sugar Factories Federation urged that the U.P. Co operative Societies Employees Service Regulations 1975 do not apply to the appellant as he was an employee of the U.P. Co operative Sugar Factories Federation, as the condition of service of the appellant and other employees of the U.P. Co operative Sugar Factories Federation are regulated by the U.P. Co operative Sugar Factories Federation Service Rules 1976 84 framed by Cane Commissioner in exercise of his powers under sub sec.
(1) of sec.
121 of the Act published in the U.P. Gazette dt.
September 4, 1976.
Rule 3 of the U.P. Co operative Sugar Factories Federation Service Rules 1976 (herein after referred to as the Federation Service Rules) provides that these Rules shall apply to all the employees of the Federation.
Rule 5 provides that every employee shall be appointed on probation for such period as the appointing authority may specify and the period of probation may be extended by the appointing authority from time to time, the rule does not prescribe any limit on the extension of the probationary period.
Rule 6 provides that upon satisfactory completion of probationary period an employee shall be eligible for confirmation.
Placing reliance on rule 5 learned counsel for the respondents urged that since there was no order of confirmation the appellant 's probationary period stood extended, therefore, he could be reverted at any time to his substantive post.
It is true that rule 5 of the Federation Service Rules does not place any restriction on the appointing authority 's power to extend the probationary period, it may extend the probationary period for an unlimited period and in the absence of Confirmation Order the employee shall continue to be on probation for indefinite period.
It is well settled that where appointment on promotion is made on probation for a specific period and the employee is allowed to continue in the post after expiry of the probationary period without any specific order of confirmation he would be deemed to continue on probation provided the Rules do not provide contrary to it.
If Rule 5 applies to the appellant he could not acquire the status of a confirmed employee in the post of Commercial Officer and he could legally be reverted to his substantive post.
There are two set of rules (i) The U.P. Co operative Societies Employees Service Regulations, 1975, (ii) the U.P. Co operative Sugar Factories Federation Employees Service Rules, 1976.
The question is which of the rules apply to the employees of the Co operative Sugar Factories Federation.
While considering this question it is necessary to advert to the relevant provisions of the Act and the Rules framed thereunder and the Notifications issued from time to time.
Section 121 of the Act confers power on the Registrar, (an officer appointed as such by the State Government under sec.
3) to frame regulations to regulate the emoluments and conditions of service of employees in a Co operative Society or class of Co operative Societies.
Section 3(2) confers power on the State Government to appoint officers to assist the Registrar and to confer on them all or any of the powers of the Registrar.
An officer on whom powers of Re 85 gistrar are conferred by the State Government, has authority to frame rules regulating conditions of service under sec.
121(1) of the Act.
Section 122(1) confers power on the State Goverment to constitute an authority for the recruitment, training and disciplinary control of the employees of the Co operative societies or class of co operative societies and it may further require such authority to frame regulations regarding recuritment, emoluments, terms and conditions of service including disciplinary control of such employees.
Regulations so framed require approval of the State Government under sub sec.
Once approval is granted, the regulations take effect from the date of publication.
The State Government in exercise of its powers under sec.
122(1) issued a Notification No. 366 C/XIIC 3 36 71 dt.
March 4, 1972 constituting the U.P. Co operative Institutional Service Board as an authority for the recruitment, training and disciplinary control of the employees of the Apex Level Societies Central or Primary Societies, and it further conferred power on the Institutional Service Board to frame regulations regarding recruitment, emoluments, terms and conditions of service of the employees of the co operative societies of the Apex Level Societies Central or Primary Societies.
In pursuance thereof the Institutional Service Board framed the U.P. Co operative Societies Employees Service Regulations 1975 regulating the conditions of service of the employee of these Co operative Societies which were placed under the purview of the Institutional Board by the Government Notification No. 366 C/XII C 3 36 71 dt.
March 4, 1972.
This Notification states that the Board shall have authority to frame regulations for the recruitment, training and disciplinary control of the employees of the Apex Level Societies, Central, or Primary Societies.
Section 2(a 4) which defines "Apex Level Societies", expressly specifies the U.P. Co operative Sugar Factories Federation Ltd. as an Apex Level Society.
Since the Institutional Service Board was conferred power to frame regulations regulating the conditions of service of the employees of Apex Level Societies, the regulations framed by the Board apply to the employees of the U.P. Co operative Sugar Factories Federation Ltd. The respondents have failed to place any Notification before the Court to show that the power of the Institutional Service Board to frame regulations, regulating the conditions of service of the employees of Apex Level Societies including that of U.P. Co operative Sugar Factories Federation Ltd. was ever with drawn.
The U.P. Co operative Sugar Factories Federation Service Rules 1976 have been framed by the Cane Commissioner under sub sec.
(1) 86 of sec.
122 of the Act.
These Rules provide that they shall apply to all the employees of the U.P. Co operative Sugar Factories Federation Ltd., but the question is whether rules so framed by the Cane Commissioner would override the Service Regulations 1975.
As noted earlier, the Institutional Service Board was constituted an authority under sec.
122(1) of the Act and authorised to frame regulations regulating the conditions of service of employees of the Co operative Societies including those of Apex Level Societies.
Sub section (2) of sec.
122 provides that on approval of the Regulations by the State Government any rule or regulations framed by the Registrar in exercise of its powers under sec.
121(1) would stand superseded.
Sub section (1) of sec.
121 confers power on the Registrar which may include any other sub ordinate officer or authority to frame rules regulating the condition of service of employees of Co operative Societies, such rules do not require approval of the State Government.
While a regulation framed by an authority constituted under sub sec.
(1) of sec.
122 requires approval of the State Government and on such approval the regulation so framed supersedes any rules made under sec.
The scheme of sec.
121 and sec.
122 postulates that primacy has to be given to regulations framed by the authority under sec.
122 of the Act.
If there are two sets of rules regulating the conditions of service of employees of Cooperative societies the regulations framed under sec.
122 and approved by the State Government shall prevail.
In this view the provisions of the U.P. Co operative Sugar Factories Federation Service Rules 1976 do not override Service Regulations of 1975.
It appears that this position was realised by the State Government and for that reason it issued Notification No. U.O. 402(II)/C I 76 dt.
August 6, 1977 constituting the Commissioner and Secretary Sugar Industry and Cane Development Department as authority under sub sec.
(1) of sec.
122 for the recruitment, training and disciplinary control of employees of the U.P. Co operative Factories Federation Ltd. The learned counsel for the respondent urged that since the Government had constituted the Commissioner and Secretary of the Development Department as the competent authority for framing regulations for the recruitment, training and disciplinary control of the employees of the U.P. Co operative Sugar Factories Federation Ltd. 1975 Regulations framed by the Institutional Service Board do not apply.
We find no merit in this submission.
Firstly, the Notification dt.
August 6, 1977 merely designates the Commissioner and Secretary Sugar Industry and Cane Development Department as the authority for the recruitment, training and disciplinary control of the employees of the 87 U.P. Co operative Sugar Factories Federation, it does not confer power on the authority to frame any rule or regulations regulating the conditions of service of the employees of Sugar Factories Federation Ltd. But even if any such power can be inferred, admittedly no rules or regulations regulating the conditions of service of the employees of the Co operative Sugar Factories Federation have as yet been framed.
Learned counsel for the respondents conceded that draft service regulations have been prepared but those have not been approved by the Government as required by sub sec.
(2) of the Act.
In absence of approval of the State Government as required by sub sec.
(2) of sec.
122, regulations, if any, framed by the Commissioner and Secretary Sugar Industry and Cane Development Department do not acquire any legal force.
In this view 1975 Regulations framed by the Institutional Service Board continue to apply to the employees of the U.P. Co operative Sugar Factories Federation Ltd.
In view of the above discussion it is manifestly clear that the appellant 's services were regulated by the U.P. Co operative Societies Employees Service Regulations, 1975.
Since under those Regulations appellant 's probationary period could not be extended beyond the maximum period of two years, he stood confirmed on the expiry of maximum probationary period and thereafter he could not be reverted to a lower post treating him on probation.
The Order of reversion is illegal.
We accordingly allow the Appeal, set aside the order of the High Court and quash the order of reversion dt.
2.9.1983 and direct that the appellant shall be treated in service and paid his wages and other allowances.
The appellant is entitled to his costs which is quantified as Rs. 1,000.
S.R. Appeal allowed.
[/INST]The appellant who was initially working as an Assistant Teacher started teaching Hindi in the Intermediate classes upon the institution being upgraded though he was not qualified to be appointed as a Lecturer in Hindi.
As he did not possess the requisite qualification of B.A. in Sanakrit, he applied for an exemption under section 16E, though originially refused was however sanctioned by an order of the Board dated 23.7.1963.
While fixing the inter se seniority, his appointment date was taken as 23.7.1963 and respondents 5 and 6 were treated as Seniors as they joined on 19.12.62 and 1.7.63 respectively.
The appellant challanged it by moving a writ petition in the Allahabad High Court with a prayer that the exemption related back to his initial appointment.
The High Court dismissed the Writ Petition and hence the appeal by special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The Language of section 16E of the Uttar Pradesh Intermediate Education Act does not admit of the construction that the exemption granted by the Board must relate back to the date of making the application seeking exemption.
Section 16E could be construed as enabling the Board to exercise the power to grant exemption prospectively after considering the report and taking into account the relevant circumstances which would by the very nature of things be with prospective effect and not with retropsective effect.
Otherwise, it would be to hold that any unqualified person can be appointd even without the minimum qualifications subject to post facto expemption being granted.
Till the exemption is granted the person is not qualified to be appointed.
107 In other words he would be lacking in the basic qualification for being appointed.
This deficiency cannot be made good with retroactive exemption unless the provision itself expressly or by necessary implication contemplates such a course of action.
Section 16E does not satisfy this test.
Thus it would appear that retrospective exemption could not have been granted and in point of fact was not granted in the present case.
Even otherwise, it is not sufficient to show that retrospective exemption could have been granted.
[111 B F] Further though the appellant was working as a lecturer, it was not under any authority of law for there is no provision which empowers the college to allow any unqualified person to teach or to appoint him as such in anticipation of his disqualification being removed in future.
Till the exemption was granted appellant was not even a teacher in the eye of law though he was allowed to teach by the indulgence of the college authorities.
The disqualification was removed only on July 23, 1963 when the Board granted the exemption.
[111H; 112A B] 2.
An employee must belong to the same stream before he can claim seniority vis a vis others.
One who belongs to the stream of lawfully and regularly appointed employees does not have to contend with those who never belonged to that stream, they having been appointed in an irregular manner.
Those who have been irregularly appointed belong to a different stream, and cannot claim seniority vis a vis those who have been regularly and properly appointed, till their appointments became regular or are regularised by the appointing authority as a result of which their stream joins the regular stream.
At that point of confluence with the regular stream, from the point of time they join the stream by virtue of the regularisation, they can claim seniority vis a vis those who join the same stream later.
The late comers to the regular stream cannot steal a march over the early arrivals in the regular queue.
[112C E] 3.
In matters of seniority the Court does not exercise jurisdiction akin to appellate jurisdiction against the determination by the competent authority, so long as the competent authority has acted bonafide and acted on principles of fairness and fairplay.
In a matter where there is no rule or regulation governing the situation or where there is one, but is not violated, the Court will not overturn the determination unless it would be unfair not to do so.
[112E F] 108
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<s>[INST] Summarize the judgementivil Appeal No. 3982 of 1989.
From the Judgment and Order dated 20.4.1988 of the Bihar High Court in C.W.J.C. No. 1749 of 1988.
B.R.L. Iyengar, Govind Mukhoty, K.K. Gupta and Hari Narain Ojha for the Appellant.
Anil Dev Singh, A.K. Sen, D. Goburdhan, T.C. Sharma, Mrs. Sushma Suri and D .P.
Mukherjee for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
203 This appeal has been preferred against the judgment dated 20th April 1988 of the Patna High Court dismissing a writ petition filed by the appellant challenging a seniority list.
Necessary facts in brief are these: The appellant and respondents 7 to 13 are Assistant Conservators of Forest in Bihar Forest Service.
Their serv ice conditions are governed by the Bihar Forest Service Rules, 1953 (hereinafter referred to as the Rules) made by the Government of Bihar in exercise of the powers conferred on it by the proviso to Article 309 of the Constitution of India.
According to Rule 2(vii) of the Rules "the service" means the Bihar Forest Service.
Rule 3 provides that the appointments of the service shall ordinarily be made by (a) direct recruitment in accordance with the Rules in Part II of these Rules by competitive examination to be held by the Commission; and (b) by promotion in accordance with the Rules contained in Part V of selected rangers specified therein.
The appellant and respondents 7 to 12 were selected rangers and were appointed as Assistant Conservator of Forest by promotion under Rule 3(b).
As is apparent from the counter affidavit on behalf of respondents 8 to 10, respond ent No. 11 was promoted as Assistant Conservator of Forest on 21st December 1976, respondent Nos. 7, 8, 9 & 12 on 29th November 1977 and respondent No. 10 on 15th December 1978.
In so far as the appellant is concerned, even though, he was appointed subsequently, his appointment was made effective retrospective from 29th November 1977.
Respondent No. 13, on the other hand, as is apparent from the seniority list which was challenged by the appellant, was appointed under Rule 3(a) of the Rule by direct recruitment on 3rd May 1978.
The counter affidavit further indicates that respondent No. 13 was confirmed as Assistant Conservator of Forest on 30th June 1983.
Respondents 7 to 11 were confirmed on 30th August 1983 and respondent No. 12 was confirmed on 5th August 1983 whereas the appellant was confirmed on 31st December 1986.
In the said counter affidavit, the dates of appointment as rangers of respondents 11, 7, 8, 9, 10, 12 and the appellant respectively are stated as 3rd April 1958, 4th April 1958, 5th April 1958, 9th April 1958, 7th April 1959, 1st April 1966 and 2nd April 1967.
Even though a rejoinder has been filed by the appellant, the correctness of the aforesaid facts has not been denied therein nor has it been urged by the learned counsel for the appellant before us that these facts are inaccurate.
It is on the basis of these facts, therefore, that the respective submissions made by learned counsel for the parties have to be considered.
204 It has been urged by learned counsel for the appellant mainly relying on a memorandum to the Cabinet dated 24th November 1977 which contains a note that if the appellant was found fit for promotion by the selection committee, his place will be above 10 general category rank officers men tioned therein, that in the seniority list the name of the appellant should have been placed above those officers.
According to the learned counsel for the appellant the memorandum was approved by the Cabinet on the same date and yet in the impugned seniority list the aforesaid direction was not carried out.
For the respondents, it was urged that the Cabinet had not approved the memorandum in its entirety.
In our opinion, however, it is not necessary to go into this controversy.
It was on the above premise that the writ petition challenging the seniority list was filed by the appellant in the High Court and according to his learned counsel, the High Court committed an error in dismissing the same.
Having heard learned counsel for the parties, we find it difficult to agree with the submission made by the learned counsel for the appellant.
As seen above, the serv ice conditions of Assistant Conservators of Forest who are members of the Bihar Forest Service, are governed by the Rules.
Rule 35 which specifically deals with the matter of seniority reads as hereunder: "35.
Seniority of officers appointed to the Service shall be determined with reference to the date of their substantive appointment to the Service.
Provided that (i) in the case of members of the Service appointed by direct recruitment at the same time, their seniority inter se shall be in the order of merit in which their names are placed in the list of successful candidates at the Final Examination of the Indian Forest Col lege, Dehra Dun; (ii) in case where appointments are made to the Service both by direct recruitment and promotion of selected Rangers at the same time, the promoted members of the service shall be senior to the members directly re cruited; and (iii) the seniority inter se of Rangers on substantive appointment to the Service by promotion at the same time 205 shall be their seniority inter se held as Rangers." In the instant case we are not concerned with Clause (i) of the proviso.
Even Clause (ii) is not attracted inasmuch as respondent No. 13 even though was appointed by direct recruitment, was not appointed "at the same time" as the appellant and respondents 7 to 12, as already indicated above.
That is clause (iii) of the proviso, therefore, which is relevant for the determination of the seniority inter se of the appellant and respondents 7 to 12.
On a plain reading of this Clause it is apparent that on substantive appoint ment of rangers to the service by promotion, their seniority inter se in the service is to be governed by "their seniori ty" inter se held as rangers".
As seen above, the appellant as well as respondents 7 to 12 have already been confirmed as Assistant Conservator of Forest and meet the requirement of "substantive appointment to the service by promotion".
In order to determine their inter se seniority as Assistant Conservator of Forest, therefore, their seniority inter se held as rangers shall be the determining factor.
The respec tive dates of appointment as rangers of the appellant and respondents 7 to 12 have already been given above.
Its perusal indicates that respondents 7 to 12 had been appoint ed as rangers much before 2nd April 1967 which was the date on which the appellant was appointed as a ranger.
The dates of appointment and confirmation of respondent No. 13 who is a direct recruit, have been noted earlier.
In this view of the matter the claim of seniority as made by the appellant has no substance.
It is settled law that the provisions of statutory rules cannot be modified or altered by executive instructions and it is only in the absence of statutory rules that executive instructions have relevance.
As such even if for the sake of argument it may be accepted that on account of the memoran dum to the Cabinet or any other executive instruction the appellant was to be given seniority as claimed by him, it could not be done as in case of a conflict the statutory provisions contained in this behalf in proviso (iii) of Rule 35 of the Rules shah prevail.
In the result this appeal fails and is dismissed but in the circumstances of the case there shall be no order as to costs.
Appeal dismissed.
[/INST]The appellant and respondents 7 to 13 are Assistant Conservators of Forest and are governed by the Bihar Forest Service Rules, 1953.
As per Rule 3 thereof appointment to the said post is made either by direct recruitment or by promotion of selected Rangers.
The appellant and respondents 7 to 12 were promoters and respondent 13 was a direct recruit.
Though the appellant was promoted subsequent to the promotion of respondents 7 to 12, his appointment was made retrospective.
The appellant was the last to be confirmed as Assistant Conservator of Forest.
As a Ranger also the appellant was appointed much later to respondents 7 to 12.
On the basis of confirmation seniority has been determined.
The appellant challenged the seniority of respondents 7 to 13 over him, by way of a Writ Petition in the High Court.
He relied on a memorandum to the Cabinet which contained a note that if the appellant was found fit for promotion his place would be above 10 general category officers and since the memorandum was approved by the Cabi net his name in the seniority list should have been placed above those officers.
The respondents resisted the claim stating that the Cabinet had not approved the memorandum in its entirety.
The High Court dismissed the Writ Petition and this appeal, by special leave, is against the said judgment.
The contentions raised before the High Court were reiterated in this appeal, this appeal.
Dismissing the appeal, 202 HELD: 1.1.
Rule 35 of the Bihar Forest Service Rules, 1953 specifically deals with seniority.
In the instant case, Clause (i) of the proviso is not attracted.
Even Clause (ii) is not attracted inasmuch as respondent No. 13 even though was appointed by direct recruitment, was not appointed "at the same time" as the appellant and respondents7 to 12.
It is Clause (iii) which is relevant for the determination of the seniority inter se of the appellant and respondents 7 to 12.
On a plain reading of this Clause it is apparent that on substantive appointment of Rangers to the service by promo tion, their seniority inter se in the service is to be governed by "their seniority inter se held as Rangers".
The appellant as well as respondents 7 to 12 have already been confirmed as Assistant Conservator of Forest and meet the requirement of "substantive appointment to the service by promotion".
In order to determine their inter se seniority as Assistant Conservator of Forest, therefore, their senior ity inter se as Rangers shall be the determining factor.
Respondents 7 to 12 had been appointed as Rangers much before the date on which the appellant was appointed as a Ranger.
Hence the claim of seniority as made by the appel lant has no substance.
[204D; 205B E] 1.2.
It is settled law that the provisions of statutory rules cannot be modified or altered by executive instruc tions, and it is only in the absence of statutory rules that executive instructions have relevance.
As such even if for the sake of argument it may be accepted that on account of the memorandum to the Cabinet or any other executive in struction the appellant was to be given seniority as claimed by him, it could not be done, as in case of a conflict, the statutory provisions contained in proviso (iii) of Rule 35 of the Rules shall prevail.
[205E F]
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<s>[INST] Summarize the judgementminal Appeal No. 201 of 1962.
Appeal by special leave from the judgment and order dated February 20, 1962, of the Bombay High Court in Criminal Appeal No. 1405 of 1961.
C. L. Sareen, for the appellant.
H. B. Khanna and R. H. Dhebar, for the respondent.
January 23.
The judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave is directed against the judgment of a division Bench of the 'Bombay High Court setting aside the order of acquittal made by the Additional Sessions judge, Kolaba, and convicting the appellant under section 302, read with section 34, of the Indian Penal Code and sentencing him to imprisonment for life.
The case of the prosecution may be briefly stated.
In the year 1959, two persons by name Ramachandra Budhya and Govind Dhaya were murdered by some people.
In all II accused, including one Deoram Maruti Patil, were brought to 680 trial; and out of them 8 accused, including the said Deoram Maruti Patil, were acquitted.
During that trial Deoram Maruti Patil 's uncle, by name Vishwanath, actively helped Deoram Maruti Patil in the conduct of his defence.
Accused 1 and 2 in the present case are the sons of Govind Dhaya and accused 3 and 4 are the nephews of Ramachandra Budhya.
They bore a grudge against Vishwanath for helping Deoram Maruti Patil and bringing about his acquittal.
On August 19, 1960, Vishwanath and one Mahadeo Pandu Patil left their village at about 8.30 p.m. in order to go to Pezari en route to Alibag.
When they were walking along a bund, accused I to 4 came from behind, armed with long sticks and the stick carried by accused 1 had a blade attached to it.
They belaboured the deceased resulting in his death.
The four accused had to stand their trial for the murder of Vishwanath before the Court of the Additional Sessions judge, Kolaba.
The charge against them was that they, in view of their common grudge against the deceased, combined together and did away with the deceased.
The said four persons were charged under section 302, read with section 34, of the Indian Penal Code for committing the murder of the deceased in furtherance of their common intention.
All of them were also charged separately for the substantive offence under section 302 of the Indian Penal Code.
All the accused pleaded not guilty to the charge.
While accused 1, 3 and 4 pleaded alibi, accused 2 raised a plea of private defence.
The prosecution examined eye witnesses, who deposed that the four accused overtook the deceased when he was going to village Pezari and felled him down by giving him lathi blows.
None of the witnesses spoke to the presence of any other person, named or unnamed, who took part in the assault of the deceased.
The learned Additional Sessions judge found that the prosecution witnesses were not speaking 681 the truth and that the version given by accused 2 was the probable one.
In the result he acquitted all the accused.
The State preferred an appeal to the High Court against the said order of acquittal under section 302, read with section 34, of the Indian Penal Code ; but no appeal was preferred against the order of acquittal under section 302 of the Indian Penal Code.
The judgment of the High Court discloses that the learned judges were inclined to believe the evidence of the witnesses, other than Kashinath and Shridar.
But they dismissed the appeal against accused 1, 3 and 4 on the ground that the appeal was against an order of acquittal.
But in regard to accused 2, they held that he was one of the participants in the assault and there was no basis for his plea of private defence.
Having come to that conclusion, the learned judges convicted accused 2 under section 302, read with section 34, of the Indian Penal Code.
As regards the persons who participated in the assault along with accused 2, it would be appropriate to quote the words of the High Court itself : "Some of the other accused were undoubtedly concerned with the incident along with accused No. 2.
Since it is possible that the story as given by the prosecution witnesses, and parti cularly by Mahadeo, was exaggerated, it is not safe to hold that each one of the other accused was also a participant in the offence.
In view of the possibility that one or more of the other accused, i.e., accused Nos. 1, 3 and 4, might not have participated in the offence, we do not propose to interfere with the acquittal of these accused.
But we are satisfied that accused No. 2 along with one or more of the other accused committed this offence and that accused No. 2 was, therefore, clearly guilty under section 302 read with section 34 I. P. Code".
To put it in other words, they, acquitted accused 1, 3 and 4 on the ground that it was doubtful whether 682 any one of them participated in the commission of the offence and convicted accused 2 on the ground that one or more of them might have participated in the offence.
Accused 2 has filed the present appeal against the judgment of the High Court.
The argument of teamed counsel for the appellant may be put thus : The learned Additional Sessions judge acquitted the accused under section 302 of the Indian Penal Code and also under section 302, read with section 34, of the said Code.
The appeal in the High Court was confined only to the acquittal of the accused under section 302, read with section 34, of the Indian Penal Code.
The charge as well as the evidence was only directed against the four named accused as the participants in the common intention to commit the murder of the deceased.
The High Court having acquitted accused 1, 3 and 4.
inconsistently convicted accused 2 for having committed the murder of the deceased jointly with the three accused who had been acquitted.
To put it differently, the argument is that when three of the four named accused, who were charged under section 302, read with section 34, of the Indian Penal Code, were acquitted, the court could not convict only one of the accused on the basis of constructive liability.
Learned counsel for the respondent counters this argument by stating that though the charge as well as the evidence was directed against the 4 named accused, a court could come to the conclusion that 3 of the 4 named accused are not identified but more than one had taken part in the commission of the offence and that in the present case on a fair reading of the entire judgment we should hold that the High Court found that though accused 1, 3 and 4 were not identified, 3 unidentified persons must have taken part in the murder.
Section 34 of the Indian Penal Code reads : "When a criminal act is done by several per sons, in furtherance of the common intention 683 of all, each of such persons is liable for that act in the same manner as if it were done by him alone.
" It is well settled that common intention within the meaning of the section implied a pre arranged plan and the criminal act was done pursuant to the prearranged plan.
The said plan may also develop on the spot during the course of the commission of the offence; but the crucial circumstance is that the said plan must precede the act constituting the offence.
If that be so, before a court can convict a person under section 302, read with section 34, of the Indian Penal Code, it should come to a definite conclusion that .the said person, had a prior concert with one or more other persons, named or unnamed, for committing the said offence.
A few illustrations will bring out the impact of section 34 on different situations.
(1) A, B, C and D are charged under section 302, read with s.34, of the Indian Penal Code, for committing the murder of E.
The evidence is directed to establish that the said four persons have taken part in the murder.
(2) A, B, C and D and unnamed others are charged under the said sections.
But evidence is adduced to prove that the said persons, along with others, named or unnamed, participated jointly in the commission of that offence.
(3) A, B, C and D are charged under the said sections.
But the evidence is directed to prove , hat A, B, C and D, along with 3 others, have jointly committed the offence.
As regards the third illustration, a Court is certainly entitled to come to the conclusion that one of the, named accused is guilty of murder under section 302, read with section 34, of the Indian Penal Code, though the 684 other three named accused are acquitted, if it accepts the evidence that the said accused acted in concert along with persons, named or unnamed, other than those acquitted, in the commission of the offence.
In the second illustration, the Court can come to the same conclusion and convict one of the named accused if it is satisfied that no prejudice has been caused to the accused by the defect in the charge.
But in the first illustration the Court certainly can convict two or more of the named accused if it accepts the evidence that they acted conjointly in committing the offence.
But what is the position if the Court acquits 3 of the 4 accused either because it rejects the prosecution evidence or because it gives the benefit of doubt to the said accused ? Can it hold, in the absence of a charge as well as evidence ', that though the three accused are acquitted, some other unidentified persons acted conjointly along with one of the named persons ? If the Court could do so, it would be making out a new case for.
the prosecution : it would be deciding contrary to the evidence adduced in the case.
A Court cannot obviously make out a case for the prosecution which is not disclosed either in the charge or in regard to which there is no basis in the evidence.
There must be some foundation in the evidence that persons other than those named have taken part in the commission of the offence and if there is such a basis the case will be covered by the third illustration.
In support of the contention that a Court, even in the first illustration, can acquit 3 of the 4 accused named in the charge on the ground that their identity has not been established, and convict one of them on the ground that more than one took part in the commission of the offence, reliance is placed upon the decision of this Court in Mohan Singh vs State of Punjab (1).
There, the appellants, along with three others, were charged with having committed offence under section 302, read with section 149, as well as section 323, read (1) [1962] Supp. 3 S.C.R. 848. 858. 685 with section 149, of the Indian Penal Code.
The Sessions judge acquitted two of them, with the result 3 of them were convicted.
One of the accused was convicted under section 302 and section 147 and two of the accused were convicted under section 302, read with section 149 and section 147, of the Indian Penal Code.
The High Court confirmed their convictions.
On appeal by special leave to this Court, two of the accused convicted under section 302, read with sections 149 and 147, of the Indian Penal Code, contended, inter alia, that as two of the five accused were acquitted, their conviction under section 302, read with sections 149 and 147, was bad in law, This Court held on the evidence that the said two accused had done the act pursuant to a pre arranged plan and therefore they could be convicted under section 302, read with section 34, of the Indian Penal Code.
But in the course of the judgment different situations that might arise in the context of the question now raised were noticed.
Adverting to one of the situations similar to that now before us, this Court observed : "Cases may also arise where in the charge, the prosecution names five or more persons and alleges that they constituted an unlawful assembly.
In such cases, if both the charge and the evidence are confined to the persons named in the charge and out of the persons so named two or more are acquitted leaving before the court less than five persons to be tried, then section 149 cannot be invoked.
Even in such cases, it is possible that though the charge names five or more persons as composing an unlawful assembly, evidence may nevertheless show that the unlawful assembly consisted of some other persons as well who were not identified and so not named.
In such cases, either the trial court or even the High Court in appeal may be able to come to the conclusion that the acquittal of some of the persons named in the charge and tried will not necessarily 686 displace the charge under section 149 because along with the two or three persons convicted were others who composed the unlawful assembly but who have not been identified and so have not been named.
In such cases, the acquittal of one or more persons named in the charge does not affect the validity of the charge under section 149 because on the evidence the court of facts is able to reach the conclusion that the persons composing the unlawful assembly nevertheless were five or more than five.
It is true that in the last category of cases, the court will have to be very careful in reaching the said conclusion.
But there is no legal bar which prevents the court from reaching such a conclusion.
" It will be seen from the.
said observations that this Court was visualizing a case where there was evidence on the record from which the court can come to such a conclusion.
It may be that the charge discloses only named persons; it may also be that the prosecution witnesses named only the said accused; but there may be other evidence, such as that given by the court witnesses, defence witnesses or circumstantial pieces of evidence, which may disclose the existence of named or unnamed persons, other than those charged or deposed to by the prosecution witnesses, and the court, on the ' basis of the said evidence, may come to the conclusion that others, named or unnamed, acted conjointly along with one of the accused charged.
But such a conclu sion is really based on evidence.
The observations of this Court really apply to a case covered by the third illustration given by us.
But the present case falls outside the said three illustrations.
The High Court gave conflicting findings.
While it acquitted accused 1, 3 and 4 under section 302, read with section 34 of the Indian Penal 687 Code, it convicted accused 2 under section 302, read with section 34, of the said Code, for having committed the offence jointly with the acquitted persons.
That is a legally impossible position.
When accused were acquitted either on the ground that the evidence was not acceptable or by giving benefit of doubt to them, the result in law would be the same : it would mean that they did not take part in the offence.
The effect of the acquittal of accused 1, 3 and 4 is that they did not conjointly act with accused 2 in committing the murder.
If they did not act conjointly with accused 2, accused 2 could not have acted conjointly with them.
Realizing this mutually destructive findings of the High Court, learned counsel for the State attempted to sustain the findings of the High Court by persuading us to hold that if the said finding was read in the context of the whole judgment, it would be clear that the learned judges meant to hold that persons other than the acquitted accused conjointly acted with the convicted accused.
We have gone through the entire judgement carefully with the learned counsel.
But the observations of the learned judges ;is regards the " 'other participants" in the Grime must in the context refer only to the " 'one or other of the said three acquitted accused participated in the offence committed by accused 2.
There is not a single observation in the judgment to indicate that persons other than the said accused participated in the offence, nor is there any evidence in that regard.
We, therefore, hold that the judgment of the High Court cannot stand.
We are satisfied that on the findings arrived at by the High Court, the conviction of accused 2 is clearly wrong.
In the result, we allow the appeal, set aside the conviction of the appellant and direct him to be set at liberty.
Appeal allowed.
[/INST]The appellant was a servant in the Hyderabad Revenue Service and was holding the post of Deputy Secretary to the Government in the Public Works Department.
The Government of Andhra Pradesh ordered an enquiry by the Tribunal for Disciplinary proceedings.
The Tribunal enquired into the charges and recommended the dismissal of the appellant from service and after due notice to the appellant the Government of Andhra Pradesh ordered his dismissal.
The appellant thereupon moved a petition under article 226 of the Constitution for quashing the aforesaid order, which was dismissed by the High Court.
In this Court it was urged by the appellant that the appointment of Mr. Sriramamurthy was incompetent as he was 672 not qualified to act as the Tribunal of Enquiry under the Hyderabad Act.
Held, that by virtue of section 127 thereof the States Reorgani sation Act applied even if it was inconsistent with anything in the Hyderabad Public Servants Act, 1950.
By reason of section 127 and the power granted by section 122 it was competent to the Government of Andhra Pradesh to name an authority under the Hyderabad Act even though that authority might not have been qualified under the latter Act.
The concluding words of section 122 shew that on the notification issuing under section 122 the existing law itself was to have effect in a different manner.
Section 122 thug made the Hyderabad Act speak in accordance with the notification issued under section 122.
That Act after the notification applied in accordance with the notification and was pro tanto adapted by the Notification.
The adaptation of the Hyderabad Act under section 120 was not a condition precedent to the issuance of the notification and Notification having issued the Hyderabad Act applied accordingly and the appointment of Mr. Sriramamurthy was therefore valid.
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<s>[INST] Summarize the judgementAppeal No. 2241 of 1970.
Appeal by special leave from the judgment and order dated April 15, 1969 of the Mysore High Court in Writ Petition No. 2071 of 1967.
M. C. Setalvad and R. V. Pillai; for the appellant.
B. R. L. Iyengar and A. G. Ratnaparkhi, for respondent No. The Judgment of the Court was delivered by Mitter, J.
In this appeal by special leave the appellant challenges the decision of the Mysore High Court quashing his ,appointment as a University Grants Professor in Sanskrit by the Board of Appointments on the sole ground of non compliance with Rule 5 of the Supplementary Rules promulgated under the Mysore University Act, 1956.
That rule provides : "The Board of Appointments shall give, in writing the reasons for the selection of any candidate and also the basis on which the selection has been made and always give in writing the reasons for overlooking the claims of those who are seniors (i.e. total service as teacher) and/or have higher qualifications.
" The facts are as follows.
The appellant and the main con testing respondent have the same academic qualifications.
The ,a appellant joined the University as a lecturer in 1945 and he was appointed a temporary Reader in Sanskrit under the University Grants Commission Scheme which was distinct from other University appointments.
He was appointed a permanent Reader in the University under the said Scheme in April 1960.
The first respondent had joined the University as a lecturer in 1938 i.e. seven years before the appellant.
He was appointed a Reader ,under the University Grants Scheme in January 1961 i.e. several months after the appellant.
In December 1965 the appellant was placed as the Head of the Department of Sanskrit.
It appears that in 1967 an appointment had to be made as Professor in the University Grants Scheme, the top position in the department.
The ,claims of the appellant, the first respondent and two other persons were considered by the Board of Appointments.
They were also interviewed by the Board and on June 9,1967 the appellant was given the said appointment.
This was later approved of by the ,Chancellor of the University on June 29, 1967.
The first respondent filed a Writ Petition in the High Court challenging the appointment of the appellant under article 226 of 623 the Constitution on various grounds but the infraction of, rule 5 set forth above was not one of them.
The High Court, however on an application made for the purpose allowed the ground to be raised but the learned single Judge dismissed the writ petition.
The: first respondent filed an appeal which was heard by a Division Bench of the High Court.
The High Court turned down all but the contention based on rule 5 above and took the view that the said rule was a mandatory provision and it was incumbent on the Board of Appointments to state in writing why the first respondent although he had longer teaching experience was passed over in favour of the appellant before us.
According to the Division Bench the appointment of the appellant became invalid for this non compliance of rule 5 by the Board of Appointments.
The order of appointment was quashed by the High Court with a direction that the University should make an appointment in accordance with law.
This judgment was rendered on April 15, 1969.
The appellant 's application for a certificate being turned down by the High Court, he filed an application for special leave before this Court on 9th September 1969 along with a petition for stay of the order of the High Court.
On the application being moved on September 22, 1969 the respondents were directed to show cause why special leave should not be granted but an interim stay was granted to the effect that the matter of a fresh appointment as a result of the quashing of the order of the appellant 's appointment was not to be placed before the Chancellor for his approval under section 26(4) of the Mysore University Act.
This was occasioned by the fact that the University had taken steps to make another appointment necessitated by the order of the Division Bench of the High Court and had asked the appellant to appear at an interview for the purpose fixed on September 21, 1969.
On affidavits being filed this Court after hearing the parties passed an order on November 14, 1969 modifying the earlier order of stay to the effect that the order of the High Court was to remain suspended till the disposal of the special leave petition and as soon as the Chancellor had decided the case, the parties were to be at liberty to mention the matter to this Court and in the meanwhile the appellant was to continue as Professor.
On a clarification of the Court 's order being sought for, an order was passed on August 26. 1970 to the effect that the Chancellor was free to deal with the matter notwithstanding that the application for special leave was pending in this Court.
It appears that the Board of Appointments re constituted after the decision of the High Court had advised the appointment of the first respondent as Professor and the Chancellor, in the circumstances of the case felt that he should not come to any decision during the pendency of the matter before this Court.
The Chancellor 's order was made on November 11, 1970.
On December 11, 1970 this Court granted special leave to the appel 624 lant and directed the stay to continue till the disposal of the appeal.
Although we have set out what transpired after the presentation of the special leave petition to this Court in September 1969 to give a complete picture of the events concerning the appointment of a Professor under the University Grants Scheme, we do not propose to take any notice of what the Second Board of Appointments did.
In our view, if the action of the Board of Appointments taken on June 9, 1967 and approved of by the Chancellor on June 26, 1967 was valid, the Board would have no jurisdiction to consider the matter for a second time.
The position in law appears to be as follows.
The Mysore University Act, 1956 came into force on October 3, 1956.
section 13 ,of the Act sets out the authorities of the University which include inter alia the Senate, the Syndicate, the Academic Council and the Board of Appointments.
Different sections following the above prescribe the powers and functions of the Senate, the Syndicate and their authorities.
Section 26 concerns the Board of Appointments.
Sub section
(1) of this section provides : "Appointments to the staff of the University shall be made in accordance with the rules made by the Chancellor in consultation with the Syndicate." Sub section
(2) shows how the Board of Appointments is to be constituted for the purpose of making appointments of Professors, Readers and Lecturers.
The Board is to consist of (1) the Vice Chancellor who was to be the ex officio Chairman, (2) the Head ,of the University Department in the subject concerned, except where the appointment to be made was the post of the Head of the concerned Department, (3) one member who was to be an expert in the subject concerned selected from outside the University by the Syndicate and (4) another person who was to be an expert in the subject concerned selected from outside the University by the Chancelor.
Under sub section
(4) "The decisions of the Board and in such cases as may be prescribed by the Chancellor, the decision of the Vice Chancellor shall not have effect unless approved by the Chancellor; thereafter, every such decision shall be final and shall not be called in question in any manner.
" The Mysore University Staff (Appointment) Rules came into froce on October 24, 1964.
Some supplementary Rules of re. cruitment governing the appointment of University teachers were approved by the Governor under section 26 of the Act on 8th April 1967 and these were published on May 25, 1967.
Rule 5 men 625 tioned above is one of these rules.
Rule 3 of the Supplementary Rules shows that the Board of Appointment was to be provided at the meeting with all relevant information about every candidate regarding his qualification, seniority, teaching experience and research work and under, rule 4 the Dean and the Head of the Department who were to be associated with the Board were to prepare a note regarding qualification, work etc.
of the candidate who had served in the department under them and give their opinion in writing to the Board of Appointment.
This rule further prescribed that the claims of the "senior (most)" teachers with approved service who acted in that vacancy for ' a long time shall be given due consideration.
After interviewing the candidates the Board of Appointments made its written recommendation as follows "The Board took into consideration the academic qualifications, research and teaching experience and the performance during the interview of the four candidates who appeared for the interview.
The Board in consultation with the Dean of the Faculty of Arts, unanimously resolved that Dr. G. Narulasiddiah be appointed Professor of Sanskrit on a starting salary of Rs. 1,000/ P.M. in the scale of Rs. 1000 50 1500 subject to the usual period probation nor two years.
If rule 5 is to be observed in its latter and not according to its true intent it must be said that the Board of Appointments failed to give in writing expressing the reasons for overlooking the claims of the first respondent whose total service as a teacher undeniably exceeded that of the appellant.
According to the High Court: " .
the clear intendment of rule 5 is that a superior claim to an appointment flows out of the seniority to which it refers and that that claim should not be overlooked except for reasons to be stated in writing and since the resolution of the Board of Appointments with which we are concerned does not state any reason for the supersession of such claim with which the petitioner became clothes under the rule, we are inclined to the view that the appointment becomes invalid for that reason.
" We find ourselves unable to accept the above dictum of the High Court.
In our view the rule was not intended to load the dice in favour of someone merely because of longer experience as a teacher.
The Proper construction of that rule is to regard the length of teaching experience as one of the important factors to be taken into consideration by the Board of Appointments.
However much may be the importance of the length of teaching experience the 6 2 6 rule did not provide that as the determining factor.
The rule did not lay down all the factors which were to be considered by the Board in making their selection.
Of necessity they had to consider: the academic qualifications of the respective candidates including that of the quality of their teaching and of the research work if any to their credit, their past experience and the impression which they created in the minds of the persons constituting the Board '.
Rule 5 laid particular stress to the total length of teaching experience of the candidates but it was not meant to outweigh other consideration.
In this case it appears that the academic qualifications of the appellant and the first respondent were, of the same standard.
In mere length of service the first respondent certainly was superior to the appellant.
But that by itself would not tip the scale in his favour.
The recommendation of the Board clearly shows that one of the factors which they had taken into consideration was "teaching experience" and in 1967 when the appointment was made the appellant had to his credit a period of 22 years of teaching experience while the first respondent had 29 years of service to his credit.
It is not as if the appellant was a man very much junior in age to the first respondent with a career in teaching far shorter than or negligible compared to that of the first respondent.
It must also be noted that when there was a question of appointing a temporary Reader under the University Grants Scheme in 1958 it was the appellant who was given preference to the first respondent and even as a permanent Reader he secured the appointment some months ahead of the first respondent.
The preference given to him in the past was certainly one of the factors to be taken into consideration.
In our view it would be giving preference to the letter of the rule than to its spirit if we were to hold that the recommendation of the Board of Appointments was to be treated as invalid merely because they had failed to state, in clear words, that the appellant was preferred to the first respondent although the latter had a longer period of service as a teacher.
Mr. Setalvad appearing for the appellant drew our attention to Seniority Rules which were framed with the approval of the Chancellor and came into force on 30th March 1969 during the pendency of the matter before the Division Bench of the Mysore High Court.
Rule 7 of these rules provides that : "Teachers appointed to a class of post in the University Grants Commission scale shall be deemed senior to teachers holding the same class of posts in the University scale.
" Reference was made to this rule for the purpose of showing that the appellant who had been a Reader under the University Grants 627 Scheme nearly three years before the &St respondent would be senior to him in terms of the rule if it had been in force And even otherwise counsel contended that the mere fact that the appellant had preceded the first respondent in appointment tinder the Said scheme showed that his preference over the first respondent was, not undeserved.
We do not think that we can take into account rule 7 for the purpose of our decision in this case.
Mr. Setalvad 's second contention was that it was apparent from the recommendation of the Board that rule 5 was substantially complied with and as such the High Court should not have set aside the appointment of the appellant.
He also placed reliance on sub section
(4) of section 26 as giving a finality to the approval of the Chancellor to the appointment made by the Board.
Mr. Ayyangar appearing for the first respondent contended, first, that rule 5 was divided into two parts and that the provision for a statement in writing giving reasons for ignoring a person 's total length of service as a teacher had to be complied with by the Board and any disregard of this rule rendered the appointment invalid.
Counsel argued that the rules had statutory force and the mere approval of the Chancellor under, sub section (4) of section 26 of ' the Act did not put a seal on the case so as to prevent from scrutiny the disregard of any mandatory provision of the rules framed under section 26(1) and approval of the Chancellor would not cure such illegality.
In our view, rule 5 was substantially corn plied with by the Board and the failure to record expressly the reason for disregarding the greater length of service of the first respondent did pot vitiate the appointment per se.
At best it was an irregularity which was cured by the approval of the Chancellor.
Mr. Setalvad 's last contention was that the High Court had gone wrong in quashing the appointment but should have rele gated the matter back to the Board of Appointments to comply with the requirements of r. 5 and for this he relied on two English decisions in Iveagh (Earl) vs Minister of Housing etc.(1) and Brayhead Ltd. vs Berkshire County Council(2).
In the view we have taken it is unnecessary to consider the last point raised by counsel or the effect of these two decisions.
The Board of Appointment was constituted of four persons who were eminently fitted to assess the relative merits of the candidates before them at the interview and their recommendation shows that although they had not expressly recorded any reason in terms of the rule, they had taken the teaching experience of the candidates into consideration.
Our conclusion might have been otherwise if it were shown that the Board had not considered the length of teach (1) (2) 628 ing experience of the candidates as one of the, factors for coming their decision.
In the result we allow the appeal and set aside the order of the High Court holding that the appellant was validly appointed as a Professor under the University Grants Scheme.
In the circumstances of the case, we leave the parties to bear their own costs.
Before parting with this case we cannot but express our dis approval in noting that the canker of litigiousness has spread even to a sphere of life where discipline should check ambition concerning personal preferment.
A teacher is justified in taking legal action when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile himself to his lot suppressing disappointment when he finds a co worker raised to a position which he himself aspired after.
K.B.N. Appeal allowed.
[/INST]An enquiry under the provisions of the Travancore Public Servants (Inquiries) Act, (Act XI of 1132) was held against the petitioner in pursuance of a resolution passed by the Council of Ministers.
The petitioner took part in the proceedings, denied the charges and raised legal objection to the competence of the Enquiry Commission to hold the enquiry.
Some of the charges were held proved.
The petitioner was asked by the Chief Secretary to show cause why be should not be removed from service.
The petitioner 's request for extension of time to show cause was granted twice but refused a third time.
On his failure to avail himself of the opportunity to show cause against the action proposed to be taken against him, the report of the Enquiry Commissioner was submitted to the Public Services Commission and the latter approved of the action proposed to be taken against the petitioner.
The proceedings relating to the enquiry were submitted to the Rajpramukh and thereupon an order in proper form for the removal of the petitioner from service was made by the Rajpramukh and authenticated by the Chief Secretary to Government.
Held, (i) that under the provisions of article 311 of the Constitution a civil servant is entitled to have a reasonable opportunity to defend himself and show cause, both at the time of enquiry into the charges brought against him and at the stage when definite conclusions have been come to on the charges and the actual punishment to follow is provisionally determined upon.
The position cannot be characterised as anomalous if the statute contemplates a reasonable opportunity at more than one stage.
In the present case the petitioner had reasonable opportunity to enter upon his defence at both the stages.
He fully availed himself of the first opportunity, but refused to avail himself of the second opportunity which was offered to him.
All the rules of natural justice were observed in the case.
(ii) The provisions of article 166(1) and (2) are directory, not mandatory; and, in order to determine whether there has been compliance with the said provisions, all that is necessary to see is that the requirements of the sub sections are met in substance.
(iii) After the integration of the two States of Travancore and Cochin, the expression " Our Government" means "The Council of Ministers" under the new set up of democratic Government in the United State.
The Rajpramukh as the head of the State is merely at constitutional head and is bound to accept the advice of his Ministers.
(iv) The consultation envisaged by article 320(3) does not extend to review petitions which the petitioner may choose to file as many times as he likes.
(v) The sanction of the Rajpramukli under article 20 of the Covenant of the United State of Travancore Cochin is necessary only before the institution of civil or criminal proceedings.
Departmental proceedings do not fall within the ambit of the said Article.
1013 Dattatreya Moreshwar Pangarkar vs The State of Bombay ([1952] S.C.R. 612), referred to.
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<s>[INST] Summarize the judgementAppeal No, 147 of 1953, 1355 Appeal by Special Leave from the Judgment and Order dated the 24th day of August 1951 of the High Court of Judicature at Bombay in Appeal No. 50 of 1951 arising out of the Order dated the 19th day of June 1951 of the said Court exercising Original Jurisdiction in Misc.
No. 143 of 1951.
M. C. Setalvad, Attorney General.for India (Porus A. Mehta and P. G. Gokhale, with him), for the appellant.
J. B. Dadachanji, M. V. Jayakar and Rajinder Narain for respondent No. 2. 1955.
March 4.
The Judgment of Vivian Bose, Venkatarama Ayyar and Sinha JJ.
was delivered by Sinha J. Jagannadhadas J. delivered a separate judgment.
SINHA J. This is an appeal by special leave from the order of the High Court of Judicature at Bombay dated the 24th August 1951 upholding that of a single Judge of that court sitting on the Original Side, dismissing the appellant 's petition under article 226 of the Constitution for a writ of certiorari quashing the order dated the 23rd January 1951 passed by the 1st respondent, the Authority under the (hereinafter referred to as the Act).
The facts leading up to this appeal may shortly be stated as follows: The 2nd respondent is and has been at all material times an employee of the Central Railway (formerly called the G.I.P. Rly.) represented by the appellant who has been nominated by the Railway Administration as responsible for payment of wages under section 3 of the Act.
Ever since 1941, the 2nd respondent has been employed by the Railway Administration as a carpenter on daily wages, and has been treated as a daily rated casual labourer and has been paid his wages at the rate of Rs. 3 4 0 per day.
He continued receiving his wages at that rate until October,, 1949 without any demur, and granting receipts for the wages thus received.
On the 2nd December, 1949 an application was made by one K. N. Pitkar " an official of Registered Trade Union, a person 1356 permitted by the Authority" under sub section (2) of section 15 of the , against the G.I.P. Ry.
administration through its Divisional Engineer, Parel, Bombay.
It was alleged on behalf of the 2nd respondent that his wages due in respect of six months from May to October 1949 amounting to Rs. 245 had not been paid or had been subjected to illegal deductions as shown in the schedule.
The schedule will be set out hereinafter.
A claim for Rs. 245 plus Rs. 15 by way of compensation was made.
The appellant, as the opposite party before the Authority, resisted the claim, inter alia, on the grounds (1) that Rs. 245 had not been illegally deducted from the wages of the 2nd respondent; and (2) that the claim of the 2nd respondent who was employed as a daily rated casual labourer on specified daily wages, to be placed on a permanent cadre on the scale of monthly rates of pay was unfounded.
It was further alleged that the 2nd respondent did not come within the purview of the Railway Services (Revision of Pay) Rules as he was a daily rated casual labourer charged to works and that no rules had been laid down governing the rates of pay and the conditions of service of daily rated casual laborers like the 2nd respondent.
Hence his terms of service were the daily wages paid to him all along.
It was thus contended that there had been no deduction from his wages.
In this connection reference was made to the award of the Railway Workers Classification Tribunal, dated the 28th May 1948.
The Authority by its orders dated the 23rd January 1951 decided that the position of the 2nd respondent was not that of a casual labourer but that of a "temporary employee" and that therefore he was entitled to be on the scale of Rs. 55 150 plus the allowances admissible.
In coming to this conclusion the Authority observed that the work done by the 2nd respondent is of the same nature as that of a member of the permanent staff.
Hence the 2nd respondent could not be called a casual labourer.
It also made reference to 1357 article 39 (d) of the Constitution containing the direction that there should be equal pay for equal work.
The Authority also negatived the contention raised on behalf of the appellant that the question of classification of an employee was outside its jurisdiction.
In pursuance of the said order the Authority allowed the 2nd respondent 's application by its further orders dated the 2nd March 1951.
Against the said orders of the Authority the appellant moved the High Court of Judicature at Bombay by an application under article 226 of the Constitution for quashing the aforesaid orders.
The matter was heard in the first instance by a learned single Judge of that court who by his orders dated the 19th June 1951 dismissed the application.
The appellant preferred an appeal under the Letters Patent which was heard by a Division Bench of that court.
The Division Bench by its order dated the 24th August 1951 dismissed the appeal and agreed with the conclusions of the Judge on the Original Side that the Authority had not acted without jurisdiction or had not exceeded its jurisdiction in entertaining the 2nd respondent 's application.
On the appellant 's application for leave to appeal to this court being rejected by the High Court, the appellant moved this court and obtained special leave to appeal on the 2nd February 1953.
The main controversy between the parties in this court is whether, having regard to the relevant provisions of the Act, the 1st respondent was competent to pass the orders it did, which orders had been upheld by the High Court of Bombay.
The Authority set up under section 15 of the statute in question is undisputably a tribunal of limited jurisdiction.
Its power to hear and determine disputes must necessarily be found in the provisions of the Act.
Such a tribunal, it is undoubted,, cannot determine any controversy which is not within the ambit of those provisions.
On examining the relevant provisions of the Act it will be noticed that it aims at regulating the payment of wages to certain classes of persons employed in industry.
It applies 1358 in the first instance to the payment of wages to persons employed in any factory or employed by a railway administration; but the State Government has the power after giving three months notice to extend the provisions of the Act or any of them to the payment of wages to any class of persons employed in any class or group of industrial establishments.
"Wages" means "all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable. . to a person employed in respect of his employment or of work done in such employment. " (omitting words not necessary for our present purpose).
Section 3 lays down that every employer or his re presentative or nominee shall be responsible for the payment to persons employed by him of all wages Section 's provides for fixation of "wage periods ' which shall not exceed one month in any case.
Section 5 indicates the last date within which, with reference to the particular wage period, wages shall be paid.
Section 7 lays down that the wages of an em ployed person shall be paid to him without deductions of any kind except those authorized by or under the Act.
Section 7(2) in clauses (a) to (k) specifies the heads under which deductions from wages may be made, namely, fines; deductions for absence from duty; deductions for damage to or loss of goods of the employer; deductions for house accommodation supplied by the employer; deductions for amenities and services supplied by the employer; deductions for recovery of advances or for adjustment of overpayments of wages; deductions of income tax payable by the employee; deductions to be made under orders of a court or other competent authority; deductions for subscriptions to, and for repayment of advances from any provident fund; deductions for payments to cooperative societies, etc.; and finally, deductions made with the concurrence of the employed person in furtherance of certain schemes approved by Government.
No other deductions are permissible.
It is also laid 1359 down that every payment made by the employed person to the employer or his 'agent shall be deemed to be deduction from wages.
Each of the several heads of deductions aforesaid is dealt with in detail in sections 8 to 13.
Section 8 lays down the conditions and limits subject to which fines may be imposed and the procedure for imposing such fines.
It also requires a register of such fines to be maintained by the person responsible for the payment of wages.
Section 9 deals with deductions on account of absence from duty and prescribes the limits and the proportion thereof to wages.
Section 10 similarly deals with deductions for damage or loss to the employer and the procedure for determining the same.
Like section 8, this section also requires a register of such deductions and realizations to be maintained by the person responsible for the payment of wages.
Section 11 lays down the limits of deductions for house accommodation and other amenities or services which may have been accepted by the employee, subject to such conditions as the State Government may impose.
Section 12 lays down the conditions subject to which deductions for recovery of advances may be made from wages.
Finally section 13 provides that the deductions for payment to co operative societies and insurance schemes shall be subject to such conditions as the State Government may prescribe.
Section 14 makes provision for the appointment of Inspectors for carrying out the purpose of the Act, with power to enter on any premises and to examine any registers or documents relating to the calculation or payment of wages and to take evidence on the spot.
His function is to see that the registers or documents prescribed by the Act containing the necessary entries as regards deductions and other matters have been properly kept by the employers or their agents in order to be able to ascertain whether any deductions from wages in excess of the provisions of sections 7 to 13 aforesaid have been made.
We then come to section 15 which makes provision for the appointment of the Authority "to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of 174 1360 the wages of persons employed or paid in that area".
Where the Authority finds that any deduction has been made from the wages of an employed person or the payment of any wages had been delayed, he may at the instance of the wage earner himself or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under the Act or any other person acting with the permission of the Authority, after making such enquiry as he thinks fit and after giving an opportunity to the person responsible for the payment of wages under section 3 to show cause, direct the refund to the employed person of the amount deducted or the payment of delayed wages together with such compensation as he may determine.
The section also lays down the limits and conditions of his power to direct payment of compensation to the employed person or of penalty to the employer, if he is satisfied that the application made on behalf of an employee was either malicious or vexatious.
His determination is final subject to a very limited right of appeal under section 17.
Section 18 vests the Authority with all the powers of a civil court under the Code of Civil Procedure, for the purpose of taking evidence, of enforcing the attendance of witnesses and of compelling the production of documents.
Section 22 lays down that no court shall entertain any suit in respect of wages or of deduction from wages in so far as the claim forms the subject matter of a pending proceeding under the Act or has formed the subject of a direction in favour of or against the plaintiff under section 15, or which could have been recovered by the application under that section.
Section 26 empowers the State Government to make rules to regulate the procedure to be followed by the authorities and courts referred to in sections 15 and 17 and provides that rules may be made inter alia, requiring the maintenance of records, registers, returns and notices necessary under the Act and the display in a conspicuous place of notices specifying the rates of wages payable to persons employed on such premises; and prescribing the authority for making a list of 1361 acts and omissions in respect of which fines may be imposed and the procedure for imposing such fines.
We have set out above in some detail the relevant provisions of the Act in order to point out that those provisions are not applicable to the complaint made in the present case.
In this connection it is necessary to set out in extenso the "particulars of claim" in the schedule appended to his application which are as follows: "The applicant is working as a carpenter mason with the opposite party under I.O.W., Byculla.
According to the orders on introduction of the prescribed scales, the Railway Administration has to make the staff working under I.O.W. on permanent monthly wages scheme under the rules of the prescribed scales.
The applicant along with others was up till now under daily wages scheme.
About 20 posts under I.O.W. where the applicant is working were to be made per manent.
The opposite party in supersession of claim of the applicant has confirmed his juniors on the permanent scales as a skilled workman in the scale of 55 3 85 4 125 5 130, whereas the opposite party continued to pay the applicant on daily wages scheme thus depriving him of his legitimate wages under the prescribed scale, which resulted in the monetary loss to the applicant of Rs. 40 13 4 per month.
Notice on behalf of the applicant was served on this count on the opposite party but of no avail and hence this application.
The juniors have been paid under the prescribed scales from April, 1949, from which date the applicant was also entitled to the prescribed scale 55 130 (scale for skilled workman).".
There is no allegation of delay in payment of wages inasmuch as it is not the respondent 's case that his wages were not paid within the time limit laid down in section 5; nor are there allegations to show that any payments have been made by the employed person to the employer or his agent which could be deemed to be a deduction from his wages within the meaning of section 7.
None of the categories of deductions as laid down in section 7 have been referred to.
In other words, it is not alleged that his Wages 1362 were so much and that so much had been deducted under any of the heads set out under section 7(2).
The allegations made by the respondent only amount to saying that he had been paid his actual wages as fixed by the railway administration but that after the introduction of the scheme of upgrading of persons employed under the daily wages scheme, others who were junior to him had been placed on the monthly wages scheme whereas his claim to be so placed had been ignored.
The respondent 's main grievance, therefore, appears to be that he had not been paid wages on the scale to which he would have been entitled if he had been placed on the monthly wages scheme.
In our opinion, the scheme of the Act as set forth above shows that if an employee were to state that his wages were, say Rs. 100 per month and that Rs. 10 had been wrongly deducted by authority responsible for the payment of wages that is to say, that the deductions could not come under any one of the categories laid down in section 7 (2), that a would be a straight case within the purview of the Act and the authority appointed under section 15 could entertain the dispute.
But it is said on behalf of the respondent that the authority has the jurisdiction not only to make directions contemplated by sub section (3) of section 15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were.
There is no difficulty in accepting that proposition.
If the parties entered into the contract of service, say by correspondence and the contract is to be determined with reference to the letters that passed between them, it may be open to the authority to decide the controversy and find out what the terms of the contract with reference to those letters were.
But if an employee were to say that his wages were Rs. 100 per month which he actually received as and when they fell due but that he would be entitled to higher wages if his claims to be placed on the higher wages scheme had been recognized and given effect to, 1363 that would not in our opinion, be a matter within the ambit of his jurisdiction.
The authority has the jurisdiction to decide what actually the terms of the contract between the parties were, that is to say, to determine the actual wages; but the authority has no jurisdiction to determine the question of potential wages.
The respondent 's complaint in the present case comes within the latter illustration.
If the respondent 's claim to be placed on the scheme of higher wages had been.
unduly passed over by the appellant, if indeed he had the power to do so, the obvious remedy of the respondent was to approach the higher authorities of the railway administration by way of departmental appeal or revision; but instead of doing that, he has sought his redress by making his claim before the authority under the Act.
The question is, has the authority the power to direct the appellant or his superior officers who may have been responsible for the classification, to revise the classification so as to upgrade him from the category of a daily wageearner to that of an employee on the monthly wages scheme.
If the respondent had been on the cadre of monthly wages and if the appellant had withheld his rise in wages to which he was automatically entitled, without any orders of his superior officers, be might justly have claimed the redress of his grievance from the authority under the Act, as it would have amounted to an underpayment.
But in the present case, on the case as made on behalf of the respondent, orders of the superior officers were necessary to upgrade him from a daily wage earner to a higher care.
The authority under the Act has not been empowered under section 15 to make any such direction to those superior officers.
The appellant is responsible to pay the respondent only such wages as are shown in the relevant register of wages presumably maintained by the department under the provisions of the Act, but he cannot be directed to pay the respondent higher wages on the determination by the authority that he should have been placed on the monthly wages scheme.
In that view of the matter it is not necessary to go 1364 into the merits of the controversy as to what classification as adumbrated by the Railway Workers ' Classification Tribunal, and adopted by the Railway administration, the second respondent should have been brought under.
If that question were open to determination by the Authority, we would have had to remit the case to the Authority to give a fresh opportunity to the parties to adduce all the relevant evidence and then to come to its final conclusions, as it appeared to us during the hearing of the case that all relevant information had not been placed before the Authority.
But, as, in our opinion, that is not a matter within its limited jurisdiction, that contingency does not arise.
For the reasons given above we allow this appeal, quash the orders of the Authority and of the High Court, but in the special circumstances of this case we make no order as to costs.
JAGANNADHADAS J. I regret that I find myself unable to agree.
The second respondent before us, employed as a carpenter in the Railway since 1941, has been working as a daily rated casual labourer.
He claimed that he should have been absorbed as a monthly rated permanent employee and that he has been wrongly superseded.
His claim to be treated as a permanent employee was apparently not accepted by the Tribu nal (the Authority under section 15 of the for Bombay).
But it was held that the position of the applicant is not that of a daily rated casual labourer but that of a monthly rated temporary employee.
His claim was treated and upheld by the Tribunal as one substantially based on the ground that the Award of the Railway Workers ' Classification Tribunal in relation to the recommendations of the Central Pay Commission was approved by the Railway Board and directed to be implemented, and that by virtue thereof he was no longer a mere casual labourer but was entitled to higher wages on the footing of a monthly rated labourer.
No question arises that the order of the Tribunal is bad owing to the 1365 variation between the claim made and the relief granted.
As held by the High Court, pleadings in these cases have to be liberally construed.
That his claim was understood as having been based on the Award of Railway Workers ' Classification Tribunal, by the Railway Authorities themselves, is clear from the statement filed on their behalf in answer to the J. employee 's claim.
Apart from the question of jurisdiction, the defence was two fold.
(1) The applicant being a daily rated casual labourer, charged to works, the directive of the Railway Board did not apply to him.
(2) Even if it applied to a person in the situation of the applicant, he was not entitled to be brought on to the monthly rates of pay in the skilled grade, without his previously passing a trade test to establish himself as skilled in his trade and he did not pass the test.
The Tribunal.
on the material referred to by it in its order, came to the conclusion (1) that the applicant did not fall within the category of workcharged staff, (2) that under the Award of the Railway Workers ' Classification Tribunal, no trade test was necessary for the applicant who was a carpenter, and (3) that as per certain instructions of the concerned authority, the period of casual labour was to be limited to six months, and that since this applicant was admittedly a casual labourer under the Railway for a much larger period, i.e. since 1941, he became entitled to be treated as a temporary employee and not as a casual labourer and to receive wages as such.
Whether these conclusions are right or wrong is not the question before us.
The only question is whether or not the Tribunal had the jurisdiction to find that the applicant was entitled to the emoluments of a monthly rated temporary employee and not to that of a daily rated casual labourer, as the result of the order of the Railway Board directing implementation of the Award of the Classification Tribunal.
The jurisdiction of the Tribunal arises under section 15 of the (Act IV of 1936) (hereinafter referred to as the Act).
The Tribunal is set up to decide "all claims arising out of deductions from the wages or delay in payment of 1366 wages".
The relief which it is authorised to award,is to direct "the refund of the amount deducted, or the payment of the wages delayed".
Such a direction made by the Tribunal is final, under section 17 of the Act, subject to the right of appeal provided therein.
Under section 22, no suit lies in any court for the recovery of wages or of any deduction therefrom which could have been recovered by an application under section 15.
However limited this jurisdiction of the Tribunal, and however elaborate the provisions in the Act for the preparation and display by the employer of the table of wages payable to the employees, and for the inspection thereof by the Factory Inspectors, it cannot be supposed that the jurisdiction of the Tribunal is only to enforce the wages so displayed or otherwise admitted.
Such a narrow construction would rob the machinery of the Act of a great deal of its utility and would confine its application to cases which are not likely to arise often, in a wellordered administration like the Railways.
Indeed, I do not gather that such a construction was pressed for, before us, in the arguments.
Even a Tribunal of limited jurisdiction, like the one under consideration, must necessarily have the jurisdiction to decide, for itself, the preliminary facts on which the claim or dispute before it depends.
In the instant case, it must have jurisdiction to decide what the wages payable are and, for that purpose, what the contract of employment and the terms thereof are.
The judgment of my learned brothers in this case apparently recognizes the jurisdiction of the Tribunal as above stated, when it said that the Tribunal has the power "to find out what the terms of the contract were to determine what the wages of the employed person were".
Whether the Tribunal 's decision in this behalf is conclusive or not is a matter that does not arise for decision in this case.
But, it is said that the Tribunal has no authority to determine the question of "potential wages".
Undoubtedly a claim to a higher potential wage cannot be brought in under the category of "claim arising out of deduction from the wages or delay in pay 1367 ment of the wages" if that wage depended on the determination by a superior departmental or other authority as to whether or not a particular employee is entitled to the higher wage a determination which involves the exercise of administrative judgment or discretion or certification, and which would, in such a situation., be a condition of the payability of the wage.
But where the higher wage does not depend upon such determination but depends on the applica tion of, and giving effect to, certain rules and orders which, for this purpose, must be deemed to be incorporated in the contract of employment, such a wage is, in my view, not a prospective wage, merely because the paying authority concerned makes default or commits error in working out the application of the rules.
In this context it is relevant to notice that the definition of "wages" in the Act is "all remuneration which would if the terms of the contract, express or implied, were fulfilled, be payable".
The word "were" in this definition which I have underlined, seems to indicate that even a "prospective wage" which would be payable on the proper application of the rules in the sense which I have explained above may well fall within its scope.
he wage under the Act is not, necessarily, the immediately pre existing wage but the presently payable wage.
In the case before us, the order of the Tribunal proceeded on the view that the applicant was presently entitled to be treated as a monthly rated temporary employee and not as a daily rated casual labourer, by virtue of the directions of the Railway Board for the implementation of the scheme of classification and that therefore he was entitled to the appropriate higher wage.
We have not been shown any material to indicate that this higher classification of the applicant depended not on the mere application, of the classification scheme and the rules thereunder, to him but upon any determination by a departmental higher authority.
If it was the latter, undoubtedly the Tribunal cannot claim to sit in judgment over that determination, whether it was right or wrong.
Such 175 1368 determination, if wrong, could be corrected only by a further departmental appeal, if any, available.
But the Tribunal had, to my mind, the authority to find whether the applicant 's case falls within the scope of determination by the departmental authority or is one of mere application of the rules to the facts of this case.
If the decision of the Tribunal in this behalf was wrong, the appropriate remedy for the Railway Authority was by way of an appeal under section 17 of the Act.
Since the finding of the Tribunal in this case involved the case of as many as six persons and the net additional amount ordered was a sum of Rs. 1,341, its finding was appealable under section 17 of the Act.
Whether or not an employee was entitled to wages of a higher category than what he was till then drawing would depend entirely on the scope of the rules with reference to which he is entitled to become one in the higher category and it cannot be assumed a priori that such a claim is a claim to "prospective wages".
In my view, therefore, there is no sufficient reason to reverse the judgment of the learned Judges of the Bombay High Court and this appeal should be dismissed with costs.
BY THE COURT.
In accordance with the decision of the majority, the appeal is allowed and the orders of the Authority and of the High Court are quashed.
There will be no order as to costs throughout.
Appeal allowed.
[/INST]The respondent joined the Jammu and Kashmir University in 1963 as lecturer on contract basis.
He was later promoted as professor.
His appointment as professor was also on contract basis and by agreement he was bound by the statutes and regulations from time to time in force in the University.
While extending his period of probation as Professor the Central Council of the University resolved that the respondent be charge sheeted for certain alleged misconduct.
An Enquiry was held under the Jammu and Kashmir University Act, 1965 and at report was submitted holding the respondent guilty.
On the day the enquiry officer submitted the report, the Jammu and Kashmir University Ordinance 1969 was promulgated.
Section 52 of the Ordinance provided that teachers employed on contract basis "unless otherwise ordered by the Chancellor after consulting the Pro Chancellor shall cease to hold such posts or to discharge such duties after 60 days from the commencement of this Ordinance or the Act, as the case may be." No such order was issued by the Chancellor extending the respondents employment on the expiration of the period.
Or, the other hand.
the Vice Chancellor.
allowed him to function as Professor and his probation was again extended for a year by the Vice Chancellor under section 13(4) of the Ordinance (which had already been replaced on November 16, 1969 by the Jammu and Kashmir University Act, 1969).
The Vice Chancellor also directed the release of the salary of the respondent and requested him to serve on the academic council as an ex official member.
Based on the enquiry report the Vice Chancellor issued a show cause notice to which the respondent submitted his explanation.
The University Council decided to terminate the services of the respondent.
In a writ petition filed by the respondent the High Court directed reinstatement.
The High Court took the view that the facts and circumstances of the, case clearly enabled the spelling out of a fresh appointment of the respondent as Professor by an emplied contract.
The High Court was also of the opinion that the enquiry directed under the 1965 Act lapsed when the 1969 Ordinance came into force and could not furnish the basis for punitive action against the respondent and therefore the order of dismissal based on the report of the Enquiry Officer was bad in law.
HELD : that the High Court 's order of reinstatement.
had to be quashed.
While the respondent had no right to continue in the University the termination of his services was invalid.
(i)Under the 1969 Ordinance and the subsequent Act which replaced it the only body competent to appoint a professor, like the respondent, is the University Council and even the Council shall make such appointments only on the recommendation of the Selection Committee created by section 36.
There is no case that.
the Selection Committee even considered or recommended the respondent for appointment and there is no suggestion that the University Council appointed the respondent as professor.
it follows that the only statutory body 170 empowered in this behalf has not appointed the respondent to the post claimed by him.
Therefore the continuance of the respondent on the expiration of the statutory two months ' period cannot be legitimated by law.
The circumstance that the respondent functioned in the University does not vest in him the legal status of a validly appointed employee with all the protection that the, Act and the relevant statutes give to such a person.
Thus no case of statutory ter mination is called for, the basis of statutory employment being absent.
[175F] When a statute creates a body and vests it with authority and circumscribes the powers by specifying limitation.
the doctrine of implied engagement le hors the provisions and powers under the Act would be subversive of the statutory scheme regarding appointment of officers and cannot be countenanced by the Court.
If a Vice Chancellor by administrative drift allows such employment it cannot be validated by any theory of factum valet.
[176E] (ii)When there was no provision in the 1969 Act which would continue or validate the enquiry commenced against the respondent by the Jammu and Kashmir University created by the 1965 Act.
the Enquiry report falls to the ground vis a vis the respondent.
The fact that he responded to a show cause notice cannot clothe the enquiry with legality and the report is impermissible material to injure the respondent with a punitive termination.
The respondent would be considerably damnified in his standing and reputation by the order of the University.
The termination of his service therefore has to be declared illegal.
[176G]
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<s>[INST] Summarize the judgementCivil Appeal No. 1236 (Nce) Of 1975 Appeal under Section 116A of the R.P. Act from the order date 1.2.84 of the Gauhati High Court in E.P. No. 3 of 1983.
C. section Vaidyanathan for the Appellant.
Kapil Sibal, K K Lahiri and Mrs. Manik Karanjwala for the Respondent.
The Judgment of the Court was delivered by 344 VARADARAJAN, J.
This appeal by the respondent in Election Petition No. 3 of 1983 on the file of Gauhati High Court is directed against the judgment of a learned Single Judge, allowing the election petition and setting aside the election of the appellant Horangse from the Longkhim Chre constituency of the Nagaland Legislative Assembly on the ground of corrupt practice, namely, presentation of four red waist coats to three Gaon Burahs and one Barik of Lirise village on 27 10 1982 to induce them to cast their votes in his favour.
The respondent/election petitioner, M. Tsubongse who contested as a Congress (I) candidate lost to the appellant who contested as a Naga National Democratic Party candidate (for short 'NNDP ') by a margin of 133 votes in the election held on 10 11 1982.
He filed his election petition seeking the appellant 's election to be set aside on the ground that he was guilty of four instances of corrupt practice falling under section 123(1) of the Representation of People Act, 1951 (for short 'the Act ') and on three other grounds, namely: (1) display of a banner with the caption "Do not sell Nagaland to India", a corrupt practice within the meaning of section 123(3A) of the Act (2) exceeding the limit of expenditure amounting to corrupt practice within the meaning of section 123(6) of the Act and (3) use of government vehicles for the purpose of the election.
The learned Single Judge, who tried the election petition, found only one of the aforesaid grounds of corrupt practice, namely, presentation of four red waist coats proved and the other grounds not proved, and he allowed the election petition and set aside the appellant 's election on that ground.
It is, therefore, necessary to set out the case of the parties briefly in regard to this single ground.
The result of the election held on 10 11 1982 was announced on the day of counting 12 11 1982 by the Returning Officer, Tuesung.
The respondent had secured 3082 valid votes while the appellant, who was the Deputy Speaker of the last Legislative Assembly of Nagaland had secured 3215 valid votes and was declared elected by a majority of 133 votes.
The respondent alleged in the election petition that the appellant gave four red waist coats to the voters Lisechem, P.W. 11, Lithrongse, P.W. 12, Murimong, P.W. 13 and Lithsaba at 4.00 p.m.
On 27 10 1982 for inducing them to cast their votes in his favour in the presence of .
Tsarise, P.W. 14 and Tselongse, P.W. 15 of Lirise village who witnessed the offer and reported the matter later to the respondent.
345 The appellant denied that the waist coats were given either by himself or in order to induce the recipients to cast their votes in his favour.
His case was that he visited Lirise village some time prior to October 1982 and was received by the villagers who considered him as one of their leaders.
In view of the custom of Nagas to receive guests or others and exchange gifts, he sent five waist coats to be given to four Gaon Burabs and the eldest Barik of the village long before the election process started.
The waist coats ware not given to procure votes or to induce the recipients to cast their votes in his favour.
Thus he denied that he committed and corrupt practice and contended that the election petition is not bona fide and has been filed only to harass him.
During the trial the appellant 's case was that he sent the five waist coats as gifts through Tsarise, P.W. 14 in September 1982 and that he did not personally distribute them after the election process had started in order to induce the recipients to cast their votes in his favour.
The dispute was thus confined to the date of distribution of the waist coats, namely, whether they were given in September 1982 or on 27 10 1982, as to whether the appellant gave them personally or sent them through P.W. 14 and as to whether they were given to induce the recipients to cast their votes in favour of the appellant or only to keep up the appellant 's promise made in August 1982 to send some gifts in return for the gift made to him E earlier as per custom.
The respondent examined Lisechem, P.W, 11, Lithrongse, P.W. 12, Murimong P.W. 13, B. Tsarise, P.W. 14 and Tselongse, P.W. 15 for proving this item of corrupt practice.
On the side of the appellant there is the evidence of the appellant R.W. 1, Chupongse, R.W. 3, Krishna Kumar R.W., 4 and Yanstsasi R.W, 5 about this charge.
On a consideration of the oral and documentary evidence the learned Judge of the High Court found that this item of charge of corrupt practice is proved beyond reasonable doubt and he accordingly allowed the election petition and set aside the appellant 's election as stated above.
However, the learned Judge did not rule out that the appellant had distributed red waist coats in September 1982 as`observed by him in paragraph 15 of his judgement which will be extracted in due course.
346 The appellant, R.W. 1 has denied in his evidence that he went to Lirise village on 27 10 1982 or presented the waist coats personally.
He has stated that he visited that village two or three days after 15 8 1982 at the request of the Head Gaon Burah, R.W. 3, and was welcomed by the Gaon Burahs and others where P.W. 14, then a leading worker and member of the NNDP was also present and was taken to the house of R.W. 3 and presented with a shawl as per the custom of the Nagas and that as he had gone there urgently and had not taken anything to make a gift by way of return as per the custom, he promised to send some gifts later and he thereafter ordered under exhibit dated 2 9 1982 for the making of five red waist coats through Krishna Kumar, R.W. 4 and got them from him on 10 9 1982 and sent them in the same month through P.W. 14 being distributed to the Gaon Burahs of Lirise village.
He has stated that he filed the nomination paper on 13 10 1982 and that P.W. 14 who was Area Council Member joined the Congress (T) party in the midst of the election and supported the Congress (I) candidate.
Krishna Kumar, R.W. 4, the proprietor of a tailoring firm at Kohima has corroborated the evidence of R.W. I about placing of the order exhibit on 2 9 1982 and taking delivery of the waist coats on 10 9 1982.
He has stated that exhibit written by the appellant is signed by him and that as the appellant was a known person he delivered the waist coats though exhibit was not surrendered to him on 10 9 1982.
The Head Gaon Burah, R.W. 3 has corroborated the evidence of R.W. l that he met the appellant at Longkhim in August 1982 and requested him to visit Lirise village and that he accordingly came to Lirise village and was received in the Mong Mong month and presented with a cloth, and that the appellant regretted that he had not brought anything to be presented by way of return and promised to send waist coats later.
He has further stated that P.W. 14 subsequently told him that the waist coats had arrived and he thereupon asked him to distribute them and give one of them to him also and they were given to him and other Gaon Burahs.
Yanstasi, R.W. 5 has corroborated the evidence of R.W. 3 about the appellant 's visit, saying that two months before the election held in November 1982 he had gone to Lirise to meet the appellant, and that the appellant was received by the villagers and taken to the Head Gaon Burah 's house and presented with a sangtam cloth and that the appellant regretted that he had not brought any present to be given by him and assured that he would send waist coats later.
R.W. 5 was Head Gaon Burah and he became Special 347 D.B. at Seotsing from 15 9 1983.
He has denied that he had worked for the appellant in the elections held in 1977 and 1982, in both of which he had been declared duly elected.
R.W. 3 has not been cross examined seriously about the month of the appellants visit to Lirise village, namely, Mong Mong month, which according to the evidence of R.W.5 is September in which the Mong Mong festival is celebrated by the Nagas.
exhibit
C was not filed in the court at the earliest stage.
R.W I has stated in his evidence that his wife came across it after he had filed his written statement in the election petition and gave it to him for being Produced during the trial.
May be, noreliance could be placed on Ex to find out when the waist coats were ordered to be made and about when they were actually delivered by R.W.4 to the appellant.
P.W.14 has not been cross examined regarding the month in which he left the NNDP and joined Congress (I) party, which according to his evidence, was in August 1982.
Similarly R.W.
I has not been cross examined about when P.W.14 left the NNDP and joined the Congress (I) party, which according to his evidence, was in the midst of the election in which he filed the nomination paper on 13 10 1982.
It is not improbable that the appellant had sent the waist coats through P.W.14 who was a prominent member of the NNDP and the Area Council member at that time for being distributed to the Gaon Burahs by way of return of the present of the shawl made to him during his earlier visit as per the custom amongst Nagas to exchange gifts during the visit of important persons like M.L.As.
and others.
The appellant was the Deputy Speaker of the Nagaland Legislative Assembly at that time.
The said custom amongst the Nagas is spoken to even by respondent P.W.1 who has stated in his evidence that normally villagers also would present gifts to visiting M.L.As.
and the visiting M.L.As.
also would .
make presents to the villagers as per the custom of the Nagas.
We find no satisfactory reason for rejecting the evidence of R.Ws. 1 to 5.
As a matter of fact, even the learned counsel for the respondent in this appeal before the trial court does not appear to have seriously challenged the acceptability of the evidence of these witnesses in the course Or his arguments before the learned Judge.
The learned Judge has stated in his judgment in regard to this matter thus: "It has been contended that even if it is assumed that the respondent (appellant in this appeal) had taken delivery of five red waist coats on 10 9 1982 as reflected in exhibit C, this would not rule out the distribution in October 1982.
It is further submitted by the learned counsel for the petitioner (respondent in this appeal) that even if 348 distribution of some waist coats had taken place in September 1982 as deposed by R.Ws. 4 and 5, the same is not enough to discard the allegation of distribution of other waist coats in October 1982.
This submission is apparently right inasmuch as because some persons had been given in September 1982 in pursuance of assurance made in August 1982 it would not by itself rule out the giving of such gifts in October, more so when the price of one waist coat seems to be around Rs. 100" The sum of Rs. 100 per piece mentioned by R.W.1 in his evidence is the price of each of the blankets which he had distributed to some persons in the village in 1981 and not of each of the waist coats given in 1982.
It is not the case of any of the parties that waist coats were presented by or at the instance of the appellant once in September 1982 and again to the same Gaons Burah in October 1982.
Nor is it probable that only waist coat would have been presented on both the occasions to the same individuals Even if the evidence of R.Ws. 1 to 5 is considered to be unsatisfactory to prove that the red waist coats were presented only in September 1982 and not in October 1982, that does not mean that the respondent 's case that the red waist coats were given to P.Ws. 11, 12 and 13 on 27.10.1982 to induce them to cast t heir votes in favour of the appellant stands proved.
The respondent has to prove his case which is disputed by the appellant independently of the fact whether the appellant has proved his defence or not.
Now we proceed to consider the evidence of P.Ws.11 to 15.
Lisechem, P.W.11, a Gaon Burah of Lirise village mentioned the date of the appellant 's visit first as 27.9.1982 and then corrected it as 27.10.1982 and again stated that he does not remember the month or dale of receipt of the waist coat by him from the appellant and he has added that it was after the date of the election.
He has stated that the appellant came to his house on 27.10.1982 and gave him a red waist coat and asked him to cast his vote in his favour and not to inform others about the presentation of the waist coat and that soon after the appellant left his house, P.Ws. 14 and 15 came to his house and asked him about what had been given to him by the appellant and he thereupon showed that waist coat to them and told them that it was given to him.
Lithrongse ' P.W.12, another Gaon Burah of Lirise village has 349 stated that the appellant came to his house at 4.00 p.m.
On 27.10.1982 and presented a red waist coat to him and asked him to cast his vote in his favour and that soon after the appellant left his house, P.Ws 14 and 15 came there and asked him as to what was given to him and he thereupon told them that the appellant gave him a waist coat and they asked him to remember it and not to deny it later.
He is unable to deny that appellant visited the village in August or September 1982 or to say whether it was in 1981 when admittedly he received a blanket from the appellant on a prior occasion when the appellant was the Deputy Speaker of the Legislative Assembly.
It is seen from his evidence that P.W. 15 belongs to the Congress (I) party and that P.W. 14 was previously in the NNDP and had subsequently joined the Congress (I) party.
Muri Mong, P.W. 13 of Lirise village has stated in his evidence that the appellant came to his village after 4.00 p.m. On 27.10.
1982 and presented a red waist coat to him and asked him to cast his vote in his favour and that a minute after the appellant left his house, P.Ws. 14 and 15 came there and asked him if a waist coat was presented to him by the appellant.
He has denied that P.W. 14 gave the waist coat to him in the first party of September 1982 and that the appellant did not visit his village or present the waist coat on 27.10.1982.
He has stated that he is an old man and that he does not remember months and dates.
Tsarise, P.W. 14 who was admittedly in the NNDP and a supporter of that party previously claims to have joined the Congress (I) party in August 1982.
He has stated in his evidence that the appellant came to Lirise village on 27.10.1982 and visited the houses of P.W.11, Lithsabha and P.Ws.
12 and 13 in that order at about 4.00 p m. and that he and P.W.15 went to those houses within a few minutes after the appellant 's departure from there and those persons individually told them that the appellant gave them a waist coat and asked them to cast their votes in his favour.
He has admitted that when he visited the house of P.Ws.11 to 13 and Lithsaba he asked them to remember the date and the time and not to deny it later.
He has denied that the appellant sent the red waist coats through him in the early part of September 1982 for distribution amongst Gaon Burahs of Lirise village.
Tsalongse, P.W. 15 does not remember the date of the appellant 's visit to Lirise village.
He has, stated in his evidence that the 350 appellant came to the village in the election period and asked the people to cast their votes in his favour.
He claims to have gone to `the house of P.W. 14 and to have seen from there the appellant visiting the houses of P.W. 11.
Lithsaba and P.Ws. 12 and 13 one after, the other.
He has stated that he and P.W. 14 went to those houses soon after the appellant left the places and they individually told them that the appellant gave red waist coats and asked them to cast their votes in his favour.
He has denied that the appellant neither visited Lirise village nor presented waist coat on 27.10.1982.
It is significant to note that though in the election petition it is clearly alleged that the appellant gave red waist coats to P.Ws. 11 to 13 and Lithsabha at 4.00 p.m.
On 27.10.1982 for inducing them to cast their votes in his favour in the presence of P.Ws.
14 and 15 and they witnessed the offer and reported the matter subsequently to the respondent P.Ws.
14 and 15 do not claim in their evidence personal knowledge about the offer presentation of the waist coats by the appellant to these four persons and about the inducement of the appellant to cast their votes in his favour.
Admittedly, P. Al.
14 had asked P.Ws. 11, 12 and 13 to remember the date and time of the appellant 's visit to their houses where he claims to have gone alongwith P.W. 15 soon after the departure of the appellant from each of those places.
It is clear that these three witnesses.
I l to 13 have mentioned the date and month of the appellant 's visit only on the basis of what P.W. 14 told them to remember.
P W. 14, who was a staunch worker of the NNDP and had switched over to the Congress (I) party to which P.W. 15 belongs, some time before the election.
and P.W. 15 are the interested witnesses.
P.W. 15 has stated in his evidence that the appellant appealed to the people of the village to cast their votes in his favour and that he went to the houses of P.Ws.
I l to 13 in Lirise village only thereafter.
If that is so, it is not likely that the appellant, then the Deputy Speaker would have carried the gunny or hessian bag containing the waist coats himself without being accompanied even by a single worker or sympathiser of the NNDP when he is stated to have visited those four houses for presenting the waist coats and inducing the recipients to cast their votes in his favour.
The evidence of P.Ws. 11 to 13 that P.Ws.
14 and 15 came to their houses within minutes after the appellant left the place and asked them about what had been given to them by the appellant and that when they told them that red waist coats have been given to them with a request to 351 favour him with their votes, they asked them to remember the date and time and not to deny the matter later P.W. 14 has stated so in his evidence is artificial and unreliable.
We are, therefore, not impressed with the evidence of P.Ws.11 to 15 about the date of the appellant 's visit to Lirise village and the presentation of the red waist coats to P.Ws. 11 to 13 and others.
On the evidence of R.Ws. 1 to 5, which we accept, we find that the appellant got the waist coats distributed through P.Ws.
14 who was then a staunch worker of the NNDP in September 1982 long before the election process had started as per the custom of Nagas to make gifts in return for the gifts received by dignitaries.
The evidence let in by the respondent to prove this item of alleged corrupt practice on the part of the appellant is wholly insufficient and unacceptable to prove the charge satisfactorily.
We are, therefore, unable to uphold the judgment of the learned Judge, setting aside the appellant 's election on the ground of the alleged corrupt practice.
We accordingly allow the appeal with costs in both the courts and set aside the judgment of the learned Judge.
S.R. Appeal allowed.
[/INST]The petitioners entertained grave doubts as to the propriety of holding the Presidential election before the general elections had been completed throughout the entire territory of India and, by applications filed under article 71(1) of the Constitution as citizens of India, invoked the jurisdiction and power of the Supreme Court thereunder to inquire into such doubts and sought for an order restraining the Election Commission from taking the poll in connection with the election of the President, fixed for May 6, 1957, till the general elections in the Union territory of Himachal Pradesh and in two Lok Sabha Constituencies of the State of Punjab, which were still to be held, had been completed.
The expiry of the term of office of the then President which caused the Presidential election was to come about on the mid night of May 12, 1957.
One of the petitioners alleged that he was a candidate for the Presidential election and the time intervening between the date when he received his nomination paper and the date fixed for the filing of it was too short to enable him to file it within time and the case of the other was that he was a prospective candidate for election to the Lok Sabha from one of the Punjab Constituencies, where election was yet to be held, and would be prevented from exercising his right to vote for the election of the President.
Held, that the present petitions were premature and must be dismissed. ^ The jurisdiction and power conferred on the Supreme Court by article 71(1) of the Constitution to inquire into and decide doubts and disputes arising out of and in connection with the election of the President can be exercised only after a particular candidate has been declared elected and on an election petition filed under section 14 of the Presidential and Vice Presidential Election Act of 1952.
The word 'election ' in article 71 of the Constitution is used in the wider sense to denote the entire process of election culminating 139 1082 in a candidate being declared elected and doubts and disputes arising out of and in connection with such election must include all doubts and disputes relating to any particular stage of it.
N. P. Ponnuswamy vs Returning Officer, Namakkal Constituency, ; , referred to.
It is a well recognised principle of the law of election that an election cannot be held up to facilitate the ventilation of individual grievances in derogation of the interest of the people in general and article 62 Of the Constitution, which requires that the election of President must be completed within the time fixed by it and has been conceived in such interest, is mandatory in character,
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<s>[INST] Summarize the judgementAppeal No. 2485 of 1992.
From the Judgment and Order dated 8.10.1991 of the Calcutta High Court in F.M.A.T. No. 2532 of 1991.
P.S. Poti and Rathin Das for the Appellants.
Dr. Shankar Ghosh, Raj Kumar Gupta and P.C. Kapur for the Respondents.
J. Special leave granted.
487 This appeal arises against the judgment dated October 8, '1991 of the ' Division Bench of the Calcutta High Court made in F.M.A.T. No. 2532 of 1991.
The first respondent, a limited Company filed under article 226 of the constitution of India Civil Order No. 16339 (W) of 1988 for a mandamus to refrain the appellants from giving effect to the vesting of the lands in Dag No. 1, Khatian No., 10, Tauzi No. 56, J.L. No. 26, Mouza Chowkgaria within P.S. Kasba, admeasuring 128.40 acres and to take possession of tank fisheries lying therein pursuant to the provisions of West Bengal Estate Acquisition Act, of 1954, for short 'the Act '.
The learned Single Judge directed an action under Sec.
10(2) of the Act after giving an opportunity to the respondents and to take possession of the said lands pursuant thereto.
On appeal the Division Bench in the impugned judgment held that the appellants should take action under the West Bengal Land Reforms Act, 1955 within a period of two months from the date of the said judgment and on its failure, the respondents would be at liberty to deal with and dispose of the lands in its own manner.
Until then the appellants were restrained to take possession of the land.
Feeling aggrieved against the said direction the above appeal under article 136 has been filed.
The Revenue Officer found from finally published record of rights that the lands in question were classified as 'Beel ' (marshy land) and tank fisheries would he classified as 'Beel Mash Khas '.
The learned Single Judge and the Division Bench of the High Court found that when the Revenue Officer initiated proceedings to revise the old Jama Rs. 1230.
9 Anas in three Jamas of Rs. 1,188 and odd in khata No. 102; Rs. 396 and odd in khata No. 128 and Rs. 3024 and odd in khata No. 131.
the respondent succeeded in his appeal under Sec.
44(3) of the Act holding the lands to be 'Tank fisheries ' and that, therefore, old Jama was to be maintained.
So the Division Bench directed to take action under the Land Reforms Act.
Shri P.S. Poti, learned Senior Counsel for the appellants contended that by operation of Secs.
4 and 5 of the Act, fisheries being one of the interests that stood extinguished and vested in the State Govt.
Free of all incumbrances with effect from June 1, 1956, the respondents have lost right, title and interest therein.
Section 6 only enables an intermediary to retain possession of certain enumerated lands which includes "tank fisheries" provided he makes an application in form 'B ' within the specified time expressing his intention to retain the lands.
Since the respondent had failed to do so the entire lands including tank fisheries stood vested in the state.
As per the entries in the record of rights the lands are only Beel (Marshy lands) and not tank fisheries and, therefore, even the exercise of the option to retain possession is not available.
Even assuming that the lands are tank fisheries, what was saved from the operation of the Act is the entitlement of the respondent to hold 488 the land as a tenant without any interest therein except the right to remain in khas (physical) possession subject to such terms and conditions as may be prescribed by the Govt.
and payment of rent.
Since the respondent raised a dispute the learned single Judge rightly directed an enquiry under Sec. 10 (2) in this behalf and to take action pursuant to its result under Sec.
10(1).
The Division Bench committed gravest error in treating that the decision of the Tribunal under Sec.
44(3) relating to Jama to be final and the lands to be tank fisheries and that the respondent is entitled to retain khas possession with all right, title and interest therein as an owner.
The direction given to initiate the action under the Land Reforms Act 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands is beyond the relief sought in the writ petition.
Therefore, the Division Bench committed manifest error of law warranting interference.
Dr. Ghosh, learned senior counsel for the respondents, contended that initially Devendra Nath Dey Sarkar purchased the lands from Harkishan Mondal, the original Zamindar in 1911 and from him the respondents had purchased the leasehold rights in 1937 and ever since they have been using the lands as tank fisheries.
When notification under Sec. 4 was issued, the lands were being used as.
tank fisheries.
Despite its vesting, by operation of Sec.
6(2) the respondent has right to retain possession as an owner.
In support thereof he placed reliance on State of U.P. vs Krishna Gopal & Anr.
[1988] Suppl.
2 SCR 391, State of West BengaI vs Atul Krishna Shaw & Anr.
[1990] Supp. 1 SCR 91 and Sasanka Sekhar Maity & Ors.
vs Union of India ; He further contended that the liability of dispossession of the respondent from the lands would arise only if the possession is found to be unlawful.
But by operation of Sees.
6(2) and 10(5) the possession is lawful.
The order of the Appellate Tribunal passed in 1957 under section 44(3) having been allowed to become final and the civil suit for declaration that it is Beel and not tank fisheries having filed by the State and got dismissed, concludes that the lands in question are only "tank fisheries".
By operation of Subsec.
(2) for Sec.
6 of the Act the respondent is entitled to retain possession and the action for dispossession under Sec.
10 (1) is illegal.
The Division Bench therefore, rightly directed to initiate proceedings under the Land Reforms Act and to take action thereunder.
Admittedly the Act came into force on February 12,1954.
Notification under Secs.
4(1) and (3) was published in the prescribed manner specifying the date of vesting of the estate and had come into effect from June 1, 1956.
By operation of sub sec.
(1) of Sec.
5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances.
"Incumbrance" defined under Sec. 2(h) of the Act means 'in relation to estates and rights of intermediaries therein, does not 489 include the rights of a raiyat or of an under raiyat or of a non agricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the provisions of sec.
6, include all rights or interests of whatever nature, belonging to intermediaries or other persons, which relates to lands comprised in estates or to the produce thereof.
Therefore, title to, rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances.
The respondents being purchasers of lease hold interest in tank fisheries, as per their own case, it also stood extin guished.
But, however, since the appellant treated the respondent as an intermediary, we proceed on that footing.
The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an under raiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec.6 of the Act.
All other rights, interest of whatever nature or little belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished.
All grants and confirmation of title, to estates and rights therein, to which the declaration of vesting applies and which were made in favour of intermediaries shall stand dismissed and ceased by operation of Sec.
5(1) (b) of the Act, Section 6 postulates by a non obstanti clause that notwithstanding anything contained in secs.
4 and 5 an intermediary shall, except in the cases mentioned in the proviso to sub sec.
(2) but subject to the other provisions of that sub sec., be intitled "to retain with effect from the date of vesting", various kinds of lands like homestead etc.
enumerated therein including 'tank fisheries ' covered by clause (e) thereto.
The explanation of 'tank fisheries ' means, "a reservior or place for the storage of the water, whether formed naturally of by excavation or by construction of embankments, which is being used for pisciculture or for fishing, together with the sub soil and the banks of such reservoir or place, except such portion of the banks as are included in a homestead or in a garden or orchard and includes any right or pisciculture or fishing in such reservoir or place".
Therefore, if lands comprised of tank fisheries whether naturally formed or by excavation or by construction of embankments being used for pisciculture or fishing, the intermediaries became entitled to retain possession, despite the intermediaries having been divested of right, title and interest therein.
This is made manifest by Sec.
10(5) of the Act which postulates that 'nothing in this section shall authorise the Collector to take khas possession of any estate or of any right of an intermediary therein, which may be retained under sec.6 '.
Sub sec.
(2) of Sec. 6 declares that, "An intermediary who is entitled to retain possession of any land under sub sec.(1) shall "be deemed to hold such land" directly under the State from the date of vesting as a tenant, subject to such terms and conditions as may be prescribed and subject to payment of such rent as may be determined under the provisions of this 490 Act and as entered in the record of rights finally published under Chapter V except that no rent shall be payable for land referred to in clause (h) or (i), provided that if any tank fishery or any land comprised in a tea garden, orchard, mill, factory or workshop was held immediately before the date of vesting under lease, such lease shall be deemed to have been given by the State Govt.
On the same terms and conditions as immediately before such date, subject to such modification therein as the State Govt.
may think fit to make '.
On the issue of notification under Sec.49, Sec. 52 prescribed procedure to deal with raiyats and under raiyats covered in Chapter 11 etc.
It says that the provisions in Chapter II shall with such modification as may be necessary apply mutatis mutandis to raiyats or under raiyats as if such raiyats or non raiyats were intermediaries and the land held by them were estates and such a person holding under a raiyat or an under raiyat were a raiyat for the purpose of clauses (c) and (d) of Sec.5, provided that, where a raiyat or an under raiyat retains under sec.6 any land comprised in a holding, then notwithstanding anything to the contrary contained in sub sec.
(2) of sec.6, then he shall pay the rent as prescribed in clauses (a) to (d) thereto.
Under Sec.5(c) every raiyat holding any land under an intermediary shall hold the same directly under the state as if the state had been the intermediary and on the same terms and conditions as immediately before the date of vesting.
Thus the right, title and interest of a raiyat or under raiyat in the lands in his possession and enjoyment are saved.
By operation of law they became full owners thereof subject to the terms and conditions that maybe imposed under Sec. 52 and payment of Jama existing on the date of notification or revised from time to time and finally entered in Record of Rights.
The pre existing rights of the intermediaries in the estate to which the declaration applied shall stand vested in the State free from all incumbrances.
Section 6 does not have the effect of divesting the state of the vested right, title and interest of the intermediary.
One of the rights i.e. possession held by the intermediaries is the only interest saved by Sec.6.
from the operation of Secs.
4 and 5.
The fishery rights also stood vested.
The pre existing rights, title and interest therein also shall stand determined as against the state and ceased.
The Collector had symbolic possession under Sec. 10.
But by use of non obstanti clause in Sec.6 (1) the respondent became entitled to retain khas possession of tank fisheries, and he shall hold tank fisheries directly under the state on such prescribed terms and conditions and subject to payment of such rent as may be determined under the Act from time to time as finally entered in Record of Rights.
If any lease by the intermediary of any tank fisheries granted prior to the date of vesting, by operation of the proviso to sub sec.
(2) of Sec. 6, the lease shall be deemed to have been given by the State Govt.
On the same terms and conditions and subject to such modification 491 therein as the State Govt. may think fit.
Such holding of the land by the intermediary of the tank fishery shall be as a tenant.
The word 'retain ' has been defined in Black 's Law Dictionary, 6th Edition, page 1316 to mean 'to continue to hold, have, use, recognise, etc.
and to keep '.
In Collings English Dictionary at page 1244 'retain ' has been defined as 'to keep in one 's possession, to be able to hold or contain, to hold in position, to keep for one 's future use as by paying a retainer or nominal charges '.
In Webster Comprehensive Dictionary International Edition, Volume II, at page 1075, the word 'retain ' has been defined, 'to keep or continue to keep in one 's possession '.
Section 10(2) of the Act empowers the Collector, after his taking charge of the estate and the interest of the intermediaries under Sec.
10(1), to issue a written order serving in the prescribed manner requiring the intermediary or any person in possession (khas or symbolic) of any such estate or any interest to give up such possession by a date to be specified in the order which shall not be earlier than 60 days from the date of service of the order, etc.
Sub section 5 of Sec.
10 prohibits him to take khas possession of any right of intermediary in the estate retained under Sec.6.
The conjoint operational conspectus assists us to conclude that the preexisting right, title and interest in the lands situated in an eatate stood extinguished and ceased to have effect on and from notified date i.e. June 1, 1956 and stood vested in the state free from all incumbrances.
The non obstanti clause under Sec.6 excluded from the operation of sees.
4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec.6, subject to Sec 6 (2).
The intermediary by operation of Sec.
10(2) shall be required to submit in form 'B ' within 60 days from the date of issuing notice under Sec.
10 (1) of his intention to retain possession of the tank fisheries.
On such submission of Form 'B ', the Collector without dispossessing him/it shall be entitled to prescribe such terms and conditions to which the intermediary or the lessee shall be bound and hold the tank fishery and shall remain in possession, using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and finally entered in the Records of Rights.
Under Sec. 39 in Chapter V, the State Govt has to carry out the purpose of the Act.
It shall prepare the Records of Rights in respect of the lands in an estate in any district or a part of a district in the manner prescribed therein.
Section 44 provides the procedure for publication of the draft and final Record of Rights prepared or "revised".
Sub section (1) thereof postulates that when a Record of Rights has been prepared or "revised" the Revenue Officer was enjoined to have it published in the prescribed manner.
On receipt of objections, if any, made 492 regarding any entry therein or any ommission thereof, he shall consider the same and is enjoined to pass an order under Sec.5A of the Act.
By operation of the proviso to sub sec.
(1) of Sec.
44 the order so passed under Sec.
5A shall be final, subject to the order of the appellate Tribunal under Sec. 44 (3) and during the continuance of that order it is not liable to be reopened.
The respondent is not right in its contention, as found favour with the High Court, that entries once made shall be final and can never be revised.
The word 'revised ' under sub sec.
(1) of Sec.
44 indicates that the State Govt.
or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made there the order under Sec.
44(3) becomes final so long as there is no revision effected.
The question of res judicate therefore, does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights.
The Division Bench of the High Court, therefore, is not right in its conclusion that the order passed by the appellate authority under Sec.
44(3) is final and the authorities have no jurisdiction to revise the Record of Rights.
After the act was amended by Act 33 of 1973, Sec.
57B was brought on statute which had barred the jurisdiction of the civil courts and exclusive jurisdiction has been conferred on the revenue authorities to deal with the matters arising under the Act.
So the dismissal of the suit as having been abated is of little consequence.
The appellants contend that even on the date of vesting the lands in question are "Beel" lands and that it is not tank fisheries.
The entries in the record of the rights disclose that the lands in question are being used as homestead or for agricultural purpose and that, therefore, it is not tank fishery.
The respondents disputed the Govt.
's stand and so it is a disputed question of fact.
We do not propose to go into, nor decide the same.
It is true, as rightly contended by Dr. Ghosh, that the lands once retained under Sec.6 by the intermediary and accepted by the authorities pursuant to form 'B ' declaration, the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions, if any, imposed and the rent imposed is being paid.
The avowed object of Act is to divest the pre existing right, title and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant.
Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the state and hold it as a tenant, subject to such terms and conditions and subject to payment of rent as may be determined under the Act.
Therefore, the entitlement to retain possession of the land i.e. tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain 493 possession by filing form 'B ' within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent.
By operation of the explanation to Sec.
6(1) (e) "tank fisheries" not only it must be a tank fishery at the date of vesting, but it must also continue to be used for pisciculture or for fishing.
The emphasis on 'being used ' obviously is that the tank fisheries should be continued to be used for public purpose, namely the fish seedling or fish must be made available for public consumption.
Dr. Ghosh is right that the crucial date is the date of vesting with regard to tank fishery also.
Not only that the intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 6(1) (e) of the Act.
Subsequent conversion of the land as tank fisheries is not material.
Whether, as a fact, it was used as a tank fishery on the date of vesting i.e. June 1, 1956 and being continued to be used as such or converted later on is a question of fact to be adjudicated after giving reasonable opportunity to the respondents.
Equally whether the respondents exercised the option to retain possession of tank fishery within 60 days from the date of publication of notification under section 4 or the notice under Sec.
10(1), etc., is also a question of fact to be determined.
In Saroj Kumar Bose vs Kanailal Mondal & Ors.
the facts were that the predecessor in interest of the respondents took permanent lease of fishery right without sub soil rights under a registered lease deed prior to the Act came into force and they continued to remain in possession and was using the lands as tank fishery.
The lassor, filed a suit for recovery of rent together with interest.
The appellant lessee resisted the suit liability contending that the tank fishery stood vested in the State and that, therefore, he was absolved of his liability to pay rent to the lessors.
The trial court decreed the suit.
On appeal, it was confirmed.
Dismissing the appeal, this court held that by operation of sec.6 of the act the right to retain possession of tank fishery by an intermediary was saved and that, therefore, the lessor continued as an intermediary to remain in khas possession.
In spite of the estate vested in the State, the tank fishery continued to remain in possession of the lessor.
In that context it was held, as relied on by Dr. Ghosh, that khas possession is not a necessary condition for retaining the property by intermediary.
State had recognised the plaintiffs as tenant by accepting rent from them.
Therefore, it was held that interest of the plaintiff did not vest in the State either.
In State of West Bengal vs Atul Krishna Shaw & Anr.
[1990] Supp. 1 SCR page 90, by a bench of this court to which one of us (K. Ramaswamy,J.) was a member, the facts were that after the estate vested in the state, the tank fisheries continued to remain in possessions of the respondent intermediaries.
Suo moto 494 proceedings were taken for correction of the classification of lands on the grounds that the plots were wrongly recorded as fishery plots.
The respondents objected to the re classification contending that they were continuing to cultivate pisciculture in the lands.
The claim of the respondents was negatived by the Settlement Officer.
On appeal, the Tribunal reversed the order of the Settlement Officer and confirmed the original classification as tank fishery.
On a writ petition filed in the High Court by the State, it was dismissed in limine.
While allowing the appeal, this court held that the crucial date for consideration whether the lands were being used as tank fishery was the date of the vesting and subsequent conversion was not material and that by operation of Sec 6 (2) of the Act, the tank fishery stood excluded from the operation of Sec. 4 and Sec. 5 of the Act.
Placing reliance on the findings at p. 101A & B, namely, 'Therefore, when by means of reservoir or a place for storage of water whether formed naturally or by excavation or by construction of embankment, is being used for pisciculture or for fishing is obviously a continous process as a source of livelihood, would be 'tank fisheries ' within the meaning of Sec.6 (1) (e) '.
Such tanks stand excluded from the operation of Sections 4 and 5 and the crucial date is the date of vesting.
As seen earlier the effect of the operation of Secs.4 and 5 is divesting the intermediaries of his pre existing right, title and interest in the estate except those which were exempted from the operation of the Act.
One of the exemptions is retention of the possession of the lands covered by Sec 6 of the Act.
See 6(1) (e), tand fisheries is one such.
Sub section (2) amplifies its effect.
Sub section '(2) transposes the pre existing possessory right of the retained lands of an intermediary of tank fisheries into holder of it as a tenant without any interest therein.
By fiction of law the respondent was transposed as "holder" of the possession directly under the State as tenant, subject to such terms and conditions as may be specified and subject to payment of rent as may be determined from time to time.
Therefore, what was saved by non obstenti clause of Sec.6(1) & (2) of the Act is the right of retention.
of the Physical (Khas) Possession of tank fisheries.
What was intended in Atul Kishan Shaw 's case was that Sec.
6(2)saved the retention of possession of tank fisheries and not divesting the state of the vested rights etc.
in the estate.
In South Indian States of A.P. and Tamil Nadu etc.
of the Madras Province, Madras Estate (Abolition and Conversion into Raiyatvari) Act, 26 of 1948 is in operation.
After the states reorganisation, in Tamil Nadu it is called Tamil Nadu Act and in Andhra Pradesh it is called Andhra Pradesh (Andhra Area) Act.
Thereunder Sec.
II provides procedure to grant raiyatvari patta to a raiyat in occupation.
Section 3(2) (d) proviso gives statutory protection to a raiyat from dispossession till raiytavari patta has been granted , Sees.
12 to 14 give right to landholder to obtain patta and see 15.
empowers the settlement officer to grant 495 patta to the landholders.
Section 19 provides that "where any raiyat or non raiyat land has been sold by any landholder for non agricultural purpose before first day of July, 1945, the buyers shall be entitled to keep the land subject to payment by him to the Govt.
of the raiyatvari assessment or ground rent which may be imposed upon the land and under the proviso it was declared that sale was not void or illegal under any law in force at that time.
The object of those provisions is to confer raiyatvari rights on person in occupation be it raiyat or landholder absolutely with no further conditions.
Thereafter he is entitled to use the raiyati land as if he is the owner thereof and the liability is to pay only land assessment or cist.
There is no limitation on the nature of user of the land.
But the language in the Act appears to be different.
As regards the raiyat or under raiyat they are treated differently from intermediary.
As regards the raiyat and non raiyat is concerned his pre existing right, title and interest in the land was not abolished and he is entitled to retain all his boundle of rights as intermediary directly under the state subject to the orders passed as per the procedure prescribed under Sec.52 and the relevant rules and payment of rent.
But in the case of an intermediary, he has been given only right to retain possession under Sec.
6 of the homestead lands or land comprised in or appertaining to buildings and structures, 25 acres of agricultural lands in khas possession, factories, workshops, tank fisheries or other enumerated properties etc.
without any interest therein and subject to the terms and conditions that may be imposed and payment of rent excising or revised as per the provisions relevant thereto.
Sub section (2) of Sec.
6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed.
The holding of the land is as a tenant, the emphasis is that his possession is without any interest in the land.
Under T.P. Act a tenant has leasehold interest in the land.
But in Sec. 6 (2) as a tenant for the purpose of payment of the rent and retention of possession and appears to be nothing more.
As regards tank fishery is concerned, though exemption has been granted, it is subject to the condition of continued user for pisciculture of fishing.
From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof i.e. for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subjects to payment of rent as prescribed under the Act, but not as owner thereof.
The direction, therefore, by the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules.
Therefore, it is manifestly illegal.
The appeal is accordingly allowed.
The order of the Division Bench of the High Court is set aside.
The direction of the Single Judge is restored.
The appellant 496 is free to issue notice to the respondent under Sec.
10(2) of the Act and conduct an enquiry into and find: (1) on the date of the vesting whether the lands were being used for pisciculture or fishing i.e. tank fisheries; (2) whether the respondent had submitted form 'B ' within the prescribed time exercising the option to retain possession of the lands in question as tank fisheries; and (3) whether the respondent is continuing to use the lands in question as tank fisheries.
Reasonable opportunities shall be given to the respondents to prove its/their case.
On the enquiry if it is found that the lands are not tank fisheries as on the date of the vesting or that the respondent had not submitted option in Form 'B ' to retain possession of the lands as tank fisheries within the prescribed period, then the lands stood vested in the state free from all incumbrances and authorities are entitled to take possession of the land under Sec.
10(1) read with Sec.
10(3).
In case if it finds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing; and if it has been continuing in possession of tank fishery, it is free to impose, if not already impossed such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing, subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights.
In case the respondent commits contravention thereof, it is open to the state to resume possession.
In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the state.
The appeal is accordingly allowed with the above modification and the rule absolute issued by the learned single Judge of the High Court will stand modified to the above extent and the writ petition is disposed of accordingly.
In the circumstances parties are directed to bear their own costs throughout.
Appeal allowed.
[/INST]Respondent Company filed a writ application in the High Court to refrain the appellants from giving effect to the vesting of the lands in question and to take possession of tank fisheries lying therein.
The Single Judge directed an action under section 10(2) of the West Bengal Estate Acquisition Act, 1953 and to take possession of the lands pursuant thereto giving an opportunity to the respondents.
The Division Bench on appeal held that appellants should take action under the West Bengal Land Reforms Act, 1955 within a period of two months of its judgment, failing which the respondents would he at liberty to deal with and dispose of the lands and until then the appellants were restrained to take possession of the lands.
The Single Judge and the Division Bench found that the Revenue Officer initiated proceedings to revise the old Jama of lands as he found from record of rights that lands were classified as 'Beel ' (marshy land) and the appeal of the respondent under Section 44(3) of the Act was allowed holding that the lands being 'tank fisheries ' old Jama was to be maintained.
481 482 ` The present appeal by special leave was filed against the judgment of the Division Bench of the High Court contending that by operation of sections 4 and 5 of the West Bengal Estate Acquisition Act, fisheries being one of the interests that stood extinguished and vested in the State Govt.
free of all incumbrances with effect from 1.6.1956, the respondents lost right, title and interest therein; that since the respondent failed to make an application in form 'B ' within the specified time expressing his intention to retain the lands, the entire lands including tank fisheries stood vested in the State; that as per the entries in the record of rights the lands were only Beel (Marshy lands)and not tank fisheries and, therefore, even the exercise of the option to retain possession was not available; that since the respondent raised a dispute, the Single Judge rightly directed an enquiry under section 10(2) and to take action pursuant to its result under section 10(1); that the Division Bench committed manifest error in treating that the decision of the Tribunal under section 44(3) relating to jama to be final and the lands to be tank fisheries and that the respondent was entitled to retain khas possession with all right, tide and interest therein as an owner; and that the direction given to initiate the action under the West Bengal Land Reforms Act, 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands was beyond the relief sought in the writ petition.
The respondents submitted that they purchased the leasehold rights in 1937 from the earliest purchaser of the lands who purchased the same from the original Zamindar and since then the respondents were using the lands as tank fisheries; that when notification under section 4 was issued, the lands were being used as tank fisheries; that despite its vesting, by operation of section 6(2), the respondent had right to retain possession as an owner; and the action for dispossession under section 10(1) was illegal; that the liability of dispossession of the respondent from the lands would arise only if the possession was found to be unlawful; and that the Division Bench, therefore, rightly directed to initiate proceedings under the West Bengal Land Reforms Act and to take action thereunder.
Allowing the appeal, this Court, HELD:1.1.
By operation of sub sec.
(1) of Sec.
5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances.
(488 G) 483 1.2."Incumbrance" defined under Sec.
2(h)of the Act means 'in relation to estates and rights of intermediaries therein, does not include the rights of a raiyat or of an under raiyat or of a non agricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the provisions of sec.
6, include all rights or interests of whatever nature, belonging to intermediaries or other persons, which relates to lands com prised in estates or to the produce there of.
Therefore, tide to, rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances.
(488 H, 489 A) 1.3.The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an underraiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec.
6 of the Act All other rights, interest of whatever nature or tide belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished.
(489 C) 1.4.All grants and confirmation of title, to estates and rights therein, to which the declaration of vesting applies and which were made in favour of intermediaries shall stand determined and ceased by operation of Sec.
5(1) (b) of the Act.
(489 D) 1.5.The respondents being purchasers of lease hold interest in tank fisheries? it also stood extinguished.
1.6.The pre existing right, tide and interest in the lands situated in an estate stood extinguished and ceased to have effect on and from notified date i.e. June 1, 1956 and stood vested in the State free from all incumbrances.
The non obstanti clause under Sec. 6 excluded from the operation of secs.
4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec. 6, subject to sec.
The intermediary by operation of Sec.
10(2) shall be required to submit in form 'B ' within 60 days from the date of issuing notice under Sec.
10(1) of his intention to retain possession of the tank fisheries.
On such submission of Form 'B ', the Collector without dispossessing him/it shall be entitled to prescribe such terms and conditions to which the intermediary or the leasee shall be bound and hold the tank fishery and shall remain in possession, using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and 484 finally entered in the Records of Rights.
(491 E F) 1.7.
The lands once retained under Sec.
by the intermediary and accepted by the authorities pursuant to form 'B ' declaration, the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions, if any, imposed and the rent imposed is being paid.
(492 E) 1.8.
The avowed object of Act is to divest the pre existing right, tide and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant.
Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the State and hold it as a tenant, subject to such terms and conditions and subject to payment of rent as may be determined under the Act.
Therefore, the entitlement to retain possession of the land i.e tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain possession by filing form 'B 'within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent.
(492 GH, 443 A) 1.9.
By operation of the explanation to Sec.
6(1) (e) "tank fisheries" not only it must be a tank fishery at the date of vesting, but it must also continue to be used for pisciculture or for fishing.
The emphasis on 'being used ' obviously is that the tank fisheries should be continued to be used for public purpose, namely the fish seedling or fish must be made available for public consumption.
(493 B) 1.10.
The intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 6(1) (e) of the Act.
Subsequent conversion of the land as tank fisheries is not material.
(493 D) State of U.P. vs Krishna Gopal & Anr., [1988] Supp.
2SCR 391 and Sasanka Sekhar Maity & Ors.
v Union of India, ; , cited.
Saroj Kumar Bose v Kanailal Mondal & Ors., [1985]2 SCR 393 and State of West Bengal v Atul Krishna Shaw & Anr., [1990] Supp. 1 SCR 901, explained.
485 1.11.
The word 'revised ' under sub sec.
(1) of Sec.
44 indicates that the State Govt.
or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made therein.
The order under Sec.
44(3) becomes final so long as there is no revision effected.
The question of res judicata, therefore, does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights.
(492 B) 1.12.
The Division Bench of the High Court is not right in its conclusion that the order passed by the appellate authority under Sec. 44 (3) is final and the authorities have no jurisdiction to revise the Record of Rights.
(492 C) 1.13.
Sub section(2) of Sec. 6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed.
The holding of the land is as a tenant, the emphasis is that his possession is without any interest in the land.
Under T.P Act a tenant has lease hold interest in the land.
But in Sec.6(2) as a tenant for the purpose of payment of the rent and retention of possession and appears to he nothing more.
As regards tank fishery is concerned, though exemption has been granted, it is subject to the condition of continued user for pisciculture or fishing.
(495 E) 1.14.
From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof i.e. for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subject to payment of rent as prescribed under the Act, but not as owner thereof.
The direction, therefore,by the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules.
Therefore, it is manifestly illegal.
(495 G) 1.15.
The appellant is free to issue notice to the respondent under Sec.
10 (2) of the Act and conduct an enquiry into and rind: (1) on the date of the vesting whether the lands were being used for pisciculture or fishing i.e. tank fisheries; (2) whether the respondent had submitted form `B ' within the prescribed time exercising the option 486 to retain possession of the lands in question as tank fisheries; and (3) whether the respondent is continuing to use the lands in question as tank fisheries.
Reasonable opportunities shall be given to the respondents to prove its/their case.
(496 A B) 1.16.On the enquiry if it is found that the lands are not tank L1.16.On the enquiry if it is found that the lands are not tank L1.16.On the enquiry if it is found that the lands are not tank fisheries as on the date of vesting or that the respondent had not submitted option in Form `B ' to retain possession of the lands as tank fisheries within the prescribed period, then the lands stood vested in the State free from all incumbrances and authorities are entitled to take possession of the land under Sec.
10(1) read with Sec.
10(3).
In case if it rinds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing; and if it has been continuing in possession of tank fishery, It is free to impose, if not already imposed, such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing, subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights.
In case, the respondent commits contravention thereof, it is open to the State to resume possession.
In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the State.
(496 C E)
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<s>[INST] Summarize the judgementCivil Appeal No. 98 of 1953.
Appeal by Special Leave from the Judgment and Decree dated the 27th day of January, 1949, of the High Court of Judicature at Patna in Appeal from Appellate Decree No. 690 of 1947 against the Decree dated the 13th January, 1947, of the Court of the District Judge, Bbagalpur, in Title Appeal No. 161 of 1946 arising out of the Judgment and Decree dated the 25th July, 1946, of the Court of the 1st Additional Subordinate Judge, Bhagalpur, in Title Suit No. 80 of 1945.
N.C. Chatterjee, (A. N. Sinha and section P. Verma, ,with him) for the appellant.
Murtaza Fazl Ali and Rajinder Narain, for respondent No. I. 1954.
April 14.
The Judgment of the Court was delivered by BOSE J.
This is a plaintiff 's appeal in a suit for re demption of what the plaintiff calls a mortgage dated 15th April, 1930.
The only question for determination is whether this is a mortgage by conditional sale or a sale out and out with a condition of repurchase.
If the former the plaintiff succeeds.
If the latter he is out of Court.
The property covered by the disputed deed belonged to one Bijai Tanti who died leaving a widow Mst.
Phaguni and two sons Siban Tanti and Chander Tanti.
On 25th May, 1922, Siban Tanti alone executed a 176 simple mortgage in favour of the second defendant for Rs. 25.
Then on 6th May, 1927, Siban Tanti, Chander Tanti and Mst.
Phaguni mortgaged the same property to the first defendant for Rs. 250.
This was also a simple mortgage.
After this came the transaction in suit dated 15th April, 1930.
The same three persons executed the disputed deed.
This was in favour of the first defendant.
The consideration mentioned in the deed is Rs. 634 10 0 due on the second mortgage and Rs. 65 6 0 taken in cash to enable the executants to meet the expenses of certain commutation proceedings under section 40 of the Bihar Tenancy Act in respect of this very land.
The second defendant sued on his mortgage of 1922 but did: not join the subsequent mortgagee, the first defendant.
He obtained a decree against the mortgagors alone and executed it in 1940.
He himself purchased the property in dispute and took possession on 20th March, 1943.
Shortly after, on 19th August, 1943, he sold this land to the plaintiff for Rs. 400.
The plaintiff 's title is derived from the second defendant who stepped into the shoes of the mortgagors because of his suit against the mortgagors in 1940.
The plaintiff 's case is that the transaction of 15th April, 1930, is a mortgage and, as the subsequent mortgagee was not joined as a party to the earlier suit, the plaintiff is entitled to redeem.
The first defendant 's case is that the transaction of 15th April, 1930, was not a mortgage but an out and out sale with a covenant for repurchase which became infructuous because no attempt was made to act on the covenant within the time specified.
The learned trial Judge and the lower appellate Court both held that the document was a mortgage and so decreed the plaintiff 's claim.
The High Court on second appeal reversed these findings and held it was a sale.
Consequently the learned Judges dismissed the plaintiff 's suit.
The plaintiff appeals here.
The question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one which invariably gives rise to trouble and litigation.
There are numerous 177 decisions on the point and much industry has been expended in some of the High Courts in collating and analysing them.
We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another.
Each must be decided on its own facts.
But certain broad principles remain.
The first is that the intention of the parties is the determining factor: see Balkishen Das V. Legge (1).
But there is nothing special about that in this class of cases and here, as in every other case where a document has to be construed the intention must be gathered, in the first place, from the document itself.
If the words are express and clear.
, effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out.
the real question in such a case is not what the parties intended or meant but what is the legal effect of the words which they used.
If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended.
As Lord Cranworth said in A Aderson vs White (2) : "The rule of law on this subject is one dictated by commonsense; that prima facie an absolute conveyance, containing nothing to show that the relation of debtor and creditor is to exist between the parties, does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase. . .
In every such case the question is, what, upon a fair construction, is the meaning of the instruments? Their Lord ships of the Privy Council applied this rule to India in Bhagwan Sahai vs Bhagwan Din (3) and in Jhanda Singh vs Wahid ud din (4).
The converse also holds good and if, on the face of it, an instrument clearly purports to be a mortgage it cannot be turned into a sale by reference to a host of (1) 27 I.A. 58.
(3) 17 I.A. 98 at 102.
(2) ; at 928.
(4) 43 I.A. 284 at 293.
23 178 extraneous and irrelevant considerations.
Difficulty only arises in the border line cases where there is ambiguity.
Unfortunately, they form the bulk of this kind of transaction.
Because of the welter of confusion caused by a multitude of conflicting decisions the Legislature stepped in and amended section 58(c) of the Transfer of Property Act.
Unfortunately that brought in its train a further conflict of authority.
But this much is now clear.
If the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are, contemporaneously executed or not.
But the converse does not hold good, that is to say, the mere fact that there is only one document does not necessarily mean that it must be a mortgage and cannot be a sale.
If the condition of repurchase is embodied in the document that effects or purports to effect the sale, then it is a matter for construction which was meant.
The Legislature has made a clear cut classification and excluded transactions embodied in more than one document from the category of mortgages, therefore it is reasonable to suppose that persons who, after the amendment, choose not to use two documents, do not intend the transaction to be a sale, unless they displace that presumption by clear and express words; and if the conditions of section 58(c) are fulfilled, then we are of opinion that the deed should be construed as a mortgage.
The document with which we are concerned, Exhibit A, is in the following terms and our first duty is to construe the language used and see whether it is ambiguous.
(We have paragraphed the document for convenience of construction and have omitted unnecessary words).
(1)" Rs. 634 principal with interest under a registered rehan bond " (simple mortgage) " dated the 6th May, 1927, is justly due. . by us the executants.
Now we further require Rs. 65 6 0 more to meet costs of the suit under section 40." (Bihar Tenancy Act).
(2)(I; and at present there is no other way in view rather it seems impossible and difficult to arrange for 179 the money without selling the property let out in rehan " (simple mortgage) " under the above mentioned bond." (3) " Therefore, we the executants declare. that we sold and vended the properties,detailed below on condition (given below) for a fair and just price of Rs. 700 " (4) "That we set off Rs. 634 10 0 against the consideration money " (torn) " payable under the aforesaid bond in favour of the said vendee and received Rs. 65 6 0 in cash from the said vendee.
In this way the entire consideration money was realised from the said vendee." (5) " and we put the said vendee in possession and occupation of the vended property detailed below and made him an absolute proprietor in our places." (6) " If we, the executants, shall repay the consideration money to the said vendee within two years. . the property vended under this deed of conditional sale attached shall come in exclusive possession and occupation of us the executants." (7) " If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof." (8) " We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money.
Perchance if we do so it shall be deemed null and void in Court." "and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants, (a) shall be liable to be prosecuted under the criminal procedure, and (b) we shall pay the entire consideration money together with loss and damage and interest at the rate of Rs. 2 per mensem per hundred rupees from the date 180 of the execution of this deed till the date of realisation from our person and other properties (c)and we shall not claim the produce of the vended property for the period of vendee 's possession against the said vendee or his heirs and representatives.
" (10) " Therefore we, the executants. . have executed this deed of conditional sale so that it may be of use in future.
" In our opinion, this language is not free from difficulty and is ambiguous.
The deed purports to be a sale and has the outward form of one but at the same time it calls itself a"conditional sale.
" It has,however, no clause for retransfer and instead says (clause 6) that if the executants pay the money within two yeas, the property " shall come in exclusive possession and occupation of us, the executants.
" That is clear about the possession but is silent about the title.
In the context we can only take these words to mean that if there is payment within the specified time, then the title will continue to reside in the executants; for what else can a right of exclusive possession import in these circumstances ? It is relevant to note in passing that this silence about title would be proper in a mortgage for there the owner 's title remains in him all the while and so a reconveyance is unnecessary.
But if there is an out and out sale the title could not revert to the original owner without a proper reconveyance.
Clause (7) appears to underline this because it couples the transferee 's; right to remain in possession and occupation and to appropriate the produce " generation after generation " with the non payment of the money within the time set out.
It is true the words of conveyance in the earlier part Of the deed (clause 5) would pass an absolute title if they stood alone but the document must be read as a whole and it must also be remembered that it was executed by ignorant justice and scribed by a man whose knowledge of conveyancing was, on the face of it, rudimentary and defective.
The deed lacks the precision of a practised hand and that probably accounts.
for its ambiguities: that there is ambiguity is patent from what we have said.
181 The next step is to see whether the document is covered by section 58(c) of the Transfer of Property Act, for if it is not, then it cannot be a mortgage by conditional sale.
The first point there is to see whether there is an " ostensible sale.
" That means a transaction which takes the outward form of a sale, for the essence of a mortgage by conditional sale is that though in substance it is a mortgage it is couched in the form of a sale with certain conditions attached.
The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one.
But if it is a mortgage, then the condition about an " ostensible sale " is fulfilled.
We next turn to the conditions.
The ones relevant to the present purpose are contained in clauses (6) and (7).
Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result that the title which is already in them will continue to reside there.
The necessary consequence of that is that the ostensible sale becomes void.
Similarly, clause (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute.
Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole.
If that is what they mean, as we hold they do, then the matter falls squarely within the ambit of section 58(c).
Now, as we have already said, once a transaction is embodied in One document and not two and once its terms are covered by section 58(c) then it must be taken to be a mortgage by conditional sale unless there are express words to indicate the contrary, or, in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion.
There are no express words here which say that this is not a mortgage but there is ambiguity, so we must probe further.
The respondents, who claim that this 182 is a sale and not a mortgage, rely on the following circumstances.
They are all culled from the deed itself First, they point to clause (5) which says that the transferee has been made the absolute proprietor in place of the executants.
Those, they say, are the operative words and point to an out and out transfer of title.
Next, they point to clause (2) where the executants say that they have no other Means of raising the money they want except by selling the property.
The respondents argue that the word " sale " could not have been used inadvertently because it is contrasted with a mortgage in the very same sentence.
The word " mortgage "is also used in clause (1), therefore it is clear that when a mortgage is intended the word " mortgage is used.
It must follow that when the word " sale is used, a sale must have been meant.
The only weakness in this argument is that when a mortgage is by conditional sale this is the form it has to take, because section 58(c) postulates that there must be an " ostensible sale " and if a sale is ostensible it must necessarily contain all the outward indicate of a real sale.
The question we are considering can only arise when the word " sale " is used and, of course, a sale imports a transfer of title.
The use of the words It absolute proprietor in our places " carries the matter no further because the essence of every sale is to make the vendee the absolute proprietor of what is sold.
The question here is not whether the words purport to make the transferee, an absolute proprietor, for of course they must under section 58(c), but whether that is done " ostensibly " and whether conditions of a certain kind are attached.
The learned counsel for the respondents next relied on the fact that clause (3) says that the price paid was a "fair and just? ' one and that the Courts below have found that the consideration was not inadequate.
, He also relies on the fact that no interest was charged, that the transferee was placed in possession of the property and was Dot to account for the usufruct also on the fact that a short term, namely two years, was fixed for repayment.
183 But on the other side, there is the very significant fact that Rs. 65 6 0 was borrowed to enable the executants to carry on commutation proceedings under section 40 of the Bihar Tenancy Act (that is, for substitution of a cash rent instead of one in kind) in respect of this very property: (clause 1).
It was admitted before us, and the lower Courts so find, that the commutation proceedings related to this very land.
The learned High Court Judges discount this by saying that there is no evidence to show that the proceedings, which were started in 1929, continued after the deed.
But that is a mistake apparently due to the fact that the copy of the entry in the Rent Schedule, produced before the learned Judges, inadvertently omitted the date.
Mr. N. C. Chatterjee produced a certified copy of the revenue record here and that gives the missing date.
From that it is clear that the proceedings continued till 18th February, 1931, that is to say, for some ten months after the deed.
This, we think, is crucial.
Persons who are selling their property would hardly take the trouble to borrow money in order to continue revenue proceedings which could no longer benefit them and could only enure for the good of their transferees.
There is another point in favour of the appellant, and that is that the surrounding circumstances show that there was a relationship of debtor and creditor between the. parties existing at the date of the suit transaction.
The bulk of the consideration went in satisfaction of the mortgage of 6th May, 1927.
In those circumstances, seeing that the deed takes the form of a mortgage by conditional sale under section 58(c) of the Transfer of Property Act, it is legitimate to infer, in the absence of clear indications to the contrary, that the relationship of debtor and creditor was intended to continue.
The point made on behalf of the respondents about the adequacy of the consideration and the absence of interest can be explained.
The transferee was to take possession of the property and would thus get the produce and it is evident to us from the tenor of the document that he was not to be accountable for it.
184 We say this because the indemnity clause (clause 9) says in sub clause (b) that in the event of the transferee 's possession being disturbed the executants would among other things, pay him, in addition to damages, the entire consideration together with interest at 2 per cent.
per month from the date of the deed and would not require the transferee to account for the usufruct.
It is true this can also be read the other way but considering these very drastic provisions as also the threat of a criminal prosecution in sub clause (a), we think the transferee was out to exact more than his pound of flesh from the unfortunate rustics with whom he was dealing and that he would not have agreed to account for the profits: indeed that is his own case, for he says that this was a sale out and out.
In these circumstances, there would be no need to keep a reasonable margin between the debt and the value of the property as is ordinarily done in the case of a mortgage.
Taking everything into consideration, we are of opinion that the deed is a mortgage by conditional sale under section 58(c) of the Transfer of Property Act.
The appeal is allowed.
The decree of the High Court is set aside and that of the lower appellate Court is restored except as to costs.
The original owners of the property have lost it.
The value of the property was put at over Rs. 10,000 in the special leave petition.
The second defendant oust,.
,, the original owners by getting a mortgage decree for Rs. 130 in his favour on a mortgage of only Rs. 25 and purchasing it at the auction himself.
He is no longer in the picture as he sold it to the plaintiff for Rs. 400.
The plaintiff has accordingly obtained property which on his own showing is worth more than Rs. 10,000 for only Rs. 400.
The first defendant spent only Rs. 250 plus Rs. 65 6 0 on it: Rs. 315 6 0 and the consideration of the disputed deed is only Rs. 700.
it is evident that both sides are speculators.
In the circumstances we direct that each party bear its own costs.
[/INST]The assessee and his minor sons separately held shares in a resident firm.
For assessment years 1952 53 to 1954 55, the assessee filed returns as an individual and therein stated under the head business income that the profit should be ascertained from the Income tax Officer assessing the firm.
The names of the partners were stated, but it was not stated in the return that some of the parties were his minor sons.
The minors, through their mother as guardian, also filed returns for these assessment years, and they were assessed to tax.
The assessee was also assessed as an individual, in respect of his share in the income of the firm and other sources, but the assessment order did not include the share of the minors from the firm.
The Income tax Officer issued notices of reassessment to the assessee under section 34(1) (a) of the Indian Income tax Act, 1922 for the years 1952 53 and 1953 54 and under section 34(1) (b) for the year 1954 55.
The Income tax Officer took the view that the assessee had not disclosed the fact that his sons were minors and the income of the sons which should have been included under section 16(3) (a) (ii) had escaped assessment in the assessee 's hands and accordingly he brought that income to tax.
The Appellate Assistant Commissioner confirmed this order.
The Appellate Tribunal, in appeal held that for the first two, years section 34(1) (a) applied, that in respect of the third year there was no change of opinion but the assessment was made on information received within the meaning of section 34(1) (b) and that the income of the minors could be assessed in the hands of the assessee 'notwithstanding the separate assessments already made on the minors.
On reference, the High Court answered the questions against the assessee.
In appeal, this Court, HELD : Section 16(3) of the Act imposed an obligation upon the Income tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in cls.
(a)(i) to (iv) and (b), but thereby no obligation was imposed upon the tax payer to disclose the income liable to be included in his assessment under section 16(3).
For failing or omitting to disclose that income proceedings for reassessment could not be commenced under section 34(1) (a).
Section 22(5) required the assessee to furnish particulars of the names of the shares of the partners but imposed no obligation to mention or set out the income of the nature mentioned in section 16(3).
In the relevant years there was no head in the form of return prescribed under the rules under which income liable to be assessed to tax under section 16(3) (a) & (b) could be disclosed.
These assessments under section 34(1) (a) for the years 1952 53 and 1953 54 could not, therefore be upheld.
[721 A] (ii) The income of a minor can be included in the hands of an assessee under section 16(3) of the Act, notwithstanding that an assessment has been made on the minor represented by his guardian.
[718 G H] 716 C.R. Nagappa vs Commissioner of Income tax, Mysore, , followed.
(iii) In respect of the assessment years 1954 55, there was no basis for the argument that the Income tax Officer had only changed his opinion.
The order of re assessment was made well within four years from the date of the last day of that assessment year.
The notice was, therefore, competently issued by the Income tax Officer.
L721 F]
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<s>[INST] Summarize the judgementDICTION: Writ Petition Nos.
6091, 8882 83, 9219, 9820 of 1983 and 10658, 10761 of 1983 & CMP.
No. 29116/83 (in WP.
No. 9618/83) (Under article 32 of the Constitution of India) With Civil Appeal No. 6392 of 1983 Appeal by Special leave from the Judgment and Order dated the 17th August, 1983 of the Delhi High Court in C.W.P. No. 1791 of 1983.
V.M. Tarkunde, A.K. Srivastava, S.K. Jain and Vijay Hansaria, for the petitioners.
R. Venkataramani for the Appellant in CA.
6392/83.
A.K. Ganguli, S.K. Baga & N.S. Das Bahl for the Respondents in CA.
No. 6392 of 1983.
P.P. Rao and A.K. Ganguli for the Delhi University.
S.N. Chaudhary for the Respondents (State of Assam) K.G. Bhagat, Addl.
General, Miss A. Subhashini & R.N. Poddar for the Respondent Union of India.
Kapil Sibal and Mrs. Shobha Dixit for the Respondent State of U.P. D.P. Mukherjee and G.S. Chatterjee for the Respondent State of West Bengal.
G.S. Narayana, Ashivini Kumar, C.V. Subba Rao, Swaraj Kaushal & Mr. M. Veerappa, for the Respondent State of Karanataka.
K. Parasaran and B. Parthasarthi for the Respondent States of Andhra Pradesh.
Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondent.
P.K. Pillai, for the Respondent State of Kerala.
P.N. Nag, for the State of H.P. P.R. Mridul, and R.K. Mehta for the State of Orissa.
Altaf Ahmed for the State of J & K. The following Judgments were delivered 951 BHAGWATI, J.
This group of Writ Petitions raises a question of great national importance affecting admissions to medical colleges, both at the under graduate and at the post graduate levels.
The question is, whether, consistently with the constitutional values, admissions to a medical college or any other institution of higher learning situate in a State can be confined to those who have their 'domicile ' within the State or who are resident within the State for a specified number of years or can any reservation in admissions be made for them so as to give them precedence over those who do not possess 'domicile ' or residential qualification within the State, irrespective of merit.
This question has assumed considerable significance in the present day context, because we find that today the integrity of the nation is threatened by the divisive forces of regionalism, linguism and communalism and regional linguistic and communal loyalties are gaining ascendancy in national life and seeking to tear apart and destroy national integrity.
We tend to forget that India is one nation and we are all Indians first and Indians last.
It is time we remind ourselves what the great visionary and builder of modern India, Jawaharlal Nehru said, "Who dies if India lives : who lives if India dies ?" We must realise, and this is unfortunately that many in public life tend to overlook, sometimes out of ignorance of the forces of history and sometimes deliberately with a view to promoting their self interest, that national interest must inevitably and for ever prevail over any other considerations proceeding from regional, linguistic or communal attachments.
If only we keep these basic considerations uppermost in our minds and follow the sure path indicated by the founding fathers of the Constitution, we do not think the question arising in this group of writ petitions should present any difficulty of solution.
The history of India over the past centuries bears witness to the fact that India was at no time a single political unit.
Even during the reign of the Maurya dynasty, though a large part of the country was under the sovereignty of the Mauryan kings, there were considerable portions of the territory which were under the rule of independent kingdoms.
So also during the Moghul rule which extended over large parts of the territory of India, there were independent rulers who enjoyed political sovereignty over the territories of their respective kingdoms.
It is an interesting fact of history that India was forged into a nation neither on account of a common language nor on account of the continued existence of a single political regime over its territories but on account of a 952 common culture evolved over the centuries.
It is cultural unity something more fundamental and enduring that any other bond which may unite the people of a country together which has welded this country into a nation.
But, until the advent of the British rule, it was not constituted into a single political unit.
There were throughout the period of history for which we have fairly authenticated account, various kingdoms and principalities which were occasionally engaged in conflict with one another.
During the British rule, India became a compact political unit having one single political regime over its entire territories and this led to the evolution of the concept of a nation.
This concept of one nation took firm roots in the minds and hearts of the people during the struggle for independence under the leadership of Mahatma Gandhi.
He has rightly been called the Father of the Nation because it was he who awakened in the people of this country a sense of national consciousness and instilled in them a high sense of patriotism without which it is not possible to build a country into nationhood.
By the time the Constitution of India came to be enacted, insurgent India, breaking a new path of nonviolent revolution and fighting to free itself from the shackles of foreign domination, had emerged into nationhood and "the people of India" were inspired by a new enthusiasm, a high noble spirit of sacrifice and above all, a strong sense of nationalism and in the Constitution which they framed, they set about the task of a strong nation based on certain cherished values for which they had fought.
The Preamble of the Constitution was therefore, framed with the great care and deliberation so that it reflects the high purpose and noble objective of the Constitution makers.
The Preamble declares in highly emotive words pregnant with meaning and significance: "We, The People of India, having solemnly resolved to constitute India into a Sovereign Socialist Secular Democratic Republic and to secure to all its citizens: Justice, social, economic and political; Liberty of thought, expression, belief, faith and worship; Equality of status and of opportunity; and to promote among them all Fraternity assuring the dignity of the individual and the unity and integrity of the Nation; 953 In Our Constituent Assembly this twenty sixth day of November, 1949, do Hereby Adopt, Enact And Give To Ourselves This Constitution.
" These words embody the hopes and aspirations of the people and capture and reproduce the social, economic and political philosophy underlying the Constitution and running through the warp and woof of its entire fabric.
It is significant to note that the Preamble emphasises that the people who have given to themselves this glorious document are the people of India, the people of this great nation called India and it gives expression to the resolve of the people of India to constitute India into a sovereign socialist secular democratic republic and to promote among all its citizens fraternity assuring the dignity of the individual and the unity and integrity of the nation.
The Constitution makers were aware of the past history of the country and they were also conscious that the divisive forces of regionalism, linguism and communalism may one day raise their ugly head and threaten the unity and integrity of the nation, particularly in the context of the partition of India and the ever present danger of the imperialist forces adopting new stratagems, apparently innocuous, but calculated to destabilise India and re establish their hegemony and, therefore, they laid great emphasis on the unity and integrity of the nation in the very Preamble of the Constitution.
Article 1 of the Constitution then proceeds to declare that India shall be a Union of States but emphasizes that though a Union of States, it is still one nation with one citizenship.
Part II dealing with citizenship recognises only Indian citizenship: it does not recognise citizenship of any State forming part of the Union.
Then follow Articles 14 and 15 which are intended to strike against discrimination and arbitrariness in state action, whether legislatives or administrative.
They read as follows: "Article 14: The State shall not deny to any persons equality before the law or the equal protection of the laws within the territory of India." "Article 15: (1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth of any of them.
(2) No citizen shall on grounds only of religion, race, caste.
sex, place of birth or any of them, be subject 954 to any disability, liability, restriction or condition with regard to (a) access to shops, public restaurants, hotels and places of public entertainment; or (b) the use of wells, tanks, bathing ghats, roads and places so public resort maintained wholly or partly out of State funds or dedicated to the use of the general public.
(3) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.
" Article 19 (1) again recognises the essential unity and integrity of the nation and reinforces the concept of one nation by providing in clauses (d) and (e) that every citizen shall have the right to move freely throughout the territory of India and to reside and settle in any part of the territory of India.
Article 301 declares that subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free.
Then there are situations envisaged in certain Articles of the Constitution such as Articles 353 and 356 where the executive power of a State forming part of the Union is exercisable by the Central Government or subject to the directions of the Central Government.
Thus, the entire country is taken as one nation with one citizenship and every effort of the Constitution makers is directed towards emphasizing, maintaining and preserving the unity and integrity of the nation.
Now if India is one nation and there is only one citizenship, namely, citizenship of India, and every citizen has a right to move freely throughout the territory of India and to reside and settle in any part of India, irrespective of the place where he is born or the language which he speaks or the religion which he professes and he is guaranteed freedom of trade, commerce and intercourse throughout the territory of India and is entitled to equality before the law and equal protection of the law with other citizens in every part of the territory of India, it is difficult to see how a citizen having his permanent home in Tamil Nadu or speaking Tamil language can be regarded as an outsider in Uttar Pradesh or a citizen having his permanent home in Maharashtra or/speaking Marathi language be 955 regarded as an outsider in Karnataka.
He must be held entitled to the same rights as a citizen having his permanent home in Uttar Pradesh or Karnataka, as the case may be.
To regard him as an outsider would be to deny him his constitutional rights and to derecognise the essential unity and integrity of the country by treating it as if it were a mere conglomeration of independent states.
But, unfortunately, we find that in the last few years, owing to the emergence of narrow parochial loyalties fostered by interested parties with a view to gaining advantage for themselves, a serious threat has developed to the unity and integrity of the nation and the very concept of India as a nation is in peril.
The threat is obtrusive at some places while at others it is still silent and is masquerading under the guise of apparently innocuous and rather attractive clap trap.
The reason is that when the Constitution came into operation, we took the spirit of nation hood for granted and paid little attention to nourish it, unmindful of the fact that it was a hard won concept.
We allowed `sons of the soil ' demands to develop claiming special treatment on the basis of residence in the concerned State, because recognising and conceding such demands had a populist appeal.
The result is that `sons of the soil ' claims, though not altogether illegitimate if confined within reasonable bounds, are breaking asunder the unity and integrity of the nation by fostering and strengthening narrow parochial loyalties based on language and residence within a state.
Today unfortunately, a citizen who has his permanent residence in a state entertains the feeling that he must have a preferential claim to be appointed to an office or post in the state or to be admitted to an educational institution within the state vis a vis citizen who has his permanent residence in another state, because the latter is an outsider and must yield place to a citizen who is a permanent resident of the state, irrespective of merit.
This, in our opinion, is a dangerous feeling which, if allowed to grow, indiscriminately, might one day break up the country into fragments, though, as we shall presently point out, the principle of equality of opportunity for education and advancement itself may justify, within reasonable limits, a preferential policy based on residence.
We may point out at this stage that though Article 15 (2) clauses (1) and (2) bars discrimination on grounds not only of religion, race, caste or sex but also of place of birth, Article 16 (2) goes 956 further and provides that no citizen shall on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them be ineligible for or discriminated against in state employment.
So far as employment under the state, or any local or other authority is concerned, no citizen can be given preference nor can any discrimination be practised against him on the ground only of residence.
It would thus appear that residential requirement would be unconstitutional as a condition of eligibility for employment or appointment to an office under the State and having regard to the expansive meaning given to the word `State ' in Ramana Dayaram Shetty vs International Airport Authority of India & Ors., it is obvious that this constitutional prohibition would also cover an office under any local or other authority within the State or any corporation, such as a public sector corporation which is an instrumentality or agency of the State.
But Article 16 (3) provides an exception to this rule by laying down that Parliament may make a law "prescribing, in regard to a class or classes of employment or appointment to an office under the government of, or any local or other authority, in a state or union territory, any requirement as to residence within that state or union territory prior to such employment." or appointment Parliament alone is given the right to enact an exception to the ban on discrimination based on residence and that too only with respect to positions within the employment of a State Government.
But even so, without any parliamentary enactment permitting them to do so, many of the State Governments have been pursuing policies of localism since long and these policies are now quite wide spread.
Parliament has in fact exercised little control over these policies States.
The only action which Parliament has taken under Article 16 (3) giving it the right to set residence requirements has been the enactment of the Public Employment (Requirement as to Residence) Act, 1957 aimed at abolishing all existing residence requirements in the States and enacting exceptions only in the case of the special instances of Andhra Pradesh, Manipur, Tripura and Himchal Pradesh.
There is therefore at present no parliamentary enactment permitting preferential policies based on residence requirement except in the case of Andhra Pradesh, Manipur Tripura and Himachal Pradesh where the Central Government has been given the right to issue directions setting residence requirements in the subordinate services.
Yet, in the face of Article 16 (2), some of the States are adopting `sons of the soil ' policies prescribing reservation 957 or preference based on domicile or residence requirement for employment or appointment to an office under the government of a State or any local or other authority or public sector corporation or any other corporation which is an instrumentality or agency of the State.
Prima facie this would seem to be constitutionally impermissible though we do not wish to express any definite opinion upon it, since it does not directly arise for consideration in these writ petitions and civil appeal.
But, it is clear that so far as admissions to an educational institution such as a medical college are concerned, Article 16(2) has no application, If, therefore, there is any residence requirement for admission to a medical college in a State, it cannot be condemned as unconstitutional on ground of violation of Article 15 clauses (1) and (2).
Nor can Article 16(2) be invoked for invalidating such residence requirement because these clauses prohibits discrimination on ground of place of birth and not on ground of residence and, as pointed out by this Court in D.P. Joshi vs State of Madhya Bharat, residence and place of birth are "two distinct conceptions with different connotations both in law and in fact".
The only provision of the Constitution on the touch stone of which such residence requirement can be required to be tested is Article 14 and that is precisely the challenge which falls to be considered by us in these writ petitions.
Now there are in our country in almost all States residence requirements for admission to a medical college.
Sometimes the requirement is phrased by saying that the applicant must have his domicile in the State.
We must protest against the use of the word `domicile ' in relation to a State within the union of India.
The word `domicile ' is to identify the personal law by which an individual is governed in respect of various matters such as the essential validity of a marriage, the effect of marriage on the proprietary rights of husband and wife, jurisdiction in divorce and nullity of marriage, illegitimacy, legitimation and adoption and testamentary and intestate succession to moveables.
`Domicile ' as pointed out in Halsbury 's laws of England (Fourth Edition) Volume 8 paragraph 421, "is the legal relationship between an individual and a territory with a distinctive legal system which invokes that system as his personal law." "(Emphasis supplied.) It is well settled that the domicile of a person is in 958 that country in which he either has or is deemed by law to have his permanent home "By domicile" said Lord Cranworth in Wicker vs Homes we mean home, the permanent home. ' The notion which lies at the root of the concept of domicile is that of permanent home.
" But it is basically a legal concept for the purpose of determining what is the personal law applicable to an individual and even if an individual has no permanent home, he is invested with a domicile by law.
There are two main classes of domicile: domicile of origin that is communicated by operation of law to each person at birth, that is the domicile of his father or his mother according as he is legitimate or illegitimate and domicile of choice which every person or full age is free to acquire in substitution for that which he presently possesses.
The domicile of origin attaches to an individual by birth while the domicile of choice is acquired by residence in a territory subject to a distinctive legal system, with the intention to reside there permanently or indefinitely.
Now the area of domicile, whether it be domicile of origin or domicile of choice, is the country which has the distinctive legal system and not merely the particular place in the country where the individual resides.
This position is brought out clearly and emphatically in paragraph 422 of Halsbury 's Laws of England (Fourth Edition) Volume 8 where it is stated: "Each person who has, or whom the law deems to have, his permanent home within the territorial limits of a single system of law is domiciled in the country over which the system extends; and he is domiciled in the whole of that country even though his home may be fixed at a particular spot within it.
" What would be the position under a federal polity is also set out in the same paragraph of volume 8 of Halsbury 's Laws of England (Fourth Edition): "In federal states some branches of law are within the competence of the federal authorities and for these purposes the whole federation will be subject to a single system of law and an individual may be spoken of as domiciled in the federation as a whole; other branches of law are within the competence of the states or provinces of the federation and the individual will be domiciled in one state or province only.
" This being the true legal position in regard to domicile, let us proceed to consider whether there can be anything like a domicile in a state forming part of the Union of India.
Now it is clear on a reading of the Constitution that it 959 recognises only one domicile namely, domicile in India.
Article 5 of the Constitution is clear and explicit on this point and it refers only to one domicile, namely, "domicile in the territory of India.
" Moreover, it must be remembered that India is not a federal state in the traditional sense of that term.
It is not a compact of sovereign states which have come together to form a federation by ceding a part of their sovereignty to the federal states.
It has undoubtedly certain federal features but it is still not a federal state and it has only one citizenship, namely, the citizenship of India.
It has also one single unified legal system which extends throughout the country.
It is not possible to say that a distinct and separate system of law prevails in each State forming part of the Union of India.
The legal system which prevails through out the territory of India is one single indivisible system with a single unified justicing system having the Supreme Court of India at the apex of the hierarchy, which lays down the law for the entire country.
It is true that with respect to subjects set out in List II of the Seventh Schedule to the Constitution, the States have the power to make laws and subject to the over riding power of Parliament, the States can also make laws with respect to subjects enumerated in List III of the Seventh Schedule to the Constitution, but the legal system under the rubric of which such laws are made by the States is a single legal system which may truly be described as the Indian Legal system.
It would be absurd to suggest that the legal system varies from State to State or that the legal system of a State is different from the legal system of the Union of India; merely because with respect to the subjects within their legislative competence, the States have power to make laws.
The concept of `domicile ' has no relevance to the applicability of municipal laws, whether made by the Union of India or by the States.
It would not, therefore, in our opinion be right to say that a citizen of India is domiciled in one state or another forming part of the Union of India.
The domicile which he has is only one domicile, namely, domicile in the territory of India.
When a person who is permanently resident in one State goes to another State with intention to reside there permanently or indefinitely, his domicile does not undergo any change: he does not acquire a new domicile of choice.
His domicile remains the same, namely, Indian domicile.
We think it highly deterimental to the concept of unity and integrity of India to think in terms of State domicile.
It is true and there we agree with the argument advanced on behalf of the State Governments, that the word `domicile ' in the Rules of 960 some of the State Governments prescribing domicilary requirement for admission to medical colleges situate within their territories, is used not in its technical legal sense but in a popular sense as meaning residence and is intended to convey the idea of intention to reside permanently or indefinitely.
That is, in fact the sense in which the word 'domicile ' was understood by a five Judge Bench of this Court in D. P. Joshi 's case (supra) while construing a Rule prescribing capitation fee for admission to a medical college in the State of Madhya Bharat and it was in the same sense that word 'domicile ' was understood in Rule 3 of the Selection Rules made by the State of Mysore in Vasundra vs State of Mysore.
We would also, therefore, interpret the word 'domicile ' used in the Rules regulating admissions to medical colleges framed by some of the States in the same loose sense of permanent residence and not in the technical sense in which it is used in private international law.
But even so we wish to warm against the use of the word 'domicile ' with reference to States forming part of the Union of India, because it is a word which is likely to conjure up the notion of an independent State and encourage in a subtle and insidious manner the dormant sovereign impulses of different regions.
We think it is dangerous to use a legal concept for conveying a sense different from that which is ordinarily associated with it as a result of legal usage over the years.
When we use a word which has come to represent a concept or idea, for conveying a different concept or idea it is easy for the mind to slide into an assumption that the verbal identity is accompanied in all its sequences by identity of meaning.
The concept of domicile if used for a purpose other than its legitimate purpose may give rise to lethal radiations which may in the long run tend to break up the unity and integrity of the country.
We would, therefore, strongly urge upon the State Governments to exercise this wrong use of the expression 'domicile ' from the rules regulating admissions to their educational institutions and particularly medical colleges and to desist from introducing and maintaining domiciliary requirement as a condition of eligibility for such admissions.
We may now proceed to consider whether residential requirement or institutional preference in admissions to technical and medical colleges can be regarded as constitutionally permissible.
Can it stand the test of Article 14 or does it fall foul of it and must be struck down as constitutionally invalid.
It is not possible to answer this question by a simple "yes" or "no" It raises a 961 delicate but complex problem involving consideration of divers factors in the light of varying social and economic facts and calls for a balanced and harmonious adjustment of competing interests.
But, before we embark upon a consideration of this question, it may be pointed out that there is before us one Civil Appeal, namely, C.A.No. 6392 of 1983 filed by Rita Nirankari and five writ petitions, namely, Writ Petition Nos. 8882 of 1983, 8883 of 1983, 9618 of 1981, 10658 of 1983 and 10761 of 1983 filled by Nitin Aggarwal, Seema Garg, Menakshi, Alka Aggarwal and Shalini Shailendra Kumar respectively.
These civil appeal and writ petitions relate to admissions to medical colleges affiliated to the Delhi University and situate in the Union Territory of Delhi.
Then we have writ petition No. 982 of 1983 filed by Dr. Mrs. Reena Ranjit Kumar and writ petition No. 9219 of 1983 filed by Nandini Daftary which relate to admission to the M.D.S. Course and M.B.B.S. course respectively of Karnataka University.
We have also writ petition No. 6091 of 1983 filed by Dr. Pradeep Jain seeking admission to the M.D.S. course in King George Medical College, Lucknow affiliated to the Lucknow University.
When these writ petitions and civil appeal were admitted, we made interim orders in some of them granting provisional admission to the petitioners and we may make it clear that wherever we have granted provisional admissions shall not be disturbed, irrespective of the result of these civil appeal and writ petitions.
We may also point out that since these civil appeal and writ petitions challenged the constitutional validity of residential requirement and institutional preference in regard to admissions in medical colleges in the States of Karnataka and Uttar Pradesh and the Union Territory of Delhi and we were informed that it is the Uniform and consistent practice in almost all States to provide for such residential requirement or institutional preference we directed that notices of these civil appeal and writ petitions may be issued to the Union of India and the States of Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Orissa, Punjab, Rajasthan, Tamilnadu and West Bengal and the State Governments to which such notices are issued shall file their counter affidavits dealing in particular with the question of reservation in admission on the basis of domicile or residential requirement within two weeks from the date of service of such notices.
Some of the State Governments could not file their counter affidavits within the time granted by us and they accordingly made an application for extension of time and by an order dated 30th August, 1983 we extended the time for filing of counter affidavits 962 and directed the State Governments to set out in their counter affidavits facts and figures showing as to what is the procedure which is being followed by them so far as admissions to medical colleges in their States are concerned.
It appears that most of the state Governments to whom notices were issued filed their counter affidavits and though no notice was directed to be issued to the State of Himachal Pradesh, the Government of that State also filed a counter affidavit.
The Delhi University in its counter affidavit gave a brief synopsis summarising the domicile or residential requirement or institutional preference followed by each State Government for admission to the medical colleges situate within its territory.
It is not necessary for the purpose of the present judgement to reproduce in detail the precise domicile or residential requirement or institutional preference adopted and prevailing in different States in regard to admissions to medical colleges.
Suffice it to state that for admission to M.B.B.S. course, domicile or permanent residence is required in some States, residence for a specified number of years ranging from three to twenty years is required in some other States while in a few States the requirement is that the candidate should have studied in an educational institution in the State for a continuous period varying from four to ten years or the candidate should be a bona fide resident of one State and in case of admissions to M.D.S. Course in Uttar Pradesh the candidate should be either a citizen of India, domicile of whose father is in Uttar Pradesh and who himself is domiciled in Uttar Pradesh or a citizen of India, domicile of whose father may not be in Uttar Pradesh but who himself has resided in Uttar Pradesh for not less than five years at the time of making the application and so far as admissions to M.D.S. Course in Karnataka are concerned, the candidate should have studied for at least five years in an educational institution in the State of Karnataka prior to his joining B.D.S. Course.
The position in regard to admissions in medical colleges in the Union Territory of Delhi is a little different, because there, out of a total of 410 seats available for admission to the M.B.B.S. course in the three medical colleges affiliated to the Delhi university, 148 are reserved seats and 262 are non reserved seats and for filling in the 262 non reserved seats, an entrance examination is held and the first 50 seats are filled from amongst the eligible candidates who pass the entrance examination in order of merit and the remaining 212 seats are filled, again on merit, but by candidates who have passed their qualifying examination from the schools situate in the Union Territory of Delhi 963 only.
It will thus be seen that in almost all States and Union Territories admissions to medical colleges are based either on residence requirements or on institutional preferences.
The question is whether such reservations or preferences are constitutionally valid when tested on the touch stone of Article 14.
There can be no doubt that the demand for admission to medical colleges has over the last two decades increased enormously and outstripped the availability of seats in the medical colleges in the country.
Today large numbers of young men and women are clamouring to get admission in the medical colleges not only because they can find gainful employment for themselves but they can also serve the people and the available seats in the medical colleges are not sufficient to meet the increasing demand.
The proportion of medical practitioners to the population is very low compared to some other countries and there is considerable unmet need for medical services.
It is possible that in highly urbanised areas, there may be a surfeit of doctors but there are large tracts of rural areas throughout the country where competent and adequate medical services are not available.
The reason partly is that the doctors who have been brought up and educated in urban areas or who are trained in medical colleges situate in cities and big towns acquire an indelible urban slant and prefer not to go to the rural areas, but more importantly, proper and adequate facilities are not provided and quite often even necessary medicines and drugs are not supplied in rural areas with the result that the doctors, even if otherwise inclined to go to rural areas with a view to serving the people, find that they cannot be of any service to the people and this acts as a disincentive against doctors setting down in rural areas.
What is, therefore, necessary is to set up proper and adequate structures in rural areas where competent medical services can be provided by the doctors and some motivation must be provided to the doctors servicing those areas.
But, as the position stands today, there is considerable paucity of seats in medical colleges to satisfy the increasing demand of students for admission and some principle has, there fore, to be evolved for making selection of students for admission to the medical colleges and such principle has to be in conformity with the requirement of Article 14.
Now, the primary imperative of Article 14 is equal opportunity for all across the nation for education and advancement and, as pointed out by Krishna Iyer, J. in Jagdish Saran vs Union of India "this" has burning relevance 964 to our times when the country is gradually being broken up into fragments by narrow domestic walls" by surrender to narrow parochial loyalties.
What is fundamental, as an enduring value of our polity is guarantee to each of equal opportunity to unfold the full potential of his personality.
Any one anywhere, humble or high, agrestic or urban, man or woman, whatever be his language or religion, place of birth or residence, is entitled to be afforded equal chance for admission to any secular educational course for cultural growth, training facility, speciality or employment.
It would run counter to the basic principle of equality before the law and equal protection of the law if a citizen by reason of his residence in State A, which ordinarily in the commonality of cases would be the result of his birth in a place situate within that State, should have opportunity for education or advancement which is denied to another citizen because he happens to be resident in State B.
It is axiomatic that talent is not the monopoly of the resident of any particular State; it is more or less evenly distributed and given proper opportunity and environment, every one has a prospect of rising to the peak.
What is necessary is equality of opportunity and that cannot be made dependent upon where a citizen resides.
If every citizen is afforded equal opportunity, genetically and environmentally, to develop his potential he will be able in his own way to manifest his faculties fully leading to all round improvement in excellence.
The philosophy and pragmatism of universal excellence through equality of opportunity for education and advancement across the nation is part of our founding faith and constitutional creed.
The effort must, therefore, always be to select the best and most meritorious students for admission to technical institutions and medical colleges by providing equal opportunity to all citizen in the country and no citizen can legitimately, without serious deteriment to the unity and integrity of the nation, be regarded as an outsider in our constitutional set up.
Moreover it would be against national interest to admit in medical colleges or other institutions giving instruction in specialities, less meritorious students when more meritorious students are available, simply because the former are permanent residents or residents for a certain number of years in the State while the latter are not, though both categories are citizens of India.
Exclusion of more meritorious students on the ground that they are not resident within the State would be likely to promote sub standard candidates and bring about fall in medical competence, injurious 965 in the long run to the very region.
"It is no blessing to inflict quacks and medical midgets on people by whole sale sacrifice of talent at the thresh hold.
Nor can the very best be rejected from admission because that will be a national loss and the interests of no region can be higher than those of the nation.
" The primary consideration in selection of candidates for admission to the medical colleges must, therefore, be merit.
The object of any rules which may be made for regulating admissions to the medical colleges must be to secure the best and most meritorious students.
This was the consideration which weighed with the Court in Minor P. Rajendran vs State of Madras in striking down a rule made by the State of Madras allocating seats in medical colleges on district wise basis.
Wanchoo, C.J. Speaking on behalf of the Court, observed: "The question whether districtwise allocation is violative of article 14 will depend on what is the object to be achieved in the matter of admission to medical colleges.
Considering the fact that there is a large number of candidates than seats available, selection has got to be made.
The object of selection can only be to secure the best possible material for admission to colleges subject the provision for socially and educationally backward classes.
Further whether selection is from the socially and educationally backward classes or from the general pool, the object of selection must be to secure the best possible talent from the two sources.
If that is the object, it must necessarily follow that object would be defeated if seats are allocated district by district.
It cannot be and has not been denied that the object of selection is to secure the best possible talent from the two sources so that the country may have the best possible doctors.
If that is the object, that argument on behalf of the petitioners appellant is that object cannot possibly be served by allocating seats districtwise.
It is true that article 14 does not forbid classification, but the classification has to be justified on the basis of the nexus between the classification and the object to be achieved, even assuming that territorial classification may be a reasonable classification.
The fact however that the classification by itself is reasonable is not enough to support it unless there is nexus between the classification and the 966 object to be achieved.
Therefore, as the object to be achieved in a case of the kind with which we are concerned is to get the best talent for admission to professional colleges, the allocation of seats districtwise has no reasonable relation with the object to be achieved.
If anything such allocation will result in many cases in the object being destroyed, and if that is so, the classification, even if reasonable, would result in discrimination, in as much as better qualified candidates from one district may be rejected while less qualified candidates from other districts may be admitted from either of the two sources." Then again in Periakaruppan vs State of Tamil Nadu, the same consideration prevailed with the Court in striking down the scheme of selection of candidates for admission to medical colleges in the State of Tamil Nadu for the year 1970 71.
It was a unit wise scheme under which the medical colleges in the city of Madras were constituted as one unit and each of the other medical colleges in the Mofussil was constituted as a unit and a separate selection committee was set up for each of these units.
The intending applicants were asked to apply to any one of the committees but were advised to apply to the committee nearest to their place of residence and if they applied to more than one committee, their applications were to be forwarded by the Government to only one of the committees.
The petitioners who were unsuccessful in getting admission, challenged the validity of this unit wise scheme and contended that the unit wise scheme infringed Article 14 of the Constitution, inter alia, because the applicants of some of the units were in a better position than those who applied to other units, since the ratio between the applicants and the number of seats in each unit varied and several applicants who secured lesser marks than the petitioners were selected merely because their applications came to be considered in other units.
This challenge was upheld by the Court and Hegde, J. speaking on behalf of the Court observed: "We shall first take up the plea regarding the division of medical seats on unitwise basis.
It is admitted that minimum marks required for being selected in some unit is less than in the other units.
Hence prima facie the scheme in question results in discrimination against some of the applicants.
Before a classification can be justified, it must be based on an objective criteria and further it 967 must have reasonable nexus with the object intended to be achieved.
The object intended to be achieved in the present case is to select the best candidates for being admitted to Medical Colleges.
That object cannot be satisfactorily achieved by the method adopted.
" These two decisions do not bear directly on the question raised before us, namely, whether any reservation can be legitimately made in admissions to medical colleges on the basis of residence requirement within the State or any institutional preference can be given students who have passed the qualifying examination held by the same university.
They deal with two specific instances of intra state discrimination between citizens residing within the same State and strike down such discrimination as violative of Article 14 on the ground that it has no rational relation to the object of selection, namely, to get the best and most meritorious students and, in fact, tends to defeat such object, But, in taking this view, they clearly and categorically proceed on the basis of the principle that the object of any valid scheme of admissions must be to "select the best candidates for being admitted to medical colleges" and that if any departure is to be made "from the principle of selection on the basis of merit" it must be justified on the touchstone of article 14.
But let us understand what we mean when we say that selection for admission to medical colleges must be based on merit.
What is merit which must govern the process of selection ? It undoubtedly consists of a high degree of intelligence coupled with a keen and incisive mind, sound knowledge of the basic subjects and infinite capacity for hard work, but that is not enough; it also calls for a sense of social commitment and dedication to the cause of the poor.
We agree with Krishna Iyer, J. when he says in Jagdish Saran 's case (supra): "If potential for rural service or aptitude for rendering medical attention among backward people is a criterion of merit and it, undoubtedly, is in a land of sickness and misery, neglect and penury, wails and tears then, surely, belonging to a university catering to a deprived region is a plus point of merit.
Excellence is composite and the heart and its sensitivity are as precious in the case of educational values as the head and its creativity and social medicine for the common people is more relevant than peak performance in freak cases.
" Merit cannot be measured in terms of marks alone, but human sympathies are equally important.
The heart is as much a factor as the head in assessing the social, value of a member of the medical profession.
This is also an aspect which may, to 968 the limited extent possible, be borne in mind while determining merit for selection of candidates for admission to medical colleges though concededly it would not be easy to do so, since it is a factor which is extremely difficult to judge and not easily susceptible to evaluation.
We may now proceed to consider what are the circumstances in which departure may justifiably be made from the principle of selection based on merit.
Obviously, such departure can be justified only on equality oriented grounds, for whatever be the principle of selection followed for making admissions to medical colleges, it must satisfy the test of equality.
Now the concept of equality under the Constitution is a dynamic concept.
It takes within its sweep every process of equalisation and protective discrimination.
Equality must not remain mere idle incantation but it must become a living reality for the large masses of people.
In a hierachical society with an indelible feudal stamp and incurable actual inequality, it is absurd to suggest that progressive measures to eliminate group disabilities and promote collective equality are antagonistic to equality on the ground the every individual is entitled to equality of opportunity based purely on merit judged by the marks obtained by him.
We cannot countenance such a suggestion, for to do so would make that equality clause sterile and perpetuate existing inequalities.
Equality of opportunity is not simply a matter of legal equality.
Its existence depends not merely on the absence of disabilities but on the presence of abilities.
Where, therefore, there is inequality, in fact, legal equality always tends to accentuate it.
What the famous poet Willian Blanks said graphically is very true, namely, "One law for the Lion and the Ox is oppression," Those who are unequal.
in fact.
cannot treated by identical standards; that may be equality in law but it would certainly not be real equality.
It is, therefore, necessary to take into account de facto inequalities which exist in the society and to take affirmative action by way of giving preference to the socially and economically disadvantaged persons or inflicting handicaps on those more advantageously placed, in order to bring about real equality Such affirmative action though apparently discriminatory is calculated to produce equality an a broader basis by eliminating de facto inequalities and placing the weaker sections of the community on a footing of equality with the stronger and more powerful section, so that each member of the community, whatever is his births occupation or social position may enjoy equal opportunity of 969 using to the full his natural endowments of physique, of character and of intelligence.
We may in this connection usefully quote what Mathew, J. said in Ahmedabad St. Xavier 's College Society and Anr.
vs State of Gujarat.
"It is obvious that "equality in law precludes discrimination of any kind; whereas equality, in fact, may involve the necessity of differential treatment in order to attain a result which establishes an equilibrium between different situations.
" We cannot, therefore, have arid equality which does not take into account the social and economic disabilities and inequalities from which large masses of people suffer in the country.
Equality in law must produce real equality; de jure equality must ultimately find its raison d 'etre in de facto equality.
The State must, therefore, resort to compensatory State action for the purpose of making people who are factually unequal in their wealth, education or social environment, equal in specified areas.
The State must, to use again the words of Krishna Iyer.
J. in Jagdish Saran 's case (supra) weave those special facilities into the web of equality which, in an equitable setting provide for the weak and promote their levelling up so that, in the long run, the community at large may enjoy a general measure of real equal opportunity equality is not negated or neglected where special provisions are geared to the large goal of the disabled getting over their disablement consistently with the general good and individual merit.
" The scheme of admission to medical colleges may, therefore, depart from the principle of selection based on merit, where it is necessary to do so for the purpose of bringing about real equality of opportunity between those who are unequals.
There are.
in the application of this principle, two considerations which appear to have weighed with the Court in justifying departure from the principle of selection based on merit.
One is what may be called State interest and the other is what may be described as a region 's claim of backwardness.
The legitimacy of claim of State interest was recognised explicitly in one of the early decisions of this Court in D.P. Joshi 's case (supra) The Rule impugned in this case was a Rule made by the State of 970 Madhya Bharat for admission to the Mahatma Gandhi Memorial Medical College, Indore providing that no capitation fee should be charged for students who are bona fide residents of Madhya Bharat but for other non Madhya Bharat students, there should be a capitation fee of Rs. 1300 for nominees and Rs. 1500 for others.
The expression bona fide resident ' was defined for the purpose of this Rule to mean inter alia a citizen whose original domicile was in Madhya Bharat provided he had not acquired a domicile elsewhere or a citizen whose original domicile was not in Madhya Bharat but who had acquired a domicile in Madhya Bharat and had resided there for not less than five years at the date of the application for admission.
The constitutional validity of this Rule was challenged on the ground that it discriminated between students who were bona fide residents of Madhya Bharat and students who were not and since this discrimination was based on residence in the State of Madhya Bharat, it was violative of Article 14 of the Constitution.
The Court by a majority of four against one held that the Rule was not discriminatory as being in contravention of Article 14, because the classification between students who were bona fide residents of Madhya Bharat and those who were not was based on an intelligible differentia having rational relation to the object of the Rule.
Venkatarama Ayyar, J. speaking on behalf of the majority observed: "The object of the classification underlying the impugned rule was clearly to help to some extent students who are residents of Madhya Bharat in the prosecution of their studies, and it cannot be disputed that it is quite a legitimate and laudable objective for a State to encourage education within its borders Education is a State subject, and one of the directive principles declared in Part IV of the Constitution is that the State should make effective provisions for education within the limits of its economy.
(Vide Article 41).
The State has to contribute for the up keep and the running of its educational institutions.
We are in this petition concerned with a Medical College, and it is well known that it requires considerable finance to maintain such an institution.
If the State has to spend money on it, is it unreasonable that it should so order the educational system that the advantage of it would to some extent at least enure for the benefit of the State ? A concession given to the residents of the State in the 971 matter of fees is obviously calculated to serve that end, as presumably some of them might, after passing out of the College, settle down as doctors and serve the needs of the locality.
The classification is thus based on a ground which has a reasonable relation to the subject matter of the legislation, and is in consequence not open to attack.
It has been held in The State of Punjab vs Ajab Singh and Anr.
that a classification might validly be made on a geographical basis.
Such a classification would be eminently just and reasonable, where it relates to education which is the concern, primarily of the State.
The contention, therefore, that the rule imposing capitation fee is in contravention of Article 14 must be rejected." (emphasis supplied) It may be noted that here discrimination was based on residence within the State of Madhya Bharat and yet it was held justified on the ground that the object of the State in making the Rules was to encourage students who were residents of Madhya Bharat to take up the medical course so that "some of them might, after passing out from the college, settle down as doctors and serve the needs of the locality" and the classification made by the Rule had rational relation to this object.
This justification of the discrimination based on residence obviously rest on the assumption that those who were bona fide residents of Madhya Bharat would after becoming doctors settle down and serve the needs of the people in the State.
We are not sure whether any facts were pleaded in the affidavits justifying this assumption but the judgment of Venkatarama Ayyar, J. show that the decision of the majority Judges proceeded on this assumption and that was regarded as a valid ground justifying the discrimination made by the impugned Rule.
We may point out that in Minor P. Rajendran 's case (supra) also, an argument was put forward on behalf of the State Government that if selection was made district wise, those selected from a district were likely to settle down as practitioners in that districts so that the districts were likely to benefit from their training.
But this argument was rejected by the Court and district wise admission to medical colleges was struck down as constitutionally invalid.
It is significant to note that the Court did not reject this argument as intrinsically irrelevant but the only ground on 972 which it was rejected was that "it was neither pleaded in the counter affidavit of the State nor had the State placed any facts or figures justifying the plea that students selected district wise would settle down as medical practitioners in the respective district where they resided".
It would be interesting to speculate what court would have decided if the State Government had placed sufficient material before the court showing that students coming from different districts in the State ordinarily settle down as medical practitioners in the respective districts from where they come.
This Court also upheld reservation based on residence requirement for a period of not less than ten years, for admission to medical colleges in the then State of Mysore, The Rule which was impugned in that case was Rule 3 of the Rules for selection of candidates for admission to the professional course leading to MBBS course in the Government Medical Colleges in the then State of Mysore and this Rule provided that "no person who is not a citizen of India and who is not domiciled and resident in the State of Mysore for not less than ten years at any time prior to the date of the application for a seat, shall be eligible to apply.
" The petitioner 's application for admission was rejected on the ground that she had not resided in the State for a period of ten years as required by Rule 3 and she consequently challenged the constitutional validity of that Rule on the plea that it violated the right to equality guaranteed by Article 14.
The challenge was however negatived and the constitutional validity of Rule 3 was upheld by a 3 Judge Bench of this Court.
The Court relied upon the decision in D.P. Joshi 's case (supra) and observed: "If classification based on residence does not impinge upon the principle of equality enshrined in article 14 as held by this Court in the decision already cited which is binding upon us, then the further condition of the residence in the State being there for at least ten years would also seem to be equally valid unless it is shown by the petitioner that selection of the period of ten years makes the classification so unreasonable as to render it arbitrary and without any substantial basis or intelligible differentia.
The object of framing the impugned rule seems to be to attempt to impart medical education to the best talent available out of the class of persons who are likely, so far as it can reasonably be foreseen, to serve as doctors, the 973 inhabitants of the State of Mysore.
It is true that it is possible to say with absolute certainty that all those admitted to the medical colleges would necessarily stay in Mysore State after qualifying as doctors: they have indeed a fundamental right as citizens to settle anywhere in India and they are also free, if they so desire and can manage, to go out of India for further studies or even otherwise.
But these possibilities are permissible and inherent in our constitutional set up and these considerations cannot adversely affect the constitutionality of the otherwise valid rule.
The problem as noticed in minor P. Rajendran 's case and as revealed by a large number of cases which have recently come to this Court is that the number of candidates desirous of having medical education is very much larger than the number of seats available in medical colleges.
The need and demand for doctors in our country is so great that young boys and girls feel that in medical profession they can both get gainful employment and serve the people.
The State has therefore to formulate with reasonable foresight a just schemes of classification for imparting medical education to the available candidates which would serve the object and purpose of providing broad based medical aid to the people of the State and to provide medical education to those who are best suited for such education.
Proper classification inspired by this consideration and selection on merit from such classified groups therefore cannot be challenged on the ground of inequality violating article 14.
The impugned rule has not been shown by the petitioner to suffer from the vice of unreasonableness.
The counter affidavit filed by the State on the other hand discloses the purpose to be that of serving the interests of the residents of the State by providing medical aid for them.
" Here also reservation based on residence requirement of not less than ten years was held to be non discriminatory though it denied equality of opportunity for admission to the medical colleges in the State to all those who did not satisfy this residence requirement.
The Court took the view that the object of the State Government in making such reservation based on residence requirement of not less than ten years was to "impart medical 974 education to the best talent available out of the class of persons who are likely, so far as it can reasonably be foreseen, to serve as doctors, the inhabitants of the State".
The principle of selection based on merit across the board was thus allowed to be modified by the claim of State interest in providing broad based medical aid to the people of the State" and reservation based on residence requirement of not less than ten years was upheld as a valid reservation.
We find an choice of the same reasoning in the following words from the judgment of Dua, J. in D.N. Chanchala vs State of Mysore. "the object of selection for admission to the medical colleges considered in the background of the Directive Principles of State Policy contained in our Constitution, appears to be to select the best material from amongst the candidates in order not only to provide them with adequate means of livelihood but also to provide the much needed medical aid to the people and to improve public health generally" (Emphasis supplied) The claim of State interest in providing adequate medical service to the people of the State by imparting medical education to students who by reason of their residence in the State would be likely to settle down and serve the people of the State as doctors has thus been regarded by the Court as a legitimate ground for laying down residence requirement for admission to medical colleges in the State.
We may also conveniently at this stage refer to the decision of this Court in D.N. Chanchala 's case (supra).
The reservation impugned in this case was university wise reservation under which preference for admission to a medical college run by a university was given to students who had passed the PUC examination of that university and only 20 per cent of the seats were available to those passing the PUC Examination of other universities.
The petitioner who had passed PUC examination held by the Bangalore university, applied for admission to any one of the medical colleges affiliated to the Karnataka University.
But she did not come within the merit list on the basis of which 20 per cent of 975 the open seats were filled up and since she had not passed the PUC Examination held by the Karnataka University, her application for admission to a medical college affiliated to the Karnataka University, was rejected.
She therefore filed a writ petition under Article 32 of the Constitution contending inter alia that the University wise distribution of seats was discriminatory and being without any rational basis was violative of Article 14.
This contention was however rejected by a 3 Judge Bench of this Court.
Shelet, J. speaking on behalf of the Court held that there was no constitutional infirmity involved in giving preference to students who had passed the PUC Examination of the same University and gave the following reasons in support of this conclusion: "The three universities were set up in three different places presumably for the purpose of catering to the educational and academic needs of those areas.
Obviously one university for the whole of the State could neither have been adequate nor feasible to satisfy those needs.
Since it would not be possible to admit all candidates in the medical colleges run by the Government, some basis for screening the candidates had to be set up.
There can be no manner of doubt, and it is now fairly well settled, that the Government, as also other private agencies, who found such centres for medical training, have the right to frame rules for admission so long as those rules are not inconsistent with the university statutes and regulations and do not suffer from infirmities, constitutional or otherwise.
Since the Universities are set up for satisfying the educational needs of different areas where they are set up and medical colleges are established in those areas, it can safely be presumed that they also were so set up to satisfy the needs for medical training of those attached to those universities.
In our view, there is nothing undesirable in ensuring that those attached to such universities have their ambitions to have training in specialised subjects, like medicine, satisfied through colleges affiliated to their own universities.
Such a basis for selection has not the disadvantage of districtwise or unitwise selection as any student from any part of the State can pass the qualifying examination in any of the three universities irrespective of the place of his birth or residence.
Further, the rules confer a discretion on the selection committee to admit 976 outsiders upto 20% of the total available seats in any one of these colleges, i.e., those who have passed the equivalent examination held by any other university not only in the State but also elsewhere in India.
It is, therefore, impossible to say that the basis of selection adopted in these rules would defeat the object of the rules as was said in Rajendran 's case or make possible less meritorious students obtaining admission at the cost of the better candidates.
The fact that a candidate having lesser marks might obtain admission at the cost of another having higher marks from another university does not necessarily mean that a less meritorious candidate gets advantage over a more meritorious one.
As a well known, different universities have different standards in the examinations held by them.
A preference to one attached to one university in its own institutions for post graduate or technical training is not uncommon.
Rules giving such a preference are to be found in various universities.
Such a system for that reason alone is not to be condemned as discriminatory, particularly when admission to such a university by passing a qualifying examination held by it is not precluded by any restrictive qualifications, such as birth or residence, or any other similar restrictions.
In our view, it is not possible to equate the present basis for selection with these which were held invalid in the aforesaid two decisions.
Further, the Government which bears the financial burden of running the Government colleges if entitled to lay down criteria for admission would be made, provided of course such classification is not arbitrary and has a rational basis and a reasonable connection with the object of the rules.
So long as there is no discrimination within each of such sources, the validity of the rules laying down such sources cannot be successfully challenged.
In our view, the rules lay down a valid classification.
Candidates passing through the qualifying examination held by a university from a class by themselves as distinguished from those passing through such examination from the other two universities.
Such a classification has a reasonable nexus with the object of the rules, namely, to cater to the needs of candidates who would naturally look to their own university to advance their training in technical studies, such as medical studies.
In our opinion, the 977 rules cannot justly be attacked on the ground of hostile discrimination or as being otherwise in breach of Article 14." University wise distribution of seats was thus upheld by the Court as constitutionally valid even though it was not in conformity with the principle of selection based on merit and marked a departure from it.
The view taken by the court was that university wise distribution of seats was not discriminatory because it was based on a rational principle.
There was nothing unreasonable in providing that in granting admissions to medical colleges affiliated to a university, reservation shall be made in favour of candidates who have passed PUC examination of that university, firstly, because it would be quite legitimate for students who are attached to a university to entertain a desire to "have training in specialised subjects, like medicine, satisfied through colleges affiliated to their own" university since that promote institutional continuity which has its own value and secondly, because any student from any part of the country could pass the qualifying examination of that university, irrespective, of the place of his birth or residence.
The second consideration which has legitimately weighed with the courts in diluting the principle of selection based on merit is the claim of backwardness made on behalf of any particular region.
There have been cases where students residing in a backward region have been given preferential treatment in admissions to medical colleges and such preferential treatment has been upheld on the ground that though apparently discriminatory against others, it is intended to correct the imbalance or handicap from which the students from the backward region are suffering and thus bring about real equality in the larger sense.
Such preferential treatment for those residing in the backward region is designed to produce equal opportunity on a broader basis by providing to neglected geographical or human areas an opportunity to rise which they would not have if no preferential treatment is given to them and they are treated on the same basis as others for admissions to medical colleges, because then they would never be able to compete with others more advantageously placed.
If creatively and imaginatively applied, preferential treatment based on residence in a backward region can play a significant role in reducing uneven levels of development and such 978 preferential treatment would presumably satisfy the test of Article 14, because it would be calculated to redress the existing imbalance between different regions in the State.
There may be a case where a region is educationally backward or woefully deficient in medical services and in such a case there would be serious educational and health service disparity for that backward region which must be redressed by an equality and service minded welfare State.
The purpose of such a policy would be to remove the existing inequality and to promote welfare based equality for the residents of the backward region.
If the State in such a case seeks to remove the absence of opportunity for medical education and to provide competent and adequate medical services in such backward region by starting a medical college in the heart of such backward region and reserves a high percentage of seats there to students from that region, it may not be possible to castigate such reservation or preferential treatment as discriminatory.
What is directly intended to abolish existing disparity cannot be accused of discrimination.
Krishna Iyer, J. said to the same effect when he observed in Jagdish Saran 's case at page 856 of the Report: "We have no doubt that where the human region from which the alumni of an institution are largely drawn is backward, either from the angle of opportunities for technical education or availability of medical services for the people, the provision of a high ratio of reservation hardly militates against the equality mandate viewed in the perspective of social justice.
" This was precisely the ground on which, in the State of Uttar Pradesh vs P. Tandon this Court allowed reservation in medical admissions for people of the hill and Uttarakhand areas of the State of U.P. on the ground that those areas were socially and educationally backward.
Similarly, the Andhra Pradesh High Court in Devi vs Kakatie Medical College, held that preferential treatment of Telangana students in medical admissions was justified since "Kakatiya Medical College was started for the spread of medical education mainly for Telangana region.
which is educationally backward in the State.
If in view of this object, provision is made to cater to the educational needs mainly of that particular region, as it badly 979 requires such assistance, it cannot be said that the object to be achieved has on relation to the classification made by giving larger representation to the Andhra region.
The increase in the Telangana quota is consistent with and promotes and advances the object underlying the establishment of the institution.
" We are however not concerned here with a case of reservation or preference for persons from a backward region within a State and we need not therefore dwell any longer upon it.
It will be noticed from the above discussion that though intra state discrimination between persons resident in different districts or regions of a State has by an large been frowned upon by the court and struck down as invalid as in Minor P. Rajendran 's case (supra) and Perukaruppan 's case (supra), the Court has in D.N. Chanchalla 's case and other similar cases up held institutional reservation effected through university wise distribution of seats for admission to medical colleges.
The Court has also by its decisions in D.P. Joshi 's case and N. Vasundhara 's case (supra) sustained the constitutional validity of reservation based on residence within a State for the purpose of admission to medical college.
These decisions which all relate to admission to MBBS course are binding upon us and it is therefore not possible for us to hold, in the face of these decisions, that residence requirement in at State for admission to MBBS course is irrational and irrelevant and cannot be introduced as a condition for admission without violating the mandate of equality of opportunity contained in Article 14 We must proceed on the basis that at least so far as admission to MBBS course is concerned, residence requirement in a State can be introduced as a condition for admission to the MBBS course.
It is of course true that the Medical Education Review Committee established by the Government of India has in its report recommended after taking into account all relevant considerations, that the "final objective should be to ensure that all admissions to the MBBS course should be open to candidates on an All India basis without the imposition of existing domiciliary condition," but having regard to the practical difficulties of transition to the stage where admissions to MBBS course in all medical colleges would be on All India Basis, the medical Education Review Committee has suggested "that to begin with not less than 25 per cent seats in each institution may be open to candidates on all India basis.
" We are not all sure whether at 980 the present stage it would be consistent with the mandate of equality in its broader dynamic sense to provide that admissions to the MBBS course in all medical colleges in the country should be on all India basis.
Theoretically, of course, if admissions are given on the basis of all India national entrance examination, each individual would have equal opportunity of securing admission, but that would not take into account diverse consideration, such as, differing level of social, economic and educational development of different regions, disparity in the number of seats available for admission to the MBBS course in different States, difficulties which may be experienced by students from one region who might in the competition on all India basis get admission to the MBBS course in another region far remote from their own and other allied factors.
There can be no doubt that the policy of ensuring admissions to the MBBS course on all India basis is a highly desirable policy, based as it is on the postulate that India is one national and every citizen of India is entitled to have equal opportunity for education and advancement, but it is an ideal to be aimed at and it may not be realistically possible.
in the present circumstances, to adopt it, for it cannot produce real equality of opportunity unless there is complete absence of disparities and inequalities a situation which simply does not exist in the country today.
There are massive social and economic disparities and inequalities not only between the States and States but also between region and region within a state and even between citizens and citizens within the same region.
There is a yawning gap between the rich and the poor and there are so many disabilities and injustices from which the poor suffer as a class that they cannot avail themselves of any opportunities which may in law be open to them.
They do not have the social and material resources to take advantage of these opportunities which remain merely on paper recognised by law but non existent in fact.
Students from backward States or regions will hardly be able to compete with those from advanced States or regions because, though possessing an intelligent mind, they would have had no adequate opportunities for development so as to be in a position to compete with others.
So also students belonging to the weaker sections who have not, by reason of their socially or economically disadvantaged position, been able to secure education in good schools would be at a disadvantage compared to students 981 belonging to the affluent or well to do families who have had the best of school education and in open All India Competition, they would be likely to be worsted.
There would also be a number of students who, if they do not get admission in a medical college near their residence and are assigned admission in a far off college in another State as a result of open All India competition, may not be able to go to such other college on account of leak of resources and facilities and in the result, they would be effectively deprived of a real opportunity for pursing the medical course even though on paper they would have got admission in a medical college.
It would be tantamount to telling these students that they are given an opportunity of taking up the medical course, but if they cannot afford it by reason of the medical college to which they are admitted being far away in another State, it is their bad luck: the State cannot help it, because the State has done all that it could, namely, provide equal opportunity to all for medical education.
But the question is whether the opportunity provided is real or illusory? We are therefore of the view that a certain percentage of reservation on the basis of residence requirement may legitimately be made in order to equalise opportunities for medical admission on a broader basis and to bring about real and not formal, actual and not merely legal, equality.
The percentage of reservation made on this count may also include institutional reservation for students passing the PUC or pre medical examination of the same university or clearing the qualifying examination from the school system of the educational hinterland of the medical colleges in the State and for this purpose, there should be no distinction between schools affiliated to State Board and schools affiliated to the Central Board of Secondary Education, It would be constitutionally permissible to provide, as an interim measure until we reach the stage when we can consistently with the broad mandate of the rule of equality in the larger sense; ensure admissions to the M.B.B.S, course on the basis of national entrance examination an ideal which we must increasingly strive to reach for reservation of a certain percentage of seats in the medical colleges for students satisfying a prescribed residence requirement as also for students who have passed P.U.C. or pre medical examination or any other qualifying examination held by the university or the State and for this purpose it should make no difference whether the qualifying examination is conducted by the State Board or by the Central Board of Secondary Education, because no discrimination can be made between schools affiliated 982 can be made between schools affiliated to the Central Board of Secondary Education.
We may point out that at the close of the arguments we asked the learned Attorney General to inform the court as to what was the stand of the Government of India in the matter of such reservation and the learned Attorney General in response to the inquiry made by the Court filed a policy statement which contained the following formulation of the policy of the Government of India: "Central Government is generally opposed to the principle of reservation based on domicile or residence for admission to institution of higher education, whether professional or otherwise.
In view of the territorially articulated nature of the system of institutions of higher learning including institutions of professional education, there is no objection, however, to stipulating reservation or preference for a reasonable quantum in under graduate courses for students hailing from the school system of educational hinterland of the institutions.
For this purpose, there should be no distinction between schools affiliated to CBSC.
" We are glad to find that the policy of the Government of India in the matter of reservation based on residence requirement and institutional preference accords with the view taken by us in that behalf.
We may point out that even if at some stage it is decided to regulate admissions to the M.B.B.S. course on the basis of All India Entrance Examination, some provision would have to be made for allocation of seats amongst the selected candidates on the basis of residence or institutional affiliation so as to take into account the aforementioned factors.
The only question which remains to be considered is as to what should be the extent of reservation based on residence requirement and institutional preference.
There can be no doubt that such reservation cannot completely exclude admission of students from other universities and States on the basis of merit judged in open competition.
Krishna lyer, J. rightly remarked in Jagdish Saran 's case (supra) at page 845 and 846 of the Report: "Reservation must be kept in check by the demands 983 of competence.
You cannot extend the shelter of reservation where minimum qualifications are absent, Similarly, all the best talent cannot be completely excluded by wholesale reservation.
So a certain percentage which may be available, must be kept open for meritorious performance regardless of university, State and the like.
Complete exclusion of the rest of the country for the sake of a province, wholesale banishment of proven ability to open up, hopefully, some dalit talent, total sacrifice of excellence at the alter of equalisation when the Constitution mandates for every one equality before and equal protection of the law may be fatal folly, self defeating educational technology and anti national if made a routine rule of State policy.
A fair preference, a reasonable reservation, a just adjustment of the prior needs and real potential of the weak with the partial recognition of the presence of competitive merit such is the dynamics of social justice which animates the three egalitarian articles of the Constitution.
" We agree wholly with these observations made by the learned Judge and we unreservedly condemn wholesale reservation made by some of the State Governments on the basis of 'domicile ' or residence requirement within the State or on the basis of institutional preference for students who have passed the qualifying examination held by the university or the State excluding all students not satisfying this requirement, regardless of merit.
We declare such wholesale reservation to be unconstitutional and void as being in violation of Article 14 of the Constitution.
But, then to what extent can reservation based on residence requirement within the State or on institutional preference for students passing the qualifying examination held by the university or the state be regarded as constitutionally permissible? It is not possible to provide a categorical answer to this question for, as pointed out by the policy statement of Government of India, the extent of such reservation would depend on several factors including opportunities for professional education in that particular area, the extent of competition, level of educational development of the area and other relevant factors.
It may be that in a State were 984 the level of educational development is woefully low, there are comparatively inadequate opportunities for training in the medical speciality and there is large scale social and economic backwardness, there may be justification for reservation of a higher percentage of seats in the medical colleges in the State and such higher percentage may not militate against "the equality mandate viewed in the perspective of social justice".
So many variables depending on social and economic facts in the context of educational opportunities would enter into the determination of the question as to what in the case of any particular State, should be the limit of reservation based on residence requirement within the State or on institutional preference.
But, in our opinion, such reservation should in no event exceed the outer limit of 70 per cent of the total number of open seats after taking into account other kinds of reservations validly made.
The Medical Education Review Committee has suggested that the outer limit should not exceed 75 per cent but we are the view that it would be fair and just to fix the outer limit at 70 per cent.
We are laying down this outer limit of reservation in an attempt to reconcile the apparently conflicting claims of equality and excellence.
We may make it clear that this outer limit fixed by us will be subject to any reduction or attenuation which may be made by the Indian Medical Council which is the statutory body of medical practitioners whose functional obligations include setting standards for medical education and providing for its regulation and coordination.
We are of the opinion that this outer limit fixed by us must gradually over the years be progressively reduced but that is a task which would have to be performed by the Indian Medical Council.
We would direct the Indian Medical Council to consider within a period of nine months from today whether the outer limit of 70 per cent fixed by us needs to be reduced and if the Indian Medical Council determines a shorter outer limit, it will be binding on the States and the Union Territories.
We would also direct the Indian Medical Council to subject the outer limit so fixed to reconsideration at the end of every three years but in no event should the outer limit exceed 70 per cent fixed by us.
The result is that in any event at least 30 per cent of the open seats shall be available for admission of students on all India basis irrespective of the State or university from which they come and such admissions shall be granted purely on merit on the basis of either all India Entrance Examn.
or entrance examination to be held by the State.
Of 985 course, we need not add that even where reservation on the basis of residence requirement or institutional preference is made in accordance with the directions given in this judgment, admissions from the source or sources indicated by such reservation shall be based only on merit, because the object must be to select the best and most meritorious student from within such source or sources.
So much for admission to the M.B.B.S. course, but different considerations must prevail when we come to consider the question of reservation based on residence requirement within the State or on institutional preference for admission to post graduate courses, such as, M.D., M.S. and the like.
There we cannot allow excellence to be compromised by any other considerations because that would be deterimental to the interest of the nation.
It was rightly pointed out by Krishna Iyer, J. in Jagdish Saran 's case, and we wholly endorse what he has said: "The basic medical needs of a region or the preferential push justified for a handicapped group cannot prevail in the same measure at the highest scale of speciality here the best skill or talent, must be handpicked by selecting according to capability.
At the level of Ph. D., M.D., or levels of higher proficiency, where international measure of talent is made, where losing one great scientist or technologist in the making is a national loss the considerations we have expended upon as important loss their potency.
Here equality, measured by matching excellence, has more meaning and cannot be diluted much without grave risk." "If equality of opportunity for every person in the country is the constitutional guarantee, a candidate who gets more marks then another is entitled to preference for admission.
Merit must be the test when choosing the best, according to this rule of equal chance for equal marks.
This proposition has greater importance when we reach the higher levels of education like post graduate courses.
After all, top technological expertise in any vital field like medicine is a nation 's human asset without which its advance and development will be stunted.
The role of high grade skill or special talent may be less 986 at the lesser levels of education, jobs no disciplines of social inconsequence, but more at the higher levels of sophisticated skills and strategic employment.
To devalue merit at the summit is to temporise with the country 's development in the vital areas of professional expertise.
In science and technology and other specialised fields of developmental significance, to relax lazily or easily in regard to exacting standards of performance may be running a grave national risk because in advanced medicine and other critical departments of higher knowledge, crucial to material progress, the people of India should not be denied the best the nation 's talent lying latent can produce.
If the best potential in these fields is cold shouldered for populist considerations garbed as reservations, the victims, in the long run, may be the people themselves.
Of course, this unrelenting strictness in selecting the best may not be so imperative at other levels where a broad measure of efficiency may be good enough and what is needed is merely to weed out the worthless." "Secondly, and more importantly, it is difficult to denounce or renounce the merit criterion when the selection is for post graduate or post doctoral courses in specialised subjects.
There is no substitute for sheer flair, for creative talent, for fine tune performance at the difficult highest of some disciplines where the best alone is likely to blossom as the best.
To sympathise mawkishly with the weaker sections by selecting substandard candidates, is to punish society as a whole by denying the prospect of excellence say in hospital service.
Even the poorest, when stricken by critical illness, needs the attention of super skilled specialists, not humdrum second rates.
So it is that relaxation on merit, by over ruling equality and quality all together, is a social risk where the stage is post graduate or post doctoral." These passages from the judgment of Krishna Iyer, J. clearly and forcibly express the same view which we have independently reached on our own and in deed that view has been so ably expressed in these passages that we do not think we can usefully 987 add anything to what has already been said there.
We may point out that the Indian Medical Council has also emphasized that playing with merit, so far as admissions to post graduate courses are concerned, for pampering local feeling, will boomeriang.
We may with advantage reproduce the recommendation of the Indian Medical Council on this point which may not be the last word in social wisdom but is certainly worthy of consideration: "Student for post graduate training should be selected strictly on merit judged on the basis of academic record in the undergraduate course.
All selection for post graduate studies should be conducted by the Universities.
" The Medical Education Review Committee has also expressed the opinion that "all admissions to the post graduate courses in any institution should be open to candidates on an all India basis and there should be no restriction regarding domicile in the State/UT in which the institution is located.
" So also in the policy statement filed by the leaned Attorney General, the Government of India has categorically expressed the view that: "So far as admissions to the institutions of post graduate colleges and special professional colleges is concerned, it should be entirely on the basis of all India merit subject to constitutional reservations in favour of Scheduled Castes and Scheduled Tribes.
" We are therefore of the view that so far as admissions to post graduate courses, such as M.S., M.D. and the like are concerned, it would be eminently desirable not to provide for any reservation based on residence requirement within the State or on institutional preference.
But, having regard to border considerations of equality of opportunity and institutional continuity in education which has its own importance and value, we would direct that though residence requirement within the State shall not be a ground for reservation in admissions to post graduate courses, a certain percentage of seats may in the present circumstances, be reserved on the basis of institutional preference in the sense that a student who has passed M.B.B.S. course from a medical college or university may be given preference for admission to the post graduate course in the same medical colleges or university but 988 such reservation on the basis of institutional preference should not in any event exceed 50 per cent of the total number of open seats available for admission to the post graduate course.
This outer limit which we are fixing will also be subject to revision on the lower side by the Indian Medical Council in the same manner as directed by us in the case of admissions to the M.B.B.S. course.
But, even in regard, to admissions to the post graduate course, we would direct that so far as super specialities such as neuro surgery and cardiology are concerned, there should be no reservation at all even on the basis of institutional preference and admissions should be granted purely on merit on all India basis.
What we have said about in regard to admissions to the M.B.B.S. and post graduate courses must apply equally in relation to admissions to the B.D.S. and M.D.S. courses.
So far as admissions to the B.D.S. and M.D.S. courses are concerned, it will be the Indian Dental Council which is the statutory body of dental practitioners, which will have to carry out the directions given by us to the Indian Medical Council in regard to admissions to M.B.B.S. and post graduate courses.
The directions given by us to the Indian Medical Council may therefore be read as applicable mutatis mutandis to the Indian Dental Council so far as admissions to BDS and MDS courses are concerned.
The decisions reached by us in these writ petitions will bind the Union of India, the State Governments and Administrations of Union Territories because it lays down the law for the entire country and moreover we have reached this decision after giving notice to the Union of India and all he State Governments and Union Territories.
We may point out that it is not necessary for us to give any further directions in these writ petitions in regard to the admissions of the petitioners in the writ petitions, because the academic term for which the admissions were sought has already expired and so far as concerns the petitioners who have already been provisionally admitted, we have directed that the provisional admissions given to them shall not be disturbed but they shall be treated as final admissions.
The writ petitions and the civil appeal will accordingly stand disposed of in the above terms.
There will be no order as to costs in the writ petitions and the civil appeal.
989 AMARENDRA NATH SEN, J. have had the advantage of reading the judgment of my learned brother, Bhagwati, J.
I agree with the orders passed by my learned brother and also the directions given by him.
I, however, propose to indicates in brief my own reasons.
My learned brother in his judgment has referred to various aspects of national life and has very aptly emphasise on the need of Unity of India.
My learned brother in his judgment has set out the relevant facts and circumstances and has also considered the relevant decisions on the question involved in the present proceedings.
Unity in diversity is the essential peculiarity of Indian culture and constitutes the basic philosophy of Indian nationality.
It is also a fundamental tenet of our constitution which seeks to promote the unity while maintaining at the same time the distinctiveness of the various classes and kinds of people belonging to different States forming the Indian Nation.
Equality in the eye of law is the fundamental postulates and is guaranteed under the Constitution.
Each and every kind of discrimination is not in violation of the Constitutional concept of equality and does not necessarily undermine the Unity of India.
The validity of any discrimination has to be tested on the touchstone of article 14 of the Constitution.
Appropriate classification may in very many cases from the vary core of equality and promote unity in the true sense amidst diversity.
To my mind the questions involved in these proceedings lies within a short compass.
The first question relates to reservation of seats for admission to Medical Colleges in any State on the basis of residence of the applicant in the State for such admission.
Connected with this question is the question of institutionalised reservation of seats for admission to Medical Colleges.
The other question raised is the question of reservation of seats on such considerations for admission to post graduate medical courses.
The question of constitutional validity of reservation of seats within reasonable limits on the basis of residence and also the question of institutionalised reservation of seats clearly appear 990 to be concluded by various decisions of this Court, as has rightly pointed out by my learned brother in his judgment in which he has referred at length to these decisions.
These decisions are binding on this Court and are to be followed.
Constitutional validity of such reservations within the reasonable limit must, therefore, be upheld.
The real question is the question of the extent of the limit to which such reservations may be considered to be reasonable.
The question of reasonableness of such reservations must necessarily be determined with reference to the facts and circumstances of particular cases and with reference to the situation prevailing at any given time.
My learned brother in his judgment has elaborately and carefully considered these aspects.
On a careful consideration of all the facts and circumstances and the materials placed, my learned brother has proposed appropriate orders and has given necessary directions in this regard.
The orders passed by my learned brother and the directions given by him on a consideration of the materials on record and the earlier decisions of this Court will serve the cause of justice, meet the requirements of law and will not affect or undermine national unity.
I am, therefore, in entire agreement with the orders passed and directions given by him in this regard.
On the question of admission to post graduate medical courses I must confess that I have some misgivings in my mind as to the further classification made on the footings of supper specialities.
Both my learned brothers, however, agree on this.
Also in a broader perspective this classification my serve the interests of the nation better, though interests of individual States to a small extent may be affected.
This distinction in case of super specialities proceeds on the basis that in these very important spheres the criterion for selection should be merit only without institutionalised reservations or any reservation on the ground of residence.
I also agree that the orders and directions proposed in regard to admission to MBBS and post graduate courses are also to be read as applicable mutatis mutandis in relation to admission to BDS and MDS courses.
The problem of admission to medical colleges and the post graduate medical studies can only be properly and effectively solved by the setting up of more medical colleges and by increas 991 ing the number of seats in such colleges to enable aspirants to have their aim of being qualified as medical practitioners and specialists in various subjects achieved.
The same is also the position with regard to BDS and MDS courses.
This aspect has been very appropriately noticed by my learned brother in his judgment.
ORDER With these observations I agree with the orders passed and the directions given by my learned brother Bhagwati, J. Some of the students seeking admission to the MBBS course in this academic year have made an application to this Court that the Judgment delivered on 22nd June, 1984 in the medical admission cases may be given effect to only from the next academic year, because admissions have already been made in the medical colleges attached to some of the Universities in the country prior to the delivery of the judgment on 22nd June, 1984 and moreover some time would be required for the purpose of achieving uniformity in the procedure relating to admissions in the various Universities.
We accordingly issued notice on the application to the learned advocates who had appeared on behalf of the various parties at the hearing of the main writ petitions as also to the Attorney General and after hearing them, we have come to the conclusion and this is accepted by all parties that in view of the fact that all formalities for admission, including the holding of entrance examination, have been completed in some of the States prior to the judgment dated 22 6 1984 and also since some time would we required for making the necessary preparations for implementing the judgment, it is not practicable to give effect to the judgment from the present academic year and in fact compelling some States to give effect to the judgment from the present academic year when others have not, would result in producing inequality and if all the States were to be required to implement the judgment immediately, admissions already made would have to be cancelled and fresh entrance examinations would have to be held and this would require at least 2 or 2 1/2 months delaying the commencement of the academic term apart from causing immense hardship to the students.
We therefore direct that the judgment shall be implemented with effect from the next academic year 1985 86.
Whatever admissions, provisional or otherwise, have been made for the academic year 1984 85, shall not be disturbed on the basis of the judgment.
We may make it clear that the judgment will not apply to the States of Andhra Pradesh and Jammu & Kashmir because at the 992 time of hearing of the main writ petitions, it was pointed out to us by the learned advocates appearing on behalf of those States that there were special Constitutional provisions in regard to them which would need independent consideration by this Court.
[/INST]In a suit filed in the High Court for a declaration and relief in respect of several properties, the Official Receiver of the High Court was appointed Receiver.
On the request of the parties, the official Receiver, decided to sell one of the properties with the permission of the Court.
The price of the property was fixed at Rs. 3.5 lakhs.
The appellant offered a sum of Rs. 4 lakhs for purchase of the property, and by his advocate 's letter enclosed a draft for Rs. 1 lakh, being 1/4 of the amount.
A meeting was held in the presence of the plaintiff and their counsel, and at the meeting the offer received from the appellant was considered and it was decided that the offer of Rs. 4 lakh by bank draft.
The Official Receiver accepted the offer of the appellant, communicated the acceptance and requested the appellant to deposit the balance amount.
The Official Receiver, thereafter moved the High Court for directions to remove respondents 1 to 4 on the ground that they had trespassed into the property a few months earlier.
Respondents 1 to 4 moved an application for being impleaded in the suit and contended that they were residing with their families under a licence since 1975 and had constructed pucca huts thereon and that with the knowledge of this continuous possession, the parties to the suit have filed the suit among themselves without impleading them (respondents 1 to 4).
583 The Single Judge rejected the aforesaid contentions of respondents 1 to 4 and held that though they were prepared to offer the sum of Rs. 1 lakh more than the appellant the property could not be sold to them.
The Division Bench, however allowed their appeal, directed respondents 1 to 4 to pay to the Official Receiver a sum of Rs. 1.25 lakhs immediately and the balance of Rs. 3.75 lakhs thereafter and on such payment ordered sale of the disputed property to respondents 1 to 4 and their 34 nominees on the ground that the Court should do social justice and in doing such justice no technicality of law would stand in its way.
Dismissing the Appeal to this Court, ^ HELD: [Per Fazal Ali & Sabyasachi Mukharji, JJ Majority] In administering justice social or legal jurisprudence has shifted away from finespun technicalities and abstract rules to recognition of human beings as human beings.
The Division Bench of the High Court had adopted the above approach, and no law is breached by the view taken by it.
It is improper for this Court in exercise of the discretion vested under article 136 of the Constitution to interfere with that decision.
[595 FG; 622A B] [Per Fazal Ali, J.] 1.
In our opinion, there appears to be some misapprehension about what actually social justice is.
There is no ritualistic formula or any magical charm in the concept of social justice.
All that it means is that as between two parties if a deal is made with one party without serious detriment to the other, then the Court would lean in favour of the weaker section of the society.
Social justice is the recognition of greater good to larger number without deprivation of accrued legal rights of anybody.
If such a thing can be done then indeed social justice must prevail over any technical rule.
It is in response to the felt necessities of time and situation in order to do greater good to a larger number even though it might detract from some technical rule in favour of a party.
Living accommodation is a human problem for vast millions in our country.[595B D] 2.
Call it social justice or solving a socioeconomic problem or give it any other name or nomenclature, the fact of the matter is that this was the best course in the circumstances that could have been adopted by the court.
Justice social, economic and political is preamble to our Constitution.
Administration of justice can no longer be merely protector of legal rights but must whenever possible be dispenser of social justice.
[595H 596A] 4.
The Division Bench of the High Court has done substantial justice by throwing aboard the technicalities particularly for the reason that courts frown over a champartous litigation or agreement even though the same may be valid.
The Division Bench by its decision got more 584 money for the owners on the one hand and one the other sought to rehabilitate the 38 families of the respondent who had already built permanent structures.
[597G H] In the instant case, the Division Bench was perfectly justified in accepting the offer of the respondents because: (a) the respondents were prepared to pay Rs. 1 lakh more than the appellant and the appellant did not pay the balance of Rs. 3 lakhs, (b) possession being 9/10th of title, the respondents being in actual possession would have no difficulty in becoming the owners, (c) respondents were prepared to purchase the property notwithstanding litigation, because if they became owners no one could challenge their title or possession.
The Single Judge completely ignored two material aspects: (a) that a bulk of the consideration money viz. Rs. 3 lakhs out of Rs. 4 lakhs was not paid by the appellant, and (b) that an owner also has right to impose certain conditions, and in exercise of that, the condition that the purchase would have to buy the land subject to the pending litigation was imposed [579C F; 5 6A D] (Per Varadarajan, J. dissenting) 1.
The Division Bench had no right or justification to alter or modify the earlier order made for the sale of the property which had become final, or to hold that a subsequent offer made by respondents 1 to 4 to purchase the property for Rs. 5 lakhs should be accepted merely because it appears to be advantageous to the owners of the property in the name of social justice.
[612F] 2.
The benefit claimed on behalf of respondents 1 to 4 which cannot called a right, for there is no corresponding obligation cannot be equated with or even brought anywhere near the social justice mentioned in the preamble of the Constitution.
[612G] 3.
Respondents 1 to 4 are trespassers in respect of the property which is in custodia legis and they are in contempt of the Court.
They cannot be allowed to continue to be in contempt and urge it as a ground for obtaining the benefit of the sale of the property in their favour.
If the appellant has not complied with any condition it may be ground for the owners and the Official Receiver not to accept his offer and refuse to sell the property to him and not for respondents 1 to 4 to raise any objection.
The offer has been accepted rightly or wrongly more than once and there fore the appellant may have a right to sue for specific performance of the contract on the basis of that acceptance by the official Receiver given with the approval of the parties.
The same is the position in regard to the delay of about a month in paying the balance of Rs.3 lakhs by the appellant.
[611D F] In the instant case, the property has been agreed to be sold by private treaty and the Official Receiver has been authorised to sell the property either by public auction or by private treaty.
The Court does not come into the picture in such a case and there is no need for the Court to approve 585 or confirm such sale.
The parties who are sui juris must be deemed to have known their interest best when they chose to approve the sale of the property for Rs. 4 lakhs in favour of the appellant notwithstanding the fact that respondents 1 to 4 had offered to purchase the property for Rs.5 lakhs.
The appeal has therefore to be allowed.
[612E; 613B] Everest Coal Company (P) Ltd vs State of Bihar & Others, [1974] 1 SCR P. 571 at P. 573, Kayjay Industries (P) Ltd. vs Asnew Drums (P) Ltd & Others, [1974] 3 SCR P. 678, Jibon Krishna Mukherjee vs New Bhee bhum Coal Co. Ltd. & Apr., [1960] 2 SCR P. 198.
Tarinikamal Pandit & Others vs Prafulla Kumar Chatterjee, [1979] 3 SCR P. 340, referred to.
(Per Sabyasachi Mukherji, J) 1.
The pendency of the proceedings under Section 145 of the Code of Criminal procedure and order, if any, passed thereon does not in any way affect the title of the parties to the disputed premises though it reflects the factum of possession.
[616D] Bhinka and Others vs Charan Singh, [1959] Supp. 2 S.C.R. P.798 referred to.
When the property is in custody of a receiver appointed by the court, the property is in the custody of the court and interference with such possession should not be encouraged and no party can acquire any title or right by coming in or over the property which is in the possession of the receiver or sanction of the court[618F] Halsbury 's Laws of England, 4th Edn., Vol, 39 pages 451,452 paragraph 890,891: Kerr On Receivers 16th Edn.
pages 121 referred to.
The concept to social justice is not foreign to legal justice or social well being or benefit to the community rooted in the concept of justice in the 20th century.
The challenge of social justice is primarily a challenge to the society at large more than to the court immediately.
Social justice is one of the aspirations of our Constitution.
But the courts, are pledged to administer justice as by law established.[620F] In the instant case, in formulating the concept of justice, however, the inarticulate factor that large number of human beings should not be dislodged from their possession if it is otherwise possible to do so cannot but be a factor which must and should influence the minds of judges.
It is true that the persons who were alleged to be in possession are with unclean hands, but they came for shelter and built in hutments.
They do not want to be rehabilitated at competitive bargain price.
In the circumstances they should not be denied rehabilitation on the ground of their original illegitimacy.
The felt necessities of time and in this case the convenience of the situation and the need for adjusting the rights of a larger number of 586 people without deprivation of any accrued right of anybody would be justice according to law.
Before social justice as something alien to legal justice, is rejected, it should be remembered that a meaningful definition of the rule of law must be based on the realities of contemporary societies and the realities and the realities of the contemporary societies are men are in acute shortage of living accommodation and if they are prepared to bargain and rehabilitate themselves on competitive terms, they should be encouraged and no technical rules should stand in their way.
That would be justice by highways ' and not infiltration 'by bye lanes '.
[621H 622B]
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<s>[INST] Summarize the judgementAppeal No. 205 of 1956.
Appeal from the judgment and decree dated May 26, 1954, of the Calcutta High Court in Appeal from Original Decree No. 127 of 1950.
580 D. N. Mukherjee, for the appellants.
N. C. Chatterjee and R. B. Biswas, for respondents Nos.
1(a) and 2. 1961.
January 25.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and decree of the High Court of Judicature at Calcutta.
The appellant was the defendant in the suit out of which this appeal has arisen and respondent No. 1 was the plaintiff, and the second respondent was a proforma defendant.
The facts of this case are these: On February 4, 1941, the respondent sold the property in dispute to the appellant for a sum of Rs. 10,000.
On February 10, 1941, there was an agreement for reconveyance within a period up to February 10, 1943, for a sum of Rs. 10,001.
The relevant clause of this agreement was the third clause which was as follows : " Clause 3.
The purchase shall be completed by the purchasers within two years, i.e., to say on or before the 10th day of February, 1943, time being the essence of the contract.
If the purchasers shall on or before the 10th day of February, 1943, pay to the vendor a sum of Rs. 10,001 the vendor shall at the cost of the purchasers execute such conveyance as may be necessary for conveying and transferring its right, title and interest in the said property free from encumbrances, if any, created by it.
" On November 26, 1942, the solicitor for respondent No. 1 wrote a letter to the appellant stating that that respondent was ready and willing to have the purchase completed as early as possible on payment of Rs. 10,001.
Along with that letter a draft conveyance was sent for approval but all this was subject to the result of a search as to the encumbrances, if any, created by the appellant.
On November 30, 1942, the solicitors for the appellant company wrote back saying that immediate arrangements should be made for giving inspection of the agreement of sale on which the respondents were relying as the appellant was unable to trace the copy of the said agreement from its record.
581 Again on December 11, 1942, the respondent 's solicitor sent a letter stating : " My client is very eager to complete the purchase and the full consideration money therefore is lying idle in his hands awaiting, the return of the relative draft conveyance as approved by you on your clients ' behalf.
" To this the reply of the appellant 's solicitors dated December 18, 1942, was: " Our clients deny that there was any concluded or valid agreement for sale with your client or with any other person in respect of the above premises." On June 10, 1943, respondent No. 1 filed a suit for specific performance and in the alternative for redemption on the footing that the transaction was in reality a mortgage.
The trial court dismissed the suit oil May 16, 1950, holding that the transaction on the basis of which the suit was brought was not a mortgage but was out and out sale with an agreement for repurchase and as the vendor had not paid the money " punctually according to the terms of the contract, the right to repurchase was lost and could not be specifically enforced ", and the court had no power 'to afford any relief against forfeiture of this breach.
The plaintiff respondent took an appeal to the High Court and it was there held that the failure on the part of the respondents to actually tender the amount of the consideration does riot bar a suit for specific performance because after the repudiation of the contract by the appellant, the tender would have been a useless formality.
The appeal was therefore allowed and the suit for specific performance decreed.
It is against this judgment and decree that the appellant has come in appeal to this Court.
The correspondence which has been proved in this case shows that when the respondent 's solicitor called upon the appellant to reconvey the property in dispute to the respondent and also sent a draft conveyance, the appellant denied that there was any concluded or valid agreement for sale in respect of the property in dispute.
This was a complete repudiation of the contract to reconvey which the 582 appellant had agreed to by cl. 3 of the agreement which has been set out above.
As the appellant had repudiated the contract and had thus failed to carry out his part of the contract it was open to the respondent to sue for its enforcement.
But it was argued on behalf of the appellant that the respondent did not tender the price, i.e., Rs. 10,001 nor was he in a position to do so and in that view of the matter the respondent is not entitled to get a decree for specific performance.
In cases of this kind no question of formal tender of the amount to be paid arises and the question to be decided is not whether any money was within the power of the respondent but whether the appellant definitely and unequivocally, refused to carry out his part of the contract and intimated that money will be refused if tendered.
The principle laid down in Hunter vs Daniel (1) is applicable to cases of this kind.
In that case Wigram, V. C., stated the position as follows: " The practice of the Courts is not to require a party to make a formal tender where from the facts stated in the Bill or from the evidence it appears the tender would have been a mere form and that the party to whom it was made would have refused to accept the money. " Lord Buckmaster in Chalikani Venkatarayanim vs Zamindar of Tuni (2) accepted this statement of the law and observed: " Their Lordships think that that is a true and accurate expression of the law, and the question therefore is whether the answer that was sent on behalf of the mortgagee amounted to a clear refusal to accept the money. " This principle applies to the facts of the present case also and the question is whether the answer sent on behalf of the appellant amounted to an unequivocal refusal to carry out its part of the contract which in our opinion it was.
It was next contended that the offer made by a solicitor is not a proper offer in law and therefore when (1) ; ; (2) (1922) 50 I.A. 41, 47.
583 the solicitor for the respondent called upon the appellant to execute the documents they were not bound to do so.
We are unable to accord our assent to this proposition.
The case upon which the Counsel for the appellant relied, i.e., Ismail Bhai Rahim vs Adam Osman (1), in our opinion has no application to the facts and circumstances of this case.
It was held in that case that the offer made by a promiser through a solicitor to pay a debt with interest thereon at the date of the offer does not of itself afford a reasonable opportunity to the promisee of ascertaining that the promisor is able and willing to perform his promise.
Unless there is something peculiar in the circumstances of that case that case does not lay down good law.
It is difficult to see why a tender made through a solicitor who is for that purpose an agent, is not a proper tender.
In our opinion the High Court rightly held that the respondents were entitled to a decree for specific per formance and we therefore dismiss this appeal with costs.
Appeal dismissed.
[/INST]The assessee, resident in British India, had some money in deposit with a concern in Bhavnagar, outside British India.
On April 7, 1947, he transferred part of it to a concern in Bombay.
He was assessed to tax on this amount under section 4(i)(b)(iii) of the Income tax Act.
The assessee contended that to attract the application of section 4(i)(b)(iii) the receipt in the taxable territory must be the first receipt of income.
Held, that the assessee was liable to tax on this amount.
Per Gajendragadkar and Wanchoo, JJ.
Where a person, resident in the taxable territories, has already received, outside the taxable territories, any income etc.
accruing or arising to him outside the taxable territories before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income tax thereon.
Though for the purposes of cl.
(a) of section 4 the receipt must be the first receipt of income in the taxable territories, for the purposes of cl.
(b)(iii) the receiving in the taxable territories need not be the first receipt.
Keshav Mills Ltd. vs Commissioner of Income tax ; , referred to.
Per Sarkar, J.
The income could not be said to have been "received" in the taxable territory within the meaning of cl.
(b)(iii) as income could be received only once.
But it is clear that the assessee " brought into " Bombay that income.
It was immaterial in what shape he received the income in Bhavnagar and in what shape he brought it in Bombay.
Keshav Mills Ltd. vs Commissioner of Income tax ; , Board of Revenue vs Ripon Press Mad.
706 and Sundar Das vs Collector of Gujrat (1922) I.L.R. , applied.
Gresham Life Assurance Society Ltd. vs Bishop [1902] A.C. 287 and Tennant vs Smith ; , referred to.
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<s>[INST] Summarize the judgementvil Appeals Nos.
1358 61 of 1979.
From the Judgment and Order dated 6.9.78 of the Allaha bad High Court in I.T.R. No. 114/78.
Ahuja, K.C. Dua and Miss. A. Subhashini for the appel lants.
842 S.C. Manchanda, Mrs. A.K. Verma and Joel Pares for the respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
These appeals by special leave are directed against the judgment of the High Court at Allahabad dispos ing of an Income tax Reference in favour of the assessee and against the Revenue.
The assessee is a co operative society running a sugar mill.
For the assessment year 1968 69 it claimed payment of interest amounting to Rs. 1,81,7 16.
This was interest paid to the accounts of its members, who had deposited certain amounts with the assessee in accordance with Bye law No. 50 and it was debited by the assessee to its profit and loss account.
In the initial years of the working of the Society, certain partly paid shares were allotted to its farmer members.
With a view to inducing these members to make further contribution to the capital of the Society, bye law No. 50 was incorporated in the Bye laws of the Society.
The bye law as amended provides: "50.
There shall be established a 'Loss Equalisation & Capital Redemption Reserve Fund ' in the society.
Every producer shareholder shall deposit every year a sum not less than 0.32 paise and not more than 0.48 paise per quintal of the sugarcane supplied by him to the society, as may be determined by the Board until the shares to be subscribed by the members are fully paid up.
The amount standing to the credit of this fund presently or to be credited in future, shall be used for making the partly paid shares fully paid up.
The balance of the said amount shall be refunded to the members soon after the present loan from the Industrial Corporation of India is repaid, whereafter the fund shall cease to exist.
" The money available in the 'Loss Equalisation and Capi tal Redemption Reserve Fund ' was utilised by the assessee for the purpose of its business.
A part of the amount was also utilised for converting the partly paid up shares into fully paid up shares.
On 8 September, 1967 the Board of Directors of the Society decided in their meeting to pay interest at 6% on the balance available in the aforesaid Fund to its various members to whom the balance money be longed.
It was on this account that the Society claimed an amount of Rs. 1,18,716 for the assessment year 1968 69.
843 The claim was rejected by the Income Tax Officer.
He took the view that the amounts deposited by the members of the Society in the 'Loss Equalisation and Capital Redemption Reserve Fund ' did not represent loans taken by the assessee but constituted a contribution by the members to convert partly paid up shares into fully paid up shares and they could not be considered as capital borrowed for the purpose of its business.
He held that section 36(1)(iii) of the Income tax Act did not apply to such interest and that it was not admissible as a deduction in computing the total income of the assessee.
For the assessment years 1969 70 to 1972 73 the claim to deduction on this account was as follows: 1969 70 .
Rs. 1,34,609 1970 71 .
Rs. 1,34,609 1971 72 .
Rs. 1,34,609 1972 73 .
Rs. 1,34,609 The Income Tax Officer took the same view for these assess ment years as he did for the assessment year 1968 69.
In appeals preferred by the assessee the Appellate Assistant Commissioner of Income tax confirmed the disallow ance for the assessment year 1968 69 on the ground that Bye law No. 50 did not provide for the refund of the amount standing to the credit of the members at any time before the payment of the loan to the Industrial Finance Corporation of India, that the loan was still outstanding on 30 June 1967, the last day of the previous year relevant to the assessment year 1968 69, and moreover the Bye law did not provide for payment of interest at all.
He observed that the Directors could not pay any interest unless the Bye law was amended by the members of the assessee.
He observed that the interest paid must be regarded as an exgratia payment to the producer members of the society who had contributed to the Fund, and that it was not made for the purpose of the business of the assessee or on the ground of commercial expediency.
The same order was passed by the Appellate ASsistant Commissioner on the appeals for the remaining years.
In second appeals filed by the assessee for all the assessment years the Income Tax Appellate Tribunal held that the amount standing to the credit of the 'Loss Equalisation and Capital Redemption Reserve Fund ' which was utilised by the assessee for the purpose of its business represented moneys borrowed for the purpose of its business and that interest paid on such moneys was eligible for deduction under 844 section 36(1)(iii) of the Income tax Act, 1961.
The Appellate Tribunal negatived the contention of the Revenue that only such deposits could constitute 'capital borrowed ' within the meaning of section 36(1)(iii) of the Act which were initially borrowed with the stipulation to pay interest thereon.
The Appellate Tribunal observed that the expression 'capital borrowed ' had not been defined in the Income tax Act and that its ordinary meaning would have to be gathered in construing the meaning of section 36(1)(iii).
It said that it was not necessary that borrowing must contain an element of payment of interest and that even if a deposit was made by the members of the society which was utilised for the pur poses of the business of the assessee, the funds represented by such deposit would be 'capital borrowed ' for the purposes of section 36(1)(iii) of the Act.
The Appellate Tribunal also recorded that it was not disputed that the deposits were taken for the purposes of the business.
In the circum stances, the Appellate Tribunal held that when the Board of Directors of the assessee considered it proper to pay inter est on those deposits, such interest was admissible under section 36(1)(iii) of the Act.
During the heating of the appeals for the assessment years 197071 and 197 1 72, it was pointed out by the Revenue that the auditors of the assessee had observed in their audit report that the payment of interest on the 'Loss Equalisation and Capital Redemption Reserve Fund ' should not have been made by the assessee in view of section 57 of the Uttar Pradesh Co operative Societies ' Act, which reads: "Fund not to be divided: Except as otherwise specifically provided in this Act, no part of the Funds other than the net profits of a co operative society shall be paid by way of bonus or dividend or otherwise distributed among its members: Provided that a member may be paid remuneration on such scale as may be laid down in the bye laws for any services rendered by him to the co operative society." The Appellate Tribunal held that section 57 was not relevant as the payment of interest to the shareholders, on the amounts deposited by them, did not represent any payment by the Society by way of bonus or dividend or otherwise, of any part of its funds other than its net profits.
The Appellate Tribunal also observed that the interest paid by the asses see to the 'Loss Equalisation and Capital Redemption Reserve Fund ' was met from out of the net profits of the assessee.
It was found that the assessee had sufficient income out of which the interest 845 could be paid by it.
For these reasons, it held that the payment of interest was not affected by section 57 of the Uttar Pradesh Co operative Societies Act.
At the instance of the Revenue the following two ques tions in respect of the five assessment years were referred by the Appellate Tribunal to the High Court at Allahabad for its opinion.
Whether the credit balances in the Loss Equalisation and Capital Redemption Reserve Fund which were actually used by the assessee for the purposes of its business represented capital borrowed by the assessee for the purpose of its business within the meaning of section 36(1)(iii) of the Act? 2.
Whether the Tribunal was right in law in allowing inter est on such balances standing to the credit of the Loss Equalisation and Capital Redemption Reserve Fund as a deduc tion in computing the total income of the assessee?" A further question common to the assessment years 1969 70 to 1972 73 was also flamed.
It reads: "Whether the Tribunal was right in law in holding that the impugned payments of interest did not contravene the provi sions of section 57 of the Uttar Pradesh Co operative Societies Act, 1965?" The High Court agreed with the view taken by the Appel late Tribunal and answered the questions in favour of the assessee and against the Revenue.
Before us, the parties have confined themselves to the first two questions and it is requested that we need not consider the third question.
In these appeals the question is whether the claim to deduction under section 36(1)(iii) of the Income tax Act can be allowed.
Section 36(1)(iii) of the Act provides that in computing the income chargeable under the head 'profits and gains of business or profession ' a deduction shall be al lowed of the amount of interest paid in respect of capital borrowed for the purposes of the business or profession.
Can it be said that the credit balance in the 'Loss Equalisation and Capital Redemp 846 tion Reserve Fund ' represents capital borrowed by the asses see for the purposes of its business? What is 'borrowed money ' has been construed by the Courts in England in a number of cases.
In Port of London Authority vs Commissioner of Inland Revenue, Lord Stemdale, M.R. observed that in order that there be borrowed money there must be a borrower and a lender, and later, when the Revenue took the case in appeal to the House of Lords, the House of Lords laid down in Commissioners of Inland Revenue vs Port of London Authority, that to constitute bor rowed money there must be "a real borrowing and a real lending".
Again in Inland Revenue Commissioners vs Rowntree & Co. Ltd., , the Court of Appeal considered the meaning of the words 'borrowed money ' and observed that the words should not be given a strained meaning and that it should be considered whether in ordinary commercial usage the relationship was that of a borrower and a lender and the transactions were loan transactions.
These cases were relied upon by the Gujarat High Court in Commis sioner of Incometax, Gujarat Iv.
Rajkot Seeds, Oil & Bullion Merchants Association Ltd., in support of the conclusion that on the facts of the case before the High Court there was no relationship of borrower and lender between the Rajkot Seeds and Oil and Bullion Merchants Association and its members in so far as deposits by the members were concerned.
It was held that the amounts were deposited by way of security taken for the due performance of the, obligation of a member under the Rules of the Asso ciation for the discharge of his obligations to the Associa tion and to the other members of the Association.
There was no loan or borrowing at all.
This question had in fact been considered by the Calcutta High Court as long ago as Commis sioner of Excess Profits Tax, Central, Calcutta vs Bhartia Electric Steel Co. Ltd., in the context of the third proviso to Rule 5A of Schedule I to the Excess Profits Tax Act, 1940.
The money in question in that case had been obtained by the issue of shares, and it was held that it could not possibly be said that the persons who had taken up the deferred shares had ever intended to grant a loan or that the Company which had obtained money on the shares had ever intended to borrow.
This Court in Bombay Steam Navigation Co. (1953) Private Ltd. vs Commissioner of Income tax Bombay, , was dealing with a claim to deduction under section 10(2)(iii) of the Indian Income tax Act 1922 in a case where under an agreement certain assets were to be taken over by the assessee from the Scindia Steam Navigation Company Ltd., and part of the consideration was paid by the assessee while the balance remained unpaid.
For agreeing to deferred payment of the balance of the consideration, the Scindias 847 were to be paid interest.
This Court observed: "An agreement to pay the balance of consideration due by the purchaser does not in truth give rise to a loan.
A loan of money undoubtedly results in a debt, but every debt does not involve a loan.
Liability to pay a debt may arise from diverse sources, and a loan is only one of such sources.
Every creditor who is entitled to receive a debt cannot be regarded as a lender.
If the requisite amount of considera tion had been borrowed from a stranger, interest paid there on for the purpose of carrying on the business would have been regarded as a permissible allowance, but that is wholly irrelevant in considering the applicability of clause (iii) of sub section (2) to the problem arising in this case.
The legislature has under clause (iii) permitted as an allowance interest paid on capital borrowed for the purposes of the business: if interest be paid, but not on capital borrowed, clause (iii) will have no application .
" The point was also discussed by this Court in Madhav Prasad Jatia vs Commissioner of Income tax, U.P., ; where the question was whether the interest claimed under section 10(2)(iii) of the Indian Income tax Act, 1922 related to borrowing for the purpose of the business.
In the present case, Bye law No. 50 indicates that deposits were to be made by the producer members in the 'Loss Equalisation and Capital Redemption Reserve Fund ' for the purpose of making the partly paid shares fully paid up, and it was understood that the balance of the amount would be applied to the loan taken from the Industrial Finance Corporation of India and thereafter whatever remained would be refunded to the depositing members resulting in the extinction of the Fund.
It is apparent that the deposits made by the members cannot be regarded as loans advanced by the members to the assessee.
The moneys deposited represent ed contribution by the members for converting the partly paid up shares into fully paid up shares and thereafter for delaying the loan taken from the Industrial Finance Corpora tion of India.
Any balance remaining was to be refunded to the members.
The circumstances that there was no certainty that any balance would remain for refund to the members would in itself indicate that the deposits could not be regarded as loans.
A loan necessarily supposes a return of the money loaned.
Even under the original Bye law No. 50, which provided for deposits by the members to the 848 'Loss Equalisation and Capital Redemption Reserve Fund ', it was contemplated that the deposits would be accumulated and be utilised for repayment of the initial loan taken from the Industrial Finance Corporation of India and thereafter for redeeming the 'Government share ', and the balance of the deposit after meeting losses would be converted into share capital and each producer member would be issued shares of the assessee.
There was never any intention between the assessee and its members to treat the deposits made by the members as loans and that the relationship between the assessee and the members should be that of borrower and lender.
The High Court erred in holding that the claim to deduction on account of interest paid by the assessee to its members was admissible under section 36(1)(iii) of the Act.
It is urged by learned counsel for the assessee that if the claim to deduction cannot be rested on section 36(1)(iii) of the Act, it should be regarded as admissible under section 37 of the Act.
We are not satisfied that all the facts necessary for considering a claim for deduction under section 37 are before us.
It will be noticed in Madhay Prasad Jatia (supra) that the question of law expressly took in the claim to deduction not only with reference to section 10(1)(iii) but alternatively with reference to section 10(2)(xv) of the Indian Income tax Act, 1922.
Whether or not it is still open to the assessee to raise that question before the Appellate Tribunal when the case goes back to it for disposing it of in conformity with the opinion expressed by this Court in these appeals is a question on which we propose to express no view at this stage.
In the result the appeals are allowed, the impugned judgment of the High Court in all these cases is set aside and the first and the second questions framed by the Appel late Tribunal are answered in the negative, in favour of the Revenue and against the assessee.
There is no order as to costs.
R.S.S. Appeals allowed.
[/INST]Reliance Industries Ltd. (RIL) and Reliance Petrochemi cals Industries Ltd. (RPL) are inter connected and repre sented Companies in the large industrial house known as Reliance Group.
RIL had promoted RPL.
RPL was incorporated on 11.1.1988 and has been a cent percent subsidiary of RIL.
It was claimed that RPL would set up the largest petrochemi cal complex in India with foreign collaboration.
RPL pro posed to issue convertible debentures for raising capital for the project.
The Controller of Capital Issues (CCI), who functions under the had, on 15th September, 1984 by way of press release issued certain non statutory guidelines for approval of issue of secured con vertible and non convertible debentures.
These guidelines were subsequently amended on 8.3.1985.
Guidelines were also given by the CCI for issue of convertible cumulative prefer ence shares, and for employees stock option scheme.
RPL had, on 4.5.1988, made an application to CCI for issue of debentures of the face value of Rs.200 crores fully convertible into equity shares on the following terms: A sum of Rs. 10 being 5% of the face value of each deben tures by 44 way of first conversion immediately into one equity share at par on allotment; (ii) A sum of Rs.40 being the 20% of the face value of each debenture by way of second conversion after three years but before four years from the date of allotment at a premi um to be fixed by the Controller of Capital Issues; (iii) The balance of Rs. 150 representing 75% of the face value of each debenture as third conversion after five years but not later than seven years from the date of allot ment at a premium to be fixed by the Controller of Capital Issues.
The CCI accorded his sanction for the issue of deben tures on 4.7.1988.
However, the sanction was amended on 19th July, 1988.
The amendment put a non transferability condi tion on the preferential share holders of RPL.
It was limit ed to the corporate shareholders of RIL and relaxed for individual share holders of RIL.
The amendment also stipu lated that the Company should obtain prior approval of the Reserve Bank of India, Exchange Control Department, for the allotment of debentures to the non residents as required under the Foreign Exchange Regulation Act, 1973.
On 26th July 1988, there was another amendment which restricted the transfer of shares allotted to the employees of RPL and RIL.
The consent orders issued by the CCI were challenged in various High Courts, by way of writ petitions and a suit.
Some High Courts issued injunctions restraining the issue of the debentures.
This Court, on 19th August, 1988, restrained the afore said issuance of injunctions by the High Courts, and issued directions for the issue of debentures.
The cases pending in various High Courts were transferred to this Court.
In these transferred cases the consent orders of the CCI were challenged mainly on the grounds that: Despite the fact that RPL did not fulfil the require ments of a proper application and the necessary consent and approval, RPL 's application was.
entertained and processed by the CCI with undue expedition and without application of mind; The guidelines issued by the CCI himself were deviated from; 45 The CCI had processed the application of RPL in a hurry, within two months; The CCI did not take into account the fact that RIL had earlier issued debentures for manufacture of identical products; The CCI failed to note that RPL did not have the neces sary licences, consents and approvals, from the relevant departments of the Government of India; The CCI failed to consider the financial soundness and feasibility of the project of RPL; The CCI did not take adequate care to examine the terms of the issue and had blindly accepted the terms as proposed by RPL; RPL in its brochures has misled the public by describing the debentures as fully secured convertible debentures; The security for the debentures was inadequate; RPL has been permitted to create securities which would have priority over the securities available to the present debenture holders and without their consent; RPL has misled the public in that in its prospectus it had stated that security would be provided to the satisfac tion of the trustees; The CCI had failed to examine whether RIL had misused the funds raised on its debentures; There has been a discrimination in favour of RIL in that RIL would be entitled to allotment of shares of the face value of Rs.57.50 crores, whereas only 5% of the investment of the debenture holders could be converted; Whereas RIL 's loan of Rs.50 crores would be converted into shares at par, the debenture holders would have to pay premium to be fixed by the CCI at the time of second conver sion of 20% of the debentures; and In the application filed by RPL, no shares were ear marked for the employees of RIL and RPL, but ultimately it was done.
46 On behalf of the petitioners, it was contended inter alia that the issue of the debentures in question was detri mental to public interest, and that public interest had been ignored.
On behalf of Respondents it was argued that the sanction issued by the CCI had been genuine and valid, and that no irregularity had been committed.
It was submitted that it was a misconception that the CCI had not followed his own guidelines relating to sanction of the issue of the deben tures, and it was incorrect to say that there had not been proper security.
Dismissing the writ petitions and the suit, this Court, HELD: 1.1.
The CCI functions under the , an Act to provide for control over the issue of capital.
The purpose of the Act must be found from the language used.
The scheme and the language used, strict ly speaking, do not indicate any positive role for the CCI in discharging his functions in respect of grant of sanc tion.
But it has to be borne in mind that he is a part of State instrumentalities committed to the endeavours of the constitutional aspiration to secure justice social and economic and also under Article 39(b) & {c) of the Consti tution to ensure that the ownership and control of the material resources of the community are so distributed as to best subserve the common good and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment.
Yet, every instrumentality and functionary of the State must fulfil its own role and should not trespass or encroach/entrench upon the field of others.
Progress is ensured and development helped if each performs his role in the common endeavour.
[90B; 124F H; 125A] 1.2.
In the changed socio economic conditions of the country one who is charged to ensure capital investment has to perform a social role in capital formation and to protect the interest of the capital market, and to oversee the growth of industrialisation and investment in such a manner as to ensure employment and demand in the national economy, to prevent wasteful investment and to promote sound methods of corporate finance.
In recent years, there has been a vast increase in the number of members of public who have surplus money to invest.
The size of the issues has assumed macro proportions and the type of investments are also more so phisticated.
Entrepreneurs with expert legal assistance could easily trap unwary investors and the development of a public interest lobby that can scrutinise issues carefully and advise prospective investors may be desirable.
[125A, B, F, G] 47 1.3.
The guidelines are only a guide and nothing more.
The application of mind by the CCI before sanction must be in the perspective for which he is enjoined by the Act.
He must endeavour to secure a balanced investment of the coun try 's resources in industry, agriculture and social serv ices.
The Controller should perform the role of social control and fulfil the social purpose in conjunction with other authorities and functionaries.
It is necessary for him in the discharge of his functions to ensure that there is not too much concentration of particular industries in particular areas, and that there is a scientific development and proper investment in key and core projects.
[125C D] 1.4.
The duties of the CCI have to be construed in the context of the above, particularly when there is no clear cut delineation of their scope in the enactment.
This is also reinforced by the expanding scope of the guidelines issued under the Act from time to time and the increasing range of financial instruments that enter the market.
The responsilbilities of the CCI in this direction should not be widened beyond the range of expeditious implementation of the scheme of the Act and should, atleast be restricted and limited to ensuring that the issue to which he is granting consent is not, patently and to his knowledge, so manifestly impracticable or financially risky as to amount to a fraud on the public.
While it is true that some procedure may have to be evolved to ensure that the CCI gets the benefit of the comments, suggestions and objections from the public before arriving at his decision whether to grant consent or not, and if so, on what terms and conditions, it will be too cumbersome to have a provision that the details of every proposed application for consent should be publicised to the maximum extent by the CCI, that objections and comments from the public should be called for, that there should be public hearing by the CCI and that he should pass a reasoned order granting or withholding consent.
That would delay the whole process of approvals which should be as expeditious as possible.
[93C E; 125G H; 126A B] 1.5.
The CCI has also a role to play in ensuring that public interest does not suffer as a consequence of the consent granted by him.
To go beyond this and require that the CCI should probe in depth into the technical feasibili ties and financial soundness of the proposed projects or the sufficiency or otherwise of the security offered and such other details may be to burden him with duties for the discharge of which he is as yet ill equipped.
[93D F] 1.6.
Being non statutory in character, the guidelines are not judicially enforceable.
A policy is not law.
A statement of policy is not a 48 prescription of binding criterion.
The competent authority might depart from these guidelines where the proper exercise of his discretion so warrants.
In the instant case, the statute provided that rules can be made by the Central Government only.
And according to section 6(2) of the Act, the competent authority has the power and jurisdiction to con done any deviation from even the statutory requirements prescribed, under sections 3 and 4 of the Act.
The CCI applied his mind to the facts of this case and the factors in general.
The CCI did not act malafide or on extraneous consideration.
[122D F; 124B D] Fernandez vs State of Mysore, ; ; R. Abdullah Rowther vs State of Tansport, etc., AIR 1959 SC 896; Dy.
Iron & Steel Controller vs Manekchand Pro prietor; , ; Andhra Industrial Work vs CCI & E, ; ; K.M. Shanmugham vs S.R.V.S. Pvt. Ltd., ; ; Sagnata Investments Ltd. vs Norwich Corpn., ; British Oxygen Co. vs Board of Trade, ; , relied on.
Ramanna Dayaram Shetty vs International Airport Authori ty; , ; Motilal Padampat Sugar Mills vs Uttar Pradesh, ; ; Ex P. Khan, [1981] 1 All.
E.R. 40; IRC vs National Federation, ; ; Reqina vs Preston Supplementary, ; Council of Civil Service Unions & Others vs Minister for the Civil Service, , referred to.
Foulkes ' Administrative Law, 6th Edn.
pp 181 to 184, re ferred to. 2.
As regards the contention that the sanction of the CCI was accorded with undue haste and favouritism, in the first place, an application of this type is intended to be disposed of with great expedition.
In a project of the type proposed to be launched by the petitioner, passage of time may prejudicially affect the applicant and it is not only desirable but also necessary that the application should be disposed of within as short a time as possible.
It is, therefore, difficult to say that the period of two months taken in granting consent in the present case is so short that an inference of haste must follow.
Secondly, on behalf of the Union of India, a list of various applications re ceived and disposed of by the office of the CCI between September, 1987 and September, 1988 has been produced to show that, generally speaking, these applications are dis posed of within a month or two.
It is true that none of these issues is of the same colossal magnitude as the present issue.
Nevertheless, the CCI could hardly keep the application pending merely because the amount involved is heavy.
It is not possible therefore to say merely from the 49 short span of time that there was a hasty grant of consent in the present case.
[73G H;74A C] 3.1.
The consent of the CCI was not accorded in igno rance of the facts pertaining to the G series of RIL deben tures.
The application for consent makes it clear that the petitioner company is a new company promoted by RIL and that RIL was promoting this company to manufacture High Density Polyethylene (HDPE), Poly Vinyl Chloride PVC and Mono Ethyl ene Glycol (MEG).
The application refers to the fact that the total cost of the project was expected to be Rs.650 crores and that this cost had been approved earlier in 1985.
Considering that RPL had come into existence only on 11.1.1988, this was a clear indication that the projects for which the debenture issue was being proposed were projects which had been mooted even by the RIL as early as 1985.
Again in the detailed application form submitted by the RPL it has been mentioned that the RIL had already obtained approval of the Central Government for implementation of the aforesaid projects under the MRTP Act.
In part C of the application form it has been mentioned that the promoter company had made necessary applications for endorsement in favour of the company of the Letter of Intent/Industrial Licences already issued by the Central Government under the Industries (Development & Regulation) Act, 1951, in the name of the holding company, viz., RIL.
It is, therefore, ex tremely difficult to agree that the fact of issue of the earlier series of debentures by the RIL or the purposes thereof could have escaped the notice of the CCI, particu larly, when it is remembered that the issue of G series of debentures by the RIL was quite recent and had also attract ed a lot of publicity.
[74D H; 75C D] 3.2.
The CCI was not performing the role of a social mentor taking into account the purpose of RIL.
If RIL has misutilised any of its funds or the funds had not been utilised for G series, then RIL would be responsible to its shareholders or to authorities in accordance with the rele vant provisions of the .
This aspect does not enter into sanctioning the capital issue for the new project in accordance with the guidelines.
Even if RIL and RPL have to be treated as one for this purpose and the grant of consent for earlier debenture issues in favour of RIL are to be taken into account in judging the necessity of the issues, there is no illegality or irregularity in the grant of consent to RPL.
RIL had not been able to utilise any part of the 'G ' series of debentures on the MEG project as there had been a cost overrun and it was decided to have a wholly owned subsidiary.
Hence the projects are those of the RIL to be implemented by RPL.
The additional finances were needed for the extension, expansion and diversification of 50 the projects originally envisaged.
This is one of the ob jects for which a debenture issue is permissible under the guidelines.
[101F H; 102A, B] 4.1.
So far as HDPE is concerned, it appears that there was a valid licence; and it may be mentioned that on 24th August, 1985 pursuant to an application made by RIL under section 22(3)(a) of the MRTP Act, the Govt.
granted approval for the establishment of a new undertaking for manufacture of HDPE.
[77F] 4.2.
Regarding foreign collaboration, an application was made by RIL in 1984 for approval of foreign collaboration with M/s Du Pont Inc. Canada, for manufacture of HDPE.
The approval was given and the validity was extended and the foreign collaboration approval was endorsed in favour of RPL on 12th October, 1988.
Similar other consents were there.
Finally, capital goods clearance was endorsed in favour of RPL for the PVC project on 12th August, 1988.
Capital goods clearance was also endorsed in favour of RPL for HDPE project on 23rd August, 1988.
Thus, it will be seen that all the basic groundwork had already been done by the RIL.
[77G, H; 78A] 4.3.
On 16th June, 1987 by a Press Note issued by the Deptt.
of Industrial Development in the Ministry of Industry of the Govt.
of India declared that where a transferee Company is a fully owned subsidiary of the Company holding the Letter of Intent or licence, the change of the Company implementing the project would be approved.
It is in the light of this that the Board of RIL on 30th December, 1987 passed a resolution to incorporate a 100% subsidiary Company whose main objects were to implement the licences/Letters of Intent received by RIL and to carry on the activities relat ing to production and distribution.
The resolution approved the name of the Company as RPL.
On 11th January, 1988 the RPL was incorporated and the Certificate of Incorporation was issued.
Thereafter, on 12th January, 1988 letters were written by RIL for endorsement of licences/Letters of Intent in favour of RPL.
The certificate of commencement of busi ness was thereafter issued.
[78B E] 4.4.
The Press Note is clear that the transfers from one company to an allied company were considered unexceptionable except where trafficking in licences is intended.
In this situation the change of name from RIL to RPL, of the li cences, letter of intent and other approvals was only a matter of course and much importance cannot be attached to the fact that CCI did not insist upon these endorsements being obtained even before the letter of consent is granted.
In any event the letter of 51 consent is very clear.
Clause (h) of the conditions attached to the consent letter makes it clear that the consent should not be construed as exempting the company from the operation of the provisions of the Monopolies & Restrictive Trade Practices Act, 1969, as amended.
Clause (c) makes it clear that it is a condition of this consent that the company will be subject to any measures of control, licensing, or acqui sition that may be brought into operation either by the Central or any State Government or any authority therein.
Under clause (t) the approval granted is without prejudice to any other approval/permission that may be required to be obtained under any other Acts/laws in force.
Having regard to the above and also to the terms and conditions of the consent letter, the grant of consent itself being condi tioned on RPL obtaining the necessary approvals, consents and permissions before embarking on the project, there was no impropriety in the CCI granting the consent without waiting for the formal endorsement of the various licences, letters and approvals in favour of RPL.
Moreover, CCI is aware of the progress of the various applications made by the company.
The Controller is also aware that the ICICI had looked into the financial soundness and feasibility of the project and there is material to show that the comments of the ICICI were made available to him.
When a project is being appraised by the institution like the ICICI and when the CCI is also aware, by reason of the participation of his representatives at the meetings of the Department of Indus try and the Department of Company Affairs about the stage or outcome of the proposals made under the IDR and MRTP Acts, it is clear that the CCI did not overlook any crucial aspect and that his grant of consent in anticipation of the neces sary transfers to the RPL was based on a practical appraisal of the situation and fully in order.
[78F H; 79A, B; 80B D] 5.
There has been sufficient compliance with the guide lines on the quantum of issue, debt equity ratio, interest rate and the period of redemption.
There was sufficient security for the debentures in the facts and circumstances of this case.
The preference in favour of shareholders of RIL was justified and based on intelligible differentia.
Indeed, if one considers the role of the CCI, he is primari ly concerned to ensure a balanced investment policy and not to guarantee the solvency or sufficiency of the security.
Most of the criticisms directed against deviation from guidelines were misplaced.
[94G, H; 95A, B] 6.1.
The discrimination alleged is on two grounds.
The first is that RIL is entitled straightaway to the allotment of shares of the face value of Rs.57.50 crores whereas only 5% of the investment by the debenture holders can be con verted into shares at par simultaneously 52 with the issue.
The second is that a loan of Rs.50 crores advanced by RIL to RPL will be converted into shares at par at the end of 3 years whereas the debenture holders will have to pay a premium even for converting 20% of their debentures into shares by that time.
These allegations do not bear scrutiny.
So far as the first ground is concerned, there is no justification for a comparison between these two categories of investors.
RIL is the promoter company which has conceived the projects, got them sanctioned, invested huge amounts of time and money and transferred the projects for implementation to RPL.
It is, therefore, in a class by itself and there is nothing wrong if it is allotted certain shares in the company, quite independently of the debenture issue, in lieu of its investments.
So far as the second ground is concerned, it overlooks certain disadvantages attached to RIL in regard to the loan of Rs.50 crores ad vanced by RIL as compared with the investor in the deben tures.
Firstly, RIL 's advance is interest free for 3 years whereas the debenture holders got interest at the rate of 12.5% during the period.
Secondly, the debenture loan is secured while the RIL 's are not.
Thus the debenture holders have certain benefits which RIL does not have and, if the debenture holders have the disadvantage of having to pay a premium, that cannot constitute basis for a ground of dis crimination.
[103E H; 104 A, B] 6.2.
RPL is a company not the State or a State instru mentality that is issuing the shares and debentures.
It is entirely for the company to issue the shares and debentures on such terms as they may consider practicable from their point of view.
There is no reason why they should not so structure the issue that it confers certain great advantages and benefits on the existing share holders or promoters than on the new subscribers.
It is not permissible for the CCI to withhold consent only for this reason or to stipulate that consent can be given only if the share holders and promoters as well as prospective debenture holders are all treated alike.
The subscribers to the debenture are only lenders to the company who have an option to convert their debt into equity on certain terms.
It is perfectly open to the sub scribers to balance the pros and cons of the issue and to desist from taking the debentures if they feel that the dice are loaded unfavourably in favour of the "proprietors" of the company.
[104B E] 7.1.
In the present case, a legal mortgage has been created by RPL in favour of the trustees in respect of its immovable and movable assets, except book debts, in respect of which financial institutions will hold a first charge on account of foreign loan.
RPL does not have any existing loans.
Therefore, the charge in favour of the debenture holders 53 iS presently the first charge.
No further borrowing is contemplated at this stage except the foreign currency loan to the extent of Rs.84 crores.
Even if the value of the foreign currency which has been sanctioned in principle by the three financial institutions is taken into account, the assets coverage goes down at each stage and does not make any critical difference to the value of the security of the debenture holders under the Trust Deed.
The purposes of borrowings, namely, term loan borrowings, deferred payment credits/guarantees and borrowing for financing new projects do not, on analysis, raise any difficulty.
There are suffi cient in built checks and controls.
The company, being an MRTP company would have to obtain both MRTP permission for creating any security irrespective of its value and fresh CCI consent under the CCI Act, except in case of exempted securities.
[119G, H; 120A C] 7.2.
With the escalation in the value of the fixed assets due to passage of time on the one hand and the re demption of a good portion of the debentures by the end of three years on the other, the security provided is complete and, in any event, more than adequate to safeguard the interests of the debenture holders.
[96G, H] 8.
Clauses 5 and 6 are only enabling clauses and in the nature of permitting the Company, despite the mortgage in favour of the debenture holders, to carry on his business normally.
What is referred to therein as residual charge is really a floating charge.
The Company 's normal business activities would necessarily involve alienation of some of its assets from time to time such as goods manufactured by it as well as procurement and discharge of loan and accommo dation facilities from banks, financial institutions and others.
The entire progress of the company would come to a standstill in the absence of such enabling provisions.
They are not only usual but essential because the basic idea is that the finances raised by the debentures should be em ployed for running the project profitably and thereby gener ate more and more funds and assets which will also be avail able to the debentures holders.
Further what the clauses provide is only that the consent and concurrence of the debenture holders need not be obtained by the company before creating securities that may have priority over the present issue of debentures.
But the trustees for the debenture holders have to concur before the company can raise any future borrowings and create, therefor, the security which will have priority over the security available to the present debenture holders.
The ICICI is not only a financial institution in the public sector but also one of the insti tutions financing the project and thus has a stake in its success and so can be trusted to safeguard the interests of the debenture holders.
The debenture trust 54 deed also contains a provision by which at the time of creation of any future charge the terms and ranking have to be agreed upon between RPL and ICICI.
Clause 16 of the trust deed authorises the trustees to intervene and crystallise the charge in certain circumstances and stultify an attempt by the company to create higher ranking charges.
There are also restraints on the company under the and the MRTP Act involving the consent of public financial institutions, Commercial Banks, the term lenders, share holders, the MRTP Commission, the Central Govt.
and the CCI before the creation of such securities.
[98B H; 99A, E, F] 9.
In certain brochures and pamphlets issued by RPL, the debentures were described as "fully secured convertible debentures".
The company admitted that there was such a description but explained that this was due to an oversight; the words "fully secured convertible debentures" were print ed in some brochures instead of the words "secured fully convertible debentures" without meaning or intending any change.
It was stated that the company 's representation was that the debentures were "secured fully convertible" ones.
This is also what had been set out in the application for consent.
Though the company did claim that the debentures were also fully secured, the emphasis in the issue was that the debentures were fully convertible and secured.
This explanation is plausible.
No importance or significance need be attached to the different description in some places.
particularly.
in the context of the nature of security actually provided for the debentures.
[95F H; 96A] 10.
Prospectus issued by RPL is not misleading because it stated that security will be provided to the satisfaction of the trustees and the CCI accepted that statement in the application for consent.
The debenture trustees are well known financial institutions and it is not possible for the CCI to ensure more than the usual practice which was fol lowed in the present case.
[100D, E] 11.
The CCI modified paragraph 5 of the consent by his letter of the 19th July, 1988 to say that allotment to the employees shall not exceed 50 debentures per individual.
It does not appear that the restriction of the allotments to the employees was at the instance of the Company; nor does it seem that any discrimination was intended in respect of the allotments to the employees.
Nor has attention been invited to any legal requirements or guidelines prescribing any fixed or minimum quota of allotment to the employees of the Company.
Under the circumstances, the question of dis crimination does not arise.
[107C, D] 55 12.
The consent order of the CCI clearly indicated that the consent conveyed in the letter shall lapse on the expiry of 12 months from the date thereof.
The consent order cate gorically stated that the approval was without prejudice to any other aPproval/permission that may be required to be obtained under any other Acts and laws in force.
It neces sarily follows that the obligation to obtain other permis sions continued.
There was no legal conditions that other approvals should be examined by the CCI before grant of its own consent.
As defined in the , a debenture need not be secured.
Therefore, guideline 10 means that security should be provided as is customarily adopted in corporate practice.
In the present case, the debentures are compul sorlly convertible and so no repayment is really involved.
The debenture is essentially an acknowledgement of debt with a commitments to repay the principal with interest.
The question of security becomes relevant for the purpose of payment of interest only in the unlikely event of winding up.
The guidelines did not provide for the quantum and the nature of the security.
A debenture may, therefore, be secured or unsecured.
An ordinary debenture has to be dis tinguished from a mortgage debenture which necessarily creates mortgage on the assets of a Company.
A compulsorily convertible debenture does not postulate any repayment of the principal and so does not constitute a debenture in the classic sense.
Even a debenture which is only convertible at option has been recognised as a hybrid debenture.
The guide lines for the protection of debenture holders issued on 14.1.1987 recognise the basic distinction between converti ble and non convertible debenture.
Compulsorily convertible debentures in corporate practice were adopted in India sometime after 1984.
Wherever the concept of compulsorily convertible debenture is involved, various guidelines issued by the Government of India treat them as equity and not as loan or debt.
Even a non convertible debenture need not always be secured.
In fact, modern tendency is to raise loan by unsecured stock which does not create any charge on the assets of a Company.
Whenever a security is created, it is invariably in the form of a floating charge.
In addition they are frequently secured by a trust deed as in the present case where specific property/land etc.
has been mortgaged to the trustees.
In the instant case, if the permission of the debenture holders were required or is insisted upon to create future security, 2.5 million debenture holders have to be informed and invited for the meeting.
The extravagant effects of this course would be collosal especially when a shareholders meeting is also additionally called for the same 56 body of persons.
It is, therefore, incorrect to say that a floating charge creates an illusory charge because future securities can be created ranking in priority over it.
[118D E] The British India Steam Navigation Co: vs The Commis sioner of Inland Revenue, ; Re.
Colonial Dusts Corporation, ; Speyar Brothers vs The Commissioner of Inland Revenue, ; Lemon vs Austin Friars Investment Trust Ltd., ; Flor ence Land & Public Works Co., ; Re.
Panama, New Zealand, and Australian Royal Mail Co., ; Re. Standard Manufacturing Co., ; Re.
Borak Foster vs Borax Co., ; Creatnor Maritime Co. Ltd. vs Irish Marine Management Ltd., referred to.
Palmer 's Company Law, 24th Edn.
672, 675, 676, 706; The Encyclopaedia of Forms and Precedents, 4th Edn., Vol.
6 p. 1094, 1095, 1097, 1098, referred to.
The Court, would be reluctant to interfere simply because one or more of the guidelines have not been adhered to even where there are substantial deviations unless the deviations are by nature and extent such as to prejudice the interests of the public which it is their avowed object to protect.
Per Contra, the Court would be inclined to overlook or ignore such deviations, if the object of the statute and public interest warrant, justify or necessitate such devia tions in a particular case.
Judicial control takes over only where the deviation either involves arbitrariness or dis crimination or is so fundamental as to undermine a basic public purpose which the guidelines and the statute under which they are issued are intended to achieve.
In the in stant case, there is no such infraction of the norms re quired to be followed in granting the sanction.
[123F H; 124A, B] 15.
Before the Courts grant any injunction they should have regard to the principles of comity of courts in a federal structure and have regard to self restraint and circumspection.
It may be impossible to lay down hard and fast rules of general application because of the diverse situations which give rise to problems of this nature.
Each case has its own special facts and complications and it will be a disadvantage, rather than an advantage, to attempt and apply any stereo typed formula to all cases.
Perhaps in this sphere, the High Courts themselves might be able to intro duce a certain amount of discipline having regard to the principles of comity of courts administering the same gener al 57 laws applicable all over the country in respect of granting interim orders which will have repercussion or effect beyond the jurisdiction of the particular courts.
Such an exercise will be a useful contribution in evolving good conventions in the federal judicial system.
[126F, G; 127A] [Having considered the facts and circumstances of the present cases, this Court directed refund of the sum of Rs.one lakh deposited RPL as ordered by the Court on 9.9.1988.
The deposit amount was meant for payment to the petitioners in case they were to spend unduly.]
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<s>[INST] Summarize the judgementivil Appeal No. 871 of 1962.
Appeal by special leave from the judgment and decree dated August 13, 1959, of the Madhya Pradesh High Court in Second Appeal No. 294 of 1959.
S.P. Sinha and M. 1.
Khowaja, for the appellant.
S.T. Desai and A. G. Ratnaparkhi, for the respondent.
This appeal arises from a suit filed by the appellants who are the representatives of residents of Nayapara Ward in particular and of the Muslim community of Raipur in general, in which they claimed an injunction restraining the respondent, Municipal Committee of Raipur, from committing acts of encroachment on their rights and the rights of 301 the Muslim community in holding Urs and other ceremonies on the plot in suit.
It appears that at Raipur, there is a piece of land called "Fazle Karim 's Bada" Khasra No. 649 measuring 4.62 acres.
Inside this Bada, there are three or four Municipal Schools.
The office of the Electric Power House is also located in one corner of the land.
Behind the School, there is a Pakka platform known as "Syed Baba 's Mazar".
Near the Electric Power House, there is a raised earth platform on which there is a flag.
This flag is called "Madar Sahib 's Jhanda".
Surrounding this land.
there is a brick wall which was made by the respondent several years past.
According to the plaint, Urs function is held every year in front of Syed Baba 's Mazar for the last several years.
On or about the 22nd October, 1956, the employees of the respondent started digging foundation at the places A, B, C and D shown on the map attached to the plaint.
These digging operations were commenced under the directions of the respondent.
because the respondent intended to construct another school building on the plot.
The appellants then served a notice on the respondent to desist from carrying on the digging operations on the ground that the property on which the said operations were being carried out, was a part of the wakf property.
When the respondent did not comply with the requisition contained in the said notice, the present suit was filed by the appellants on October 29, 1956.
This suit has been flied under O.1 r. 8 of the Code of Civil Procedure.
The case of the appellants is that the plot of land in suit was old Kabrasthan known as "Chuchu 's Takia", and is a permanent inalienable wakf property.
On this plot are tombs of renowned saints like Syed Baba.
and Madar Sahib 's Jhanda.
On a part of the plot.
every year Urs and other religious functions are performed.
In fact, the land has been registered under the Madhya Pradesh Public Trusts Act (No. 30 of 1951) (hereinafter called the Act) as trust property; as such, the respondent can claim no right or title to the said land.
That is the basis on which the appellants claimed injunction against the respondent.
The respondent disputed this claim.
It was urged in the written statement filed by the respondent that the land was never and could never be wakf property.
There was no tomb on the land.
There are only two so called tombs.
but they have no significance.
The Urs is of very recent origin and it is allowed to be held with the licence of the respondent.
The plot originally, belonged to private persons and had been acquired by the Government in land acquisition proceedings in 1910 11.
The respondent got the said land from the Government in 1922.
In 1932 33.
the Deputy Commissioner fixed rent of the land which is being paid by the respondent eversince.
On this land, the respondent has constructed some schools, and a part of the land which is lying vacant is allowed to be used by the people of the neighbourhood for traffic.
The respondent thus has full right to 302 construct on its own plot of land.
The representative character of the appellants was disputed by the respondent and their right to file the present suit was challenged.
On these pleadings, several.
issues were framed by the learned trial Judge.
They covered the title of appellants, the title of the respondent, and the right of the appellants to file the suit.
The issue with which we are concerned in the present appeal related to the registration of the plot in the register kept under the relevant provisions of the Act and its effect.
The appellants ' contention was that the said registration was conclusive against the respondent and in favour of the appellants ' claim.
This contention was rejected by the trial Judge, with the result that the appellants ' suit was dismissed.
With the findings recorded by the learned trial Judge on the other issues we are not concerned in the present appeal.
The matter then went in appeal.
and the appellate Court confirmed the conclusions recorded by the trial Court and dismissed the appeal.
The appellants challenged the correctness of the said appellate decree by preferring a second appeal in the High Court of Madhya Pradesh.
but the second appeal also failed.
and that has brought the appellants to this Court by special leave.
Thus. it would be noticed that the appellants have failed on the merits of their claim in all the courts below.
and the technical point raised by them that the registration of the plot under the relevant provisions of the Act concluded the matter.
has also been rejected.
It is this last point which has been urged before us by Mr. Sinha on behalf of the appellants.
Before we deal with this point.
however, it would be relevant to mention how the property came to be entered in the register kept under the relevant provisions of the Act.
The record shows that the Masjid Nayapara.
Raipur had been entered in the register as a public trust on June 25.
1954 in Case No. 23XXXiii/7 of 1952 53.
certain properties were entered in the said register in respect of this trust.
In 1956.
Abdul Karim.
Mutawali Masjid Naypara Raipur applied to the SubDivisional Officer.
Raipur alleging that the property now in suit also belonged to the public trust and should be included amongst its properties.
On this application, public notice was issued calling upon persons interested in the property to show cause why it should not be added to the properties of the wakf.
No objection was.
however.
received and on October 23.
the Sub Divisional Officer reported that the poperty be shown against the trust.
The said report was sanctioned by the Registrar.
Public Trusts on April 22.
That is how the property came to be registered as belonging to the public trust.
and it is on this entry that the whole argument of the appellants is based.
In considering the validity of the contention raised by Mr. Sinha before us.
it is necessary to examine broadly the scheme 303 of the Act and the material provisions on which Mr. Sinha relies.
The Act was passed in 1951 to regulate and to make better provision for the administration of public religious and charitable trusts in the State of Madhya Pradesh.
Section 2(4) of the Act defines a "public trust", and section 2(8) defines a "wakf". 'Working trustee ' is defined by section 2(9).
Section 3(1) provides that the Deputy Commissioner shall be the Registrar of public trusts in respect of every public trust; and section 3(2) imposes on the Registrar the obligation to maintain a register of public trusts, and such other books and registers and in such form as may be prescribed.
Section 4(1) deals with the registration of public trusts and in requires that within three months from the date on which the said section comes into force in any area or from the date on which a public trust is created, whichever is later, the working trustee of every public trust shall apply to the Registrar having jurisdiction for the registration of the public trust.
Section 4(3) lays down the particulars which have to be stated by the application which is required to be made under section 4(1).
All these particulars are in relation to the nature of the trust, its properties, the mode of succession to the office of the trustees, and other allied matters.
Section 4(4) empowers the Registrar to decide the merits of the application, while section 4(5) provides for an appeal against his decision which is required to be filed within 30 days of the order.
Mr. Sinha relies on a specific provision contained in section 4(5) which says that subject to the decision in such appeal.
the order of the Registrar under sub section (4) shall be final.
Section 4(6) requires the signing and verification of the application in the manner laid down in the code of Civil Procedure for signing and verifying plaints.
That takes us to section 5 which deals with the enquiry to be held by the Registrar on the application made before him under section 4(1).
Eight points are set down under section 5(1) which the Registrar has to consider.
Section 5(2) lays down that the Registrar shall give in the prescribed manner public notice of the inquiry proposed to be made under sub section (1) and invite all persons interested in the public trust under inquiry to prefer objections, if any, in respect of such trust.
Under section 6, the Registrar has to make his findings on the point specified by section 5(1); and under section 7, the Registrar causes entries to be made in the Register in accordance with his findings.
Section 7(2) naturally lays down that the entries made under section 7(1) shall be final and conclusive.
Section 8(1) allows a civil suit to be filed against the findings of the Registrar within six months from the date of the publication of the notice under section 7(2); such a suit can be filed by a working trustee or a person having interest in a public trust or any property found to be trust property.
Section 9 permits applications to be made for change in the entries recorded in the register.
It will be recalled that the application which was made in 1956 by Abdul Karim was under the provisions of section 9(1).
If an application is made for change in 304 the entries as, far instance, for adding to the list of properties belonging to the trust, a proceeding has to be taken for making the said change and this is prescribed by section 9(2).
Section 9(3) makes the provisions of section 8 applicable to any finding under section 9 as they would apply to a finding under section 6.
These provisions are contained in Chapter II of the Act.
Chapter III deals with the management of trust property; Ch.
IV with the problem of audit; Ch.
V with control; and Ch.
VI contains miscellaneous provisions, including section 35 which confers the rule making power on the State Government.
That, broadly stated, is the nature of the scheme of the Act and the material provisions which fall to be considered in the present appeal.
Mr. Sinha relies on the fact that under section 4(5) of the Act, the decision of the Registrar is made final, subject to the appellate decision, if any; and he also refers to the right of instituting a suit reserved by section 8.
His argument is that if any person who claims interest in the property which is alleged to be trust property fails to satisfy the Registrar about his claim, he can file a suit under section 8(1).
Section 8(1) allows a suit to be filed, subject to the conditions prescribed by it, and the right to file such a suit is given to a working trustee, or a person having interest in a public trust or any property found to be trust property.
The respondent is interested in the property in suit which is found to be trust property, and since it did not avail itself of the right to file a suit within the specified time, the order passed by the Registrar must be held to be final and conclusive against its claim.
If finality does not attach to such an order even after six months have expired within the meaning of section 8(1), then the provision contained in section 4(5) will serve no purpose whatever.
That is the manner in which Mr. Sinha has presented his case before us.
We are not impressed by this argument.
In testing the validity of this argument, we must bear in mind the important fact that the Act is concerned with the registration of public, religious and charitable trusts in the State of Madhya Pradesh, and the enquiry which its relevant provisions contemplate is an enquiry into the question as to whether the trust in question is public or private.
The enquiry permitted by the said provisions does not take within its sweep questions as to whether the property belongs to a private individual and is not the subject matter of any trust at all.
It cannot be ignored that the Registrar who, no doubt, is given the powers of a civil court under section 28 of the Act, holds a kind of summary enquiry and the points which can fall within his jurisdiction are indicated by clauses (i) to (x) of section 4(3).
Therefore, prima facie.
it appears unreasonable to suggest that contested questions of title, such as those which have arisen in the present case, can be said to fall within the enquiry which the Registrar is authorised to hold under section 5 of the Act.
Besides, it is significant that the only persons who are required to file their objections in response to a notice issued by the 305 Registrar on receiving an application made under section 4(1), are persons interested in the public trust not persons who dispute the existence of the trust or who challenge the allegation that any property belongs to the said trust.
It is only persons interested in the public trust, such as beneficiaries or others who claim a right to manage the trust, who can file objections, and it is objections of this character proceeding from persons belonging to this limited class that fall to be considered by the Registrar.
It cannot be said that the respondent falls within this class; and so, it would be idle to contend that it was the duty of the respondent to have filed objections under section 3(2).
It is true, section 8(1) permits a suit to be filed by a person having interest in the public trust or any preperty found to be trust property.
The interest to which this section refers must be read in the light of section 5(2)to be the interest of a beneficiary or the interest of a person who claims the right to maintain the trust or any other interest of a similar character.
It is not the interest which is adverse to the trust set up by a party who does not claim any relation with the trust at all.
That is why we think the finality on which Mr. Sinha 's argument is based cannot avail him against the respondent inasmuch the respondent was not a party to the proceedings and could not have filed any objections in the said proceedings.
Then again, the right to file a suit to which section 8(1) refers is given to persons who are aggrieved by any finding of the Registrar.
Having regard to the fact that the proceedings before the Registrar are in the nature of proceedings before a civil court, it would be illogical to hold that the respondent who was not a party to the proceedings can be said to be aggrieved by the findings of the Registrar.
The normal judicial concept of a person aggrieved by any order necessarily postulates that the said person must be a party to the proceedings in which the order was passed and by which he feels aggrieved.
It is unnecessary to emphasise that it would be plainly unreasonable to assume that though a person is not a party to the proceedings and cannot participate in them by way of filing objections, he would still be bound to file a suit within the period prescribed by section 8(1) if the property in which he claims an exclusive title is held by the Registrar to belong to a public trust.
Similarly, the right to prefer an appeal against the Registrar 's order prescribed by section 4(5) necessarily implies that the person must be a party to the proceedings before the Registrar; otherwise how would he know about the order? Like section 8(1), section 4(5) also seems to be confined in its operation to persons who are before the Registrar, or who could have appeared before the Registrar under section 5(2).
The whole scheme is clear, the Registrar enquires into the question as to whether a trust is private or public, 306 and deals with the points specifically enumerated by section 4(3).
Therefore, we have no hesitation in holding that the courts below were right in coming to the conclusion that the fact that the property now in suit was added to the list of properties belonging to the wakf, cannot affect the respondent 's title to it.
On the merits, all the courts below have rejected the appellants ' case and have upheld the pleas raised by the respondent in defence.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]The first appellant, who was the Mutawalli of a public trust, filed a representative suit for an injunction restraining the respondent from committing acts of encroachment on the suit property, on the ground that the property was that of the trust and had been so registered by the Registrar of Public Trusts, under the Madhya Pradesh Public Trusts Act, 1951.
The suit was dismissed by the trial court and also on appeal.
In their appeal to the Supreme Court the appellants contended that, since the respondent did not avail itself of the ,right to file a suit within the specified time, the order passed by the Registrar must be held to be final and conclusive against the respondent.
HELD: The fact that the property in suit was added to the list of the properties belonging to the trust, could not affect the respondent 's title to it.
[306 A B] The enquiry which the Act contemplates is an enquiry into the question as to whether a trust is public or private and does not take within its sweep questions as to whether a property belongs to a private individual and is not the subject matter of any trust at all.
The only persons who are required to file their objections in proceedings before the Registrar are persons interested in the public trust not persons who dispute the existence of the trust or who challenge the allegation that any property belongs to the said trust.
Inasmuch as the respondent was not a party to the proceedings and could not have filed any objections in the proceedings the respondent was not bound to file an appeal under section 4(5) of the Act or a suit under section 8(1), challenging order of the Registrar.
Therefore, the finality given to the finding of the Registrar could not be availed of by the appellant as against the respondent.
[304 G; 305 A B, D E]
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<s>[INST] Summarize the judgementAppeal No. 442 of 1965.
Appeal from the judgment and decree dated August 10, 1961 of the Bombay High Court in Appeal No. 23 of 1960.
H.R. Gokhate, P. N. Duda, and J. B. Dadachanji, for the appellant.
H. M. Seervai, Advocate General for the State of Maharashtra, R. Gopalakrishnan and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought, by certificate, from judgment of the Bombay High Court dated August 10, 1961 by which the appeal of the respondent against the judgment of section M. Shah, J. of that High Court was allowed and the suit of the appellant was dismissed.
The appellant was a member of the Bombay Medical Service, Class 11 and as such was an employee of the State of Maharashtra.
In 1943, the appellant was posted at the Civil Hospital, Ahmedabad and on February 18, 1950 he was in charge of the Medico Legal Section of that hospital.
On January 19, 1950, one Nabimahomed complained to Mr. Rathod, Sub Inspector of Police ' Anti Corruption Branch, Ahmedabad, 580 implicated by the Anti Corruption Branch of the Police and asking him to consider the representation before giving his sanction for prosecution of the appellant and before making an order of suspension.
The Surgeon General forwarded the report of Sub Inspector, Mr. Rathod as well as the representation of the appellant to the State Government by his letter dated February 1, 1950.
He requested the Government that in the circumstances mentioned in the Sub Inspector 's report orders may be issued for placing the appellant under suspension.
His recommendation was approved by the Minister for Health and by the Chief Minister.
By a letter dated February 13, 1950, the Deputy Secretary to the Government informed the Surgeon General that the appellant should be suspended with immediate effect pending further orders.
The Surgeon General thereafter issued an order to the Civil Surgeon, Ahmedabad dated February 16, 1950 that the appellant should be placed under suspension pending further orders from the date of the receipt of the memorandum.
In pursuance of the directions received by him from the Surgeon General, the Civil Surgeon, Ahmedabad, issued the following office order and sent it; to the appellant : "Under orders from the Surgeon General, with the Government of Bombay, conveyed in his Memorandum No. section 97/189/A dated 16th February, 1950, you are informed that you are suspended pending further orders with effect from the afternoon of 18th instant.
You should hand over your charge to Mr. section section Doctor, B.M.S. Class 11 at this hospital.
" On August 21, 1950 the Government directed that the appellant should be allowed subsistence allowance at Rs. 153 5 0 per mensem from the date of his suspension February 19, 1950 to March 31, 1950, at Rs. 158 13 0 per mensem from April 1, 1950 to February 18, 1951 and at Rs. 119 2 0 per mensem from February 19, 1951 onwards.
The Government also directed that the appellant should be paid in addition Rs. 35/ per mensem as dearness allowance and Rs. 14/ as house rent allowance during the entire period of suspension.
On May 6, 1950 sanction was given for the prosecution of the appellant under section 161, Indian Penal Code.
On February 26, 1951 the appellant was convicted by the First Class City Magistrate at Ahmedabad and sentenced to one day 's imprisonment and a fine of Rs. 1000/ .
The appellant filed an appeal to the Sessions Court, but his appeal was dismissed.
Thereafter, the appellant took the matter in revision to the Bombay High Court.
The revision application was allowed and the conviction and sentence passed against the appellant were set aside.
On March 14, 1952, the appellant made a representation to the Government praying that he should be reinstated in service.
581 The Government, however, applied to the High Court for leave to appeal to this Court against the decision if the High Court and on the said application being rejected, the Government applied to this Court for special leave to appeal.
This Court rejected the application on October 13, 1952.
On November 27, 1952 the Government issued another order in regard to the payment of subsistence allowance to the appellant.
On February 20, 1953 the Government directed that a departmental enquiry should be held against the appellant.
The Civil Surgeon, Ahmedabad was appointed Inquiry Officer and he was asked to complete the inquiry within three months and submit his report to the Government through the Surgeon General.
For reasons which are not apparent the departmental inquiry was delayed and ultimately an order of dismissal was made against the appellant on February 11, 1960.
Before the conclusion of the departmental inquiry and while that inquiry was going on the appellant gave a notice to the respondent under section 80 of the Civil Procedure Code.
On April 11, 1953 the appellant brought the present suit against the respondent praying for a declaration that the order of suspension was illegal and inoperative in law and the appellant continued in service as though no order for suspension had been passed.
The appellant claimed remuneration and allowances with usual increments from the date of his suspension till the date of his reinstatement.
The respondent controverted the allegations made in the plaint and asserted that the suspension of the appellant was not illegal.
Shah, J. of the Bombay High Court before whom the suit was tried held that the appellant was entitled to salary and allowances upto the date when he was dismissed i.e., February 11, 1960.
He granted to the appellant a declaration that the order of suspension was illegal and inoperative in law and the appellant continued to be on duty till February 11, 1960 as though no order of suspension had been made.
He also granted a decree directing the respondent to pay to the appellant Rs. 51,135.28 with interest on Rs. 43,223/ at the rate of 4 per cent p.a. and the cost of the suit.
The respondent appealed against the judgment of the trial Judge.
The appeal was heard by a Bench consisting of the Chief Justice and Mody, J.
The Appellate Bench held that the respondent had inherent power to suspend the appellant and to withhold full remuneration for the period of suspension under Rule 151 of the Bombay Civil Services Rules.
The Appellate Bench therefore held that the order of suspension made by the respondent was legally valid as it was in exercise of the inherent power as regards prohibition of work, and in exercise of its powers conferred by the rules so far as the withholding of pay during enquiry against his conduct was concerned.
The Appellate Bench also held that the suit was barred under Article 14 of the Schedule to the Indian Limitation Act.
For these reasons the Appellate Bench allowed the appeal, set aside the decree passed by the trial 582 Judge and dismissed the suit and ordered the appellant to pay four fifths of the costs of the respondent through out.
The first question to be considered in this appeal is whether Government had the power to suspend the appellant by its order dated February 13, 1950 pending enquiry into his alleged misconduct.
It was contended on behalf of the appellant that the power to suspend is not an implied term in an ordinary contract between master and servant and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself.
It was urged that there was no express provision in the Bombay Civil Services Rules granting a power to the Government to suspend a Government servant pending enquiry into the allegations made against him.
The argument was put forward that in the absence of any express provision either in the contract of employment or in any statute or statutory rules governing such employment, there was no power to suspend a public servant pending inquiry into the allegations of his misconduct.
We are unable to accept the argument put forward on behalf of the appellant as correct.
The general law on the subject of suspension has been laid down by this Court in three cases, viz., The Management of Hotel Imperial, New Delhi vs Hotel Workers ' Union,(1) T. Cajee vs U. Jormanik Siem,(2) and R. P. Kapur vs Union of India(3).
It is now well settled that the power to suspend, in the sense of a right to forbid a servant to work, is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract, or of an express, term in the contract itself.
Ordinarily, therefore, the absence of such power either as an express term in the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and even if he does so in the sense that he forbids the employee to work, he will have to pay wages during the period of suspension.
Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the order of suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay.
This principle of law of master and servant is well established: (See Hanley vs Pease & Partners, Ltd., (4) Wallwork vs Fielding, (5) and the judgment of Cotton, L. J. in Boston Deep Sea Fishing and Ice Co. vs Ansell) (6).
It is equally well settled that an order of interim suspension can be passed against the employee while an inquiry is pending into his conduct even though there is no such term in the contract of appointment or in the rules, but in such a case the employee would (1) ; (3) ; (5) (2) ; (4) (6) 583 be entitled to his remuneration for the period of suspension if there is no statute or rule under which it could be withheld.
In this connection it is important to notice the distinction between suspending the contract of service of an officer and suspending an officer from performing the duties of his office on the basis that the contract is subsisting.
The suspension in the latter sense is always an implied term in every contract of service.
When an officer is suspended in this sense it means that the Government merely issues a direction to the officer that so long as the contract is subsisting and till the time the officer is legally dismissed he must not do anything in the discharge of the duties of his office.
In other words, the employer is regarded as issuing an order to the employee which, because the contract is subsisting, the employee must obey.
The general principle therefore is that an employer can sus pend an employee pending an inquiry into his misconduct and the only question that can arise in such suspension will relate to payment during the period of such suspension.
If there is no express term relating to payment during such suspension or if there is no statutory provision in any enactment or rule the employee is entitled to his full remuneration for the period of his interim suspension.
On the other hand, if there is a term in this respect in the contract of employment or if there is a provision in the statute or the rules framed thereunder providing for the scale of payment during suspension, the payment will be made in accordance therewith.
This principle applies with equal force in a case where the Government is an employer and a public servant is an employee with this qualification that in view of the peculiar structural hierarchy of Government administration, the employer in the case of employment by Government must be held to be the authority which has the power to appoint the public servant concerned.
It follows therefore that the authority entitled to appoint the public servant is entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him.
But what amount should be paid to the public servant during such suspension will depend upon the provisions of the statute or statutory rule in that connection.
If there is such a provision the payment during suspension will be in accordance therewith.
But if there is no such provision, the public servant will be entitled to his full emoluments during the period of suspension.
On general principles therefore the government like any other employer, would have a right to suspend a public servant in one of two ways.
It may suspend any public servant pending departmental enquiry or pending criminal proceedings; this may be called interim suspension.
The Government may also proceed to hold a departmental enquiry and after his being found guilty order suspension as a 584 punishment if the rules so permit.
This will be suspension as a penalty.
As we have already pointed out, the question as to what amount should be paid to the public servant during the period of interim suspension or suspension as a punishment will depend upon the provisions Of the statute or statutory rules made in that connection.
On behalf of the respondent Advocate General of Maharashtra relied upon Rules 151 and 152 of Ch.
VIII of the Bombay Civil Service Rules.
These rules provide as follows: "151.
A Government servant under suspension is entitled to the following payments : (a) In the case of a military officer who is liable to revert to military duty, to the pay and allowances to which he would have been entitled had he been suspended while in military employment.
(b) In any other case, to a subsistence grant at such rates as the suspending authority may direct, but not exceeding one fourth of the pay of the suspended Government servant.
Provided that the suspending authority may direct that the Government servant under suspension shall be granted in addition such compensatory allowances as the Government may sanction by general or special order for issue under this proviso.
Note 1.
The grant of subsistence allowance cannot altogether be withheld." "152.
When the suspension of a Government servant is held to have been unjustifiable or not wholly justifiable; or when a Government servant who has been dismissed, removed or suspended is reinstated, the revising or appellate authority may grant to him for the period of his absence from duty (a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed, removed or suspended and, by an order to be separately recorded any allowance of which he was in receipt prior to his dismissal, removal or suspension; and (b) if otherwise, such proportion of such pay and allowances as the revising or appellate authority may prescribe.
585 In a case falling under clause (a), the period of absence from duty will be treated as a period spent on duty.
In a case falling under clause (b) it will not be treat ed as a period spent on duty unless the revising or appellate authority so direct. .
Note 2 Under this rule the revising or appellate authority can convert a period spent under suspension into one of leave admissible under the rules.
The period of suspension cannot, however, be converted into leave without pay except in accordance with the conditions in Rule 752.
Subsistence allowance paid under this rule should be adjusted or recovered from the Government servant when the period of suspension is converted into leave with or without pay.
" On behalf of the appellant Mr. Gokhale contended that Rule 151 applies only to a case where a Government servant is suspended by way of penalty and not to a case of interim suspension.
We see no warrant for accepting this argument.
Suspension is used in Rule 151 in a general sense and Rule 151 applies to all kinds of suspension, whether it is imposed by way of penalty or as an interim measure pending departmental inquiry or a criminal proceeding.
We see no reason, either in the context or the language of Rule 151, to place a restricted interpretation upon the meaning of the word "suspension" in that rule.
On the contrary, the language of Rules 153 and 156 suggests that the suspension contemplated by these rules includes not only suspension by way of penalty but also interim suspension pending a departmental inquiry or a criminal proceeding.
Rules 153 and 156 state as follows "153.
Leave may not be granted to a Government servant under suspension." "156.
A Government servant committed to a prison either for debt or on a criminal charge should be conssidered as under suspension from the date of his arrest and therefore entitled only to the payments specified in Rule 151 until the termination of the proceedings against him when, if he is not removed or dismissed from service, an adjustment of his pay and allowances should be made according to the conditions, and terms prescribed in rule 152 the full amount being given only in the event of the Government servant being considered to be acquitted of blame, or, if the imprisonment was for debt, of its being proved that the Government servant 's liability arose from circumstances beyond his control.
" If the word "suspension" in Rules 153 and 156 contemplates suspension pending an inquiry we see no reason why it should be 586 given a different interpretation in Rules 151 and 152.
We are accordingly of the opinion that Rule 151 empowers the State Government to withhold pay for the period of interim suspension but the Government servant is entitled under that rule to a subsistence allowance at such rate as the suspending authority may direct but not exceeding one fourth of his pay.
It follows therefore that the order of the State Government dated February 13, 1950 suspending the appellant pending enquiry into his conduct was legally valid and the argument of the appellant on this aspect of the case must be rejected.
The view that we have expressed is supported by the ratio of the principle of the decision of this Court in R. P. Kapur vs Union of India(1).
The question in that case arose with regard to the interpretation of Fundamental Rule 53 which provided for payment to a Government servant under suspension and which states as follows "53(1).
A Government servant under suspension shall be entitled to the following payments, namely : (i) in the case of a Commissioned Officer of the Indian Medical Department or a Warrant Officer in Civil Employ who is liable to revert to Military duty, the pay and allowances to which he would have been entitled had he been suspended while in military employment; (ii)in the case of any other Government servant (a) a subsistence allowance at an amount equal to the leave salary which the Government servant would have drawn if he had been on leave on half average pay or on half pay and in addition, dearness allowance, if admissible on the basis of such leave salary: Provided that where the period of suspension exceeds twelve months, the authority which made or is deemed to have made the order of suspension shall be competent to vary the amount of subsistence allowance for any period subsequent to the period of the first twelve months as follows Fundamental Rule 54 is to the following effect: "54(1) When a Government servant who has been dismissed, removed, compulsorily retired or suspended is re instated or would have been re instated but for his retirement on superannuation while under suspension.
the authority competent to order the reinstatement shall consider and make a specific order (1) ; 587 (a) regarding the pay and allowances to be paid to the Government servant for the period of his absence from duty or for the period of suspension ending with the date of his retirement on superannuation as the case may be; and (b) whether or not the said period shall be treated as a period spent on duty.
(2) Where the authority mentioned in sub rule (1) is of opinion that the Government servant has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the Government servant shall be given the full pay and allowances to which he would have been entitled, had he not been dismissed, removed, compulsorily retired or suspended, as the case may be.
It was held by the majority decision of this Court that Fundamental Rule 5 3 contemplates all kinds of suspension, whether it is a penalty or as an interim measure pending departmental inquiry or criminal proceeding.
It is manifest that Rules 151 and 152 of the Bombay Civil Service Rules are couched in a similar language to that of Fundamental Rules 53 and 54 and it must be held for this reason also that Rules 151 and 152 of the Bombay Civil Service Rules comprise in their scope both kinds of suspension, whether it is a penalty or as an interim measure pending an inquiry into the conduct of the Government servant concerned or criminal proceeding against him.
We proceed to consider the next question arising in this case i.e., whether the order of suspension came to an end on February 15, 1952 when the appellant was acquitted by the High Court in revision and whether in consequence the appellant is entitled to full pay for the period from February 15, 1952 to February 11, 1960 when he was ultimately dismissed.
It was contended on behalf of the appellant that he was suspended pending an inquiry into the charge for the criminal offence alleged to have been com mitted by him and as the proceedings in connection with that charge ended with the acquittal of the appellant by the High Court on February 15, 1952, the order of suspension must be deemed to have automatically come to an end on that date.
We see no justification for accepting this argument.
The order of suspension dated February 13, 1950 recites that the appellant should be suspended with immediate effect "pending further orders".
It is clear therefore that the order of suspension could not be automatically terminated but it could have only been terminated by another order of the Government.
Until therefore a further order of the State Government was made terminating the suspension 588 ,the appellant had no right to be reinstated to service.
On behalf ,of the appellant reliance was placed on the decision of the Orissa High Court in Narayan Prasad Rewany vs State of Orissa(1).
But the facts of that case are clearly to be distinguished.
The order of suspension in that case did not contain the phrase "pending further ' orders".
Furthermore, the order of suspension was passed under R. 93A of the Orissa Service Code, Vol. 1, under which the Government servant could be suspended during the periods when he was not actually detained in custody or imprisoned.
Having, regard to the terms of that rule it was held by the Orissa High Court that the order ceased to be operative as soon as criminal proceedings had terminated.
In the present case, however, the appellant was not suspended under any rule similar to rule 93A of the Orissa Service Code, Vol. 1 and the decision of the Orissa High Court has therefore no rele vance.
We are therefore of the opinion that the order of suspension of the appellant made by the State Government on February 13, 1950 did not come to an end on the date of the order of acquittal made by the High Court and Counsel for the appellant is unable to make good his submission on this aspect of the case.
It is not necessary for us to express any opinion as to whether the suit is barred under Article 14 of the Schedule to the Indian Limitation Act as we have held that the claim of the appellant is devoid of merit.
For the reasons already expressed, we hold that the judgment of the Bombay High Court dated August 10, 1961 is correct and this appeal must be dismissed.
In view of the circumstances of the case we do not propose to make any order as to costs ,of this Court.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 4957 Orissa 51.
[/INST]The appellant was convicted by the Sessions Judge under section 302 of the Indian Penal Code and the conviction was upheld by the High Court.
According to the prosecution evidence the appellant was trying to assault one D when the latter 's brother K intervened.
The appellant took out a knife and caused an injury on K 's thigh which cut an artery and resulted in his death.
In appeal, by special leave, before this Court it was urged that in the circumstances of the case the intention and knowledge requisite for an offence under section 302 I.P.C., had not been established.
HELD: (i) The appellant had not used the knife while he was engaged in the fight with D.
It was only when he felt that the deceased also came up against him that . he whipped out the ' knife.
The deceased was at that time in a crouching position.
In these circumstances it could not be said that the appellant intended to cause the injury in the thigh knowing that it would cut the artery.
It was, therefore, not possible to apply cl. 3 of section 300 to the act of the accused, and he was not guilty of murder.
[250 G H] Virsa Singh vs State of Punjab. ; , applied.
(ii) However, when the appellant struck the deceased with the knife, he must have known that the deceased then being in a bent position, the blow would land in the abdomen or near it a vulnerable ' part of the human body and that such a blow was likely to result in his death.
In these circumstances it would be quite legitimate to hold that he struck the deceased with the knife with the intention to cause an injury likely to cause death.
The offence, therefore.
clearly fell under section 304 Part 1.
[251 B C]
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<s>[INST] Summarize the judgementivil Appeal No. 341 of 1973.
From the Judgment and Order dated 26.2.1971 of the Punjab and Haryana High Court in L.P.A. No. 566/1968.
Harbans Singh for the Appellants.
R.S. Sodhi and S.K. Sinha for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
This is an appeal by certificate against the Judgment of a full bench of the Punjab and Haryana High Court dated 20th November, 1970.
The question involved in this appeal is ingenious but untenable.
The question re ferred to the full bench reads as follows: "Whether after the re organisation of the State of Punjab the land owners owning land in both the States of Punjab and Haryana can claim to retain the permissible area in each State separately after 1st of November, 1966.
If so, whether an order declaring the area to be surplus passed prior to the date above said, but which order has not been implemented and the surplus land so declared has not in fact been utilised would continue to have effect after said date?" Now the facts.
Balwant Singh was a displaced person from West Pakistan.
He owned in all 67 standard acres of land distributed in various villages.
According to him he had sold some properties to strangers and the remaining in favour of his wife and minor son in 1957.
On 8th November, 1960, when proceedings under the Punjab Security of Land Tenures Act, 1930 (for short the Act) were initiated ' the Special Collector, Punjab, declared 29 standard acres be longing to him as surplus area.
While doing so, the trans fers made by him mentioned above, were ignored.
He had an option to choose the property which fell to his share.
He opted for the entire land belonging to him and situated in village Samani as his permissible area and did not opt for any area in Mohamad Pera, District Ferozepore.
The Special Collector reserved for him about 18 standard acres out of his holding in village Dhab Kharial in order to make up his permissible area of 50 standard acres.
This part of the order of the Special Collector, though 695 challenged in appeal, was confirmed by the Commissioner, Jullundar Division on 5th January, 1965, since the appeal before him was held to be barred by limitation.
The appel lant pursued the matter before the Financial Commissioner, Planning, Punjab,_by filing a revision.
This was dismissed on 19 2 1965.
On 1st November, 1966, the , (for short, Re organisation Act) came into force.
The State of Punjab was distributed under the Act to the present State of Punjab, State of Haryana, Union Territory of Chand igarh and Union Territory of Himachal Pradesh.
In December, 1966, Balwant Singh, his wife and his minor son filed a writ petition for the issuance of necessary directions to the States of Punjab and Haryana restraining them from utilising the surplus area declared by the Special Collector by his order dated 8 11 1960.
It is relevant to note here that the original properties that belonged to him fell within the new State of Punjab and the new State of Haryana.
The matter came before a learned Single Judge.
The following questions were raised before him: (1) That after the States Reorganisation, persons owning lands both in the State of Punjab and Haryana could claim that they should be allowed permissible area in both the States separately, (2) that orders passed regarding surplus area prior to 1st November, 1966, and which area had not been utilised till then, should be deemed to have no effect and (3) that the proceedings declaring surplus land were bad for want of notice to the transferees.
These contentions were repelled by the learned Single Judge.
He took the matter in appeal.
The Division Bench before whom the appeal was posted felt that an important question was involved and therefore referred the appeal to a larger bench.
The full Bench considered the matter in detail and held that the order declaring the area to be surplus passed before 1st November, 1966, would continue to have effect after that date, even if that order had not been implemented and persons owning land in the newly created States is not, in law, entitled for a separate allotment under the Act.
It is this conclusion of the Full Bench that is assailed before us on the strength of a certificate issued by the Court Balwant Singh had more than the permissible area, viz., 50 standard acres with him.
The excess area was liable to be declared as surplus.
Surplus area was declared by the Spe cial Collector, by his 696 order dated November 8, 1960.
It was confirmed in appeal and in revision.
The revisional order is dated 19th February, 1965, that is before 1st November 1966, when the Re organi sation Act came into force.
As indicated above, by virtue of the Re organisation of the two States, a part of his hold ings fell in the territory of the State of Haryana and another part in the State of Punjab.
He evolved a contention that he could have 50 standard acres of land in each of the two States.
On this basis, he questioned the order dated 8th November., 1960.
He supported this argument with the addi tional plea that the said order had not been implemented and the land declared surplus not utilised.
The question that fell to be decided by the full Bench was whether the order which had become final would continue to have effect after the date of enforcement of the Re organisation Act when that order had not been given effect to and the surplus area had not been utilized by the Govern ment.
Under the Scheme of the Act, it is the entire holding of a person on 15th April, 1953, that is to be taken into consideration for.
determining his surplus area.
The Govern ment acquires the right to utilize the surplus area of a person against whom an order of declaration has been made for the resettlement of tenants ejected or to be ejected.
Sections 9(1)(i) and 10A(a), which read as follows, make the position clear: "9(1).
Notwithstanding anything contained in any other law for the time being in force, no land owner shall be competent to eject a tenant except when such tenant (i) is a tenant on the area reserved under this Act or is a tenant of a small land owner; or. . . ." "10A(a) The State Government or any officer empowered by it in this behalf, shall be competent to utilise any surplus area for the re settlement of tenants ejected, or to be ejected, under clause (i) of sub section ( 1 ) of Section 9.
" It was contended before the High Court and repeated before us that the order did not get finality unless the surplus area had in fact been utilised, and tenants re settled there.
This contention did not find 697 favour with the High Court.
We will presently examine wheth er the contention has any merit.
It is true that along with the order declaring the land of an owner as surplus, a corresponding right & duty accrues to the Government to utilise the surplus area for the re settlement of tenants.
In other words, the rights on the land declared as surplus get vested in the Government, to be distributed amongst the tenants for re settlement.
This is an indefeasible right that the Government secures.
The appellant is not well rounded in his contention that he could get back the land if the surplus had not been utilised.
There is nothing in the Act which imposes any time limit for the Government to utilise the land for the purpose mentioned in the Act.
Nor is there any provision enabling the owner of the land to claim back the land and to get it restored to him if utili zation is not made by the Government within a specified period.
All that the Act contains by way of exception is what is seen in Section 10A(b).
If at the time of the com mencement of the Act, the land is acquired by the Government under the relevant acquisition laws or when it is a case of inheritance, the owner could claim exclusion of such land from his land for fixation of his ceiling under the Act.
The second exception itself is further lettered by the provision in Section 10 B that where succession had opened after the surplus area or any part thereof had been utilised under Section 10A(a), the saving specified in favour of an heir by inheritance would not apply in respect of the area so uti lised.
To put it short, the Government had under the Act an unfettered right without time limit to utilise the land for re settlement of tenants subject to the two exceptions mentioned above.
It is, of course, desirable that re settle ment should be done as expeditiously as possible.
Inaction on the part of the Government to re settle the tenants will not clothe the owner with a power for restoration of the land.
The contention of the appellant based on non utilisa tion of the land has, therefore, to fail.
The second question is whether the appellant is entitled to have the best of the two worlds; in other words, to have his quota of full 50 acres in Punjab and another 50 acres in Haryana.
Section 88 of the Re organisation Act makes the position clear.
It reads as follows: "The provisions of Part II shall not be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the State of Punjab shall, until otherwise provid ed by a competent Legislature or other compe tent authority, be construed as meaning the territories within that State 698 immediately before the appointed day.
" As per this Section the provisions of the Act which was applicable to the old State of Punjab would continue to apply to the new State.
In other words the order passed before 1st November, 1966, which became final, declaring the surplus area, would be given effect to and the order would be implemented uninfluenced by the division of the State.
After the Re organisation Act, the Governer of Haryana in exercise of the powers conferred by Section 89 of the Re organisation Act passed an order by name Haryana Adaptation of Laws (States and Concurrent Subjects) Order, 1968, on 23 10 1968 making it to take effect retrospectively from 1st November, 1966.
Clauses 10 and 11 of the order read as follows: "10.
The provisions of this order which adapt or modify any law so as to alter the manner in which, the authority by which, or the law under or in accordance with which any powers are exercisable shall not render invalid any notification, order, licence, permission, award, commitment, attachment, by law.
Rule or regulation duly made or issued, or anything duly done, before the appointed day; and any such notification, order licence, permission, award, commitment, attachment, bye law, rule, regulation or thing may be revoked, varied or undone in likemanner, to the like extent and in the like circumstances as if it has been made, issued, or done after the commencement of this order by the competent authority and under and in accordance with the provisions then applicable to such a case.
Nothing in this Order shall affect the previous operation of, or anything duly done or suffered under any existing State law or any right, privilege, obligation or liability already acquired, accrued or incurred under any such law, or any penalty, forfeiture or punishment incurred in respect of any offence already committed against any such law.
" A combined reading of these two clauses makes it clear that any order made or anything done or any liability in curred or a right accrued before the 1st November, 1966 would not be affected by the coming into force of the order.
These two clauses show unambiguously that the respective State Governments would be entitled to give effect 699 to orders passed before 1st November, 1966, declaring the surplus area by utilising them for the re settlement of the tenants, despite the reorganisation of the State of Punjab.
The orders passed will be respected by both the States.
The fact that the land belonging to a particular owner, under fortuitous circumstances, fall in the two newly formed States, will not in any way affect the operation of the orders which had become final prior to 1st November, 1966.
To accept the appellant 's contention would create anomalies.
Persons against whom proceedings under the Act were taken and became final prior to 1st November, 1966, would be entitled to claim lands in both the States while those whose petitions are pending on the date the States Reorganisation Act came into force would be in a disadvantageous position.
This is not the object of the Act.
Nor the scheme behind it.
The States re organisation was a historical accident.
The land owners cannot take advantage of this accident, to the detriment of ejected tenants or tenants in need of re set tlement.
For the above reasons, we hold that the High Court was justified in answering the question referred to it against the appellant.
The appeal is accordingly dismissed.
There will be no order as to costs.
S.R. Appeal dis missed.
[/INST]The respondent was employed by the appellant company, but later on his work and conduct became very unsatisfactory and repeated warnings, both oral and written, did not show any improvement.
A thorough inquiry into his record of service was made and a report was submitted which showed that he was unsuitable to be retained in its service.
No formal enquiry, however, was held by submitting a charge sheet to the respondent and giving him an opportunity to rebut those chares.
The appellant gave him a choice either to terminate his services on payment of full retrenchment compensation, or if he refused to accept the same, to make an application for permission to terminate his services.
Eventually, the appellant filed an application before the Labour Appellate Tribunal under section 22 Of the Industrial Disputes (Appellate Tribunal) Act, 1950, for permission to discharge the respondent from its service.
The application was originally heard ex parte, the respondent not appearing, and the Tribunal, by order dated October 14, 1955, allowed the application.
Subsequently the respondent made an appli cation for a review of the order under Or.
47, R. I, for setting it aside under Or. 9, R. 13 and for restoration of the application under Or. 41, R. 21, Of the Code of Civil Procedure.
The Tribunal found that there was sufficient cause for the respondent not appearing when the application was called on for hearing, and set aside the ex parte order and restored the appellant 's application.
On a further hearing of the application, the parties adduced evidence and the Tribunal, after hearing them, rejected the application on the, ground that a prima facie case had not been made out for permission to discharge the respondent.
On appeal to the Supreme Court it was contended for the appellant (1) that the Labour Appellate Tribunal had no jurisdiction to review its own order and (2) that it exceeded its jurisdic tion under section 22 Of the Act, in discussing the evidence led before it in meticulous detail and coming to the conclu sion that the appellant failed to make out a prima facie case to discharge the respondent from its service.
Held: (1) that under section 9, sub sections
(1) and (10) of the Act the Labour Appellate Tribunal had jurisdiction to set aside the 515 ex parte order dated October 14, 1955, and restore the application to its file.
(2) that under section 22 of the Act, the jurisdiction of the Labour Appellate Tribunal in considering whether a prima facie case has been made out by the employer, is to see whether the employer is acting mala fide or is resorting to any unfair labour practice or victimisation, and whether on the evidence led it is possible to arrive at the conclusion in question.
Though the Tribunal may itself have arrived at a different conclusion it has not to substitute its own judgment for the judgment in question.
Atherton West & Co. Ltd. vs Suti Mill Mazdoor Union and Others, , The Automobile Products of India Ltd. vs Rukmaji Bala & others; , and Laksh mi Devi Sugar Mills Limited vs Pt.
Ram Sarup, (1956) S.C.R. 916, relied on.
In the instant case, though the appellant was justified in making the application for permission to discharge the respondent on account of his work and conduct being demon strably unsatisfactory, and the standard of proof which the Tribunal ];ad applied for finding whether there was a Prima facie case was not strictly justifiable, in view of the fact that no formal inquiry into the charges against the respond ent was held and the evidence on behalf of the appellant did not show that the respondent was given an opportunity to controvert the allegations made against him, the decision of the Tribunal was upheld.
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<s>[INST] Summarize the judgementAppeal No. 158 of 1967.
Appeal by special leave from the judgment and order dated August 5, 1966 of the Rajasthan High Court.
in section P. Civil Regular Second Appeal No. 222 of 1964.
section T. Desai, P. C. Bhartari, J. B. Dadachanji and Pukhraj Singh, for the appellant.
S.V. Gupte, K. K. Jain and H. K. Puri, for respondents Nos. 1 to 9.
That Judgment of the Court was delivered by P.Jaganmohan, Reddy, J. This Appeal by Special Leave of this Court is against the Judgment of a Single Judge of the Rajas 838 than High Court affirming the Judgment and decree of the, District Court with certain variations.
Respondents 1 to 9 filed a suit against the Appellants and Respondents 10 and 11 and two others for a declaration that they have been carrying on and are entitled to carry on Darshan, Prakshal and Poojan etc.
of the idol of Adeshwarji, the first Tirthankar in the Temple named after him at Paroli without interference according to the tenets observed by the Digambri Sect of the Jain religion. ' The said Temple of Shri Adeshwarji is said to have been in existence for 200 years while, the Respondents aver that the inscriptions on it bear Vikram Samvat 1510 (1454 AD).
The Plaintiffs further alleged that the Temple was constructed and the idol, was consecrated according to and by the followers of the tenets of the Digamber sect; that the Plaintiffs and the other followers of the Digamber Sect have been performing Darshan, Prakshal and Poojan of the said idol according to their tenets every since the Temple was founded; that on the 23rd of December 1949 the Defendants attempted to convert the said idol into the idol of Swetambri Sect by putting Chakshus (artificial eyes ) thereon, but were prevented from doing so by a strong opposition of the followers of the Digamber Sect; that thereafter some temporary arrangements were made between the followers of the two Sects who agreed to maintain the status quo until a decision of the Civil Court on the rival claims of the parties was given; that in disregard of the temporary settlement and without getting the rights in the Temple adjudicated upon by the Civil Court, the Defendants made arrangements to put Dhwajadand and Kalash on the said Temple according to their tenets,, and that they also further learnt that the Defendants were intending to enclose the said idol by putting up doors and locks with the.
object of interfering with and obstructing the free exercise by the Digamberies of their unfettered rights to perform Poojan, Prakshal and worship of the said ideal according to their tenets.
On these allegations it was prayed that the Defendants be restrained by a permanent injunction from (i) erecting the Dhwajadand, and putting up Kalash; (ii) enclosing the idols by putting up doors and locks; or in any manner altering the nature and shape and appearance of the idols installed in the said Temple; or directly or indirectly doing any act or thing which may have the effect of wounding the religious susceptibilities and sentiments of the followers of the Digamberi Jain Sect; and (iii) from interfering with the free and unfettered rights of the Plaintiffs of performing Darshan.
Prakshal and Poojan and other rites according to the tenets of Digamber Jain Sect.
839 The Defendants did not deny that they,intended to put the Netras ' but said that they did so because the Netras which the idol had even before the said date having been damaged and fallen out, new Netras were put up.
They further claimed that since its existence the Temple of Adeshwarji has been in the possession of the Defendants who have been in exclusive management of the Temple and its property; that the Plaintiffs never used to do Poojan or Prakshal in the Temple nor had they any Tight thereto, and that when in 1949 there was a dispute between the parties a temporary arrangement was made but the Defendants did not admit any right of Plaintiffs to Poojan.
It, was further averred that the said idol and the Temple is in all respects Jain Swetambri Sect, that it has been so used and described in all the historic records from time to time and that the Civil Court had no jurisdiction to decide the religious rights of the parties nor is it a dispute of a civil nature.
On these pleadings issues were framed on 3 12 55 but subse quently after the evidence in the case was recorded and having regard thereto fresh issues were framed in substitution of the former ones on 4 6 57 but thereafter no evidence was led by either party.
The controversy between the parties as is evident from these issues was, as to which Sect of the Jains the main idol of Adeshwarji belongs, which Sect has constructed the upper portion of the idol referred to and the nearby portion of the temple; under what tenets have the followers of the Sects, Digamber and Swetamber, performed Darshan, Prakshal and Poojan of the idol of the temple referred to and can any Sect change those previous tenets , whether the Notras (artificial eyes) of the idol, Bhujband and Dhwajadand over the temple existed before and if not, can they be placed and inserted now; and whether the Temple is in possession and under the management of the Defendants alone from the time it came into existence.
The Civil Judge of Bhilwara decreed the suit of the Plain tiffs, against which the Defendants appealed.
The District Judge, however, allowed the appeal and dismissed the suit on the ground that in his opinion no question of any right to property or office was involved in the suit ' and consequently the plaintiffs suit was dismissed with costs.
On an appeal from this Judgment the High Court allowed the Appeal holding that inasmuch as the allegations in the plaint relate to an assertion of a right of worship and an interference with that right, a dispute of civil nature arises which is, clearly cognizable by a Civil Court.
In this view the case was, remanded to the District Judge for determining the appeal on merits.
Leave to Appeal was also refused.
840 After remand the District Judge confirmed the Judgment and decree of the Trial Court with certain variations.
Against this Judgment the Appellants filed an appeal to the High Court and the Respondents filed cross objections.
The High Court affirmed the Judgment of the District Judge except for that part of the decree directing the Appellants to keep open the doors of the Temple between 8.30 and 9.30 each morning to enable the Respondents to worship without interference, which, however, was modified to enable Respondents to worship at the Temple between 6 a.m. to 9 a.m. every morning, during which time the Temple was not to be locked.
It further directed that if the Swetambaries wanted also to worship during this period without disturbing the Digamberies they had the liberty to do so.
The learned Advocate for the Appellants Shri section T. Desai urged several contention before us namely; (i) the High Court was in error in not deciding the ownership of the Temple or of the idol; (ii) that it should have held that a presumption of ownership would arise having regard to the concurrent findings that the Swetamberies were in management and possession of the Temple; (iii) that the reliefs claimed make it clear that the dispute is not of a civil nature for in any view of the matter the Courts were in error that placing of the Dhwajadand and Kalash on the Temple changes the nature of the temple; (iv) that the High Court should not have accepted the cross appeal fixing 3 hours time for the worship of the Digamberies Sect; (v) that the Judgment of the Trial Court is wholly vitiated because the Trial Judge not having accepted the evidence based his findings on his own inspection.
Before as deal with these contentions, it is necessary to detail the findings of the Courts below The Trial Court while decreeing the Plaintiff 's suit held that though it was not proved as to who built the Temple of Adeshwarji initially, both Digamberies and Swetamberies worshipped in the said Temple; that the management and the possession of the Temple was with the Defendants Swetamberies for a long time, that the Swetamberies were not entitled to put artificial eyes or to put Dhwajadand or Kalash on the Temple; and that the Defendants were trying to interfere with the rights of the Plaintiffs ' and were making alterations to transform the character of the Temple.
In this view the Trial Judge gave a declaration in favour of the Plaintiffs against Defendants in their personal capacity as well as representatives of the Jain Swetamberies Sect that the Plaintiffs or the followers of the Digamberi Sect have been performing Prakshal, Poojan and Darshan and are also entitled to do so in future.
He also issued a permanent injunction against the Defendants in their personal capacity as well as representatives 841 of the Jain Swetamberi Sect restraining them from changing the shape and appearance of the idol by putting Netras (artificial eyes), Armlets, and Mukat, from erecting Dhwajadand and putting Kalash on the Temple and putting locks on the shutters of the Temple.
The Appellants were further directed not to restrain the followers of the Jain Digamber Sect from performing Darshan, Poojan and Prakshal according to their tenets.
After the remand Appellants urged before the District Judge the following contentions : (1)That the Temple belongs to Swetamber Sect and the Plaintiffs are entitled to have Darshan only of the idol, otherwise they have got no right to worship it according to their tenets; (2) That the idol being Swetamberi, the Defendants are entitledto put artificial eyes in the idol, Dhwajadand and Kalash on them Temple; (3) That the Defendants having been managing the Temple for the last so many years, their management cannot be interfered with it for the betterment of the idol, it is kept under lock, it cannot be said to wound the sentiments and religious feelings of the Plaintiffs.
The District Judge held on the first contention that though the Temple is admittedly an old one there is not an iota of evidence as to who constructed the Temple originally; that the Appellants have been in management and possession of the Temple, which fact was not really challenged by the Respondents, though this by itself does not imply that the Temple is a Swetamberi Temple.
It was also contended that the Respondents had no right to worship the idol but can only have Darshan.
This contention was also rejected on a review of the evidence led by both parties, and also, by relying on Exh. 1 which embodied a compromise between the two Sects under which the right of the Respondents to worship the idol was specifically admitted.
On the second point urged before him the District Judge held that the Appellants case that there were eyes already in the idol, but as they got damaged they wanted to replace them is not substantiated by the evidence led on behalf of the Appellants themselves.
It also held that an attempt was made by, the Swetamberies in 1949 to install the eyes in the idol and that as most of the Appellant 's witnesses admitted that though Dhwajadand was offered on certain occasions which were retained by the Oswals (Swetamberies) there was no Dhwajadand and Kalash on the temple itself.
On the third point it was held that the Appellants, who were in management and possession of the Temple for the last so many 842 years, have a right to lock the main Temple, to prevent it from being defiled, which does.
not in any way interfere with the right of worship of the Respondents or any other person on their behalf.
This being so ' the Trial Courts decree excepting for restraining the Appellants to lock the Temple was affirmed subject to the further,direction as already noticed keeping the Temple open for worship of the Respondents and the Digambaries Sect between 8.30 and 9.30 a.m.
When the appeal and cross objections were pending before the High Court the Appellants filed an application under Order 41, Rule 27 of the Civil Procedure Code for recording the evidence of Shri Satya Prakash Srivastava, Director of Archaeology and Museum, Rajasthan to establish the denominational identity of.
the idol in the Temple.
It was stated in that, application that since he District Judge had remarked that the parties had not produced sufficient evidence and it was not possible to come to any conclusions regarding the nature of the idol as to whether it is Swetamberi or Digamberi, the petitioner had moved the Direc tor of Archeology who after a thorough examination came to the conclusion that the idol was Swetamberi.
In view of this Report it was prayed that the said Director be called in evidence and be examined.
In the alternative it was prayed that the case be remanded to the Trial Court for allowing the parties to lead additional evidence so that effective adjudication can be made.
The High Court however, did not feel the need for any additional evidence as the case could be disposed of on the material on record.
In this view it dismissed the application.
Even before us the learned Advocate for the Appellant tried to persuade us to look into that Report and urged that the evidence of the Director was necessary and ought to have been allowed to be adduced.
In view of the concurrent findings of all the Courts on certain material aspects of the case to which we shall presently refer, it is possible to determine the controversy between the parties, as such we agree with the High Court that no additional evidence is required at this stage, though the parties could have led better evidence in the initial stages itself.
It was further contended on behalf of the Appellants that the Respondents suit was not maintainable because it did not involve a dispute of a Civil nature.
Respondents ' learned Advocate though he first indicated that he would raise a preliminary objection to this contention being urged because when the High Court set aside the Judgment of the District Judge and remanded the case to be decided on merits holding that the suit was maintainable as it raised a dispute of a civil nature, the Appellants ought to have appealed to the Supreme Court.
The learned Advocate for the Appellants however contends that the remand order of the 843 High Court did not finally dispose of the rights of the parties as such it is open to him to urge in this appeal that the suit was not maintainable on the ground that it does not raise any dispute of a civil nature.
Though the preliminary objection was not subsequently pressed even on the merits, the learned Advocate for the Appellant is unable to satisfy us that the suit is not of a civil nature.
From the pleadings and the controversy between the parties it is clear that the issue is not one which is confined merely to rites and rituals but one which effects the rights of worship namely whether the Swetamberies by placing Chakshus, Dhwajadand and Kalash according to their tenets or by locking the temple could preclude the Digamberies from worshipping in accordance with their tenets.
It is admitted that the Digamberies will not worship the idol which is not Nirakar ' or which has Chakshus.
If the Digamberies have a right to worship at the temple the attempt of the Swetamberies to put Chakshus or to place Dhwajadand or Kalash in accordance with their tenets and to claim that the idol is a Swetamberi idol was to preclude the Digamberies from exercising their right to worship at the temple.
These findings clearly establish that the Appellants interfered with the rights of Digamberies to worship with respect to which a civil suit is maintainable under Section 9 of the Civil Procedure Code.
This position is well established.
If authority was needed we may refer only to two cases.
The Privy Council in Sir Seth Hukam Chand & Ors.
vs Maharaj Bahadur Singh & Ors.(1), had to deal with the practices observed by Digamberies and Swetamberies on the Parasnath Hill which is considered to be sacred by.
both the Sects but in respect of which the Digamberies objected to the continuous employment of human beings on the Hill and against building thereon of Dwellings necessarily involving according to their tenets of a sacrilegious pollution and desecration of the sacred hill, while the Swetamberies had no such belief.
Sir John Wallace delivering the opinion of the Board observed :"These are matters for the Jain themselves and the Civil Courts are only concerned with them in so far as they are relevant to questions of civil right such as an alleged interference with the Plaintiffs rights to worship on the hill, and in that case the issue must be not whether the acts complained of are in accordance with orthodoxy or with previous practice, but whether they do in fact interfere with the plaintiff 's rights of worship".
Again this Court in Nar Hari Sastri and Others vs Shri Badrinath Temple Committee (2 ) was concerned with the rights of the Deoprayagi Pandas to enter the Badrinath Temple alongwith their Yajmans or clients, which it was claimed the Pawal or the Trustee denied and threaten to obstruct the said Deoprayagi (1) (2) ; 844 Pandas from entering the precincts of the Temple along with their Yajmans or from assisting the pilgrims in the matter of Darshans etc.
inside the Temple.
The Defendant however, asserted that it was neither necessary nor desirable that the plaintiffs should be allowed to accompany their Yajmans or clients into the Temple, as he had himself made adequate arrangements for the Darshan and worship of the pilgrims and that as the sole Trustee and manager of the Temple he had the right to regulate entry into the Temple so the over crowding might be avoided and order maintained inside it.
Mukerjea J, (as he then was) speaking for the Court dealt with this contention in the following passage "The true position therefore is that the Plaintiffs ' right of entering the temple along with their Yajmans is not a precarious or permissive right depending for its existence upon the arbitrary discretion of the Temple authorities; it is a legal right in the true sense of the expression but it can be exercised subject to the restrictions which the Temple Committee may impose in good faith for maintenance of order and decorum within the Temple and for ensuring proper performance of customary worship.
In our opinion, the Plaintiffs are entitled to a declaration in this form.
" It is clear therefore that a right to worship is a civil right, interference with which raises a dispute of a civil nature though as noticed earlier dispute which are in respect of rituals or ceremonies alone cannot be adjudicated by Civil Courts if they are not essentially connected with Civil rights of an individual or a sect on behalf of whom a suit is filed.
In our view the contention of the learned Advocate for the Appellant to the maintainability of the suit is not well founded.
One other objection which the learned Advocate for the Appellants urged at the outset is that the findings of the Trial Judge are vitiated because he did not rely on the evidence on record but decided to which Sect the idol in dispute belongs, only on what he found on his inspection of the idol and the Temple which cannot be evidence in the case, without his being subjected to cross examination.
It is further contended that even if what has been stated in the Judgment is what the Trial Judge had observed in his inspection there is nothing to show that he had drawn up inspection notes and made them part of the record as required under the law.
The contention that the Trial Judge had given his findings mainly on the observations made during his inspection in the first place is based on insufficient appreciation of what was really observed when dealing with the question as to 845 which Sect the idol in dispute belongs.
It was observed in the Judgment that most of the witnesses produced were non Jains and therefore, their evidence does not carry much weight to establish to which Sect the idol belongs.
After stating that the remaining witnesses of the parties have given statements in favour of their party the Trial Judge said that these statements also cannot be much relied upon.
The decision of his case is based mostly on the site inspection and the evidence on record.
Even while giving the findings the Trial Judge remarked that the evidence led by the Plaintiff appears to be correct.
These observations themselves show that the evidence on record was an element in the formulation of the Trial Courts Judgment buttered by the observations of the learned Judge during the site inspection.
There is therefore, no validity in the contention that the finding of the Trial Judge was based entirely on the result of his inspection.
It is also evident from a narrative given in the Judgment of what was noticed during the inspection that the Judge had inspected the site on two occasions once on 24 3 1956 and again a year and two months thereafter on 23 5 1957.
The details given by him could not have been given if he had not made some inspection notes.
It would also appear that at the time of the inspection Council for the Plaintiffs and Defendants were present because when giving a description of the idol of Neminathji in the Swetemberi Jain Temple when it was noticed that some portion of the idol under the waist and naval is raised and is like a line, the Council for the Plaintiffs pointed out to him that mark denoted the wearing of a loin cloth while the Counsel for the Defendants said it was the mark of an Artist.
Again in respect of the observation that on the back side and at the lower portion of the navel some portion is raised, the Counsel for the Plaintiffs had pointed out to the loin cloth, while the Counsel for the Defendants said that it has been engraved by an Artist without any sense.
We are satisfied that the description given by the learned Judge of the idols in the Adeshvarji Temple and the Temple of the Swetambaries were observations made during an inspection at which both the Plaintiffs ' and Defendants ' Advocates were present and that there must have been notes also in respect of the inspection made on both the occasions.
The Appellants had at no time made a grievance either to the District Judge or to the High Court or even before this Court except during the stage of arguments that there were no inspection notes nor that the inspection was made by the Judge behind the back of the parties.
if these objections had been raised earlier the Respondents would have had an opportunity of showing that there were inspection notes.
The Judgment in our view is not based solely on the result of personal inspection made by the Trial Judge, which inspection was for the purposes of understanding the evidence in the case and has been so used by the Trial Judge.
We must, 846 therefore, reject the contention of the learned Advocate for the Appellants that the finding in respect of the idol is vitiated.
In this view it is not necessary to deal with any of the decisions referred to before us.
It was contended by Shri Desai that unless the ownership of the Temple is established or that the idol belongs to the Digamberies no injunction can be given nor the Plaintiffs permitted to worship.
It is argued that in the plaint the Respondents wavered that the idol is a Digamberi idol and if they have failed to prove it then their right to worship fails.
At any rate the argument proceeds that the High Court was in error in not deciding the ownership of the Temple or of the idol.
We have earlier indicated the plaint averments in which there is no mention of the ownership of the Temple or of the idol but that paragraphs 2 and 3 of the plaint merely gave a description of the Temple and the idol when it is averred that the idol was constructed and consecrated according to and by the followers of the Digamberi Sect and that the Plaintiffs and the other followers of the Digamberi sect have been performing Darshan, Prakshal and Poojan of the said deity in the said Temple for a considerable number of years past and really ever since the Temple was founded.
There is therefore, force in the contention of Shri Gupte, learned Advocate for the Respondents that having regard to the concurrent findings of the Courts below that the idol was Nirakar ' (naked) that there were no Chakshus, no Mukat, no Armlet, no Dhwajadand or no Kalash, would show that the idol was consecrated by the Digamberies.
It was also held as had already been noticed that though it is not possible to say when the Temple was constructed and the idol consecrated it was an ancient Temple and that both the Digamberies and the Swetamberies worship the idol.
It is not denied that while the Digamberies will not worship an idol which has Chakshus or which has clothes or Mukat( the Swetamberies would worship a Digamberi idol without these and hence the right to worship a Digamberi idol by both the sects is possible and indeed has been so held by all the Courts.
Even the Defendants ' witnesses substantiate these findings.
We would refer to only two of these witnesses.
Shri Suwa Lal D.W. 4 even though he says that the Temple belonged to the Oswals in which he and his father has been performing Sewa for the last 30 or 35 years on behalf of the Oswals (Swetamberies) admitted that since he attained the age of discretion and upto the time of giving evidence he had never seen Adinathji wearing clothes, never saw the idol with eyes and had never seen Dhwajadand or Kalash on the Temple and does not know whether the idol belongs to Oswals or Saravagis (Digamberies).
D.W. 3 Shri Pokhar a barber of Oswals also supports this witness.
That the Digamberies had a right to worship is also borne out by exhibit 1 dated 847 23 12 49 which was a compromise entered into between Swetam beries and Digamberies at the time when the Swetamberies attempted to put Chakshus in the idol.
No doubt this was an interim arrangement till the decision of a Civil Court adjudicating the respective rights, but there was never any question of either Sect not having the right to worship the idol.
The dispute had arisen only as to whether Swetamberies can fix Chakshus in the idol.
1 states as follows: "We Panchas give this award that a dispute had arisen between the Swetamberies and Digamberies as Swetamberies recently fixed eyes on the idol.
This new thing should not continue.
These eyes should be removed.
Digamberies have a right to perform Poojan so they can mark saffron Tiki ' and have Darshan and come back.
Digambries will not performs Prakshal, Poojan.
Swetamberies will continue incurring expenses as usual.
The idol shall remain backed (Nirakar)".
The representatives of both Sects have signed this award, as a temporary measure agreeable to both the Sects, who indicated that they would press their rights in a Civil Court.
Once the right of worship of the Digamberies is established there is little doubt that they are entitled to the injunction sought for by them against the Defendants Appellants from preventing them from worshiping or from interfering with that right by placing Chakshus in the idol, Dhwajadand, Kalash on the Temple.
In view of these findings the further question that when once it has been found that the Swetamberies have the right of management and possession of the Temple there is a presumption of ownership under Sec.
110 of the Evidence Act does not arise nor is it relevant.
It is no doubt contended by the Respondents Advocate that when consecration of an idol takes place the ownerships of the Temple is in the idol and therefore, the question, of presumption under Sec. 110 does not arise.
It is again contended by Shri Desai that the moment it is held that it is not possible to, come to a conclusion as to which Sect the idol belongs, as has been held by the Court below, the Respondents cannot be allowed to object to the Appellants worshipping the idol according to their tenets.
This contention, however, in our view ignores the rights of the Digamberies to worship in accordance with their tenets.
If the contention of the learned Advocate for the Appellants is accepted it will be tantamount to holding that Digamberies have no right to worship as there would denomination change in the idol if the Swetamberies are held to have the right to worship it according to their tenets by placing Chakshus in the idol or by erecting their Dhwajadand or Kalash over the Temple.
848 Lastly it is urged that the High Court ought not to have entertained the cross objection by extending the time for worship from 1 hour to 3 hours.
In our view the directions of the High Court are not unreasonable nor do they in any way affect the right of the Respondents to worship because the directions clearly enable the Swetamberies who wish to worship the deity within that period without disturbing the Digamberies to be at liberty to do so and likewise it will be open to Digamberies to go and worship in the temple during the period it is kept open.
In view of the acute controversy between these 2 sects and their reluctance to arrive at an amicable settlement the directions given by the High Court are manifestly reasonable just and proper.
In this view the appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
[/INST]After catches of prawns made from time to time were brought to the respondent 's premises, a casual and irregular group of women and girls of the locality came at their convenience to do the peeling, washing, etc.
at piece rates.
There were no.specified hours of work and after finishing their work, the workers would go on to do similar work at other premises in the locality.
The respondent 's conviction under section 92 of the FactoriesAct for, inter alia, using his premises as a factory without obtainingregistration, etc.
was set aside in revision by the High Court on the viewthat the workers in question were not "workers" within the meaning of the .
On appeal to this Court, HELD:The High Court had rightly decided that the workers in the present case were not "workers" covered by section 2(1) of the .
[714 C] Dharangadhara Chemical Works Ltd. vs State of Saurashtra, A.I.R. , Chintaman Rao & Another vs The State of Madhya Pradesh, ; ; State of Kerala vs V. M. Patel, [1960] K. L. J. 1524 and Birdhichand Sharma vs First Civil Judge, Nagpur; , ; applied.
Obiter : After this Court had laid down a test to be applied for determining who were "workers" within the meaning of the , the High Court should have treated the question of principle as no longer open.
The High Court had certified the case to be fit for appeal as it felt that the question involved is of general importance in the State.
If the question of principle has been settled by this Court, the application of the principle to the facts of a particular case does not make the question a fit one for the Supreme Court within Article 134(1) (c) of the Constitution.
[714 D]
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<s>[INST] Summarize the judgementvil Appeal No. 5 186 of 1989.
From the Judgment and Order dated 31.8.1989 of the Delhi High Court in Company Appeal No. 35 of 1988.
F.S. Nariman, Ashok K. Mahajan and Subhash Sharma for the Appellants.
Anil B. Devan and Vinoo Bhagat for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
Leave granted.
This is an appeal from the judgment and order of the Division Bench of the High Court of Delhi, dated 31st Au gust, 1989.
The appellant No. 1 M/s World Wide Agencies (P) Ltd. is a private limited company incorporated under the provisions of the Indian (hereinafter referred to as 'the Act ') to which Table 'A ' of Schedule 1 to the Act applies, as stipulated under the Articles of Association of the company.
As per the memorandum of associ ation the appellant company was carrying on the business of travel agents at G 40, Connaught Circus, New Delhi.
The authorised Share capital of the company was to the tune of Rs.5 lakhs divided into 5000 equity shares of Rs. 100 each.
The paid up capital as per the last annual return filed by the company with the Registrar of Companies, was Rs.2,01,000.
The company had at all relevant times 7 share holders and the total number of shares subscribed and paid up was 2010 shares.
The appellant No. 2 Mrs. Amrit Kaur Singh, at all rele vant times, was a shareholder holding 545 fully paid up shares in the share capital of the company, and was also the whole time working Director of the company, holding the office from 1974 onwards.
Late Mr. S.K. Desor was a British national.
He held 600 shares in the said company, acquired by him from the Ex Managing Director Mr. Amrik Singh Saluja and his family.
The respondents Nos. 2 & 3 to this appeal are children of late Mr. S.K. Desor who died on 5th March, 1985.
As per the certified copy of the annual return made up to 15th February, 1984 548 the shareholders of appellant No. 1 (company) were as fol lows: Mr. S.K. Desor 600 shares Mrs. Amrit Kaur Singh 545 shares Mr. Yash Pal Malhotra 250 shares Mrs. Amrit Gupta 200 shares Mrs. Savitri Devi Kohli 5 shares Mr. A.S. Saluja 5 shares Mr. Balwant Singh 405 shares 2010 shares A petition under sections 397 & 398 of the Act and in the alternative for winding up of the company was filed by the respondents on 25th March, 1985, wherein it was alleged that on 12th March, 1985 respondent No. 1, being the widow of late Mr. S.K. Desor, applied as a legal heir of late S.K. Desor to the Board of Directors of the appellantcompany for transmission of 850 shares held by her late husband.
It is stated that the shares of Yash Pal Malhotra had been ac quired by late Mr. S.K. Desor; and that respondent No. 1 filed an affidavit of her daughter Ms. Kim Paul, relinquish ing her claim to the shares of her late father.
The Board of Directors resolved that they had no objection to transmis sion of the shares held by Mr. S.K. Desor but the actual transmission would take place on respondent No. 1 's obtain ing Reserve Bank of India 's permission and the succession certificate.
The respondent No. 1 's application for allot ment of 5 shares as per her letter of the same date was allowed by the Board of Directors, and it was resolved that in view of allotment of these shares, her interest in the shares of her late husband, she be appointed as a Director of the company, subject to Reserve Bank of India 's permis sion.
It is stated in the judgment under appeal that at the said meeting of the Board of Directors, they recorded their deep appreciation for the services rendered by late Mr. S.K. Desor as Managing Directorcum Chairman of the company, and.
mourned his passing away.
The quorum of the said meeting was two Mrs.
Amrit Gupta and Mrs. Savitri Devi Kohli.
It is recorded in the judgment under appeal that on 23rd March, 1985 the Board of Directors held another meeting.
The minutes of the meeting of 12th March, 1985 were confirmed by the two above mentioned Directors.
The third Director, Mrs. Amrit K. Singh, however, objected as she stated that she had not been informed of the last meeting.
Various averments had been made in the petition with 549 regard to oppression and removal of certain valuables of Mrs. Amrit K. Singh and illegal operation of the bank ac count etc.
It was also asserted that Mrs. Singh was holding 545 shares benami and these in fact belonged to Mr. S.K. Desor.
A preliminary objection was raised on behalf of Mrs. Amrit K. Singh regarding the maintainability of the petition on the ground that the appellants were not members of the company as their names had not been recorded in the register of members.
A further objection was taken that a composite petition under sections 397 & 398 of the Act with an alternative prayer for winding up of the company was not maintainable.
The learned single Judge of the High Court sitting as a Company Judge dealt with the application and held that the appellants who were the wife and children of late Mr. S.K. Desor and had obtained letters of administration.
u/s 290 of the Indian Succession Act read with section 273 of the Act, as also the permission of the Reserve Bank of India, should be treated as members for the purpose of maintaining a petition sections 397 & 398 of the Act.
The learned single Judge also held that a composite petition was maintainable.
The appellant Mrs. Amrit K. Singh filed an appeal for herself and, as she alleged, as "Working Director" from the judgment and order dated 21st September, 1988 of the learned single Judge.
It appears that the appellants, aggrieved thereby, had also moved this Court under article 136 of the Constitution.
This Court by its order dated 18th January, 1989 stayed the further proceedings before the learned single Judge and directed expeditious disposal of the appeal pending before the division bench or the High Court, from the said order of 21st September, 1988 which had been admit ted on 13th October, 1988, for consideration by the Division Bench of the High Court of the application for.
directions.
By a judgment and order delivered on 31st August 1989 the Division Bench dismissed the said appeal and held that the petition section 397 & 398 was maintainable by the respondents in the facts and circumstances of the case, and that a composite petition sections 397,398 & 433(f) of the Act was maintainable.
Aggrieved thereby, the appellants preferred this appeal to this Court.
We are concerned with two questions of law, namely, whether the legal heirs of a deceased shareholder can be treated as members of the company for the purpose of main taining a petition sections 397 & 398 of the Act, and whether a composite petition under sections 397, 398 & 550 433(f) of the Act is maintainable.
We had the advantage of hearing Mr. F.S. Nariman, counsel for the appellants and Mr. Anil Diwan for the respondents.
It may be mentioned that during the pendency of the appeal before the High Court, without prejudice to the rights and contentions of the parties, an emergent meeting of the Board of Directors was directed by the High Court to be held on 28th January, 1989 to consider the question of registration of 450 shares belonging to the deceased Mr. S.K. Desor in the name of Mrs. Margarat T. Desor and her son Sameer K. Desor, being re spondents Nos. 1 & 3 respectively.
It further appears that as per the directions of the Division Bench, dated 27th January, 1989 the court had appointed Chairman Mr. C.K. Mahajan and Mrs. Margarat T. Desor were not permitted to vote at the said meeting.
At a meeting held subsequent thereto, by a majority, it was resolved not to register the respondents Nos. 1 & 3 as members.
It must, however, be noted that the Division Bench vide its order dated 27th January, 1989 had directed that no effect would be given to the said Resolution.
The question, therefore, which is material to be consid ered, is, whether the legal heirs of a deceased shareholder whose names are not entered in the register of members, are entitled to maintain petition sections 397 & 398 of the Act.
It was contended on behalf of the appellants that sections 397 & 398 of the Act must be strictly construed.
Section 397 of the Act which is in chapter VI of the Act under the heading "Prevention of Oppression and Mismanage ment", provides as follows: "Application to Court for relief in cases of oppression.(1) Any member of a company who complains that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members including any one or more of themselves may apply to the Court for an order under this section, provided such members have a right so to apply in virtue of section 399.
(2) If, on any application under sub section (1), the Court is of the opinion (a) that the company 's affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members, and 551 (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the fact would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up; the Court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.
" On behalf of the appellants it was contended that the right which is a specific statutory right, is given only to a member of the company and until and unless one is a member of the company, there is no right to maintain application u/s 397 of the Act.
Mr. Nariman contended that there was no automatic transmission of shares in the case of death of a shareholder to his legal heir and representatives, and the Board has a discretion and can refuse to register the shares.
Hence, the legal representatives had no locus standi to maintain an application sections 387 & 398 of the Act.
Mr. Nariman submitted that the rights under sections 397 & 398 of the Act are statutory rights and must be strictly construed in the terms of the Statute.
The right, it was submitted, was given to "any member" of a company and it should not be enlarged to include "any one who may be entitled to become a member".
In order to decide the question involved, it would be necessary to examine certain provisions of the Act.
Section 2(27) of the Act states that "member" in relation to company does not include a bearer of a share warrant of the company issued in pursuance of section 114 of the Act.
Section 41 of the Act provides as follows: "(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
(2) Every other person who agreed in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company.
" Section 26 of the English Companies Act, 1948 in sub stantially the same.
Section 109 of the Act states as follows: "A transfer of the share or other interest in a company of a 552 deceased member thereof made by his legal representative shall, although the legal representative is not himself a member, be as valid as if he had been a member at the time of the execution of the instrument of trans fer.
" In this connection, it would be relevant to refer to Articles 25 to 28 of Table A of the Act, which deal with the transmission of shares and which are in the following terms: "25.(1) On the death of a member the survivor where the member was a joint ,holder, and his legal representatives where he was a sole holder, shall be the only persons recognised by the company as having any title to his interest in the shares.
(2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.
26.(1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter pro vided, elect, either (a) to be registered himself as holder of the share; or (b) to make such transfer of the share as the deceased or insolvent member could have made.
(2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death of insolvency.
(1) If the person so becoming entitled shall elect to be registered as holder of the share himself, he shall deliver or send to the company a notice in writing signed by him stating that he so elects.
(2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share.
553 (3) All the limitations, restrictions and provisions of these regulations resulting to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice or transfer were a transfer signed by that member.
A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends or other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, become being registered as a member in respect of the share, be entitled in respect of it to exer cise any right conferred by membership in relation to meetings of the company: Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all divi dends, bonuses or other moneys payable in respect of the share, until the requirements of the notice have been complied with.
" Article 28 is more or less in para materia to articles 32 of Table A to the English Companies Act.
It may also be mentioned, as it ' has been mentioned by the High Court, that section 210 of the English Companies Act, before its amendment in 1990, was substantially the same as section 397 of the Act.
As mentioned hereinbefore, it is the admitted case of the parties that the regulation for management of the compa ny as contained in Table A to the Act apply to appellant No. 1 and the said relevant provision in the articles of associ ation of the company regarding transfer of shares is Article 17, which is as follows: "No share shall be transferred to any person other than a shareholder of the company so long as any member of the company is willing to purchase the same at fair value.
This clause shall not apply to the executor of administrator of a deceased shareholder, if there is will or to the heir or lineal decend ents where no letter of administration has been taken." 554 Mr. Nariman submits that in view of the specific provi sions of section 397 of the Act only a member is entitled to move a petition under sections 397 and 398 of the Act and that member is one whose name is in the register of members in view of section 41 of the Act, as mentioned hereinbefore.
In this connec tion, it is was emphasised that not only must the applicant be a member but in terms of section 399 of the Act, he has to fulfil the conditions laid down under clauses (a) and (b) of section 399 of the Act.
These should be construed so as to mean what the words say.
According to Mr. Nariman, a member is not, in view of the scheme of the Act, the representative of a deceased member.
It is true that it must be a member and section 41 of the Act provides that a member of a company is a person who has applied in writing and "whose name is entered in the regis ter of members" is entitled to move the petition.
It appears in this case that names of respondent Nos. 2 and 3 had not then been entered in the register of members at the relevant time when the application was made.
But the name of Late Shri S.K. Desor was still on the register of members and the requisite shareholding for moving a petition under sections 397 and 398 of the Act was held by him.
This question, though res integra so far as this country is concerned, has been considered in England, where Pennycuick, J. had occasion to consider this in Re Jermyn Street Turkish Baths Ltd., The Company there was incorporated in 1946 and represented a joint venture by L and section In 1952, S transferred his shareholding to Mrs. P who became a director of the company.
L died in 1953 and thereafter Mrs. P was mainly responsible for the company 's affairs.
The petition ers therein were appointed administrators in L 's estate in 1960, and in 1961, at their request, the names of the peti tioners therein were entered in the register of members of the company against the name of L as administrators of L.
On the questions whether the entry constituted merely a note of the grant of administration or the registration of the petitioners as members, and whether the petitioners were members of the company for the purposes of presenting a petition under section 210 of the English Companies Act at p. 65 of the report, Pennycuick, J. noted that it was contended before him that the petitioners therein were not members of the company and hence had no locus standi to present the petition bearing in mind that petition under section 210 of the English Companies Act could only be presented by a member of the company.
In the facts of that case, Pennycuick, J. held that the petitioners were duly registered as members of the company but he proceeded to hold that even if it were so, the personal representatives of a deceased member must be regarded as members of the company for the purposes of 555 section 210 Of the English Companies Act.
In this connection, reference was made to the decision of Buckley, J. in Re Bayswater Trading Co. Ltd., , where at p. 609 of the report, it was held that 'member ' would in clude representative of a deceased member for the purpose of section 353 of the English Companies Act.
This judgment of Penny cuick, J. went up in appeal to the Court of Appeal and it was reversed.
See Re Jermyn Street Turkish Baths Ltd., But on the point whether the repre sentative of a deceased member can maintain an action under section 210 of the English Companies Act, the views of Penny cuick, J. were not reversed or modified.
Mr. Nariman submit ted that the observations of Pennycuick, J. were obiter for the decision of the case.
We are unable to agree.
Indeed, this was a point specifically referred to by Pennycuick, J. as being raised and specifically decided.
But we need not detain ourselves with this controversy because the decision of the English Courts are not binding in the courts of India.
But the observations or the reasoning are of persua sive value.
We are clearly of the opinion that having regard to the scheme and the purpose of sections 397 and 398 of the Act, the reasoning on a para materia provision of the English Act would be a valuable guide.
The said construction, appears to us, to further the purpose intended to be fulfilled by petitions under sections 397 and 398 of the Act.
It facilitates solution of problems in case of oppression of the minorities when the member is dead and his heirs or legal representa tives are yet to be substituted.
This is an equitable and just construction.
This construction, as suggested by Penny cuick, J. does not militate against either equity or justice of the such situation.
We would, therefore, adhere to that construction.
In this connection, it may be mentioned that in the 1972 Edition of Gore Browne on Companies, it has been stated as follows: "It has recently been settled that the person al representatives of a deceased member, even though they are not registered as members, are entitled to present a petition under section 210.
In Re. Jermyn Street Turkish Baths Ltd., Pennycuick, J. held that on its true construc tion section 210 required that the word 'member ' should include the personal represen tatives of a deceased member, on whom title of his shares devolved by operation of law.
" In 1st Supplement January 1978 of Gore Browne on Compa nies, at para 16, it is stated that "while the shares remain in the name of the deceased holder, his estate is prima facie entitled to any subsequent benefits deriving from the shares".
At p. 491 of Buckley on Companies , the decision of Re Jermyn Street Turkish Baths Ltd. 's case (supra) has also been referred to and it was observed that for the purpose of the petition under section 210 of the English Companies Act, 'member ' includes the personal representatives of a deceased member.
Buckley also notes that this decision referred herein was reversed without affecting this point by the Court of Appeal.
In Halsbury 's Laws of England, 4th Edition, Vol. 7, para 1010, at p. 604, same view has been expressed.
The division bench of the Delhi High Court also noticed that the view expressed in Re Jermyn Street Turkish Baths (supra) also finds indirect support from various other decisions of the English Courts.
Reference was made to the decision in James vs Buena Venture Nitrate Grounds Syndicate Ltd., [1896] 1 Chancery Division 456; Re Dlewellyn vs Kasintoe Rubber Estate Ltd., and New Zealand Gold Extraction Company (Newbe ryyautin Proces) Ltd. vs Peacock, These decisions do indicate that the right of members in similar, though not identical situations, should be construed as being belonging to the legal representative or heirs of deceased members.
Our attention, however, was drawn to the decision of Supreme Court of Victoria in Re Meyer Dougals Pty. Ltd., ; by Gowans, J. Article 22 of Table A to the Victorian Companies Act, 1938 (4602) provides as follows that: "22.
A person becoming entitled to a share by reason of the death, bankruptcy or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not before being registered as a member in respect of the share be entitled in respect of it to exercise any right conferred by membership in relation to meeting of the company.
" Gowans, J. in that case found that there was a "careful distinction between members and persons entitled to share by reason of the death of a member but who are not registered appear to deny the status of a member to a legal personal representative who is not a member".
On an analysis of various decisions, Gowans, J. was of the view that a de ceased 's estate and its representative may in a particular context have to be treated as not a member and in view of the provisions of section 186(1) of the Victorian Companies Act, 1961 which provides "any member of a company who complains that the affairs of the company are being conducted in manner oppressive to one or more of 557 the members (including himself) may . apply to the court for an order under that section", Gowans, J. came to the conclusion that there was no reason for treating the word "members" in that section as not applying to a legal repre sentative who is not entitled to be accorded the right which registration would give him to vote in regulating the con duct of the company 's affairs.
The object of the section, which is in para materia to section 399 of the Act, was to pro vide a remedy for the case where, notwithstanding the fact that a person possesses the right of a member enabling him to participate in the conduct of the affairs of the company, he can claim that he as a member or as one of a number of members, is or are being oppressed by those who conduct the affairs of the company.
According to Gowans, J., it should not be treated as applying to someone who is not so entitled and cannot so claim.
With respect, we are unable to accept this view.
Having regard to the purpose of the section as we conceive it, it would not be just construction to deny the legal representatives of the deceased member the right of maintain a petition under sections 397 and 398.
We would prefer to accept the view of Pennycuick, J. in Re Jermyn Street Turkish Baths Ltd. 's case (supra).
It appears to us that this will be in consonance with the equity of the sections.
In Gower 's Principles of Modern Company Law, at p. 68, reference has been made to Re Jermyn Street Turkish Baths Ltd. 's, case (supra) and also to Re Meyer Douglas Pry Ltd. 's, case (supra), which, according to the learned author, seems to be more convincing.
Mr. Nariman also referred us to the comments in Hahlo 's Casebook on Company Law, 2nd Edi tion, p. 35 1, where in footnote, reference was made to Re Jermyn Street Turkish Baths Ltd. 's, case (supra), which have been followed in some decisions.
It was noted as fol lows: "It appears doubtful whether personal repre sentatives of deceased shareholders, who themselves are not, or cannot become, registered as shareholders, can be regarded as "members" for the purposes of section 210 of the 1948 Act: Re Cuthburt Cooper & Sons Ltd., [1937] Ch.
392 and Re Meyer Douglas Ltd., at 655.
" We do not agree for the reason mentioned before.
It further appears to us the Australian judgment does not reconcile to logic in accepting that legal representative can petition for winding up, which is called the "sledge hammer remedy", but would refuse the lesser and alternative remedy of seeking relief against oppression and mismanage ment though the latter remedy requires establishment of winding up on just and equitable grounds as a precondition for its 558 invocation.
It would be rather incongruous to hold that the case for winding up on just and equitable grounds can be made out by the legal representatives under section 439(4)(b) of the Act but not the other.
This does not appear to be logi cal.
It appears to us that to hold that the legal represen tatives of a deceased shareholder could not be given the same right of a member under sections 397 and 398 of the Act would be taking a hyper technical view which does not ad vance the cause of equity or justice.
The High Court in its judgment under appeal proceeded on the basis that legal representatives of a deceased member represent the estate of that member whose name is on the register of members.
When the member dies, his estate is entrusted in the legal repre sentatives.
When, therefore, these vestings are illegally or wrongfully affected, the estate through the legal represen tatives must be enabled to petition in respect of oppression and mismanagement and it is as if the estate stands in the shoes of the deceased member.
We are of the opinion that this view is a correct view.
It may be mentioned in this connection that succession is not kept in abeyance and the property of the deceased member vests in the legal represen tatives on the death of the deceased and they should be permitted to act for the deceased member for the purpose of transfer of shares under section 109 of the Act.
In some situations and contingencies, the "member" may be different from a "holder".
A "member" may be a "holder" of shares but a "holder" may not be a "member".
In that view of the matter, it is not necessary for the present purpose to examine this question from the angle in which the learned Single Judge of the Calcutta High Court analysed the posi tion in the case of Kedar Nath Agarwal vs Jay Engineering Works Ltd. and Ors., , to which our attention was drawn.
Admittedly in the present case, the legal representa tives have been more than anxious to get theft names put on the register of members in place of deceased member, who was the Managing Director and Chairman of the company and had the controlling interest.
It would, therefore, be wrong to insist their names must be first put on the register before they can move an application under sections 397 and 398 of the Act.
This would frustrate the very purpose of the necessity of action.
It was contended on behalf of the appellant before the High Court that if legal representatives who were only potential members or persons likely to come on the register of members, are permitted to file an application under sections 397 and 398 of the Act, it would create havoc, as then persons having blank transfer forms 559 signed by members, and as such having a financial interest, could also claim to move an application under sections 397 and 398 of the Act.
The High Court held that this is a fallacy, that in the case of persons having blank transfer forms, signed by members, it is the members themselves who are shown on the register of members and they are different from the persons with the blank transfer forms whereas in the case of legal representatives it is the deceased member who is shown on the register and the legal representatives are in effect exercising his right.
A right has devolved on them though the death of the member whose name is still on the register.
In our opinion, therefore, the High Court was pre eminently right in holding that the legal representa tives of deceased member whose name is still on the register of members are entitled to petition under sections 397 and 398 of the Act.
In the view we have taken, it is not necessary to consider the contention whether as on the date of petition, they were not members.
In that view of the matter, it is not necessary for us to consider the decision of this Court in Rajahmundry Electric Supply Corpn.
Ltd. vs A. Mageshwara Rao & Ors., 13.
In view of the observations of this Court in Life Insurance Corporation of India vs Escorts Limited & Ors., ; at p. 1412, it is not necessary, in our opinion, to consider the contention as made on behalf of the appellant before the High Court that the permission of the Reserve Bank of India had been errone ously obtained and consequently amounts to no permission.
In the present context, we are of the opinion that the High Court was right in the view it took on the first aspect of the matter.
The second question was whether a combined petition under sections 397, 398 and 433(f) of the Act was maintainable.
In view of the observations of this Court in Shanti Prasad Jain vs Kalinga Tubes, and the reasoning of the Bombay High Court in Bilasrai Joharmal & Ors.
vs Akola Electric Supply Co. Pvt. Ltd., , we are of the opinion that the averments which a petitioner would have to make to invoke the jurisdiction under sections 397 and 398 are not destructive of the averments which are required to be made in a case for winding up under section 433(f) of the Act on the just and equitable ground, though they may appear to be contradictory.
As Halsbury 's Laws of England, 4th Edition, Volume 7, at p. 604 605, discusses that the prayer must be made stating that the affairs are such which fulfil the requirement of winding up but to wind up the company would unfairly prejudice that part of the members, but otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up, the Court may, with a view to bringing to an end the 560 matters complained of, make such order as it thinks fit, whether for regulating the conduct of the company 's affairs in future or otherwise.
We are of the opinion that averments which a petitioner would have to make to invoke the juris diction of sections 397 and 398 of the Act are not destructive of the averments which are required to be made in a case for winding up under section 433(f) on the just and equitable ground, though they may appear to be rather conflicting if not contradictory.
We are in agreement with the High Court that the petition must proceed upto certain stage which is common to both winding up and though there may be some difference in procedure to be adopted, it is not such which is irrecon cilable and cannot simultaneously be gone into.
Indeed these are made in the manner indicated before.
It has to be borne in mind that a discretion is conferred on the court and it is only when the Court is satisfied that the facts justify the making of a winding up order on the ground that it is just and equitable that the company should be wound up, but if the Court is further of the opinion that it would be a remedy worse than the disease, then the Court can examine whether the alternative relief by way of a direction under ' section 397 can be granted.
This is a well accepted remedy exercised by the Courts.
We are, therefore, of the opinion that the High Court.was right in the view that a composite petition under sections 397,398 and 433(f) of the Act is main tainable.
The appeal, therefore, must fail and is accordingly dismissed.
We dismiss the appeal with costs, which is as sessed at Rs.5,000.
Y. Lal Appeal dis missed.
[/INST]The Petitioner landlord filed a suit No. 213 of 1970 for eviction against the first respondent and four others in the court of Civil Judge, Senior Division, Thane.
The suit was decreed by the Trial Court.
The first respondent alone filed an appeal before the District Court.
The appeal was dis missed confirming the eviction.
Thereafter the first re spondent filed a Writ Petition in the High Court of Bombay which was also dismissed.
The first respondent then filed Civil Appeal No. 2628 of 1980 in this Court which was dis missed by this Court on 18.8.1987.
However at the request of the appellant this Court had allowed him to continue to be in possession and carry on the business till 31.3.89 subject to the appellant and all his employees in the business filing an usual undertaking in the Court that they will hand over and deliver vacant possession of the premises on the expiry of the period mentioned above and will go on deposit ing the mesne profits until possession is delivered.
In pursuance of this order an undertaking was filed by the first respondent as also by persons shown as his employees and staying in the premises.
Sometime in the beginning of 1989 one Raghuram A. Shetty Second respondent in this Petition filed Civil Suit No. 306 of 1989 in the Thane Civil Court for a declaration that the decree for eviction obtained in respect of the premises in question in civil suit No. 213 of 1970 cannot be executed against him and for a permanent injunction against the Petitioner herein.
He also moved an application for a tempo rary injunction from executing the said decree.
The Thane Civil Court granted a temporary injunction as prayed.
That is how the Petitioner herein filed this contempt petition both against the original tenant K.M.M. Shetty and the second respondent the Plaintiff in Civil Suit No. 306 of 1989.
After discussing in detail the various developments of the case 562 brought about by the first respondent as well as by the 2nd respondent herein, this Court directed that the order grant ing injunction against the Petitioner from executing the eviction decree against the 2nd respondent shall not be operative and that the Petitioner is entitled to execute the decree for eviction against all persons who are in posses sion of the property.
While holding the first respondent guilty of committing contempt by wilful disobedience of the undertaking given by him in this court, the Court, HELD: Breach of an injuction or breach of any undertak ing given to a Court by a person in civil proceedings on the faith of which the Court sanctions a particular course of action is misconduct amounting to contempt.
[568F] The remedy in such circumstances may be in the form of a direction to the contemnor to purge the contempt or a sen tence of imprisonment or time or all of them.
[568F] When a court accepts an undertaking given by one of the parties and passes an order based on such undertaking, the order amounts in substance to an injunction restraining that party from acting in breach thereof.
[568D] The breach of an undertaking given to the Court by or on behalf of a party to a civil proceeding is, therefore, regarded as tantamount to a breach of injunction although the remedies were not always identical.
For the purpose of enforcing an undertaking that undertaking is treated as an order so that an undertaking, if broken, would involve the same consequences on the persons breaking that undertaking as would their disobedience to an order for an injunction.
[568D E] In the light of this Court 's finding in the instant case, that there was a breach of the undertaking mere impo sition of imprisonment or fine will not meet the ends of justice.
There will have to be an order to purge the con tempt by directing the first respondent contemnor to deliver vacant possession immediately and issuing necessary further and consequential directions for enforcing the same.
[568G]
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<s>[INST] Summarize the judgementivil Appeal No. 575 (NT) of 1975.
From the Judgment and Order dated the 24.4.1973 of the Calcutta High Court in Income Tax Reference No. 202 of 1969.
B. Ahuja and Ms. A. Subhashini for the Appellant.
K.P. Bhatnagar, S.P. Mittal and B.P. Maheshwari for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
This appeal by special leave is directed against the judgment of the High Court at Calcutta answering the following question in favour of the assessee and against the Revenue: "Whether, on the facts and in the circum stances of the case, the share of profit of the assessee 's wife was includable in the total income of the assessee under section 64(1)(iii) of the Income Tax Act, 1961?" 739 The assessee was assessed in the status of an individual for the assessement year 1962 63 corresponding to the previ ous year 26 March, 1961 to 13 April, 1962.
At the material time the assessee was a partner in a firm, Messrs Ramesh and Co., with a share of eight annas therein.
The balance was shared by three other partners, the assessee 's father, Kunjilal Agarwala, the assessee 's brother, Hariram Agarwala and a stranger, Jagdish Prasad.
On 10 November, 1960 and on 28 November, 1960 the assessee made two gifts of Rs.21,000 and Rs.30,000 respectively to his wife, Kaushalya Devi, from his account in the firm.
On 28 November, 1960 he made anoth er gift of Rs. 11,000 to his mother Chili Bai from that account.
It may be observed that Chili Bai received another gift of Rs.20,000 from her husband, Kunjilal, effected by similarly drawing from his account with the firm.
The assessee 's wife, Kaushalya Devi, as well as his mother Chili Bai became partners with three other persons in a newly constituted firm, Messrs Kunjilal Hariram & Co. The three other partners were the assessee 's grand father, Moharilal Agarwala, the assessee 's brother, Hariram Agarwala and the stranger, Jagdish Prasad Gup.
The Partnership Deed dated 10 November, 1960 provided that the business was to commence from 12 November, 1960.
The preamble to the deed stated: "Whereas the partner of the Fifth Part who has extensive experience and outstanding talent of organisation in Jagree and Grains Trade but little finance requested the partners of the First four Parts to enter into co partnership with him on contributing the necessary finance to carry on business in Jagree and Grains and also act as Commission Agents in Jagree Grains and allied commodities to which request they acceded." Clause 4 of the Partnership Deed stipulated: "That the partners of the First Four Parts shall initially contribute Rs.25,000 each to be put in within six months from the commence ment of the partnership.
The said contribu tions augmented by further deposits and prof its or depleted by withdrawals and tosses shall carry interest at the rate of 6% per annum.
The amount if any, standing to the credit of the partner of the Fifth Part shall carry interest at the same rate." 740 On 12 November, 1960 Kaushalya Devi contributed Rs.21,000 as capital, which came out of the gift made by the assessee on 10 November, 1960.
She also contributed Rs.30,000 as capital, which amount came out of the gift made on 28 November, 1960.
In the course of assessment proceedings for the assess ment year 1962 63 in respect of the assessee the Income Tax Officer included the profits of the assessee 's wife from the firm, Messrs. Kunjilal Hariram & Co., under section 64(1)(iii) of the Income Tax Act, 1961.
An appeal by the assessee was dismissed by the Appellate Assistant Commissioner of Income Tax, who observed that the wife would not have become a partner of the firm unless she had contributed capital, and as the capital was provided by the husband the inclusion of the wife 's share of income in the assessment of the assessee was justified.
In second appeal, it was conceded by the assessee before the Income Tax Appellate Tribunal that the interest received by the assessee 's wife on her capital contribution to the firm was includible in the total income of the assessee, but it was contended that the balance of the share of profit was not so includable as the assessee 's wife had become a part ner in the firm in her own right, and it was immaterial that the capital invested by her had been provided as a gift by the assessee.
The Appellate Tribunal found that the admis sion of the assessee 's wife as partner in the firm was solely on account of her contribution of capital to the firm, that the assets in the form of cash were transferred directly by the assessee to his wife otherwise than for adequate consideration, and that the income must be said to have arisen indirectly from the assets transferred.
The second appeal was dismissed.
At the instance of the assessee the question of law set forth earlier was referred to the High Court at Calcutta for its opinion.
The High Court has taken the view that the share of profits arose to the assessee 's wife primarily because the partnership made a profit and although it had connection with the gift it did not arise as a result of the gift, that the income arose from the share of profits only because the other partners agreed to take the assessee 's wife as partner and was allowed to contribute to the partnership firm, that the admission of the assessee 's wife to the partnership was not in consequence of the gift, and that, therefore, upon all those circumstances, the connection between the income of the share of profits and the gifts by the assessee to his wife was too remote to be included within the provisions of section 64(1)(iii) of the Income Tax Act.
741 S.64(1)(iii) of the Income Tax Act, 1961, as it stood at the relevant time, provides: "64(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly (i) xx xx xx (ii) xx xx xx (iii) subject to the provisions of cl.
(i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connec tion with an agreement to live apart.
" The income may arise directly or indirectly, but there must be a proximate connection between the accrual of the income and the assets transferred by the assessee.
In Commissioner of Income tax, West Bengal 111 vs Prem Bhai Parekh and Others, this Court held that the income of minor sons, who had invested capital in the firm out of moneys gifted to them by their father (the assessee) could not be included in the assessment of the assessee.
The Court observed: "Before any income of a minor child can be brought within the scope of section 16(3)(a) (iv), it must be established that the said income arose directly or indirectly from assets transferred directly or indirectly by his father.
There is no dispute that the assessee had transferred to each of his minor sons, a sum of Rs.75,000.
It may also be that the amount contributed by those minors as their share in the firm came from those amounts.
But the question still remains wheth er it can be said that the income with which we are concerned in this case arises directly or indirectly from the assets transferred by the assessee to those minors.
The connection between the gifts mentioned earlier and the income in question is a remote one.
The income of the minors arose as a result of their admission to the benefits of the partnership.
It is true that they were admitted to the 742 benefits of the partnership because of the contribution made by them.
But there is no nexus between the transfer of the assets and the income in question.
It cannot be said that income arose directly or indirectly from the transferor the assets referred to earlier.
Section 16(3) of the Act created an artificial income.
That section must receive strict construction as observed by this court in Commissioner of Income tax vs Keshavlal Lal lubhai Patel, In our judgment before an income can be held to come within the ambit of section 16(3), it must be proved to have arisen directly or indirectly from a transfer of assets made by the assessee in favour of his wife or minor children.
The connection between the transfer of assets and the income must be proximate.
The income in question must arise as a result of the transfer and not in some manner con nected with it.
" It seems to us that the observations of this Court in that case fully cover the case before us.
There is no doubt that the wife became a partner because of the capital contributed by her in the firm, but, as observed by the High Court, in the judgment under appeal, it was upon agreement by the remaining partners that she became a member of the partner ship.
The mere contribution of the capital by the wife into the firm would not automatically have entitled her to part nership in the firm.
The partnership was based on agreement, and it is the event of agreement between the partners that brought the assessee 's wife into the firm as partner.
Learned counsel for the Revenue relies on Commissioner of Income tax, Bangalore vs J.H. Gotla, ; Commissioner of Income tax, Assam Tripurn and Manipur vs Jwalaprasad Agarwala, ; V.D. Dhanwatey vs Commissioner of Income tax, Madhya Pradesh, Nagpur and Bhandara, and Smt.
Mohini Thapar vs Com missioner of ' Income tax (Central), Calcutta, and Others, but we are not satisfied that those cases are of assistance to the Revenue.
Reliance was placed on Potti Veerayya Sresty vs Commissioner of Income Tax, A.P., where the Andhra Pradesh High Court upheld the inclusion of the wife 's income from cloth business carried on by her, into which cloth business she had invest ed a portion of the assets transferred by the assessee.
It is sufficient to observe that the cloth business was her own business and, as the High Court pointed out, there was no necessity to depend upon the agreement of others.
It is on that basis that the High Court distinguished Prem Bhai Parekh 's case (supra).
743 We are of the view that the High Court is right in answering.
the . question referred to it in the negative, in favour of the assessee and against the Revenue.
In the result the appeal fails and is dismissed with costs.
R.S.S. Appeal dismissed.
[/INST]Accused Nos. 1 to 6, constituting an unlawful assembly the common intention of which Was to kill Baharan Mian, came to his house armed with deadly weapons.
Baharan Mian, appre hending trouble, ran inside Co arm himself but his wife prevented him from coming out again.
At that time, Baharan Mian 's two infant daughters, Sahana Khatoon aged about seven years and Chand Tara aged about seven months, were playing in the 'dalan ' of his house.
Failing in their object to kill Baharan Mlan, accused No. 1 gave farsa blows on the head, abdomen and left thumb of Sahana Khatoon causing serious injuries, and accused No. 2 gave one farsa blow on the head of infant Chand Tara.
As a result of these injuries, Sahana Khatoon died the same day while Chand Tara died after 28 days.
Accused Nos.1 and 2 were charged under sections 302, 452 and 148 I.P.C., whereas accused Nos.
3 to 6 were sought to be held vicariously liable under section 302/149 I.P.C. Accused Nos. 3 and 4 were further charged under sections 447 and 148, I.P.C. and accused Nos. 5 & 6 were charged under sections 447 and 147, I.P.C. The Trial Court convicted accused Nos. 1 and 2 on all the three counts and awarded the sentence of death to both of them for the commission of the offence punishable under section 302, I.P.C. Accused Nos. 3 and 4 were convicted under sections 302/149, 447 and 148, I.P.C. and for the offence under section 302/149, each of them was directed to suffer imprison 499 ment for life.
Accused Nos. 5 and 6 were convicted under sections 302/149, 447 and 147, I.P.C.
For the offence under sections 302/149, I.P.C., they were sentenced to undergo imprisonment for life.
The High Court dismissed the appeal of accused Nos. 1 and 2 and, while accepting the reference, confirmed the sentence of death awarded to them for the murder of the two infant girls.
The conviction of the remaining four accused under section 302/149 was, however, altered to sections 326/149 and the sentence of imprisonment for life given to each of them was substituted by a sentence of rigorous imprisonment for seven years.
Their convictions and sen tences on the other counts were, however, maintained: Before this Court it was contended on behalf of the appellants that (1) the evidence adduced by the prosecution was not reliable; (2) Even on the facts found proved by the courts below, accused Nos.
1 to 6 could not be held guilty of murder with the aid of section 149, I.P.C. as the kill ings of the two girls was outside the common object of the unlawful assembly; (3) the facts of the case did not warrant a death penalty in the case of accused Nos. 1 and 2, more so because the procedural requirement of section 235(2) of the Cr.
P.C. was not followed in letter and spirit; and (4) section 302, I.P.C., and section 354(3), Cr.
P.C., insofar as they permit the imposition of the death penalty were viola tive of Articles 14, 19 and 21 of the Constitution of India.
While partly allowing the appeals by converting the sentence of death in the case of accused nos.
1 and 2 to imprisonment for life under section 302, I.P.C., and setting aside the conviction of accused nos.
3 to 6 under section 326/149 I.P.C., the Court, HELD: (1) There is no substance in the contention that the prosecution evidence is unreliable and should not be acted upon for confirming the conviction of the accused persons.
[508B C] (2) If the prosecution did not examine some persons who were admittedly present at the scene of occurrence, on learning that they were won over, it cannot be said that the prosecution was unfair to the accused persons.
The non examination of these persons cannot affect the probative value of the evidence of other prosecution witnesses.
[508F] (3) Section 149.
I.P.C., creates a. specific offence.
Since this section imposes a constructive penal liability, it must be strictly construed.
[509G] 500 (4) It is not the intention of the legislature in enact ing section 149 to render every member of an unlawful assem bly liable to punishment for every offence committed by one or more of its members.
In order to invoke section 149 it must be shown that the incriminating act was done to accom plish the common object of the unlawful assembly.
Even if an act incidental to the common object is committed to accom plish the common object of the unlawful assembly, it must be within the knowledge of other members as one likely to be committed in prosecution of the common object.
If the mem bers of the assembly knew or were aware of the likelihood of a particular offence being committed in.
prosecution of the common object they would be liable for the same under sec tion 149.
I.P.C. [510F H] (5) What is important in each case is to find out if the offence was committed to accomplish the common object of the assembly or was one which the members knew to be likely to be committed.
There must be a nexus between the common object and the offence committed, and if it is found that the same was committed to accomplish the common object, every member of the assembly will become liable for the same.
[509H; 510A B] (6) In the instant case, the common object of the unlaw ful assembly, as alleged in the charge, was to kill Baharan Mian.
When accused Nos. 1 and 2 realised that Baharan Mian was beyond their reach.
frustrated at their failure to accomplish their mission, wielded their weapons on the innocent girls, which was no part of the common object of the unlawful assembly.
For accomplishing their common object it was not necessary to kill the two girls who were not a hinderance to accused Nos. 1 and 2 accomplishing their common object.
Accused Nos.
3 to 6 cannot, therefore, be convicted for the injuries caused to the two minor girls by accused Nos. 1 and 2, with the aid of section 149.
[511A B] (7) Section 302, I.P.C, casts a heavy duty on the Court to choose between death and imprisonment for life.
When the Court is called upon to choose between the convict 's cry 'I want to live ' and the prosecutor 's demand 'he deserves to die ', it goes without saying that the Court must show a high degree of concern and sensitiveness in the choice of sen tence.
[511D E] (8) In our justice delivery system several difficult decisions are left to the presiding officer, sometimes without providing the scales or the weights for the same.
In cases of murder, however, since the choice 501 is between capital punishment and life imprisonment, the legislature has provided a guideline in the form of sub section (3) of section 354 of the Code of Criminal Proce dure, 1973.
[511E F] (9) When the law casts a duty on the Judge to state reasons it follows that he is under a legal obligation to explain his choice of the sentence.
It may seem trite to say so but the existence of the 'special reason clause ' in the above provision implies that the Court can in fit cases impose the extreme penalty of death which negatives the contention that there never can be a valid reason to visit an offender with the death penalty, no matter how cruel, gruesome or shocking the crime may be.
[512A C] (10) Where a sentence of severity is imposed, it is imperative that the Judge should indicate the basis upon which he considers a sentence of that magnitude justified.
Unless there are special reasons, special to the facts of the particular case, which can be cataloged as justifying a severe punishment, the Judge would not award the death sentence.
If a Judge finds that he is unable to explain with reasonable accuracy the basis for selecting the higher of the two sentences, his choice should fail on the lower sentence.
[512D E] (11) The choice of the sentence has to be made after following the procedure set out in sub section (2) of sec tion 235 of the Code.
Since the provision is intended to give the accused an opportunity to place before the Court all the relevant material having a bearing on the question of sentence, there can be no doubt that the provision is salutary and must be strictly followed.
[513D, H; 514A] (12) The requirement of hearing the accused is intended to satisfy the rule of natural justice.
In the case of life or death, the presiding officer must show a high degree of concern for the statutory right of the accused and should not treat it as a mere formality to be crossed before making the choice of the sentence.
If the choice is made without giving the accused an effective and real opportunity to place his antecedents, social and economic background, mitigating and extenuating circumstances, etc.
before the Court, the Court 's decision on the sentence would be vulner able.
[514C] (13) A sentencing decision taken without following the requirements of sub section (2) of section 235 of the Code in letter and spirit may have to be replaced by an appropri ate order.
In the instant case, the Trial Court actually treated it as a mere formality as is evident from 502 the fact that it recorded the finding of guilt on 31st March, 1987, and on the same day before the accused could absorb and overcome the shock of conviction they were asked if they had anything to say on the question of sentence.
Immediately thereafter the decision imposing the death penalty on the two accused was pronounced.
[514B, E] (14) As a general rule, the Trial Courts should after recording the conviction adjourn the matter to a future date and call upon both the prosecution as well as the defence to place the relevant material bearing on the question of sentence before it and thereafter pronounce the sentence to be imposed on the offender.
[514F G] (15) In the instant case, the Trial Court did not attach sufficient importance to the mandatory requirement of sub section (2) of section 235 of the Code.
The High Court also had before it only the scanty material placed before the Sessions Judge when it confirmed the death penalty.
Absence of particulars of ancedents of accused, their socio economic conditions, the impact of their crime on the community, etc. makes the choice of punishment difficult.
[514G H] (16) It is necessary that the maximum sentence pre scribed by law should be reserved for 'the rarest of rare ' cases which are of an exceptional nature.
Sentences of severity are imposed t9 reflect the seriousness of the crime, to promote respect for the law, to provide just punishment for the offence, to afford adequate deterrent to criminal conduct and to protect the community from further similar conduct.
[515G] (17) In the instant case, unfortunately the material for choice of sentence is scanty.
The motive for the crime is obscure, the one stated.
namely, the quarrel between two infants of both sides, does not seem to be correct.
The killings were not for gain.
The change shows that the target was Baharan Mian, the father, and not the two infants.
The killing of the two infants was not in the contemplation of any of the accused.
Both the girls were the victims of the offenders ' ire resulting from frustration at the escape of their target.
There is nothing so uncommon about the crime as to make the case an exceptional one.
The mere fact that infants are killed, without more, is not sufficient to bring the case within the category of 'the rarest of rare ' cases.
[516C E] Bachan Singh vs State of Punjab, ; and Machhi Singh vs State of Punjab, , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 1314 of 1978.
Appeal by special leave from the judgment and order dated the 23rd March, 1978 of the Allahabad High Court in Civil Revision No. 1906 for 1976.
WITH CIVIL APPEAL No. 2436 OF 1981 Appeal by special leave from the judgment and order dated the 20th August, 1981 of the Allahabad High Court in Civil Writ Petition No. 6909 of 1979.
AND CIVIL APPEAL No. 1710 OF 1981 From the judgment and Decree dated the 13th March, 1981 of the Allahabad High Court in Writ Petition No. 6167 of 1979.
AND SPECIAL LEAVE PETITION (CIVIL) NO.
3573 OF 1979 494 From the judgment and order dated the 3rd January, 1979 of the Allahabad High Court in Civil Revision No. 3714 of 1978.
G.L.Sanghi, Mrs. A. Verma and D.N. Mishra for the Appellant in CA.
No. 1314 of 1978.
J.P. Goyal, S.Markandeya and C.K.Ratnaparkhi for the Respondent in CA.
1314 of 1978.
A.K. Srivastava for the Appellant in CA.
1710/80.
R.B. Mehrotra for Respondent in CA.
1710/80.
Pramod Swarup and Mrs. section Markandeya for the appellant in CA.
2436 of 1980.
S.N. Kacker and K.K Gupta for the Respondent in CA.
2436 of 1980.
P.R.Mridul, Praveen Jain and K.B. Rohatgi for the Petitioner in SLP (Civil) No. 3573 of 1979 R.H. Dhebar for the Respondent.
The Judgment of the Court was delivered by MISRA J.
The first two appeals by special leave and the third by certificate and the special leave petition raise a common question of law and, therefore, we propose to dispose of them by a common judgment.
The pattern of facts in all these cases is similar.
We, therefore set out the facts of Civil Appeal No. 1314 of 1978 to bring out the point for consideration in these matters.
The appellant Om Prakash Gupta is a tenant of a shop on a monthly rent of Rs. 150/ .The respondent landlord filed a suit for the eviction of the tenant on the ground that the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (Act 13 of 1972 and hereinafter referred to as 'the Act ') did not apply to the shop and the tenant was liable to eviction.
The Judge, Small Causes Court, Mainpuri decreed the suit on the finding inter alia that the construction of the shop in suit was completed in the year 1967 and 495 that ten years having not elapsed since then, the provisions of the Act did not apply to the case.
The defendant went up in revision under section 25 of the Provincial Small Causes Courts Act against the judgment and decree of the trial Court but the same was substantially dismissed.
The defendant thereupon filed a revision under section 115 of the Civil Procedure Code in the High Court which came up for hearing before a learned Single Judge who remitted the following issue to the trial court: "On what date was the construction of the building in dispute completed within the meaning of section 2 (2) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, and deemed to have been completed as contemplated by Explanation I (a) thereto.
" The Judge Small Causes Court by his order dated 26th of November 1977 returned the following finding: "The construction of the disputed shop will be deemed to have been completed on the date of the first assessment i.e. 1.4.68 within the meaning of section 2 (2) of the U.P. Urban Buildings Act, 1972.
" The finding returned by the trial court was sought to be challenged on behalf of the tenant on the ground that the date of occupation should be taken to be the date of completion of the construction of the shop and not the date of the first assessment.
In Tilak Raj vs Sardar Devendra Singh,(1) a learned Single Judge of the same High Court had the occasion to consider section 2 (2) of the Act.
He held: "It is apparent from this provision that for purposes of this Act, a building is to be deemed to be constructed, if it is subject to assessment, on the date with effect from which the first assessment is made.
It is immaterial whether the building was constructed actually prior to that date or it had come into occupation prior to that date.
The law recognised for the purposes of this Act, the date of assessment as the date of the completion of the building.
There is thus no error in the judgment of the court below.
" 496 The learned Single Judge before whom the revision in the instant case came up for hearing doubted the correctness of the above decision.
He, therefore, referred the case to a Division Bench.
There is no dispute that the first assessment of the shop took place on 1st of April, 1968.
It is also not in dispute that the shop in question was occupied by the defendant on 16th of June, 1967, and prior to his occupation the shop was in occupation of another tenant for about a month and a half.
The appellant sought the benefit of section 39 of the Act on the ground that if the date of occupation was taken to be the date of the completion of the construction of the shop, then ten years having elapsed during the pendency of the revision before the High Court, the Act would be applicable.
The Division Bench, however, over ruled the contention of the appellant and held that the construction of the shop in question would be deemed to have been completed on 1st of April 1968 and, therefore, the Act would not be applicable to the building till the date of the decision of the revision on March 23, 1968.
The defendant undaunted by the failure came to this Court to challenge the judgment of the High Court.
Mr. G.L. Sanghi, senior counsel.
appearing for the appellant strongly contended that on a correct interpretation of sub section (2) of section 2, the Act would be applicable to the shop in question.
It would be appropriate at this stage to extract sub section (2) of section 2 of the Act insofar as it is material for the purposes of the case: "Except as provided in sub section (5) of section 12, sub section (1 A) of section 21, sub section (2) of section 24, sections 24A, 24B, 24C or sub section (3) of section 29, nothing in this Act shall apply to a building during a period of ten years from the date on which its construction is completed: Explanation I.
For the purposes of this sub section: (a) the construction of a building shall be deemed to have been completed on the date on which the completion thereof is reported to or otherwise recorded by the local authority having jurisdiction and in the case of a building subject to assessment the date on which the first assessment thereof 497 comes into effect, and where the said dates are different, the earliest of the said dates, and in the absence of any such report, record or assessment, the date on which it is actually occupied (not including occupation merely for the purposes of supervising the construction or guarding the building under construction) for the first time :. " The precise contention on behalf of the appellant is that the exemption created by this sub section does not embrace buildings constructed prior to the enforcement of the Act.
In support of his contention, Mr. Sanghi, relied upon Rattan Lal Shinghal vs Smt.
Murti Devi.(1) The same contention was raised by him in that case also and a Division Bench of this Court accepted the contention and held that Act 13 of 1972 was prospective and applied only to buildings brought into being de novo after the Act came into force.
In that case there is no discussion except this bald observation.
This Court in a subsequent case Ram Saroop Rai vs Lilavati(2) held to the contrary.
It is on this account that the present appeals were referred to a larger Bench.
There is no ambiguity in the language of sub section (2) of section 2 and in the absence of any ambiguity there is no question of taking any external aid for the interpretation of the sub section.
In plain words the sub section contemplates that the Act shall not apply to a building during a period of ten years from the date on which its construction is completed.
It nowhere says that the building should have been constructed after the enforcement of the Act and to interpret it in the way the learned counsel for the appellant seeks to interpret it, we would be adding words to the sub section, which is not permissible.
Primarily the language employed is the determining factor of the intention of the legislature.
The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself.
The question of interpretation arises only when the language is ambiguous and, therefore, capable of two interpretations.
In the present case the language of sub section (2) of section 2 of the Act is explicit and unambiguous and it is not capable of two interpretations.
498 As a second limb to the first argument, it is contended that the building will be deemed to have been constructed on the date of occupation on 16th of June, 1967 and not on the date of the first assessment, and that if this be so, the appellant would be entitled to the benefit of section 39 of the Act on the date when the revision came to be decided by the High Court on 23rd of March, 1978.
In order to appreciate this argument it will be expedient to refer to Explanation I to sub section (2) of section 2 which has already been extracted.
Explanation I provides that the building shall be deemed to have been completed on the date on which completion thereof is reported to or otherwise recorded by the local authorities having jurisdiction, and in case of a building subject to assessment the date on which the first assessment thereof comes into effect and where the said dates are different, the earliest of the said dates, and in the absence of any such report, record or assessment, the date on which it is actually occupied for the first time.
A perusal of Explanation I makes it abundantly clear that the date of occupation would be taken to be the date of completion of the construction only when there is no report or record of the completion of the construction or no assessment, thereof.
If there is an assessment, as in the present case it is, it will be the date of the first assessment which will be deemed to be the date of completion of the construction and in that view of the matter the building had not become more than ten years ' old on the date when the revision came to be decided by the High Court, and therefore there was no question of giving the benefit of section 39 of the Act to the appellant.
Further, in order to attract section 39 the suit must be pending on the date of commencement of the Act which is 15th of July, 1972 but the suit giving rise to the present appeal was filed on 23rd of March, 1974 long after the commencement of the Act.
There is yet another reason why section 39 will have no application to the present case.
In view of sub section (2) of section 2 of the Act the Act is not applicable to a building which has not a standing of ten years and if the Act itself was not applicable, it would be absurd to say that section 39 thereof would be applicable.
Considered from any angle the Act has no application to the present case and the appellant could not be given the benefit of section 39.
The suit has, therefore, been rightly decreed by the courts below.
We find no force in either of the contentions raised by Mr. Sanghi.
The counsel for the appellants in the other appeals and 499 the petitioner in the special leave petition, adopted the arguments of Mr. Sanghi.
For the foregoing discussion the appeals and the special leave petition are dismissed.
There shall, however, be no order as to costs.
We, however, direct that the order of eviction in each case shall not be executed before 30th of June, 1982 on condition that each of the appellants in the appeals and the petitioner in the special leave petition files an undertaking in this Court within four weeks from today to the following effect: 1. that he will hand over vacant and peaceful possession of the suit premises to the landlord respondent on or before 30th of June, 1982; 2.
that he will pay to the respondent arrears of rent, if any, within a month from today; 3. that he will pay to the respondent future compensation for use and occupation of the suit premises for each calendar month by the 10th of the succeeding month; and 4. that he will not induct any other person in the suit premises as a sub tenant or licensee or in any other capacity whatsoever.
We further direct that in default of compliance with any one or more of the conditions of the undertaking or if the undertaking is not filed within the stipulated time, the decree of eviction shall become executable forthwith.
N.V.K. Appeal dismissed.
[/INST]The five accused Ram Karan, his sons Sunil Kumar, Ved Prakash, Anil Kumar, Satish Kumar and deceased son Chhoteylal filed a Civil Suit 34 of 1967 against the decased Prakash Chandra, his brother Gopi Chandra and one Krishan Devi, alleging that while constructing their new house Prakash Chandra had encroached upon a portion of their land.
In that suit appellant Ram Karan got Commissioners appointed by the court on five or six occasions for taking measurements of the properties with the object of proving his case of encroachment by Prakash Chandra, the deceased.
But these Commissioners ' reports were set aside on the objection raised by Prakash Chandra and the other defendants.
The last Advocate Commissioner Mr. Mathur (C.W. 1) visited the spot on 6 9 1970, the day of occurrence, accompanied by Mr. Zafar Hussain (C.W. 2) who appeared for deceased Prakash Chandra and Mr. Mahesh Chandra (C.W. 3) who appeared for Ram Karan.
After the completion of the survey work and measurements at about 1 P.M. when all the three lawyers were standing and talking in front of the house of the appellants deceased Prakash Chandra and Umesh Chandra came there to talk to the Commissioner, which interference was not liked by the appellants.
This resulted in a sudden quarrel, exchange of hot words later followed by assault with knife etc., on the appellants which, according to prosecution, was in the exercise of right of self defence by the prosecution party, particularly Dinesh Chandra (P.W. 11).
On the side of the appellants Ram Karan 's son Chhotey Lal (accused) died and on the side of the prosecution Prakash Chandra and his son Umesh Chandra died and Dinesh Chandra (P.W. 11) was grievously injured.
All the five accused were tried and convicted by the Sessions Judge for offences under sections 302/149 I.P.C. (two counts) and 307/149 I.P.C. and were sentenced to imprisonment for life and rigorous imprisonment for four years respectively.
Ram Karan was also convicted under section 147 and sentenced to undergo rigorous imprisonment for one year and his four sons were convicted under section 148 and sentenced to rigorous imprisonment for two years.
In appeal the 396 High Court acquitted Anil Kumar and Satish Kumar, set aside the conviction and sentence under sections 147 and 148 I.P.C. in respect of the rest and confirmed (a) their sentence of life imprisonment by altering the conviction one under sections 302/34 I.P.C. and (b) their sentence of four years rigorous imprisonment to one under sections 307/34 I.P.C. Hence the appeal by special leave by Ram Karan and his two sons.
Acquitting Ram Karan and allowing the appeal of the other two in part, the Court ^ HELD: Having regard to the age of the appellant Ram Karan who was about 70 years old at the time of the occurrence, there is a reasonable doubt as to whether he would have caught hold of the young man Dinesh Chandra (P.W. 11) by his waist and whether he would have asked all his sons to attack and kill Prakash Chandra and his sons.
The appellant Ram Karan is entitled to be set at liberty.
[409 D E] BY MAJORITY Per Fazal Ali, J. (and on behalf of D.A. Desai, J.) 1:1.
Exception 4 to section 300 I.P.C. provides that culpable homicide is not murder if it is committed without pre meditation in a sudden fight in the heat of passion upon a sudden quarrel and without the offenders having taken undue advantage or acted in a cruel or unusual manner.
[399 D] 1:2.
In this case, the incident occurred upon a sudden quarrel and no one took undue advantage or acted in a cruel or unusual manner on either side.
Prakash Chandra and Umesh Chandra on the side of the prosecution died and Chhotey Lal on the side of the accused died and each of them met a homicidal death.
Therefore exception 4 to section 300 Indian Penal Code is clearly attracted and the offence of murder would be reduced to culpable homicide in respect of Sushil Kumar and Ved Prakash and, therefore, they would be guilty of committing on offence under section 304(1)/34 I.P.C. A sentence of rigorous imprisonment for seven years would be appropriate; conviction and sentence under sections 307/34 I.P.C. being in order would run con currently.
[399 B C, G H, 400 A] Per Varadarajan, J. (contra).
Sunil Kumar and Ved Prakash were the aggressors and they have been rightly convicted under section 302 read with section 34 I.P.C. for the offence of murder of Prakash Chandra land Umesh Chandra and under sections 307/34 I.P.C. with reference to P.W. 11.
Neither Exception 2 nor Exception 4 to section 300 I.P.C. would apply to the facts of the case and the offence cannot be brought under section 304 (Part I) I.P.C.
The evidence of P.Ws. 1, 10 and 11 proves beyond reasonable doubt that these two appellants Sunil Kumar and Ved Prakash attacked the deceased Prakash Chandra and Umesh Chandra with knives as a result of which both of them, who had no weapons died on the spot and these two appellants attacked P.W. 11 with knives with such intention that if he had died as a result of the injuries sustained by him they would be guilty of murder in furtherance of their common intention to murder.
Their conviction under section 307/34 is proper.
[408 F H, 409 C D] 397
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<s>[INST] Summarize the judgementAppeal No. 395 of 1959.
Appeal by special leave from the Award dated November 25, 1957 of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 24 of 1956.
N. C. Chatterjee, D. H. Buch and K. L. Hathi, for the appellants.
M. C. Setalvad, Attorney General for India, J. B. Dadachanji and section N. Andley, for the respondent Nos. 1 and 2.
M. C. Setalvad, Attorney General for India, Dewan Chaman Lal Pandhi and I. N. Shroff, for the respondent No. 3. 1960.
November 30.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an industrial matter.
It appears that the appellants were originally in the service of the Scindia Steam Navigation Co. Ltd. (hereinafter called the Scindias).
Their services were transferred by way of loan to the Air Services of India Limited (hereinafter referred to as the ASI).
The ASI was formed in 1937 and was 813 purchased by the Scindias in 1943 and by 1946 was a full subsidiary of the Scindias.
Therefore from 1946 to about 1951, a large number of employees of the, Scindias were transferred to the ASI for indefinite periods.
The Scindias had a number of subsidiaries and it was usual for the Scindias to transfer their employees to their subsidiary companies and take them back whenever they found necessary to do so.
The ' appellants who were thus transferred to the ASI were to get the same scale of pay as the employees of the Scindias and the same terms and conditions of service (including bonus whenever the Scindias paid it) were to apply.
The Scindias retained the right to recall these loaned employees and it is the case of the appellants that they were entitled to go back to the Scindias if they so desired.
Thus the terms and conditions of service of these loaned employees of the ASI were different from those employees of the ASI who were recruited by the ASI itself.
This state of affairs continued till 1952 when the Government of India contemplated nationalisation of the existing air lines operating in India with effect from June 1953 or thereabouts.
When legislation for this purpose was on the anvil the appellants felt perturbed about their status in the ASI which was going to be taken over by the Indian Air Lines Corporation (hereinafter called the Corporation), which was expected to be established after the , No. XXVII of 1953, (hereinafter called the Act) came into force.
They therefore addressed a letter to the Scindias on April 6, 1953, requesting that as the Government of India intended to nationalise all the air lines in India with effect from 1 June, 1953, or subsequent thereto, they wanted to be taken back by the Scindias.
On April 24, the Scindias sent a reply to this letter in which they pointed out that all persons working in the ASI would be governed by cl. 20 of the Air Corporation Bill of 1953, when the Bill was enacted into law.
It was also pointed out that this clause would apply to all those actually working with the ASI on 103 814 the appointed day irrespective of whether they were recruited by the ASI directly or transferred to the ASI from the Scindias or other associated concerns.
It was further pointed out that if the loaned employees or others, employed under the 'ASI, did not want to join ,the proposed Corporation they would have the option not to do so under the proviso to cl.
20(1) of the 'Bill; but in case any employee of the ASI whether loaned or otherwise made the option not to join the proposed Corporation, the Scindias would treat them as having resigned from service, as the Scindias could not absorb them.
In that case such employees would be entitled only to the usual retirement benefits and would not be entitled to retrenchment compensation.
Finally, it was hoped that all those in the employ of the ASI, whether loaned or otherwise, having been guaranteed continuity of employment in the new set up would see that the Scindias would not be burdened with surplus staff, requiring consequential retrenchment of the same or more junior personnel by the Scindias.
On April 29, 1953, a reply was sent by the union on behalf of the appellants to the Scindias.
It was pointed out that the loaned staff should not be forced to go to the proposed Corporation without any consideration of their claim for re absorption into the Scindias.
It was suggested that the matter might be taken up with the Government of India and the persons directly recruited by the ASI who were with other subsidiary companies might be taken by the proposed Corporation in place of the appellants.
It seems that this suggestion was taken up with the Government of India but nothing came out of it, particularly because the persons directly recruited by the ASI.
who were employed in other subsidiary companies did not want to go back to the ASI.
In the meantime, the Scindias issued a circular on May 6,1953, to all the employees under the ASI including the loaned employees, in which they pointed out that all the persons working with the ASI would be governed by cl.
20(1) when the Bill became law and would be absorbed in the proposed Corporation, unless 815 they took advantage of the proviso to cl.
20(1).
It was also pointed out that such employees as took advantage of the proviso to el.
20(1) would be treated as having resigned from service and would be entitled to usual retirement benefits as on voluntary retirement, and to nothing more.
It was also said that their conditions of service would be the same until duly altered or amended by the proposed Corporation.
The circular then dealt with certain matters relating to provident fund with which we are however not concerned.
It appears that the Act was passed on May 28, 1953.
20(1) of the Act, with which we are concerned, is in these terms: "(1) Every officer or other employee of an existing air company (except a director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement) employed by that company prior to the first day of July, 1952, and still in its employment immediately before the appointed day shall, in so far as such officer or other employee is employed in connection with the undertaking which has vested in either of the Corporations by virtue of this Act, become as from the appointed date an officer or other employee, as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the existing air company if its undertaking had not vested in the Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation : Provided nothing contained in this section shall apply to any officer or other employee who has, by notice in writing given to the Corporation concerned prior to such date as may be fixed by the Central Government by notification in the official gazette 816 intimated his intention of not becoming an officer or other employee of the Corporation." After the Act was passed, notice was sent on June 17, 1953, to each employee of all the air companies which were being taken over by the proposed Corporation m and he was asked to inform the officer on special duty by July 10, 1953, if he desired to give the notice contemplated by the proviso to section 20(1).
A form was sent in which the notice was to be given and it was ordered that it should reach the Chairman of the Corporation by registered post by July 10.
The appellants admittedly did not give this notice as required by the proviso to section 20(1).
In the meantime on June 8, 1953, a demand was made on behalf of the appellants in which the Scindias were asked to give an assurance to them that in the event of retrenchment of any loaned staff by the proposed Corporation within the first five years without any fault, the said staff would be taken back by the Scindias.
Certain other demands were also made.
The Scindias replied to this letter on July 3 and pointed out that they could not agree to give an assurance to take back the loaned staff in case it was retrenched by the proposed Corporation within the next five years.
We are not concerned with the other demands and the replies thereto.
On July 8, a letter was written on behalf of the appellants to the Scindias in which it was said that the appellants could not accept the contention contained in the circular of May 6, 1953.
Though the appellants were carrying on this correspondence with the Scindias, they did not exercise the option which was given to them under the proviso to section 20(1) of the Act,.
by July 10, 1953.
First of August, 1953, was notified the appointed day under section 16 of the Act and from that date the undertakings of the "existing air companies" vested in the Corporation established under the Act (except the Air India International).
So on August:1, 1953, the ASI vested in the Corporation and section 20(1) of the Act came into force.
Hence as none of the appellants had exercised the option given to them under the proviso, they would also be governed by the said provision, 817 unless the contention.
raised on their behalf that they could in no case be governed by section 20(1), is accepted.
The tribunal came to the conclusion that, whatever the position of the appellants as loaned staff from the Scindias to the ASI, as they were informed on May 6, 1953, of the exact position by the Scindias and they did not ask for a reference of an industrial dispute immediately thereafter with the Scindias and as they" ' did not exercise the option given to them by the proviso to section 20(1) before July 10, 1953, they would be governed by section 20(1) of the Act.
In consequence, they became the employees.
of the Corporation as from August 1, 1953 and would thus have no right there after to claim that they were still the employees of the Scindias and had a right to revert to them.
The consequence of all this was that they were held not to be entitled to any of the benefits which they claimed in the alternative according to the order of reference.
It is this order of the tribunal rejecting the reference which has been impugned before us in the present appeal.
The main contention of Mr. Chatterjee on behalf of the appellants is that they are not governed by section 20 (1) of the Act and in any case the contract of service between the appellants and the Scindias was not assignable and transferable even by law and finally that even if section 20(1) applied, the Scindias were bound to take back the appellants.
We are of opinion that there is no force in any of these contentions.
20(1) lays down that every officer or employee of the "existing air companies" employed by them prior to the first day of July, 1952, and still in their employment immediately before the appointed day shall become as I from the appointed day an officer or employee, as the case may be, of the Corporation in which the undertakings are vested.
The object of this provision was to ensure continuity of service to the employees of the "existing air companies" which were being taken over by the Corporation and was thus for the benefit of the officers and employees concerned.
It is further provided in section 20(1) that the terms of service etc. would be the same until they are duly altered by the Corporation.
One should have thought that the employees of the air 818 companies would welcome this provision as it ensured them continuity of service on the same terms till they were duly altered.
Further there was no compulsion on the employees or the officers of the "existing air companies" to serve the Corporation if they did not want to do so.
The proviso laid down that any officer or other employee who did not want to go into the service of the Corporation could get out of service by notice in writing given to the Corporation before the date fixed, which was in this case July 10, 1953.
Therefore, even if the argument of Mr. Chatterjee that the contract of service between the appellants and their employers had been transferred or assigned by this section and that this could not be done,, be correct, it loses all its force, for the proviso made it clear that any one who did not want to join the Corporation, was free not to do so, after giving notice upto a certain date.
Mr. Chatterjee in this connection relied on Nokes vs Doncaster Amalgamated Collieries Ltd. where it was observed at p. 1018 "It is, of course, indisputable that (apart from statutory provision to the contrary) the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A 's consent, which is the same thing as saying that, in order to produce the desired result,, the old contract between A and X would have to be terminated by notice or by mutual consent and a new contract of service entered into by agreement between A and Y." This observation itself shows that a contract of service may be transferred by a statutory provision; but in the present case, as we have already said, there was no compulsory transfer of the contract of service between the "existing air companies", and their officers and employees to the Corporation for each of them was given the option not to join the Corporation, if he gave notice to that effect.
The provision of section 20(1) read with the proviso is a perfectly reasonable provision and, as a matter of fact, in the interest of employees themselves.
But, Mr. Chatterjee argues that section 20(1) will only apply to those who were in the employ of the "existing air companies"; it would not (1) , 819 apply to those who might be working for the "existing air companies" on being loaned from some other company.
In other words, the argument is that the, appellants were in the employ not of the ASI but of the Scinaias and therefore section 20(1) would not apply to them and they would not become the employees of the Corporation by virtue of that provision when they failed to exercise the option given to them by the proviso.
According to him, only those employees of the ASI who were directly recruited by it, would be covered by section 20(1).
We are of opinion that this argument is fallacious.
It is true that the appellants were not originally recruited by the ASI.
They were recruited by the Scindias and were transferred on loan to the ASI on various dates from 1946 to 1951.
But for the purposes of section 20(1) we have to see two things: namely, (i) whether the officer or employee was employed by the existing air company on July 1, 1952, and (ii) whether he was still in its employment on the appointed day, (namely, August 1,1953).
Now it is not disputed that the appellants were working in fact for the ASI on July 1, 1952, and were also working for it on August 1, 1953.
But it is contended that though they were working for the ASI they were still not in its employment in law and were in the employment of the Scindias because at one time they had been loaned by the Scindias to the ASI.
Let us examine the exact position of the appellants in order to determine whether they were in the employ of the ASI or not.
It is not disputed that they were working for the ASI and were being paid by it; their hours of work as well as control over their work was all by the ASI.
From this it would naturally follow that they were the employees of the ASI, even though they might not have been directly recruited by it.
It is true that there were certain special features of their employment with the ASI.
These special features were that they were on the same terms and conditions of service as were enjoyed by the employees of the Scindias in the matter of remuneration, leave, bonus, etc.
It may also be that they could not be, dismissed by the ASI and the Scindias may have had to take action in case it was 820 desired to dismiss them.
Further it may be that they could be recalled by the Scindias and it may even be that they might have the option to go back to the Scindias.
But these are only three special terms of their employment with the ASI.
Subject to these special terms, they would for all purposes be the employees of the ASI and thus would in law be in the employment of the ASI both on July 1, 1952 and on August 1, 1953.
The existence of these special terms in the case of these appellants would not in law make them any the less employees of the ASI, for whom they were working and who were paying them, who had power of control and direction over them; who would grant them leave, fix their hours of work and so on.
There can in our opinion be no doubt that subject to these special terms the appellants were in the employ of the ASI in law.
They would therefore be in the employ of the ASI prior to July 1, 1952 and would still be in its employ immediately before August 1, 1953.
Consequently, they would clearly be governed by section 20(1).
As they did not exercise the option given to them by the proviso to section 20(1), they became the employees of the Corporation from August 1, 1953, by the terms of the statute.
The last point that has been urged is that even if section 20(1) applies, the Scindias are bound to take back the appellants.
Suffice it to say that there is no force in this contention either.
As soon as the appellants became by force of law the employees of the Corporation, as they did so become on August 1, 1953, in the circumstances of this case, they had no further right against the Scindias and could not; claim to be taken back in their employment on the ground that they were still their employees, in spite of the operation of section 20(1) of the Act.
Nor could they claim any of the alternative benefits specified in the order of reference, as from August 1, 1953, they are by operation of law only the employees of the Corporation and can have no rights whatsoever against the Scindias.
We are therefore of opinion that the tribunal 's decision is correct.
The appeal fails and is thereby dismissed.
There will be no order as to costs.
Appeal dismissed.
[/INST]The appellants were partners in a registered firm which was dissolved on March 24, 1945.
A private limited company succeeded to the business of the firm from March 25, 1945.
For the accounting period April 1, 1944, to March 24, 1945, the firm was assessed to excess profits tax under the Excess Profits Tax Act, 1940.
It had deposited certain sums of money as required under section 10 of the Indian Finance Act, 1942, read with section 2 Of the Excess Profits Tax Ordinance, 1943, and in accordance with those provisions became entitled to repayment of a portion of the excess profits tax.
The appellant 's claim before the Income.
tax Officer under section 25(4) of the 'Indian Income tax Act, 1922, that no tax was payable on the profits of the firm for the period between April 1, 1944, to March 24, 1945, was allowed, but their plea that the amount of refund of the excess profits tax was business profit and therefore similarly exempt from tax, was rejected.
The High Court, on a reference, took the view that the amount refunded was income from other sources taxable under section 12 Of the Indian Income tax Act, 1922, and that, therefore, the appellants were not entitled to the benefit of section 25(4) Of that Act.
Held, that in view of section 12(1) of the Excess Profits Tax Act, 1940, and section II(II) of the Indian Finance Act, 1946, the amount refunded was income from business for the purposes of the Indian Income tax Act, 1922, and did not lose its character which it had before the deposit.
It fell under section 10 of the Indian Income tax Act and was, therefore, exempt under section 25(4) of that Act.
Mc Gregor and Baljbur Ltd. vs Commissioner of Income tax, Bengal, and A. & W. Nesbitt Ltd. vs Mitchell, [1926] II T.C. 2II, relied on.
</s>
|
<s>[INST] Summarize the judgementAppeals Nos.
392 and 393 of 1954.
Appeals by special leave from the judgment and order dated March 26, 1962, of the Calcutta High Court in Civil Revision Nos. 3176 of 1958.
G.S. Chatterjee and S.C. Mazumdar, for the appellant (in C.A. No. 392/64).
N.C. Chatterjee and section (7.
Mazumdar, for the appellant (in C.A. No. 393/64).
C.K. Daphtary, Attorney General, B. Sen, S.C. Bose and P.K. Bose, for the respondents (in C.A. 392/64).
B. Sen, S.C. Bose and P.K. Bose, for the respondent (in C.A. No. 393/64).
The Judgment of the Court was delivered by Hidaytullah, J.
these two appeals the appellants seek to displace a common judgment and order of the High Court of Calcutta dated March 26, 1962 by which a Full Bench of the Court, specially constituted to hear and determine certain petitions under article 226 of the Constitution involving a common point of law, discharged the Rule issued earIier in them.
These cases were concerned with Muslim wakfs in which either the ultimate benefit to charity is postponed till after the exhaustion of the wakif 's family and descendants or the income from the wakf estate is applied for the maintenance of the family side by side with expenditure for charitable or religious purposes.
The common question which arose and still arises is whether these wakfs are affected by the passing of the West Bengal Estates Acquisition Act, 1953 (West Bengal Act I of 1954). ?hat Act, in common with similar Acts of other States in india abolished from a date notified by the State Government all intermediaries such as proprietors, tenure holders etc.
between the raiyat and the State and vested the estates and the rights of the intermediaries in the State free from all incumberances.
Section 3 of the Act provided that the Act was to have effect notwithstanding anything to the contrary contained in any other law or in any contract express or implied or in any instrument and notwithstanding any usage or custom to the contrary.
There were, however, some exceptions and one such exception was that an intermediary was entitled to retain, with effect from the date of vesting, land held in khas under a trust or endowment or other legal obligation exclusively for a purpose which was charitable or religious or both.
Notices under section 10(2) of the Act were issued by the Collectors in charge, Estate Acquisitions, to the respective Mutwallis informing them that after the notification issued on November II, 1954 under section 4 of the Act there was extinction and cesser of the estate 309 and rights of these intermediaries and their divested estates and rights vested in the State.
The Mutawallis were called upon by said notice or order to give up possession of these estates and interests within 60 days of the service of the order, to the officer empowered by the Collector in this behalf.
The orders also specified in schedules appended thereto, the details of such properties, interests and rights.
Notices of this kind were issued to Fazlul Rabbi radhan, Mutawalli of Abdul Karim Wakf Estate, who is appellant a Civil Appeal No. 392 of 1964 and to Kawsar Alam, Mutawalli of Penda Mohammad Wakf Estate, appellant in Civil Appeal No.393 of 1964.
Similar notices were issued to other mutawallis in respect of other wakfs.
The mutawallis appeared in answer to the notices and objected to them.
They claimed that they were protected by section 6(1)(i) of the Act (to which detailed reference will be made (resently) as they were holding the properties exclusively for purposes which were charitable or religious or both.
This claim was not accepted by the Collector, Estate Acquisitions, and appeals to the commissioner also failed.
The orders of the Collector and the Commissioner are dated February 24, 1956 and January 18, 1958 respectively.
The appellants after serving notices of demand for justice filed petitions in the High Court under article 226 of the Constitution.
The petitions came up for hearing before D.N. Sinha J. and were refered, on his recommendation, to a Full Bench consisting of Bachaat, D.N. Sinha and P.N. Mookerjee JJ.
These learned Judges by separate but concurring judgments held that the wakfs in question were not protected by section 6(1)(i) as they were not exclusively for purposes which were charitable or religious or both and discharged the Rule.
The cases were, however, certified under article 133(1)(a) and (c) of the Constitution and these two appeals were filed.
It is not necessary to state how the Act is constructed for the ' only question is whether the wakfs can be said to be exclusively for purposes which are religious or charitable or both and thus exempted from the operation of the Act by virtue of section 6(1)(i) which reads "6.
Rights of intermediary to retain certain lands.
(1) Notwithstanding anything contained in section 4 and 5, an intermediary shall, except in the cases mentioned in the proviso to sub section (2) but subject to the other provisions of that sub section, be entitled to retain with effect from the date of vesting (i) where the intermediary is a corporation or an institution established exclusively for a religious or a charitable purpose or both, or 310 is a person holding under a trust or an endowment or other legal obligation exclusivey for a purpose which is charitable or religious or both land held in khas by such corporation or institution, or person, for such purposes.
" Section 2(c) defines "charitable purpose" and section 2(n) "religious purpose".
These definitions are: "2(c) "charitable purpose" includes the relief of poor, medical relief or the advancement of education or of any other object of general public utility;" "2(n) "religious purpose" means a purpose connected with religious worship, teaching or service or any performance of religious rites;" If this concession is not available then the estate must vest in the State Government under sections 4 and 5 of the Act.
The former section invests power in the State Government to notify the date from which the estates and rights of every intermediary are to vest in the State free of all incumberances and the latter says that upon due publication of the notification the vesting takes place from the date notified.
This has been done.
The wakfs in these two appeals are dissimilar in their terms but both provide for application or income for the support of the wakifs and their families.
In the Abdul Karim Wakf (Civil Appeal 392 of 1964) the value of the property is shown as Rs. 1,00,000 and a ceiling of Rs. 4,500 is placed by the wakif on expenditure per year (el. 12).
The mutawalliship and the Naib mutawalliship run in the family from generation to generation first in the male line and after exhaustion of the male line in the female line.
The charities mentioned specifically or generally require a stated expenditure of Rs. 904 per year.
The wakif has.
in addition, provided for an expenditure of Rs. 2,000 at a time, for the solace of his own soul and for his burial ceremonies etc.
Rs. 25 have been ordered to be spent on Milad every year.
As regards secular expenses the deed directs that 10 per cent of the income is to be kept as d reserve fund and from savings from the income other properties are to be purchased (cl. 19).
The mutawalli and the Naib mutawalli are tO receive 8 per cent of the income in proportion of 5:3.
Then follow numerous dispositions for the benefit of the family.
They are: "15.
My wife Bibi Jainulnessa wilt get as long as she is alive, Rs. 1,200 annually at the rate of Rs. 100 per month and Bibi Taherankhatun, the widow of my eldest son, will get as long as she is alive, Rs. 480 annually (Rupees four hundred eighty only) at the rate of Rs. 40 per month.
Such monthly allowances 311 will be stopped after their death.
After their death their heirs will not get any portion of the aforesaid monthly allowances.
Each of my three sons Shriman Tojammal Hossain Prodhan, Shriman Ahmad Yasin Prodhan and Shriman Azizul Huq Prodhan, will get Rs. 24 per cent out of the net income of the wakf estates (after payment of revenue, cess etc.
which are current at present or will be levied in future and after meeting the costs of administration).
Shriman Abu Alam Prodhan, the only son born of the loins of my deceased second son will similarly get at the rate of Rs. 7 per cent out of the net income.
A fund will be created with a deposit at the rate of Rs. 3 (Rupees three only) per cent, out of the annual net income for the purpose of education of the sons of my sons, sons of my daughters, sons of the daughters of my sons and my great grandsons (in the male line).
The Mutawalli and the Naib Mutawalli in consultation with each other will render help as far as possible to the boy amongst them who will be meritorious and has zeal for education according to his standard of education.
If there be any surplus the same will be kept in deposit in the wakf estate for meeting the expenses of education of the future heirs.
If after graduation he goes to England, France, Germany, America, Japan, Australia and other progressive countries for higher education, then the Mutawalli and the Naib Mutawalli will, in consultation with each other, help him as far as possible.
, "20.
The provision made for allowances for my aforesaid three sons and my grandson Shriman Abu AIam Prodhan in Schedule (Kha) will vest, after their death in the respective sons and grandsons in the male line equally.
If any of them has no son or grandson, in that case after his death if his wife lives and continues to follow her own religion, she will get one eighth share of the aforesaid allowance as long as she is alive.
The remaining seveneighth share and in the absence of his wife, sixteen annas share will vest in the wakf estate.
Daughters born of them will not get the said allowance (in the female line).
" In the Penda Mohammad Wakf Estate (Civil Appeal 393 of 1964) the value of the property is shown as Rs. 40,000.
The expenditure on charities and religious purposes is about Rs. 3,700 per year.
312 These are specified in Schedule Kha.
The pay of the Naib Mutawalli is fixed at Rs. 300 per year.
The Mutawalliship and the Naib Mutawalliship run in the family and Mutawalli holding office can appoint his successor.
The other important clauses of the wakf namah dealing with the application of the funds are: "(9) The Mutawalli shall from the income of the wakf property pay at first revenue and other legitimate government and zamindary dues. "(10) The Mutawalli shall pay all expenses required for the maintenance of the wakf property and the Mutawalli shall get ten per cent of such expenses.
The Mutawalli shall pay Rs. 25 (Rupees twenty five only) per month to the Naib Mutawalli as his remuneration. "(12) The Mutawalli will be entitled to take as his own remuneration the balance remaining after deducting expenses under items Nos.
(9) and (10) as well expenses under Schedule (ka) and (kha) below from the income of the Wakf property and he will be entitled to spend the sum for his own work.
In Schedule Ka dispositions are made for the family and the various clauses run as follows: "(1) My grandson Jaman Ajimuddin Ahmed shall get a sum of Rs. 200 (Rupees two hundred) per month as his tankha (allowance) that is the cost of his maintenance and on his demise his heirs shall get the said tankha generation after generation and by way of succession for ever.
(2) My daughter Sreemati Hiramannessa Bibi shall get Rs. 25 (Rupees twenty five) per month for her maintenance and on her demise her heirs shall continue to get the said tankha generation after generation for ever by way of succession.
(3) My second wife Srimati Bibijannessa Bibi shall get Rs. 30 (Rupees thirty) per month during her life time as tankha that is as costs of her maintenance and on her demise none of her heirs shall get the same and it will be included in the Wakf Estate".
It was not claimed before us in these cases that the provisions about the family have become inoperative by the exhaustion of the beneficiaries and we proceed on the assumption that the families the wakifs do still enjoy the benefits.
In these circumstances, the question is whether these trusts can be described as those exclusively for religious or charitable purposes or both.
If they can be 313 so described section 6(1)(i) would exempt them from the operation of the Act; otherwise, in view of the provisions of sections 3, 4 and 5 the estates of the intermediaries vested in the State on the appointed date.
As already stated the provisions of the Act apply notwithstanding anything to the contrary contained in any other law or in any instrument and notwithstanding any usage or custom to the contrary.
The Act must, therefore, be construed on its actual words and the exemption cannot be enlarged beyond what is granted there.
The exemption is given to Corporations and institutions established exclusively for a religious or a charitable purpose or both but to this kind of eleemosynary foundations no mutawalli in either deed can lay claim.
The matter can thus only come in, if at all, within the words of the exempting clause which read: " . a person holding under a trust or endowment or other legal obligation exclusively for a purpose which is charitable or religious or both? ' The word "exclusively" limits the exemption to trusts, endowments or other legal obligations which come solely within charitable or religious purposes.
These purposes are defined by section 2(c) and (n) and the definitions have already been reproduced.
It is quite dear (and indeed the contrary was not suggested at the Bar) that the expression "religious purpose" cannot cover these two cases.
The definition is an exhaustive one and to satisfy the requirement the purpose must be connected with religious worship, teaching or service or performance of religious rites.
No religious worship, teaching or service or performance of religious rites is involved when the wakif provides for his family or himself even though a person giving maintenance to his family or himself is regarded in Mahomedan Law as giving a sadaqah.
But even if regarded as a pious act a sadaqah of this kind is not a religious worship or rite.
In our opinion, neither of the deed makes a disposition coming within the description "exclusively for religious purposes".
This leaves over for consideration whether they come within the expression "charitable purposes".
The definition of "charitable purposes" in the Act follows, though not quite, the well known definition of charity given by Lord Macnaghten in Commissioners for Special Purposes of Income Tax vs PemseI(1), where four principal divisions were said to be comprised trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community not falling under any of the preceding heads.
The definition in this Act makes one significant change when it speaks of "public utility" and this gives a guidance to the whole meaning and purpose of the exemption.
No doubt the definition is not an exhaustive one like the definition of 'religious purposes '.
It only speaks of what may be included in it besides the natural meaning of the words.
It ; 583.
314 is quite clear that the provision for the family of the wakif or for himself cannot be regarded as 'relief of poor ', 'medical relief ' or the `advancement of education '.
It cannot also be regarded as an ex penditure on an object of general public utility.
The definition as it stands cannot obviously comprehend such dispositions.
But it is contended by Mr. N.C. Chatterjee that in giving a meaning to the expression "charitable purposes" we must be guided by the notions of Mahomedan Law and he relies upon the observation of Sir George Rankin in Tribune Press Trustees, Lahore vs
I.T. Commissioner(1).
Mr. Chatterjee claims that provision for the wakif and the wakif 's family is a charitable purpose according to Mahomedan Law.
In the Tribune case the Judicial Committee was required to interpret section 4(3)(i) of the Indian Income tax Act 1922 (XI off 1922).
That section provided: "(3) This Act shall not apply to the following classes of income: (i) Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in case of property so held in part only for such purpose, the income applied, or finally set apart for application, thereto.
In this sub section 'charitable purpose ' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility.
" In dealing with the will of Sardar Dayal Singh who had constituted a trust to maintain the Press and the Newspaper, "keeping up the liberal policy of the said newspaper and devoting the surplus income . in improving the said newspaper . ", the question had arisen whether the running of a newspaper was an object of general public utility or whether it was to be treated as a business concern.
The High Court at Lahore was divided in its opinion.
Learned Judges in favour of granting the prayer for exemption were of the opinion that the true test was not what the Court considered to be an object of public utility, but what the testator thought to be.
The Judicial Committee pointed out that in reaching this view those learned Judges were following what Chitty J. said in In re Foveaux, etc.(2) and further that that case was dissented from in later cases.
In these latter cases it was held that though the private opinion of the Judge was immaterial, nevertheless for a charitable gift to be valid, it must be shown (1) that the gift was for public benefit, and (2) that the trust was one of which the Court could, if (1)L.R. 66 I.A. 241 at P. 252.
[1895] 2 ch.
501, 315 necessary undertake and control otherwise trusts to promote all kinds of "fantastic" objects in perpetuity would be established.
The Judicial Committee acceded to this view but pointed out further: . "It is to be observed, moreover, that under the Incometax Act the test of general public utility is applicable not only to trusts in the English sense, but is to be applied to property held under trust "or other legal obligation" a phrase which would include Moslem wakfs and Hindu endowments.
The true approach to such questions, in cases which arise in countries to which English ideas let alone English technicalities may be inapplicable, was considered by the Board in Yeap Cheah Neo vs Ong Cheng Neo(1), and it was well said by Sir Raymond West in Fatima Bibi vs Advocate General of Bombay(2); "But useful and beneficial in what sense? The Courts have to pronounce whether any particular object of a bounty falls within the definition; but they must, in general, apply the standard of customary law and common opinion amongst the community to which the parties interested belong.
" Relying on this passage Mr. Chatterjee contends that if the Mahomedan Law regards gifts for the benefit of the wakif and his family as "charity" it is not for the Courts to say that they are not and he claims exemption for the wakfs.
He relies upon the precept of the Prophet "A pious offering to one 's family, to provide against their getting into want, is more pious than giving alms to beggars.
The most excellent of sadkah is that which a man bestows upon his family '.
Now it is a matter of legal history that wakfs in which the benefits to charity or religion were either illusory or postponed indefinitely, while the property so dedicated was being enjoyed from generation to generation by the family of the wakif, were regarded as opposed to the rule against perpetuities as contained in the Indian Succession and the Transfer of Property Acts.
This was so declared in a succession of cases by the Judicial Committee and the opinion of Amir Ali expressed in his Tagore Lectures as well ' as in Meer Mahomed Israeli Khan vs Shasti Churn Ghore(3) and Bikani Mia vs Shukul Poddar(4) was not accepted.
These cases are referred to in the three opinions in the High Court and most important of them is Abul Fata Mahomed Ishak and Others vs Bussomoy Dhur Chowdry, and others(5).
In that case Lord Hobhouse, while emphasising that (1) (2) Bom.
42, 50 (3) (4) (5) 22 I.A. 76.
316 Mahomedan Law ought to govern a purely Mahomedan disposition, declined to hold that disposition in which the benefit was really intended to go to the wakif and his family could be described as charity even under that law.
Speaking of the precept above quoted by us Lord Hobhouse observed: " . it would be doing wrong to the great lawgiver to suppose that he is thereby commending gifts for which the donor exercises no self denial; in which he takes back with one hand what he appears to put away with the other; which are to form the centre of attraction for accumulations of income and further accessions of family property; which carefully protected so called managers from being called to account; which seek to give to the donors and their family the enjoyment of property free from all liability to creditors; and which do not seek the benefit of others beyond the use of empty words." Similar observations were made by Lord Hobhouse in L.R. 17 I.A. 25 and by Lord Natson in L.R. 19 I.A. 170 in earlier cases.
These cases led to agitation in India and the (VI of 1913) was passed.
It declared the rights of Mussalmans to make settlements of property by way of wakf in favour of their families, children and descendants.
For the purposes of the Validating Act the term 'wakf ' was defined to mean "the permanent dedication by a person professing the Mussalman faith of any property for any purpose recognized by the Mussalman law as religious, pious or charitable".
This gave a wider meaning to the word wakf but only for the purpose of taking them out of the validity which would have otherwise existed and which was already authoritatively stated to have so existed.
After the passage of these two Acts wakfs in which the object was the aggrandisement of families of wakifs without a pretence of charity in the ordinary sense became valid and operative.
But the intention of the Validating Act was not to give a new meaning to the word "charity" which in common parlance is a word denoting a giving to some one in necessitous circumstances and in law a giving for public good.
A private gift to one 's own self or kith and kin may be meritorious and pious but is not a charity in the legal sense and the Courts in India have never regarded such gifts as for religious, or charitable purposes even under the Mahomedan Law.
It was ruled in Syed Mohiuddin Ahmed and Ant.
vs Sofia Khatun(1) that neither the Wakf Validating Act 1913 nor the Shariat Act 1937 had the effect of aborgating the Privy Council decisions on the meaning of "charitable purpose" as such.
We do not say that the English authorities should be taken as the guide as was suggested in soms of these cases at one time.
For (1) 44 C.W.N.974.
317 one thing, the law was developed in the Chancery Courts without the assistance of any statutory definition.
The earliest statute on the subject is one of 1601 in the forty third year of the reign of Queen Elizabeth I and in its preamble it gave a list of charitable objects which came within the purview of that Act, and for another, Courts in England extended these instances to others by analogy and the subject is often rendered vague and difficult to comprehend.
A clear guide is available to us in India in the interpretation of the almost similar provisions of the Indian Income tax Act 1922 already quoted.
The observations of Sir George Rankin in the Tribune, case, on which much reliance is placed by the appellants were intended to convey the same caution about English cases which we have sounded here.
The Judicial Committee did not intend to lay down that the words of a statute so precise in its definition should be rendered nugatory by leaving room for inclusion in "charitable purposes", objects which by no means could be charity in the generally accepted legal sense.
No doubt the definition which is common is not exhaustive and leaves scope for addition but it does not make for enlargement in directions which cannot be described as "charitable".
This view of the definition was taken in respect of the analogous provision of the Indian Income tax Act.
In D.V. Arur vs Commissioner 'of Income tax(1) and in re Mercantile Bank of India (Agency) Ltd.(2)it was laid down that for satisfying the test of charitable purpose there must always be some element of public benefit.
Indeed it must be so, if family endowments which are in effect private trusts are not to pass as charities which, as was observed in Mujibunnissa and Ors.
vs Abdul Rahim and Abdul Aziz(3), it is superfluous in the present day to say, is not the law.
When the two deeds are examined and their provisions considered in the light of these principles, it is easily seen that they are not exclusively for charitable purposes.
They do provide in part for objects which are religious or charitable or both but mingled with those purposes are some which are secular and some which are family endowments very substantial in character.
If the latter benefits had ceased or the families had become extinct leaving only the charities or if the provisions were for poor and needy though belonging to the wakif 's family, other considerations might conceivably have arisen, as was stated by Bachawat J. in his opinion.
The deeds as they stand cannot, however, be said to come within the exemption claimed.
The appeals must, therefore, fail.
They are dismissed but in the circumstances we direct parties to bear their own costs.
Appeals dismissed.
(1) I,A.R. (2) (3) 21 I.A. 15 at p, 26.
[/INST]The 2nd respondent purchased on 24th December 1956, at a public auction sale held by the Divisional Forest Officer, the cut timber of a coupe and paid the first installment of the purchase price immediately.
The appellant stood surety for the payment of the remaining three instalments.
The coupe was divided into 4 sections according to the rules which were deemed to be part of the contract and the boundary certificates was furnished to the 2nd respondent on 5th February 1957.
He began operations in the 1st section on the last week of February, but defaulted in the payment of the 2nd instalment which was due on 1st March 1957, and so, on 25th April the appellant and 2nd respondent were informed by the forest authorities, that no further removal of the timber would be allowed, as the value of timber already removed exceeded the amount paid.
On 28th April a fire broke cut and the timber sold to the 2nd respondent ceased to exist.
On 3rd May 1957, the formal deed of con tract, which was signed by the 2nd respondent and the Divisional Forest Officer on 24th December, was signed by the Chief Conservator of Forests, as required by the rules.
Since the 2nd respondent had not paid the later instalments proceedings were commenced by the 1st respondent against the appellant, whereupon he filed a suit for restraining the 1st respondent from continuing the proceedings.
The suit was decreed by the trial court, but dismissed on appeal, by the High Court.
In his appeal to this Court, the appellant contended that the 2nd respondent had not been put in possession of the timber sold, except the portion in the 1st section of the coupe, that there was no transfer of property in the timber and therefore he was not liable to pay the amounts due on the other 3 instalments, the transfer of property in the timber being a condition precedent to his liability.
HELD: There was an unconditional contract for the sale of specific goods in a deliverable state, the property in the timber passed to the 2nd respondent when the contract was made on 24th December 1956 under s 20 of the , and possession was also given on 5th February 1957.
Therefore, the appellant 's suit was rightly dismissed by the High Court [391 H] The timber was sufficiently identifiable and was therefore specified goods and there was nothing in the contract postponing possession till the other instalments have been paid.
The fact that the contract was signed by the Chief Conservator, after fire had broken out has no effect on the validity of the contract, or on the question of delivery of possession or on the passing of property in the timber.
The instructions in the Forest Manual about execution of contracts plainly take into consideration the lapse of time between the execu 382 tion by the lessee and by the competent forest authority, and therefore, the date on which the Chief Conservator signed had not any real effect on the actual date on which the sale of the timber took place.
It was also within the realm of possibility that the timber might be lost on account of fire or other risk, before the contract was formally signed.
The sale of the timber to the 2nd respondent was therefore final on 24th December, the date of sale, subject to the acceptance of his bid by the competent authority.
[387 E H; A B] Williams vs North China Insurance Co., L.R. (1876)1 C.P.D. 757, applied.
Rule 8 of the Forest Contract Rules empowers the Divisional Forest Officer to stop the removal of the timber on his finding that the value of the timber already removed exceeded the amount of instalments paid.
But, that would not amount to reserving a right of disposal in the State, because, the rules provide that though Ordinarily the timber should be sold for cash payment in full, payment in instalments could be considered as payment in full, if a right in accordance with r. 8 is reserved.
When a contractor is deemed to have paid in full the price, there could be no occasion for the Government to reserve a right of disposal.
The provision in r. 8 is only in pursuance of the statutory provision in section 83 of the Forest Act.
1927, which provides that when any money is payable for or in respect of any forest produce, the amount thereof shall be a first charge on such produce, and that such produce may be taken possession of by a Forest Officer, until such amount has been paid.
[390 H 391 D]
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<s>[INST] Summarize the judgementminal Appeal No. 100 of 1969.
572 Appeal by special leave from the judgment and order dated January 8, 1969 of the Bombay High Court in Criminal Application No. 1341 of 1968.
C. L. Sareen and J. C. Talwar, for the appellant.
P. K. Chatterjee and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Shelat, J.
The appellant and one Bakshi Singh Sunder Singh were accused No. 2 and accused No. 1 respectively in the committal proceedings before the Presidency Magistrate, 28th Court, Greater Bombay.
This appeal, by special leave, is directed against the judgment of the High Court of Bombay refusing to quash the order of committal passed by the learned Magistrate.
The facts relevant to this appeal are few and may first be stated.
On October 31, 1963, one Jivansingh Uttam Singh obtained a British passport bearing No. 183459 at Nairobi.
On the strength of that passport he was returning to India with his family.
On his way he died on board the ship.
According to the prosecution that passport came into the hands of the appellant.
Bakshi Singh desired to go to the United Kingdom, but had no passport.
The appellant agreed to arrange his journey and also for that purpose to obtain a passport for him.
The allegation was that the appellant prepared an applica tion for a visa in the name of Bakshi Singh.
It was further alleged that with a view to procure the said visa the photograph of the said deceased Jivansingh was removed from the said passport and that of Bakshi Singh substituted.
The visa having in this fashion been obtained, Bakshi Singh journeyed to the United Kingdom having on his way made some intermediate halts.
The British authorities suspected that the, passport was a forged document and repatriated Bakshi Singh to India.
On his arrival he was handed over to the Special Police, Bombay.
The Special Police carried out investigation in the course of which they recorded statements of certain witnesses including that of Tanna Singh, the younger brother of Bakshi Singh.
On completion of the investigation, the police filed a charge sheet before the learned Magistrate.
That charge sheet is not before us.
But counsel for the appellant informed us that Bakshi Singh was therein charged under secs.
419 and 471 read with sec.
468, and the appellant was charged under secs.
419/109, 468 and 471 of the Penal Code.
Counsel also.
informed us that the Magistrate did not examine any witnesses, during the committal 573 proceedings but on a perusal of the charge sheet and the documents filed before him under sec.
173 of the Code of Criminal Procedure he framed the charges and committed, by his order dated September 13, 1968, Bakshi Singh and the appellant for trial before the Sessions Court.
By that order he directed the said Bakshi Singh to stand his trial under secs.
120B, 419, 467 and 471 read with sec.
467, and the appellant under secs.
120B and 467 of the Penal Code.
The offence of criminal conspiracy charged under sec.
120B was that the said Bakshi Singh and the appellant had conspired to forge the said passport for the use of the said Bakshi Singh.
In the High Court various contentions were raised on behalf of the appellant in support of his application under sec.
561A of the Code of Criminal Procedure including that under sec.
196A (2).
That contention was that no consent as required by sec.
196A(2) having been first obtained, the Magistrate had no jurisdiction to take cognizance of the offence of conspiracy, and therefore, the committal order was without jurisdiction and had to be quashed.
In this appeal we are concerned only with that contention as the special leave ranted to the appellant has been limited to that ground alone.
Sub sec.
2 of sec.
196A, which is relevant to the present case, provides that no court shall take cognizance of the offence of criminal conspiracy punishable under sec.
120B of the Penal Code in a case ' inter alia where the object of such conspiracy is to commit any non cognizable offence.
There is no doubt that the charge, as framed by the Magistrate and for which he committed the appellant and Bakshi Singh to stand their trial before the Sessions Court, was for criminal conspiracy, the object of which was to forge the said passport, a non cognizable offence.
In respect of that offence, sec.
196A(2) would undoubtedly apply.
What that section prohibits is taking cognizance of an offence of criminal conspiracy unless consent to the initiation of proceedings against the person charged with it has been first obtained.
As provided by sec.
190 of the Code of Criminal Procedure, a Magistrate may take cognizance of an offence either (a) upon receiving a complaint, or (b) upon a police report, or (c) upon information received from a person other than a police officer or even upon his own information or suspicion that such an offence has been committed.
As has often been held taking cognizance does not involve any formal action or indeed action of any kind but occurs as soon as a Magistrate applies his mind to the suspected commission of an offence.
Cognizance, therefore, takes place at a point when a magistrate first takes judicial notice of an offence.
This is the position whether the magistrate takes 574 cognizance of an offence on a complaint or on a police report, or upon information of a person other than a police officer.
Therefore, when a magistrate takes cognizance of an offence upon a police report, prima facie he does so of the offence or offences disclosed in such report.
It is not in dispute that the charge sheet submitted by the police officer for the purpose of initiation of proceedings by the magistrate was for offences under sees.
419 and 471 read with sec.
468 against Bakshi Singh and under sees.
419/109, 471 and 468 against the appellant.
The charge sheet admittedly did not refer to or charge either of them with criminal conspiracy under sec.
120B. Prima facie it is not possible to say that at the stage when the police filed the charge sheet the Magistrate took cognizance of the offence, under sec.
120B, for, that was not the offence alleg ed in the charge sheet to have been committed by either of the two accused persons.
True it is that the Magistrate ultimately drew up charges which included the offence under sec.
120B, the object of which was to forge the passport, an offence under sec.
The Magistrate also did not consider it necessary to examine any witnesses and frame the charges on a perusal of the charge sheet submitted to him by the police, the statement of witnesses recorded by the police during their investigation and such other documents as were filed under sec.
173 of the Code of Criminal Procedure &,fore him.
The materials before him, therefore, were the same as were before the police officer who had filed the charge sheet.
But while drawing up the charges and passing his order of committal, the Magistrate considered that though the charge sheet filed before him alleged the commission of offences under secs.
419/109, 471 and 468, the proper charge on the materials before him, although they were the same as before the police officer, warranted a charge of criminal conspiracy for forging a passport.
It is quite clear, however, that the cognizance which he took was of the offences alleged in the charge sheet because it was in respect of those offences that the police had applied to him to initiate proceedings against Bakshi Singh and the appellant and not for the offence under sec.
It was at a later stage, i.e., at the time of passing the committal order that he considered that a charge under sec.
120B was the more appropriate charge and not a charge under sec.
109 of the Penal Code.
That being so, it must be held that the Magistrate took cognizance of the offence of abetment of an offence of forgery and impersonation so far as the appellant was concerned and not of the offence of criminal conspiracy, and therefore, sec.
196A(2) did not apply.
Counsel in this connection relied on certain observations made in a minority judgment of section K. Das, J., in Pramatha Nath 575 Taluqdar vs Saroj Ranjan Sarkar.
(1) The question involved there was, whether a second complaint could be entertained by a magistrate who or whose predecessor had on the same or similar allegations dismissed a previous complaint, and if so, in what circumstances should such a complaint be entertained.
Arising .
out of this question a contention was raised whether on the complaint, as it was framed, the Magistrate had the jurisdiction to, take cognizance of the offences alleged in the complaint in the, absence of a sanction under sec.
The second complaint alleged offences under secs.
467 and 471 read with sec.
109 of the Penal Code.
But in para 5 thereof, there was an allegation as to criminal conspiracy and it was on the basis of that allegation that sec.
196A(2) was sought to be involved.
It was in this connection that the learned Judge at page 315 of the report, observed : "It would not be proper to decide the, question of sanction me rely by taking into consideration the offences mentioned in the heading or the use of the expression " criminal conspiracy" in para, 5.
The proper test should ' be whether the allegations made in the petition of complaint disclosed primarily and essentially an offence or offences for which a consent in writing would be necessary to the initiation of the proceedings within the meaning of section 196A(2) of the Code of Criminal Procedure.
It is from that point of view that the petition of 'complaint must be examined.
" The learned Judge ultimately held that though the offence of criminal conspiracy was alluded to in para 5 of thesaid complaint, the offence "primarily and essentially" chargedwas abetment by conspiracy under sec.
109 of the Penal Code, and therefore.
no consent under sec.
196A(2) was required.
In Biroo Sardar vs Ariff (2) the view also taken was that itis not the, sections referred to which matter but the offence prima facie disclosed.
Following that decision, the High Court of Bombay in Ramchandra vs Emperor(3) observed that the question whether sanction is necessary or not depends not on the sections referred to in a complaint but the offence prima facie disclosed '.
by the facts alleged in it.
It is clear from the charge sheet submitted to the magistratethat the offence of criminal conspiracy was not even referred to.
The offence "primarily and essentially" alleged therein was oneof abetment of forgery under secs.
468 and 471 and of false, (1) [1962] Supp. 2 S.C.R. 297.
(2) A.I.R. 1925 Cal.
(3) A.I.R. 1939 [Bom.] 129.
576 impersonation under sec.
419 read with sec.
Assuming that the Magistrate before taking cognizance had persued the statements of witnesses recorded by the police during investigation, it was conceded by counsel, after he himself had gone through them from the record, that none of the witnesses had alleged therein either directly or indirectly of the appellant having entered into a criminal conspiracy with Bakshi Singh for forging the passport.
It cannot be disputed that the charge sheet also prima facie disclosed the offence of abetment.
That being so, it is ,impossible to sustain the argument that the Magistrate took cognizance of the offence under sec.
120B, and therefore, consent under sec.
196A(2) was required as a condition precedent or that the committal order and the proceedings for committal which be took were vitiated for want of such consent.
The appeal, therefore, fails and is dismissed.
V.P.S. Appeal dismissed.
[/INST]In 1944 the Ruler of the erstwhile Indian State of Korea granted to D a mining lease in respect of an area of 5.25 sq. miles in the State.
According to the terms of the lease the rates of royalty varied from 5% 0 25% according to the price of the coal per tons extracted from the eased area, that is to say, from 4 as.
per ton if the price was Rs. 51 per .on to 25% of the price per ton at the pit 's head if that price was Rs. 20/or more.
On the merger of the Korea State with Madhya Pradesh the leased area became subject to the provisions of the Mines & Minerals (Regulation and Development) Act 53 of 1948 and the Mineral Concorde Rules, 1949.
, In 1952 D assigned the lease and its benefits to the respondent company.
The State of Madhya Pradesh granted its consent to the assignment for the unexpired period of the lease in consideration of the respondent company agreeing to comply with the terms and conditions of the lease including payment of royalties ' On December 28, 1967 Parliament passed the Mines & Minerals (Regulation and Development) Act 67 of 1957 under its power under Entry 54 of List I of the Seventh Schedule to the Constitution.
The Act as amended by Act 15 of 1958 was brought into force by a notification of the Central Government with effect from June 1, 1958.
Under section 9(1) of the Act a lessee under a mining lease granted before the commencement of the Act was liable to pay royalty at the rate for the time being specified in the Second Schedule.
Under item (1) of the Second Schedule royalty payable in respect of coal was the same as under r. 41 of the Mineral Concession Rules, 1949, that is, 5% of the f.o.r. price, subject to.
a minimum of fifty naye paise per ,on.
Under section 30A which had been inserted by Act 15 of 1958 with re trospective effect, the provisions of section 9(1) and section 16(1) were not applicable to mining leases granted before 25th October 1949 in respect of coal, but the Central Government bad power if satisfied that it was expedient to do so, to direct by notification in the Official Gazette, that all or any of the said provisions (including rules made under sections 13 and 18) shall apply to or in relation to such leases "subject to such exceptions and modifications, if any, as may be specified in that or in any subsequent notification".
On December 29.
1961 the Central Government issued a notification in exercise of its power under the second part of section 30A by which it directed application of section 9(1) with immediate effect to or in relation to the pre 1949 coal mining leases "subject to the modification that the lessee shall pay royalty at the rate specified in any agreement between the lessee and the lessor or at 2 1/2% of f.o.r. price, whichever is higher, in lieu of the rate of royalty specified in respect of coal in the Second Schedule to the said Act.
" The Collector served upon the respondent company demand notices to pay the arrears of royalty for the period December 29, 1961 to December 31, 1965 at the rates specified in the lease.
The com 610 pany in a writ petition before the High Court urged that the exception; and modifications under section 30A had to be and were intended to cushion of soften the burden which would otherwise fall on the lessees under section 9(1) and the Second Schedule and therefore any modification or exception which would be specified in such notification was intended to reduce rather than increase the rate of royalty payable under section 9(1).
The State Government contended that the respondent company was bound to pay royalty at the rates provided in its lease, that being higher than the minimum.or 2 1/2% provided in the notification.
The High Court rejected the contention raised by the State as being inconsistent with the purpose for which section 30A was introduced.
The State appealed.
HELD : The notification was issued in exercise of the powers con feared by section 30A.
That power was to apply by issuing a notification there% under, sections 9(1) and 16(1) and the rules made under sections 13 and 18.
The notification in terms directed the application of section 9(1) which meant that on and from December 29, 1961 the company would have to pay royalty as prescribed under that sub section read with the Second Schedule, that is, at 5%.
The notification however applied section 9(1) subject to one modification, namely.
that the lessees under the pre 1949 leases were to pay royalty at the rate provided in their leases or at 21% whichever was higher.
The modification was to the rate applicable under section, 9(1) and the Second Schedule, that is, to the rate of 5%.
Considering the object with which section 30A was enacted viz. to phase the rate of 5% and not to impose it at one stroke, the modification could not mean recovery at a rate inconsistent with section 9(1) and the Second Schedule.
that is, at the rate higher than 5% provided thereunder.
[620 D F] Such a modification, if it were to be construed as meaning payment at a rate higher than 5% would be in excess of the power under section 30A and also in contravention of the language of section 9(1) and the Second Schedule.
A lateral meaning which the State canvassed for could therefore be accepted only at the cost of invalidating the notification.
Where two constructions are possible the one which sustains the validity of the law must be preferred.
[620 G H; 621 A] On a plain reading of the notification it was clear that what it meant was that instead of the rate flowing from the application of section 9(1) and the Second Schedule, a modified rate should be applied, that is, 'in lieu of the rate of royalty ' specified in the Second Schedule, royalty at the agreed rate should be charged if it was lower than 5% or at 21% minimum, whichever was higher.
The notification thus did not empower the State Government to recover royalty at a rate higher than 5% in lieu of the rate chargeable under section 9(1) and the Second Schedule which provided 5% only.
[621 B C] The High Court was therefore justified in quashing the impugned orders also the demand notices issued in pursuance of that order.
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<s>[INST] Summarize the judgementivil Appeal NO. 293 of 1988.
From the Judgment and Order dated 24.4.1987 of the Andhra Pradesh High Court in W.P.
NO.1645 Of 1987.
M.C. Bhandare, M. Qamaruddin and Mrs. M. Qamaruddin for the Appellant.
P.A. Choudhary, A.V. Rangam and T.V.S.N. Chari for the Respondents.
JAGANNATHA SHETTY, J.
This appeal by leave is directed against the judgment and order dated April 24, 1987 Of the Division Bench Of the High Court of Andhra Pradesh dismissing the writ petition NO.1645 Of 1987.
PG NO 896 Briefly stated, the facts are these: In the month of August 1984 a Ministry headed by Sri N. Bhaskara Rao suddenly came into power in A.P.
The said Ministry just lasted for about a month and had to go out of office for want of vote of confidence by the State Legislative Assembly.
During that short term, the Government granted a number of permissions to various private bodies and individuals for starting colleges of education (B.Ed.) courses.
The appellant was one among those beneficiaries.
The permission was granted with several conditions.
Those conditions were required to be complied with within a period of six months.
In the middle of September 1984 Bhaskara Rao 's Ministry went out of office and the Government headed by Sri N.T. Rama Rao came back to power.
Soon thereafter the permissions granted were suspended or cancelled.
The appellant and other institutions aggrieved by the cancellation moved the High Court of Andhra Pradesh for relief under Article 226.
~he appellant filed writ petition No. 812 of 1986.
The State contended that the parties did nOt comply with the conditions of the grant of permission.
All those writ petitions were disposed of by common order dated March 7, 1986.
The High Court was of opinion that the cancellation was as arbitrary as the grant of permission.
So a via media was taken since the parties have invested large sums of money for establishing the colleges.
The High Court laid down certain conditions and issued directions for compliance for granting permission and recognition to the colleges.
Some of those directions are as follows| "(1) The petitioners shall comply with the requirement of the deposit of Rs.4,50,000 within one month from this date.
If the Director of School Education does not cooperate with the petitioners in opening a joint account the deposit shall be made in a fixed deposit account in the name of the college in any nationalised or scheduled bank.
(It shall be open to the petitioner to pursue his application for exemption meanwhile but the time limit prescribed herein remains or applies to this petition as well).
(2) The petitioners shall comply with the requirements relating to the appointment of qualified staff and the laboratory, Library and audio visual equipment within three months from today.
For the purpose of recruitment of the teaching staff, the petitioners shall issue Notifications in two dailies with wide circulation in this State Calling PG NO 897 for applications from the qualified teachers on receipt of applications selections shall be made by the Selection Committee if one is already constituted by the Government or the University and if no Selection Committee is constituted, it shall be constituted consisting of a member of the Management, the Director of School Education or his nominee, not below the rank of a Joint Director and in his absence by D.E.O and an Expert to be nominated by the University.
The petitioners shall send communications to the Director of School Education and the University as soon as applications are received for the purpose of constituting the Selection Committee and the said officers shall take the necessary steps in this behalf.
(3) If the qualified staff do not respond to the Notification issued by the petitioners and consequently the petitioners find difficulty in appointing qualified staff the petitioners shall made a representation to the Director of School Education seeking his help in the recruitment and appointment of qualified teaching staff.
(4) All other requirements, including the Model School, subject to which permissions were initially granted to the petitioners shall be complied with by the petitioners not later than 3]st July, 1986.
(5) The petitioners shall send a compliance report to the Director of School Education as soon as the requirement regarding deposit of Rs.4,50,00() within the permitted time is complied with duly endorsing a copy of the compliance report to the Government.
Similarly, the petitioners shall send a compliance report to the Director of School Education regarding the appointment within the permitted time of the required qualified teaching staff and also the provision of library laboratory and audio visual equipment endorsing a copy of the compliance shall send a report to the Director of School Education endorsing a copy thereof to the Government regarding the compliance of all other requirements as directed above by 3 Ist July, 1986.
" The Director of School Education was asked to make such enquiry as he thinks fit to satisfy himself about compliance of the above requirements.
If there was no satisfactory compliance within the prescribed period, the High Court said PG NO 898 that the concerned institution shall cease to function at the end of the academic year 1985 86.
In accordance with directions issued by the High Court, the District Educational Officer inspected the appellant 's college.
He made a report dated June 25, 1986 stating that there was non compliance with the directions of the High Court.
Accepting that report, the Director made an order dated September 20, 1986 declaring that the college shall cease to exist with effect from the last working day of the academic year 1985 86.
Challenging the validity of that declaration, the appellant moved the High Court with writ petition No. 1645 of 1987.
The appellant also filed three more writ petitions.
Writ petition No. 11087 of 1985 was filed for a direction to the Nagarjuna University, Guntur to grant affiliation to the appellant 's college.
Writ petition No. 9417 of 1986 was filed for a declaration that the resolution of the Nagarjuna University refusing to grant affiliation to the college was arbitrary and illegal.
Writ petition No. 17725 of 1986 was filed by the students of the college for a direction to declare the results of their B.Ed.
examination held on October 7, 1985.
All the four writ petitions were disposed of by the High Court by a common order which is now under appeal before us.
The writ petition No. 1645 of 1987 was dismissed on the ground that the appellant has not complied with the conditions laid down by the High Court.
Consequently, Writ Petition Nos. 11087 of 1985 and 9417 of 1986 which were filed against the Nagarjuna University were also dismissed.
The High Court however, made some observations regarding the manner in which the syndicate of the University has to dispose of the application for affiliation.
The High Court observed that denial of affiliation affects the very life and existence of institution.
Therefore, it would be fair and proper that the syndicate or other competent authority of the University which deals with the question of affiliation, must give reasons for refusal to grant affiliation.
However, there are no appeals before this court against the dismissal of those two writ petitions.
The present appeal is only against the order of dismissing writ petition No. 1645 of 1987.
At the outset.
it may be stated that before the High Court the appellant did not contend that it had complied with all the conditions laid down for recognition.
The contention.
however, was that the college is a minority institution and therefore.
it need not comply with all those requirements.
The High Court did not accept that contentionand in our opinion very rightly.
It was observed that since the appellant has deliberately refused to comply PG NO 899 with the conditions by taking a new and untenable stand that it is a minority institution, it is not entitled to any relief.
The High Court also noted the inadequacy in the recruitment of lecturers.
As against seven lecturers, only five lecturers were appointed by the appellant.
The posts of lecturer in Mathematics and Physical Science were left unfilled.
The Principal was not qualified to hold the post.
The lecturer in social studies was also not qualified.
The High Court further referred to the deficiencies pointed out by the Inspection Commission of Nagarjuna University and finally said: "The court allowed the writ petition subject to directions (a) to (j) contained in paragraph 134 of its judgment.
Direction (b) clearly says that the selections shall be made by a selection committee comprising of one nominee of the Director of School Education and one nominee of the University.
This was so directed notwithstanding the contention urged by the petitioner that it is a minority institution.
Indeed, the Bench was of the opinion that the said aspect is totally irrelevant in the circumstances of the case.
The reason is evident.
The Division Bench merely directed the petitioner institution to comply with the conditions of grant within a certain extended period and no more.
The petitioner did not question the judgment of the Division Bench dated 7.3.1986, which means that he has accepted it.
The said judgment has become final so far as the petitioner is concerned.
Now when the question of compliance with and implementation of those direction arise, the petitioner cannot turn round and say that since the petitioner institution is a minority institution.
it need not comply with the said directions.
Such a contention cannot be countenanced, and cannot be taken note of in the circumstances of the case.
" Before us, the question as to the nature of the institution whether it is a minority institution or not, has not been canvassed.
Counsel for the appellant said that he will urge that contention in other appropriate case.
He rested this case on one ground that the conditions laid down by the High Court have been substantially complied with.
Reference was made to the earnest efforts made by the appellant to recruit the best qualified staff by inviting applications through successive advertisements in news papers.
When there was no response to the advertisements, the appellant, it is said, approached the department for recruitment of staff.
But the department did not cooperate.
PG NO 900 It was argued that the appellant in the circumstances could not be blamed and if at all it should be the department to be found fault with.
In the alternative it was contended that the appellant has since satisfied all the necessary requirements for grant of permission and affiliation of the college.
We do not want to examine the alternate contention urged by the appellant.
That is a matter for the statutory authorities like the District Educational Officer and the Nagarjuna University to satisfy them selves whether the institution should be permitted to carry on the course of study.
Whether it has satisfied the necessary conditions for grant of permission and affiliation.
We express no opinion on that aspect of the matter.
As to the first contention, very little remains in favour of the appellant.
While considering the validity of the earlier cancellation of the permission, the High Court had laid down certain guidelines and issued some directions for obedience.
The High Court made that order in the interest of the institution and the students, though strictly speaking it was beyond the power of the High Court.
The High Court did make it clear that if those conditions were not complied with within the prescribed period, the institution shall cease to function.
The record reveals that there were many deficiencies in the institution.
The reports of the District Educational Officer and the Inspection Commission of Nagarjuna University indicated that the appellant did not satisfy all the requirements for granting permission or affiliation.
We find no justification to consider the correctness of those reports.
Nor we could find fault with the order of the High Court.
Indeed we must accept it in the circumstances of the case.
We may however, state that if the appellant has since substantially complied with the necessary conditions after the disposal of the matter by the High Court, it will be open to it to approach the concerned authorities for permission to start the college again.
This however, is not the end of the matter.
There still remains another question.
That question arises out of the interim order made by this Court.
In this Court when the Advocates were on strike, the appellant appears to have personally moved CMP No. 5153 of i988 for permission to admit students for the term l987 88.
That petition came up before a Bench of this Court on February 23, 1988.
Mr. J. Prasad, petitioner in person was present in the Court and Mr. Balasubramaniam on behalf of the State Government was present.
No advocate was present.
Mr. Balasubramaniam, was PG NO 901 an officer of the establishment of the Andhra Pradesh Government Legal Cell at Delhi.
Obviously he was ignorant of, the facts of the case.
This Court after going into the relevant papers made an interim order as follows: "We have also read the report of 9th February, 1988 made by the District Educational Officer, Ongole.
We direct subject to compliance of the conditions, petitioners should be permitted to admit students for the term 1987 88.
The verification should be made within one week from today and if there have been any shortfall, petitioner has opportunity to comply the same within one week.
The time granted upto Ist of March, 1988 shall stand extended upto 15th March, 1988.
CMP is disposed of.
" As is obvious from the above interim order that the appellant was permitted to admit students for the academic year 1987 88 subject to compliance with the conditions.
This Court did not specify the number of students to be admitted.
On March 9, 1988, the Department sent a Committee of two persons for inspection and report about the facilities available in the college.
The Committee consisted of Shri R. Durga Prasad of G.G.C.E. Nellore and Shri B. Venkateswara.
District Educational Officer, Ongole.
They visited the college and submitted the report dated March 9, 1988.
Several irregularities were pointed out in that report particularly with regard to accommodation, furniture, library.
laboratory and games material.
With regard to staff it is stated that the staff appointed are qualified, but it does not state whether the required numbers in different disciplines have been recruited or not.
That report was forward to the Directorate of School Education.
On March 11, 1988, the Director wrote to the Secretary.
Government Education Department, A.P. to examine the case of the appellant in detail and accord permission to run the college till 1987 88 and also permit admissions of students in view of the interim order made by this Court.
The Director also pointed out in his letter that the appellant is claiming to be a minority institution and seeking admission of 160 students.
On April 4, 1988, the Government made an order according sanction to run the college till 1987 88 with an intake capacity of 100 students subject to fulfilment, among others, the following conditions: "(1) The college building should be constructed expeditiouly.
The management should procure equipment and material for the laboratories expending an amount of not PG NO 902 less than Rs.20,000 during 1987 88.
They should also procure audio visual equipment and material at a cost of not less than Rs.30,000.
The management should provide library facilities and expend a sum of Rs.5,000 towards purchase of books.
They should also provide adequate furniture.
(2) The management should appoint full contingent staff on prescribed scales of pay.
(3) They should appoint edequate teaching and non teaching staff on prescribed scales of pay.
(4) Admissions into the B.Ed.
Course in the College should be through the Common Entrance Examinations conducted by the University in view of the High Court judgment dated 8.10.1987 in W.P. No. 552 of 1986.
(6) The management should not collect any capitation fees.
(7) To establish a Model School The Director of School Education was requested to report the fulfilment of conditions by the management to the Government within six months from the date of issue of the order, failing which the permission accorded as liable to be cancelled without any notice.
This order was made subject to final judgment of the Supreme Court of India. ' ' It appears even before the aforesaid Government order, the appellant had admitted 160 students.
The students were not allotted by the Convenor, B.Ed., Common Entrance Test.
It is now said that these 160 students have undergone the required nine months training in the academic year 1987 88 and therefore, they should be permitted to appear for the examination.
Counsel for the State submitted that the appellant has been a law breaker from the very beginning and no concession should therefore be extended to perpetuate the illegality by permitting the students to appear in the examination.
In any event, he said that more than 100 students should not be permitted.
PG NO 903 The explanation of the appellant however, in this context is, that there is a general circular of the State Government permitting unaided schools/colleges to admit 160 students for B.Ed.
course as economic viability.
The appellant, therefore, had to admit the students before the due date extended by this Court and could not have waited for the belated Government order.
The explanation of the appellant appears to be far from satisfactory.
The permission to start the college by the appellant was cancelled twice by the authorities for want of requirements.
On the ground, the university also has refused to grant affiliation to the college.
The order of the High Court affirming the decision of the university is not under appeal before us.
In spite of it, the appellant s sought an interim order from this Court and admitted 160 students.
If the Government order had been delayed, the appellant ought to have asked the Convenor, B.Ed.
Common Entrance Test to allot the students for admission to the college.
That was one of the conditions laid down by the High Court also.
Even that was not complied with.
From the sequence of events which were earlier referred to, we cannot avoid the conclusion that the appellant was trying to overreach everybody body at every stage.
This is one side of the picture.
There is however, another side.
They are the students who were admitted on the strength of the interim order made by this Court.
The student were perhaps led to believe that this Court permitted the appellant to admit them.
We consider, therefore, that it may not be proper to drive them to street if they have undergone the prescribed course with the necessary syllabi and other matters relating thereto.
But it would be for the Director of School and the Registrar.
Nagarjuna University to consider and satisfy themselves and not for this Court at once to permit to them to appear in the examination.
In the result we dismiss the writ appeal.
but direct respondent 1 and 3 to consider forthwith whether the students in the appellant 's college have undergone the necessary B.Ed.
course and if so, permit them to appear for the ensuing examination and publish their result.
In the circumstances.
however, we make no order as to costs.
Before parting with the case, we should like to add a word more.
Though teaching is the last choice in the job market, the role of teachers is central to all processes of formal education.
The teacher alone could bring out the PG NO 904 skills and intellectual capabilities of students.
He is the 'engine ' of the educational system.
He is a principal instrument in awakening the child to cultural values.
He needs to be endowed and energised with needed potential to deliver enlightened service expected of him.
His quality should be such as would inspire and motivate into action the benefitter.
He must keep himself abreast of ever changing conditions.
He is not to perform in a wooden and unimaginative way.
He must eliminate fissiparous tendencies and attitudes and infuse nobler and national ideas in younger minds.
His involvement in national integration is more important, indeed indispensable.
It is, therefore, needless to state that teachers should be subjected to rigorous training with rigid scrutiny of efficiency.
It has greater relevance to the needs of the day.
The ill trained or substandard teachers would be detrimental to our educational system; if not a punishment on our children.
The Government and the University must, therefore, take care to see that inadequacy in the training of teachers is not compounded by any extraneous consideration.
A.P.J. Appeal dismissed.
[/INST]In the matter giving rise to the Special Leave Petition (Civil) No. 8219 of 1982 the plaintiffs filed a suit alleging that their father, who dies in the year 1956, had mortgaged the suit property for 30,000 Koris by a registered mortgage deed dated 20th April, 1943, executed in favour of the power of attorney holder and manager of the defandants Nos.
l and 2.
The defendant No. 3 is the heir of the attorney who was also managing the properties of the defendants Nos.
I and 2.
The mortgage property consisted of two delis having residential houses, shops, etc.
The mortgagees had inducted tenants in the suit property being defandants Nos. 4 to 9 in the original suit.
When the mortgage transaction took place the economic condition of the father of the plaintiffs was weak and he was heavily indebted to others.
Taking advantage of that situation, the mortgagees took mortgage deed from him on harsh and oppressive conditions by getting incorporated a long term of 99 years for redemption of mortgage.
Though possession was to be handed over to the mortgagees, they took condition for interest on the part of principal amount in the mortgage deed.
Mereover, the mortgagees were given liberty to spend any amount they liked for the improvement of the suit property and were also permitted to rebuild the entire property.
A registered notice to the defendants Nos.
I and 2 was given to redeem the mortgage, but they failed to do so, hence, the present suit was filed to redeem the mortgage and to recover actual possession from the defendants Nos. 4 to 9 who were the tenants Inducted by the mortgagees.
PG NO 827 Defendant No. 1 resisted the suit alleging that the term of the mortgage was for 99 years, so the suit filed before the expiry of that period was premature.
The defendant No. 3 resisted the suit by filing the written statement.
The defendants Nos. 4 to 9 resisted the suit on the grounds that the plaintiffs were not entitled to redeem the mortgage and even if they were so entitled, they could not get actual physical possession from the tenants who were protected by the Bombay Rent Act, because they were inducted by the mortgagees.
The Court proceeded against defendants Nos.
2/1 to 2/7 (heirs of mortgagee defendant No. 2) ex parte, and a preliminary decree for redemption of mortgage was passed on 2nd April, 1974 by the Trial Court.
But this ex parte decree was set aside by the District Court in the appeals filed by the heirs of defendant No. 2 on the ground that summons of the suit had not been duly served upon them.
Thereafter defendent No. 2/1 filed his written statement alleging that the suit was bad for non joinder of the sisters of the plaintiffs as parties.
Moreover, as per the terms and conditions of the mortgage deed, there was usufructuary mortgage for 20,000 koris, and the remaining 10.,000 koris were advanced to the mortgagor at monthly interest at the rate of 1/2 per cent.
There was a condition in the mortgage deed that the mortgagor would pay principal amount us well as the interest at the time of redemption.
When the suit was filed in the year 1972, the mortgagees were entitled to recover interest on 10,000 Koris for a period of 29 years, that the total mortgage amount along with interest would come to 47,400 koris equivalent to Rs. 15800 and the Civil Judge had no jurisdiction to try such suit; that the court fees was also not sufficient; that it was not true that the father of the plaintiffs was of weak economic condition.
The grand father of the plaintiffs was as Advocate and the father of the plaintiffs was the clerk of an advocate. 'The plaintiff No. l was also working as an Advocate at the time of the mortgage, so they knew the legal position; that at the relevant time the prevalent custom in Kutch State was to take mortgages of long term for '99 years and when it was permissible to take mortgage deeds with such a long term, it was also necessary to give permission for rebuilding the whole property, for better enjoyment of lt.
So these terms could not amount to clog on equity of redemption of mortgage, the mortgagees did not take any undue advantage and they were not present physically when the transaction took place through their power of attorney holders.
If the conditions of mortgage deed did not amount to clogs on equity of redemption, the suit would be clearly premature.
The plaintiff No. I had subsequently became a Civil Judge and was ultimately the Chairman of the Tribunal so if the said terms and conditions of the mortgage were onerous and oppressive, he would not have sat idle for 29 years.
But he remained silent because he was aware of the PG NO 828 said custom.
The prices of immovable properties had increased tremendously, therefore, the suit had been filed with mala fide intention; that in case the Court comes to the conclusion that there was a clog on equity or redemption and the plaintiffs were entitled to the redemption, then the interest on 10,000 koris should be awarded to the mortgages; and that the suit should be dismissed as there was no clog on equity of redemption and the Court had no jurisdiction to try the suit.
The other defendants remained absent.
The Trial Court while decreeing the suit came to the conclusion that there was mortgage transaction between the father of the plaintiffs and the mortgagees on 20th April, 1943, that the terms and conditions in the mortgage deed being harsh and oppressive, amounted to clog on equity of redemption, so the plaintiffs were entitled to file the suit even before the expiry of the term of the mortgage; that the sisters of the plaintiffs were not necessary parties to the suit and even if they were, a co mortgagor was entitled to file the suit for redemption so the suit was not bad for want of non joinder of necessary parties; that it had jurisdiction to try the suit; that the mortgagees were not entitled to claim interest on 10,000 koris and that the plaintiffs were entitled to recover possession from the defendants Nos. 4 to 9 who were the tenants inducted by the mortgagees.
The appeals filed by the mortgagees as well as the tenants were dismissed by the first appellate Court holding that the terms and conditions of the mortgage deed were oppressive and harsh, there was clog on equity of redemption and the mortgagor should be freed from that bondage that the tenants had no right to he in possession and were not entitled to the protection of the Bombay Rent Control Act after the redemption of the mortgage.
The High Court dismissed the second appeal.
Civil Appeal No. 9993 of 1983 is an appeal by the tenant.
Civil Appeal No. 397 of l980 is also an appeal by the tenant.
In this case the decree holder instituted a regular suit for redemption of the mortgage property.
The suit was dismissed.
Thereupon the respondent No. l preferred an appeal to the District Judge where the suit was decreed.
The defendants filed a second appeal which was dismissed.
The decree holder made an application for final decree.
The Court while giving the final decree for redemption of the mortgage directed the judgment debtors to hand over the possession of the mortgage property within three months on the decree holder making payment of dues in respect of the mortgage in the court.
In pursuance of the final decree the decree holder took out the execution proceedings and PG NO 829 deposited the dues in the Court and claimed possession of the mortgage property from the appellant herein stating that he was a tenant in the possession of the property.
Notice was issued to the tenant, who submitted his objection stating that he was a tenant, not to be evicted in the execution of the decree and that he was entitled to get the protection under the Bombay Rent Control Act.
The District Judge held that there was no conduct on the part of the decree holder which would stop him from claiming physical possession from the tenant of the mortgagee in possession.
The High Court rejected the appeal summarily.
Hence the appeal.
Civil Appeal No. 1286 of 1981 is also an appeal by the tenant.
The appellant is the tenant of the mortgagee inducted in 1955.
The property was mortgaged in 1948 for a period of five years.
It appears that the tenant was inducted after the period of redemption had expired.
The mortgagor had a right to redeem after the expiration of the mortgage.
The first appellate court came to the conclusion that the tenants were not protected under the provision of the Bombay Rent Control Act.
The appellant preferred this appeal in this Court.
On behalf of the appellants it was contended that in the former Kutch District there was a custom to mortgage for a long term of 99 years and when the period was long, naturally the mortgagee would he required to give full authority to repair and reconstruct the mortgaged property with a view to keep pace with new demands of changing pattern, so the condition should not he treated as clog on equity of redemption; (2) that there is no evidence to lead to the conclusion that there was any undue influence; (3) that the provision for the payment towards cost and expenses of repairs and construction did not amount to a clog on the equity of redemption; (4) that on the evidence and the facts the transactions did not amount to clog on the equity of redemption; (5) that in Civil Appeal No. 9993 of 1982 the plaintiff 's were not entitled to recover possession from the appellants, who are tenants in the mortgage properties, since their rights are protected under the Bombay Rents, Hotel and Lodging House Rates Control Act? 1947 as the said Act applies to the area of Kutch in the Bombay State.
Therefore, no decree for eviction could he passed against them except in accordance with the provisions of the said Act; (6) that the Trial Court did not make any finding as to when the tenants were inducted, either before or after the rent restriction Act was made applicable to the area of ' Kutch and (7) that the High Court has erred in not following the said legal position entrenched by a line of decisions of this Court with the rights of a tenant inducted by a mortgagee with possession would enure beyond the period of PG NO 830 redemption of the mortgage if his rights are enlarged by subsequent tenancy legislation in force in the area in which the property is situated.
Dismissing the Appeals, HELD: 1.
The Court will ignore any contract the effect of which is to deprive the mortgagor of his right to redeem the mortgage.
[844E] 2.
The rights and liabilities of the mortgagor are controlled by the provisions of section 60 of the .
[846F] 3.
Any provision inserted to prevent.
evade or hamper redemption is void.
[846G] 4.
The doctrine "clog on the equity of redemption" is a rule of justice, equity and good conscience.
It must be adopted in each case to the reality of the situation and the individuality of the transaction [847A] 5.
Freedom of contract is permissible provided it does not lead to taking advantage of the oppressed or depressed people.
The law must transform itself to the social awareness.
Poverty should not be unduly permitted to curtail one s right to borrow money on the ground of justice, equity and good conscience on just terms.
If it does, it is bad.
Whether it does or does not.
however, depends upon the facts and the circumstances of each case.
[847H; 848A] 6.
Whether in the facts and the circumstances of these cases.
the morgage transaction amounted to clog on the equity of redemption, is a mixed question of law and fact.
[848D] 7.
Courts do not look with favour at any clause or stipulation which clogs equity of redemption.
A clog on the equity of redemption is unJust and unequitable.
The principles of English law, as we have noticed from the decisions referred to hereinbefore which have been accepted by this Court in this country, looks with disfavour at clogs On the equity of redemption.
Section 60 of the , in India, also recognises the same position.
(848D E] 8.
It is a right of the mortgagor on redemption, by reason of the very nature of the mortgage, to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage.
If he is PG NO 831 prevented from doing so or is prevented from redeeming the mortgage, such prevention is bad in law.
If he is so prevented, the equity of redemption is affected by that whether aptly or not, and it has always been termed as a clog.
Such a clot is inequitable.
The law does not countenance it.
[848F G] 9.
Whether or not in a particular transaction there is a clog on the equity or redemption, depends primarily upon the period of redemption, the circumstances under which the mortgage was created, the economic and financial position of the mortgagor, and his relationship vis a vis him and the mortgagee, the economic and social condition in a particular country at a particular point of time, customs if any, prevalent in the community or the society in which the transaction takes place, and the totality of the circumstances under which a mortgage is created, namely circumstances of the parties, the time, the situation, the clauses for redemption either for payment of interest or any other sum, the obligation of the mortgagee to construct or repair or maintain the mortgaged property in cases of usufructuary mortgage to manage as a matter of prudent management, these factors must be co related to each other and viewed in a comprehensive conspectus in the background of the facts and the circumstances of each case, to determine whether these are clogs on equity of redemption.
[848H; 849A C] 10.
A mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge or some other obligation for which il is given The security must, therefore, be redeemable on the payment or discharge of such debt or obligation.
,any provision to the contrary, notwithstanding, is a clog or fetter on thc equity of redemption and, hence.
bad and void.
"Once a mortgage must always remain a mortgage", and must not be transformed into a conveyance or deprivation of the right over the property.
[849D E] 11 .
The law must respond and be responsive to the felt and discernible compulsions of circumstances that would be equitable.
fair and just, and unless there is anything to the contrary in the Statute, law must take cognisance of that fact and act accordingly.
Ia the context of fast changing circumstances and economic stability, long term for redemption makes a mortgage an illusory mortgage, though not decisive.
[850D E] 12.
Even apart from section 76(a) of the if the words of the mortgage deed clearly and indubitably express an intention to allow expressly creation PG NO 832 of a tenancy beyond the term of ' the mortgage, then only the lease created in exercise of the power expressly conferred by the mortgage deed would be binding on the mortgagor.
If the words of the mortgage deed do not clearly and indubitably disclose the intention to allow expressly the creation of a tenancy beyond the terms of the mortgage, the mere fact that the mortgage deed authorises the mortgagee with possession to induct a tenant would not create a tenancy binding on the mortgagor after the redemption of the mortgage.
[857E G] 13.
In the instant cases the tenancy rights did not come to be enlarged by the Tenancy Legislation after the tenant was put into possession by the mortgagee and the tenancy created in favour of the tenants by the mortgagor did not have the concurrence of the morfgagor so as to claim tenancy rights even after redemption of the mortgage.
[866C] Khatubai Nathu Sumra vs Rajgo Mulji Nanji and Ors.
, A.I.R. 1979 Gujarat 171; Lalji Purshottam vs Thacker Madhavji Meghaji, 17 Gujarat Law Reporter 497; Maganlal Chhotalal Chhatrappati and Ors.
vs Bhalchandra Chhaganlal Shal, 15 Gujarat Law Reporter 193; Soni Motiben vs M/s. Hiralal Lakhasmhi, 22 Gujarat Law Reporter 473; Vadilal Chaganlal Soni and Others vs Gokaldas Mansukh and Other, ; Sarjug Mahto and Others vs Smt.
Devruo Devi and Others, A.I.R. 1963 Patna 114; Kunjbiharilal vs Pandit Prag Narayan, A.I.R. 1922 Oudh 283; section V. Venkatarama Reddiar vs Abdul Ghani Rowther & Ors., A.I.R. and Devkinandan and Another etc.
vs Roshan Lal and Others, A.I.R. , approved.
Santley vs Wilde, [1989] 2 Ch.
474; Vermon vs Betheli, ; and 839; G. and C. Kreglinger vs New Patagonia Meat and Cold Storage Company Ltd., [1914] Appeal Cases 25; All lndia Film Corporation vs Raja Gyan Nath, ; Sachalmal Parasram vs Ratnabai, and Om Prakash Garg vs Ganga Sahai & Ors., , relied on.
Seth Ganga Dhar vs Shankar Lal & Ors., and Jadavji Purshottam vs Dhami Navnitbhai Amaratlal & Ors., [1987] 4 SCC 223, distinguished, Aziz Khan vs Duni Chand and Others, A.I.R. 1918 P.C. 48; Jarrah Timber & Wood Paving Corporation vs Samuel, 119031 2 Ch.
l; Chhedi Lal vs Babu Nandan, AIR 1944 Allahabad 204; PG NO 833 Bhika and Anr.
vs Sheikh Amir and Ors., A.l.
R. 1923 Nagpur 60; Mahabir Gope vs Harbans Narain Singh, ; ; Hariher Prasad Singh vs Must.
of Munshi Nath Prasad, [1956] S.C.R. l; Asa Ram vs Mst.
Kam Kali, ; Dahya Lal vs Rasul Mohammed Abdul Rahim, ; ; Madan Lal vs Bedri Narain and Others, ; Mulla 's , 7th Edition, pages 401 and 402; Rashbehary Ghose 's 'Law of Mortgage ' 6th Edition, pages 227 and 228; Dalal 's Rent Act 4th Edn.
page 814 referred to.
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 2057 of 1979.
Appeal by Special Leave from the Judgment and Order dated 11 1 1979 of the Delhi High Court in L.P.A. No. 46/73.
S.R. Srivastava for the Appellant and Dr. N.C. Shinghal (in person) P.P. Rao, and Miss A. Subhashini for Respondents 1 & 2.
B.R. Aggarwal for Respondent No. 15.
The Judgment of the Court was delivered by DESAI, J.
A highly qualified ophthalmic surgeon feeling aggrieved that he has not been justly treated in the matter of promotion to a post in Supertime Grade II seeks redress of his grievance praying for a mandamus that he may be deemed to have been promoted from February 18, 1971, failing which more out of frustration and less by any justification he seeks quashing of the promotion of respondents 4 to 24 though convinced that even if the Court were to accede to his request he is in no way likely to be benefited by this bizarre exercise.
51 First to the fact situation.
The Union of India has framed Central Government Health Scheme and in implementation thereof has set up various institutions for medical relief and medical education.
A Central Health Service became a necessity for effectively implementing the scheme.
With a view to constituting the Service, Central Health Service Rules 1963 ( '1963 Rules ' for short), were framed and brought into operation on May 15, 1963.
The Rules envisaged categorisation of personnel manning the Service into five different categories, to wit, category 'A ' supertime scale Rs. 1600 2000, category 'B ' supertime scale Rs. 1300 1600, category 'C ' senior scale Rs. 675 1300, category 'D ' junior scale Rs. 425 950 and category 'E ' class II scale Rs. 325 800.
On account of various imponderables the Service could not be constituted and 1963 Rules were amended by Central Health Service (Amendment) Rules, 1966, ( '1966 Rules ' for short).
Initial constitution of Service was to be on and from September, 9, 1966.
1966 Rules contemplated again the division of Service into four categories, namely, category I comprising supertime grade I Rs. 1800 2250; supertime grade II Rs. 1300 1800; category II consists of Specialists ' grade Rs. 600 1300; category III includes General Duty Officers grade I Rs. 450 1250; and category IV comprises General Duty Officers grade II Rs. 350 900.
1966 Rules provided the method of initial constitution of the Service.
Rules 7A(1) and 7A(2) provided for absorbing departmental candidates holding posts in categories 'A ' and 'B ' under 1963 Rules in posts in supertime grade I and supertime grade II respectively of reorganised Service under the 1966 Rules.
Those in service on September 9, 1966, and holding post in categories 'C ', 'D ' and 'E ' were absorbed either in the Specialists ' grade or General Duty Officers, grade as the case may be.
For the purposes of constitution and absorption of departmental candidates on the date of initial constitution of re organised service a Selection Committee was set up and absorption was made in accordance with the recommendations of the Committee This process of absorption was over in March 1967, but the constitution of the Service was deemed to be effective from September 9, 1966.
There were some promotions to supertime grade II up to 1971 but as they are not the subject matter of dispute in this appeal they may be ignored.
There was also direct recruitment to the Service between 1966 and 1971.
Between February 1971 to July 17, 1978, when the appellant came to be promoted to supertime grade II, respondents 4 to 24 were promoted on different dates to supertime grade II, The promotion of respondents 4 to 24 is challenged by the appellant on diverse grounds 52 but the principal contention is that their promotions are in contravention of rule 8 of 1966 Rules.
Rule 8 provides for future maintenance of the Service.
Relevant for the present appeal is rule 8(3) which provides for recruitment to supertime grade II both by promotion and nomination by direct recruitment.
As the appellant claims promotion to supertime grade II from February 18, 1971, and simultaneously questions promotion of respondents 4 to 24 to supertime grade II on various dates after February 18, 1971, and before July 17, 1978, when he was actually promoted, on a certain interpretation of the relevant rule, it may be here extracted: xx xx xx "8.
Future maintenance of the service After appointments have been made to the Service under rule 7 and rule 7A, future vacancies shall be filled in the following manner, namely: xx xx xx (3) Supertime Grade I (a) Fifty percent of the vacancies in Supertime Grade II shall be filled by promotion of: (i) General Duty officers, Grade I, with not less than ten years of service in that category; or (ii) Specialists ' Grade officers with not less than eight years of service in that category; in the ratio of 2:3 on the recommendation of a Departmental Promotion Committee on the basis of merit and seniority of the officer 's concerned; Provided that no person shall be eligible for appointment to any such post unless he possesses the qualifications and experience requisite for appointment to such post.
Provided that where the case of an officer appointed to any post in the grade of General Duty Officer, Grade I or the Specialists ' Grade, as the case may be, is considered for the purposes of promotion to any posts in Supertime Grade II under this sub rule, the cases of all persons senior to such officer in the grades of General Duty Officer, Grade I or Specialists ' Grade, as the case may be, shall also be considered, notwithstanding that they may not have rendered 10 years or 8 years of service, respectively, in those grades".
To appreciate the contention of the appellant as to how he claims promotion to supertime grade II on February 8, 1971, it may be noted 53 that effective from that date the Central Government converted one post from amongst unspecified specialists ' Grade posts in supertime Grade II in Ophthalmology Speciality at Willingdon Hospital and transferred Dr. B.S. Jain, respondent 3, who was then working as Chief Ophthalmologist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla, and offered the vacancy in super time grade II caused by the transfer of respondent 3, to appellant who was next in seniority by way of promotion on ad hoc basis as per memorandum dated December 7, 1970.
Appellant responded to this offer as per his letter dated December 9, 1970, wherein after putting forward various personal inconveniences and a possible loss in emoluments even on promotion, he concluded his response to the offer as under: "In view of my personal problems and in the public interest I most humbly request that this promotion may kindly be granted to me while in Delhi.
" Thereafter the Government offered the post to Dr. Radha Natarajan but she declined the offer.
Subsequently the Government offered the post to Dr. M.C. Sharma who accepted the same but he was not appointed and ultimately Dr. G.C. Sood was promoted to supertime grade II post and was appointed at Simla.
Appellant contends that when a post in Ophthalmology at Willingdon Hospital was created on February 1, 1971, by conversion of one post from amongst unspecified Specialists ' grade posts in supertime grade II that post could only have been filled in by promotion from amongst those holding the post in Specialists ' grade in ophthalmology speciality and he being the seniormost and otherwise qualified, he should have been promoted from that date.
Simultaneously he contends that filling in the post so created in supertime grade II at Willingdon Hospital by transfer of respondent 3 Dr. B.S. Jain was in violation of the statutory rule and hence invalid.
He also contends that as he was not qualified to hold the post of Chief Ophthalmologist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla, because it was a teaching post and he lacked teaching experience which was an essential qualification, the offer of that post to him was merely an eye wash and he could not have accepted the same.
It is necessary to examine three different limbs of the submission separately.
Rule 5 of 1966 Rules provides for authorised strength of the Service.
The authorised strength of the various categories of the service on the date of commencement of 1966 Rules shall be as specified in the first schedule.
Part A of the first schedule deals with supertime 54 grade I and Part B deals with supertime grade II.
Part C deals with Specialists ' grade.
The vertical promotional channel is from specialists ' grade and General Duty Officers Grade I to supertime grade II and from thereon to supertime grade I.
On the date of initial constitution of Service there were 275 permanent and 102 temporary, in all 377 posts in specialists ' grade.
Out of this strength of posts in specialists ' grade, 28 posts were upgraded to supertime grade II, 19 being classified as unspecified specialists ' posts and 9 unspecified posts.
To that extent the permanent strength of posts in specialists ' grade was reduced by 28 so as to leave it at 247.
There is no dispute that 19 unspecified Specialists ' posts and 9 unspecified posts were upgraded to supertime grade II.
The controversy is how these posts were to be filled in.
Appellant contends that as these 28 posts were in Specialists ' grade and the strength of Specialists ' grade posts was reduced by 28, whenever any post out of these 28 posts added to supertime grade II is required to be filled in, it can only be filled in by promotion from amongst those originally belonging to specialists ' grade, i.e. category 'C ' under 1963 Rules.
Simultaneously he contends that as these unspecified specialists ' grade posts and unspecified posts, 28 in number, can be filled in from those belonging to specialists ' grade, ipso facto they can only be filled in by promotion and not either by direct nomination or by transfer.
In support of this submission reliance is also placed on an affidavit filed on behalf of Union of India in a petition filed by Dr. B.S. Jain wherein it was in terms stated that these 28 posts could only be filled in by promotion and in no other manner.
The raison d 'etre for upgrading the 28 posts from specialists ' grade to supertime grade II yet dividing them in two separate categories each having its own nomenclature, viz., 19 posts designated as unspecified Specialists ' grade posts and 9 designated as unspecified posts is not difficult to discern.
Unlike other professions, medical profession has developed branchwise expert specialised knowledge referable generally to number of parts in which human anatomy is divisible.
General medicine and general surgery are two broad genus but under each one of them there are numerous specialities and there is intensive study and research in speciality for being qualified for the speciality.
Being an expert in any one speciality simultaneously results in being excluded from other specialities even though the specialities may be species of a genus like general medicine or general surgery.
Again, in each speciality there will be a post of a Lecturer, an Assistant Professor, an Associate Professor and a Professor with a vertical movement by way of promotion.
In a non teaching hospital there will be posts like Junior Surgeon, 55 Senior Surgeon, Head of the Department and so on.
In a profession so compartmentalised specialitywise, ex hypothesi it is difficult to provide for promotional avenue by way of a general seniority list integrating different specialities categorywise, cadrewise or gradewise.
If such a general seniority list including persons belonging to different specialities albeit in the same grade is drawn up for purposes of promotion it might lead to a startling result because the need may be of a promotional post in a speciality and the man at top of the seniority list may not belong to that speciality but may belong to a different speciality and if any promotion was to be given to him to a post in a speciality for which he is neither qualified nor eligible it would be impossible to give vertical promotions by referring to such general seniority list.
If the promotion is to a post generally called administrative post in a hospital a general seniority list including experts belonging to different specialities may be helpful but when promotions are to be given to posts in different specialities a general seniority list is not only unhelpful but may really impede the process of promotion.
Again, demands of different specialities for additional strength may differ from hospital to hospital, from area to area and even from time to time.
In order to meet such unforeseen eventualities the rules provide for an addition to the strength of supertime grade II by keeping 19 posts designated as unspecified Specialists ' grade posts and 9 unspecified posts in a pool.
Whenever a demand came for providing a higher post in supertime grade II in any particular speciality ordinarily where the strength of the service is prescribed a post will have to be created which any one familiar with bureaucratic jagornot would immediately realise how time consuming it is.
Anticipating such a situation and to meet with the demands of specialities within a reasonable time it was provided that there would be a pool of 19 unspecified Specialists ' posts in supertime grade II and 9 unspecified posts also in supertime grade II.
This would facilitate conversion from the pool of unspecified Specialists ' posts of an unspecified Specialists ' post to a specified Specialist post in a speciality where a need has been felt.
Once the need is felt and a post is converted from an unspecified post to a specified post in supertime grade II it becomes an addition to the strength of that speciality and the post can be filled in, in accordance with the relevant rule.
But it is implicit in this arrangement that the person to be appointed to such a post would be one who is eligible to be appointed to that speciality and not some one who is on top of the general seniority list in Specialists ' grade or general duty officers ' grade from which promotion is to be made.
If promotion has to be made from a general seniority list which includes all Specialists in the Specialists ' grade the one at the top may be a Cardiologist and the post may be converted into Anesthesiology and it 56 does not require long persuasive argument to hold that a Cardiologist cannot be appointed as an Anaesthetic.
It is, therefore, crystal clear that when a post from amongst unspecified Specialists ' posts is converted to a specified post which means specified in the speciality in which a need has been felt from amongst those in the specialists ' grade belonging to that speciality and in order of their inter se seniority a promotion could be given.
This position is inescapable and it is difficult to comprehend a position contrary to this.
In fact, this situation has been expressly recognised by this Court in Union of India & Ors.
vs section B. Kohli & Another, wherein it was held that for being appointed as a Professor in a particular speciality in that case Orthopaedics, the condition that a person must have a post graduate degree in Orthopaedics would not result in any classification without reference to the objectives sought to be achieved and this would not result in any discrimination nor would it be violative of Article 16.
In passing a contention of the appellant that all 28 posts which were deducted from the strength of permanent posts in Specialists ' grade and added to supertime grade II must on that account alone be filled in by promotion from those belonging to the specialists ' grade only may be examined.
There is no merit in this contention.
If there was any substance in this contention there was no reason to provide for two different designations and divide the 28 posts in two different nomenclatures.
28 posts are made up of 19 posts designated as unspecified Specialists ' posts and 9 unspecified posts.
Undoubtedly 19 posts which were designated as unspecified Specialists ' post must be filled in from amongst those belonging to the Specialists ' grade but that itself also shows that the remaining 9 unspecified posts can be filled in from amongst those who may be promoted from 'General Duty Officers grade I because General Duty Officers grade I are also promotable to supertime grade II.
The nomenclature unspecified Specialists ' post and unspecified post provides an effective answer and indicates that while in the case of the former promotion must be given from Specialists in respect of the latter General Duty Officers Grade I would be eligible for promotion.
Merely because all 28 posts were deducted from the strength of posts in Specialists ' grade it could not be said that all 28 posts would be available for promotion to those belonging to Specialists ' grade only.
The language employed in rule 5 also points in this direction.
There is, therefore, no substance in the contention that all 28 posts must be filled in by promotion from amongst those who belong to Specialists ' grade only.
57 The last limb of the argument is that the 19 unspecified Specialists ' posts in supertime grade II can only be filled in by promotion and not in any other manner and particularly not by transfer.
The provocation for this submission is posting of Dr. B. section Jain in supertime grade II post created at Willingdon Hospital in February 1971.
Undoubtedly one unspecified Specialists ' grade post was converted and was designated as specified post in supertime grade II in Ophthalmology speciality at Willingdon Hospital in February 1971.
Appellant says that once an unspecified Specialists ' grade post was converted into a specified post and that as it was assigned to Ophthalmology speciality, he being the seniormost Ophthalmologist and qualified for the post, that post could only be filled in by promotion and he should have been promoted and the posting of Dr. B. section Jain by transfer to that post was illegal and invalid.
Rule 8 provides for future maintenance of the Service.
Rule 8(3) provides for 50% of the vacancies in supertime grade II to be filled in by promotion of General Duty Officers Grade I and Specialists ' grade officers in the ratio of 2:3 and the remaining 50% of the vacancies to be filled in by direct recruitment in the manner specified in the second schedule.
Now, once an unspecified specialists ' grade post in supertime grade II is converted and made a specified post in a speciality it is an addition to the strength of the speciality and the filling in of such post shall be governed by rule 8 (3).
Undoubtedly if it is to be filled in by promotion, that would only be from amongst those belonging to Specialists ' grade officers as the converted post was unspecified Specialists ' post.
But to say that it can be filled in only by promotion is to ignore the mandate of statutory rule 8(3) which provides for filling in posts in supertime grade II by either promotion or nomination in the ratio therein prescribed.
Once there is a post in supertime grade II which is to be filled in subsequent to the initial constitution of the Service, rule 8 (3) will be attracted in all its rigour.
And it should not be overlooked that rule 8 (3) provides for filling in of posts in supertime grade II by promotion as well as by direct recruitment in the ratio of 1:1.
On a true interpretation of the 1966 Rules in general and rule 8 (3) in particular it could not be, gainsaid that whenever an unspecified Specialists ' post is converted into a specified post and assigned to a speciality it can be filled in either by promotion or by direct recruitment as the situation warrants according to the rule and as determined by the quota rule.
But it was very strenuously contended that the Central Government in implementing the rule has understood and in fact implemented the rule to this effect that whenever an unspecified Specialist 's post is converted as a specified post and assigned to a speciality it can only be filled in by promotion.
Reliance was placed upon an affidavit made on behalf of the Central Government in a writ 58 petition filed by Dr. B. section Jain in Delhi High Court.
In the counter affidavit on behalf of the Central Government a stand was taken that the 19 unspecified Specialists ' posts were meant only for promoting category 'C ' clinical Specialists to supertime grade II.
In Union of India vs Bhim Singh & Ors., the Court refers to the stand taken on behalf of the Union of India in that case as under: "Learned counsel for the appellant (Union of India) submits that these posts were included in supertime grade II not with reference to the actual number of officers who had completed 8 years of service or more on a particular date but only with a view to providing opportunities of promotion to the former Category 'C ' officers holding clinical Specialist posts".
It does appear that such a stand was taken on behalf of the Union of India but simultaneously it may be noted that the Court has not accepted the stand.
And it would be too late in the day to say that on such a stand of the Union of India, if it runs counter to the rule explicit in meaning, any argument can be founded or any relief can be claimed unless estoppel is urged.
And no such estoppel is claimed In P. C. Sethi & Ors.
vs Union of India & Ors., the petitioners urged that the view put forward on their behalf had been admitted by the Government in its affidavit filed in connection with certain earlier proceedings of similar nature and other admissions in Parliament on behalf of the Government.
Negativing this contention this Court held that such admissions, if any, which are mere expression of opinion limited to the context and not specific assurances, are not binding on the Government to create and estoppel.
Similar view was also expressed in J. K. Steel Ltd. vs Union of India where following the earlier decision of this Court in Commissioner of Income tax, Madras vs K. Srinivasan and K. Gopalan, it was observed that the interpretation placed by the Department on various sub sections in the instructions issued by the Department cannot be considered to be proper guide in a matter wherein the construction of a statute is involved.
Therefore, it cannot be said that 19 unspecified Specialists ' posts could only be filled in by promotion and such an interpretation or stand would run counter to the express provision contained in rule 8(3) which is statutory.
Even if such be the stand of the Central Government it will have to be negatived and was in fact negatived in the case of Dr. B. section Jain.
59 Incidentally it would be incongruous to hold that when a post is created in a certain grade, category or cadre and it is to be filled in, some one who is already in that grade, category or cadre cannot be transferred to that post and the post so vacated by him can be filled in, in the manner prescribed.
Even if there was some substance, though there is none, in the contention on behalf of the appellant that whenever unspecified Specialists ' post is converted into a specified post it can only be filled in by promotion yet when some one who is already in that grade is transferred to the newly created post and the post vacated by such transferred employee is offered by way of promotion which in fact was done in this case there is any violation of the rule.
As pointed out earlier, when a post is created it is an addition to the strength of that particular category and the additional strength has to be filled in the manner prescribed in the rule and that no sanctity attached to the place where the post is created but the sanctity attaches to the number of posts and the manner of filling them.
Now, Dr. B. section Jain was already holding the post in supertime grade II at Simla when a post in supertime grade II in Ophthalmology was created at Willingdon Hospital from amongst unspecified Specialists ' posts.
Even if this additional post has to be filled in by promotion as contended by the appellant, it is not open to him to urge that the post at Willingdon Hospital alone must have been filled in by Promotion.
Dr. B. section Jain was transferred to the post created at Willingdon Hospital and the post vacated by him which was in supertime grade II was offered to the appellant as and by way of promotion.
Therefore, even if the contention of appellant is to be accepted, there is no violation of rule 8(3).
Equally it is also not correct to contend that Dr. B. section Jain could not have been transferred to the post created at Willingdon Hospital.
Transfers in posts which are in the same grade or are considered equivalent can be affected on administrative exigencies.
Once a new post is created and it is an increase in the strength of the Cadre in which the post is created, every one in that cadre is eligible to fill in that post and transfer is permissible.
Transfer of Dr. B. section Jain is, therefore, beyond question.
In E. P. Royappa vs State of Tamil Nadu & Anr., it is observed that the services of cadre officers are utilised in different posts of equal status and responsibility because of exigencies of administration and employing the best available talent in suitable post.
There is no hostile discrimination in transfer from one post to other when the posts are of equal status and responsibility.
Therefore, it is futile to urge that filling in the post created at Willingdon Hospital in supertime grade II by transfer of Dr. B. section Jain, a person already promoted to supertime grade II was invalid 60 in as much as the post was not filled in by promotion or direct recruitment but by transfer.
The next contention is that the refusal of the appellant to accept the post at Simla offered to him will not debar him from promotion because the appellant was not qualified for the post at Simla.
If an employee eligible for promotion is offered a higher post by way of promotion, his refusal to accept the same would enable the employer, the Central Government in this case, to fill in the post by offering it to a junior to the Government servant refusing to accept the post and in so acting there will be no violation of article 16.
Further, the Government servant who refuses to accept the promotional post offered to him for his own reasons cannot then be heard to complain that he must be given promotional post from the date on which the avenue for promotion opened to him.
Appellant being conscious of this position tried to circumvent it by saying that the Post at Simla offered to him by way of promotion in super time grade II was a teaching post for which he was not qualified and, therefore, his refusal to accept the same cannot come in his way from claiming promotion from the very date on which he refused to accept the promotion to a post for which he was not qualified.
Appellant went so far as to suggest that the Government action in offering him the post at Simla was actuated by malice in that while making a show of offering him a promotional post it so deliberately acted as would impel the appellant to refuse the same.
Says the appellant that one post from the pool of unspecified specialists, posts was converted to a specified post in Ophthalmology and was sanctioned at Willingdon Hospital which is not a teaching hospital and, therefore, the appellant was fully qualified for being promoted to that post.
Instead of acting in this straight forward manner the Government transferred Dr. B. section Jain from Simla to the post newly created at Willingdon Hospital and purported to offer the Simla post to the appellant for which appellant was not qualified and thus deliberately thwarted the promotional opportunity of the appellant and that this smacks of malice.
To substantiate this submission the appellant points out that the designation of the post at Simla was Chief Ophthalmoligist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla.
This according to the appellate was a teaching post and the qualification prescribed by the regulation framed by the Medical Council of India requires as an essential qualification a teaching experience as Reader or Assistant Professor in Ophthalmology for five years in a Medical College after requisite post graduate qualification.
It was further stated that the appellant had no teaching qualification though he started teaching at the Safdarjang Hospital when he was recognised as a post graduate teacher in Ophthalmology but 61 his teaching experience extended to barely two weeks.
It was also said that essential teaching experience prescribed by the Medical Council of India under its regulation is not relaxable and that, therefore, appellant was not qualified for the post of Associate Professor which was offered to him.
In S.B. Kohli 's case (Supra) this Court did observe that a discretion to relax teaching experience qualification is conferred only on the U.P.S.C. in cases of direct recruitment and not to the Departmental Promotion Committee in case of promotion.
That being the intent of the law it is to be given effect to.
This observation is in a slightly different context but one may safely proceed on the assumption that essential teaching qualification for the post of an Associate Professor prescribed by Medical Council of India is not relaxable.
Therefore it can be said with some justification that the appellant who did not have the requisite teaching experience was not qualified for the post of Associate Professor.
But this want of qualification impelling refusal to accept promotion appears to be an afterthought on his part.
When the promotional post was offered to him as per letter dated December 7, 1970, appellant did not reply by saying that he was not qualified for the post.
In his reply dated December 9, 1970, to the offer made by the Government appellant pointed out that he was involved in some litigation with regard to his house and that his stand for eviction would be weakened by his transfer.
He then proceeded to point out that he was suffering from chronic bronchitis and that the climate at Simla may not suit him.
He also pointed out the adverse effect of climate on the health of his wife.
He then proceeded to point out that apart from his personal problems he was engaged in the Safdarjang Hospital for teaching of post graduate students and, therefore, he requested the Government "the post of Chief Ophthalmologist cum Associate Professor of Ophthalmology may kindly be bestowed on me at Safdarjang Hospital where there is essential need for such a post".
Could this be the stand of a person offered a promotional post honestly believing that he was not qualified for the same? The post offered to him was of Chief Ophthalmologist cum Associate Professor.
Appellant believes and now says that he was not qualified for the same if the post was at Simla but if the same post was created at Delhi with the same designation with the same responsibility for teaching and that too at the post graduate level he considered himself to be fully qualified for the same and requested the Government to bestow that post on him.
He then proceeds to point out his merits and puts forth his disinclination for being promoted to the post at Simla.
In the face of his bold statement that he is prepared to be appointed as Chief Ophthalmologist continuing to do teaching work at the post graduate level at the Safdarjang Hospital, he now wants to assert that he was not qualified for the post.
This convenient after 62 thought cannot decry the fact that the appellant declined to accept the post at Simla not because he believed he was not qualified for the post but because he was not inclined to leave Delhi, may be for reasons which may be true and compelling for him.
This becomes explicit from a further averment in paragraph 7 of his reply wherein he pointed out to the Central Government that even though he was selected by the U.P. Government for the post of Chief Medical officer, Gandhi Memorial Eye Hospital, Aligarh, on a fabulous salary of Rs. 3,000/ p.m. and which offer was transmitted to him through the Government so as to enable the Government to release him and although the Government was considering his release on deputation for the post but he himself declined the offer because of domestic problems.
There is thus no room for doubt that the appellant considers himself qualified for any post in Delhi and was under no circumstances willing to leave Delhi and his disinclination to accept any post at Simla stemmed not from his honest belief that he was not qualified for the post but because he was not inclined to leave Delhi.
Undoubtedly it may be that under the regulation stricto sensu he may not be qualified for the post of Associate Professor because he did not possess the requisite teaching experience.
But an ad hoc arrangement could have been made and it was open to the central Government, if the appellant had accepted the post, to move the Medical Council of India to permit the Central Government to appoint the appellant at Simla.
Some way could have been found but the door was bolted by the appellant himself declining the offer for reasons other than his qualification which he may have found compelling.
In this background it is difficult to accept the submission of the appellant that the offer made by the Government was an eye wash or a make believe and, therefore, his refusal to accept the offer of promotion would not postpone his promotion.
Incidentally it would be advantageous to take note of the fact at this stage that the appellant was promoted to supertime grade II on July 17, 1978 and between February 1971 when he declined to accept promotion and July 1978 when he was in fact promoted, no one junior to him in the speciality to which he belongs was ever promoted overriding his claim to supertime grade II.
Therefore, if since his refusal to accept promotion at Simla appellant was never superseded by any one junior to him in his speciality it is difficult to entertain the contention that in refusing promotion to him when some posts were converted from unspecified Specialists ' posts into different specialities and were filled in by those who were qualified to be promoted in the respective speciality in which the post was created he could be said to have been superseded in violation of article 16.
And in this view of the matter nothing more need be examined but as certain other contentions were advanced 63 which even if accepted would not in any case benefit the appellant, it appears to us an exercise in futility but we would rather dispose them of than gloss over them.
In the High Court appellant canvassed twofold contention that between 1966 and 1971, i.e. after the initial constitution of service and before the proposal offering promotion to the appellant at Simla was made 25 promotions were given to supertime grade II to persons who were ineligible for the same and secondly after February 1971 and before July 1978 when he was actually promoted to supertime grade II, 29 promotions were given to supertime grade II some of whom are respondents 4 to 24 and that their promotion was in contravention of rule 8(3) of the Rules and, therefore, invalid.
Before this Court the first limb of the argument, namely, invalidating promotions between 1966 and 1971 to supertime grade II was not canvassed.
It was the second limb of the argument that was pressed into service.
None of those who were promoted between February 1971 and July 1978 belonged to the speciality to which appellant belongs.
Each of them belonged to a different speciality and admittedly appellant was not qualified for being promoted to any supertime grade II post in the speciality in which each one of them was promoted.
When this aspect became clear a question was posed to the appellant how he would be benefited even if his contention were to prevail that none of them was eligible for promotion to supertime grade II and, therefore, the promotion of each of them deserved to be quashed.
The answer was that there is a common seniority list of persons belonging to supertime grade II and promotion to supertime grade I is by seniority and that promotion of respondents 4 to 24, if quashed, would push the appellant higher up in seniority above them and would enhance his chances of promotion to supertime grade I. Remote chances of promotion could hardly be said to be condition of service which if impaired would be violative of article 16.
Even assuming that a remote chance of promotion if adversely affected would give a cause of action, it was made clear that the appellant is retiring on superannuation in the last quarter of this year and that even if he is assigned a deemed date of promotion somewhere in February 1971 yet there are number of persons above him in supertime grade II who were promoted between 1966 and 1971 and appellant has not even a remote chance of promotion.
Appellant at that stage reacted by saying that even if it be true, yet the promotions of respondents 4 to 24 ought to be quashed because when he with respondents 4 to 24 and others belonging to supertime grade II attend a meeting convened to discuss some administrative matter or for holding charge of higher post temporarily vacant they claim seniority over him and his dignity is impaired.
This calls for no comment save 64 and except saying that the approach appears to be more emotional rather than realistic.
However, the contention may be examined on merit.
Promotion of respondents 4 to 24 was questioned on the ground that each of them was ineligible for promotion to supertime grade II on the date on which each of them was promoted in view of the provision contained in rule 8(3).
Rule 8(3) has been extracted herein before.
The contention is that since the initial constitution of service on September 9, 1966, any future promotion to supertime grade II from departmental candidates could be from amongst those who qualify for the same as provided for in rule 8(3).
Apart from academic qualification, the experience qualification prescribed is that, the General Duty Officers grade I and Specialists ' grade officers should have put in 10 years and 8 years of service respectively in that category.
Appellant contents that service in the category means service in that category which was constituted under the 1966 amendment rules.
Rule 2(c) defines category to mean a group of posts specified in column 2 of the table under rule 4.
Rule 4 provides for classification, categories and scales of pay.
It provides that there shall be four categories in the service and each category shall consist of the grade specified in column 2 of the table appended to the rule.
The four categories are: first category which includes supertime grade I and supertime grade II posts.
Category two is Specialists ' grade posts, category three comprises General Duty officers, grade I and category four includes General Duty Officers grade II.
It was contended that the service to be rendered for the qualifying period must be in the category and, therefore, a general Duty Officer grade I can only become eligible for promotion after he renders 10 years of service in that category which came into existence on September 9,1966, and this would apply mutatis mutandis to the Specialists ' grade officers who must put in 8 years of service in the category which came into existence on September 9, 1966.
If this contention were to prevail, apart from anything else, appellant himself would not have been qualified for promotion to supertime grade II in February 1971 from which date he claims as being eligible for promotion to supertime grade II because he had not put in 8 years of service in the category of specialists ' grade officers formed on September 9, 1966.
That apart, it is impossible to overlook the history of the Service.
The rules were initially framed in 1963.
At that time the service was sought to be classified in 5 categories styled category 'A ' to category 'E '.
Expression 'category ' in 1963 Rules was defined to mean a group of posts carrying the same scale of pay.
Another salient feature of which notice should be taken is that save and except upward revision in scale, category I under the 1966 amendment Rules includes cate 65 gories 'A ' and 'B ' under 1963 Rules.
Category 'C ' has been designated as Specialists ' grade, i.e. category II under the 1966 Rules.
Category 'D ' is equated with General Duty Officers grade I styled category III and category 'E ' is equated with General Duty officers grade II, i.e. category IV.
Expression 'service in the category ' has to be understood in this historical background.
It is difficult to entertain the contention that the past service of Specialists ' category 'C ' officers got wholly wiped out merely because the nomenclature of category 'C ' Specialists officers was changed to Specialists ' grade officers replacing the expression 'category C ' by category II.
And that would apply mutatis mutandis to General Duty Officers grade I and grade II.
The change in the definition of the expression 'category ' appears to be instructive in that by the change service in the post is emphasised and the question of the grade of pay is relegated into background.
And this change appears to be with a purpose inasmuch as when certain qualifying service is prescribed for being eligible for promotion in a category the emphasis is on service rendered in a post irrespective of the grade.
A specialists ' grade officer belonging to category II was a specialists ' grade officer in category C. He was even then eligible for promotion to supertime grade II.
Was it ever intended that a Specialists ' grade officer belonging to category 'C ' under 1963 Rules who had put in more than 8 years of service but who was not promoted prior to September 9, 1966, the date of initial constitution of service, or on the date of initial constitution of service, would be ineligible for promotion for a period of 8 years simply because the designation of the category changed? Was it intended that there should be a complete hiatus for a period of 8 years in promoting Specialists ' grade officers to supertime grade II and for a period of 10 years in case of General Duty Officers grade I.
There is no warrant for such an inference from the Rules.
Such an intention cannot be attributed to the framers of the Rules nor is it possible to accept the submission of the appellant that the posts could have been filled in by direct recruitment because where candidates eligible for promotion were not available it was open to resort to direct recruitment as provided in the Rules.
It is a well recognised canon of construction that the construction which makes the Rules otiose or unworkable should be avoided where two constructions are possible and the Court should lean in favour of the construction which would make the rule workable and further the purpose for which the rule is intended.
While prescribing experience qualification in 1966 Amendment Rules, the framers of the Rules could not have intended to ignore wholly the past service.
A specialist who was in category 'C ' was included in category II with the designation specialists ' grade officer.
Similarly, General Duty Officer grade I in category 'D ' acquired the same nomenclature General Duty Officer grade I in cate 66 gory III.
There was an upward revision of pay scales of both the categories.
Should the change in designation be understood to mean that the past service rendered as Specialist or as General Duty Officer is wholly wiped out for any future promotion ? Even after change of designation it is not suggested that the duties underwent any change.
Same duty was performed a day prior to September 9, 1966, and the day thereafter by both the categories in the respective posts.
In this background the High Court was right in holding that the word 'category ' used in rule 8(3)(a) has to be understood to mean the post included in that category and consequently service in that category would mean service in a post included in that category.
The appellant contended that this construction would run counter to the posting of former categories 'D ' and 'E ' officers on probation on September 9, 1966, in specialists ' grade and General Duty Officers grade I.
In this connection it must be recalled that on initial constitution of Service some persons who were in the category of General Duty Officers were absorbed and appointed in Specialists ' grade and vice versa was true of some persons.
It is equally true that Officers belonging to categories 'D ' and E ' were considered in a category lower to category 'C '.
It is equally possible, therefore, that on September 9, 1966, i.e. the date of initial constitution of Service some of the officers belonging to categories 'D ' and 'E ' who were absorbed in categories II and III respectively may have been put on probation but for qualifying service for upward promotion service rendered as probationer is not to be ignored.
Viewed from either angle it is crystal clear that service rendered in equivalent post prior to the date of initial constitution of Service could be taken into account in calculating qualifying service for next promotion.
This was the stand taken by the Government in the affidavit filed in Civil Writ No. 1155/71 filed by Dr. Chandra Mohan in the High Court of Delhi and that appears to be consistent with the construction of rule 8(3).
The contention, therefore, that executive instruction cannot run counter to the statutory rule must be rejected as untenable in the facts of this case.
It was next contended that the Government was guilty of legal malice in that in February 1971 on a need being felt, a post in supertime grade II in Ophthalmology speciality was sanctioned at Willingdon Hospital and filled in by transfer of Dr. B.S. Jain overlooking and ignoring the rightful claim of appellant and on transfer of Dr. B.S. Jain on March 7, 1972, to Safdarjang Hospital, the post was also transferred to Safdarjang Hospital.
In this connection appellant also pointed out that there is material on record to show that the Superintendent of Willingdon Hospital felt an acute need for a post in super 67 time grade II in Ophthalmology speciality and yet it was not created while on the other hand in order to accommodate some favourites like respondents, 4, 5,8,9,12,13 and 15 some posts in different specialities where they could be accommodated were created without the need for the same.
There is evidence to the effect that appellant had sent a proposal duly recommended by Medical Superintendent of Safdarjang Hospital to the authorities for creating a supertime grade II post in Eye Department in May 1971 as per letter dated May 3, 1971.
There is also material to show that some ad hoc appointments were made in supertime grade II.
It is, however, not possible to strike down those appointments on the ground that some posts were created in supertime grade II though not needed wherein some of the respondents were promoted or that there was no justification for creation of posts or for making ad hoc appointments.
It should be distinctly understood that not a single post was created in Ophthalmology speciality to which appellant could have been appointed.
The need for the post of the requirements of the hospital, or the need for an ad hoc or additional appointment is a matter which the Government is competent to decide and in the absence of requisite material the Court cannot interpose its own decision on the necessity of creation or abolition of posts.
Whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity.
The Government is a better Judge of the interests of the general public for whose service the hospitals are set up.
And whether a hospital catering to the needs of general public providing medical relief in different specialities has need for a particular post in a particular speciality would be better judged by the Government running the hospital.
If Government is a better judge it must have the power to create or abolish the posts depending upon the needs of the hospital and the requirements of general public.
Creation and abolition of posts is a matter of Government policy and every sovereign Government has this power in the interest and necessity of internal administration.
The creation or abolition of post is dictated by policy decision, exigencies of circumstances and administrative necessity.
The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public (see M. Ramanatha Pillai vs The State of Kerala and Anr).
The Court would be the least competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from malafide, legal or factual.
In this background it is difficult to entertain the contention of the appellant that posts were created to accommodate some specific individuals ignoring the requirements of the hospital or the interests of the general public at large.
68 It was next contended that respondent 9, Dr. K.P. Mathur and respondent 23, Dr. A. R. Majumdar should have been considered ineligible for promotion because both of them were adversely commented upon by the Madras High Court as being negligent in discharge of duties and the Government had to pay a sum of Rs. 10,000/ as compensation by way of damages for their negligence.
He sought inspection of some files to substantiate this allegation.
Unfortunately though respondents 9 and 23 were made parties they did not appear to controvert this fact.
But it appears from the record that they were promoted after they were selected by the Departmental Promotion Committee and the promotion was approved by U.P.S.C. Appellant contended that this averment on his part has remained uncontroverted and it must be taken as having been admitted and proved.
It may be mentioned that in the petition filed by the appellant in the Delhi High Court this allegation was not specifically averred.
In a subsequent affidavit filed by him this allegation was put forth.
If respondents 9 and 23 had not appeared in the High Court the appellant should have shown that this subsequent affidavit was served upon them, and in that event alone some adverse inference may be drawn against them.
It may be that the Government may not be interested in either denying or admitting this averment which directly and adversely affects respondents 9 and 23.
However, in view of the fact that they were selected by the Departmental Promotion Committee and the promotion was approved by the U.P.S.C. it is difficult to entertain the contention at the hand of the appellant who is not in any way going to be benefited by the invalidation of their promotion.
It was incidentally urged that promotions given to respondents 9,12,13 and 15 must be set aside because they belonged to former category 'D ' and were given promotions against 19 unspecified posts in contravention of the affidavit of the Government.
As stated earlier, there were some specialists in category 'D ' also.
At the time of initial constitution of service those who qualified for being appointed General Duty Officers from category 'D ' were absorbed in category III and those who were eligible for being absorbed in Specialists ' grade were so absorbed.
After absorption they belonged to the respective category.
Thereafter on conversion of posts from the pool of 19 unspecified specialists ' posts they were promoted as being found qualified for the same and for the post to which each one of them was promoted appellant was not qualified and, therefore, the contention that the promotion of the aforementioned four respondents should be set aside has no merit in it.
Having examined the challenge to the promotion of respondents 4 to 24 on merits, it must be made clear that the appellant is least 69 qualified to question their promotions.
Each one of them was promoted to a post in supertime grade II in a speciality other than ophthalmology and appellant admittedly was not qualified for any of these posts.
Even if their promotions are struck down appellant will not get any post vacated by them.
Incidentally High Court also upheld their promotions observing that by the time the petition was heard each one of them had requisite service qualification and, therefore, the promotions could not be struck down.
Once the challenge on merits fails the second string to the bow need not be examined.
Having said all this, appellant is least competent to challenge their promotions.
In a slightly comparable situation this Court in Chitra Ghosh and Anr.
vs Union of India and Ors.
observed as under: "The other question which was canvassed before the High Court and which has been pressed before us relates to the merits of the nominations made to the reserved seats.
It seems to us that the appellants do not have any right to challenge the nominations made by the Central Government.
They do not compete for the reserved seats and have no locus standi in the matter of nomination to such seats.
The assumption that if nominations to reserved seats are not in accordance with the rules all such seats as have not been properly filled up would be thrown open to the general pool is wholly unfounded.
" It was last urged that the High Court has set aside the promotion of respondent 18, Dr. P. C. Sen who was promoted in 1971 and, therefore, there was an opening in supertime grade II in September 1971 and appellant should be considered eligible for promotion to the post from that date and that this Court should consider appellant 's eligibility for promotion from September 1971 and if found eligible, should grant the same.
Dr. P.C. Sen was General Duty Officer grade I and he was posted as Director of Health Services, Manipur.
Appellant contends that he was in Specialists ' grade and was senior to Dr. Sen and was not unqualified for the post of Director of Health Services, Manipur, but the post was not offered to him and, therefore, he must be considered eligible for promotion from the date on which Dr. P.C. Sen was promoted.
The High Court in L.P.A. 46/74 filed by the appellant has set aside the promotion of Dr. P.C. Sen as also of Dr. Jasbir Kaur but the High Court has not thought fit to direct the Government by a mandamus to consider eligibility of the appellant for the post of Director of Health Services, Manipur.
There is no material before us whether the appellant was qualified for the post.
If he was eligible it would be for the Government to consider how it should deal with the post.
We 70 are, however, surprised that the appellant who was not prepared to go to Simla in February 1971 would have been willing to go to Manipur in September 1971.
In our opinion it would be giving him an unfair advantage now by giving a technical benefit of a situation whereby promotion of Dr. Sen has been invalidated by the High Court.
Neither Dr. Sen nor the Government have preferred appeal against the judgment by which the promotions of Dr. P.C. Sen and Dr. Jasbir Kaur were invalidated by the High Court.
But the matter must remain at that stage and there is no justification for giving a direction that the appellant should be considered for the post which is deemed to have fallen vacant in September 1971 on the invalidation of promotion of Dr. P.C. Sen.
In this connection it may be pointed out that some time after the hearing was over in this Court learned counsel for the appellant has circulated a letter that the High Court has set aside the promotion of respondent 7, Dr. Ramesh Prasad Singh as also of respondent 21, Dr. Brij Gopal Misra.
It is undoubtedly true that the learned single Judge who heard the petition initially had set aside the promotion of Dr. Brij Gopal Misra to the post of Regional Deputy Director, N.M.E.P., Hyderabad.
But neither from the judgment of the learned single Judge nor from the judgment of the Division Bench it is possible to ascertain that the promotion of Dr. Ramesh Prasad Singh has been invalidated.
No direction in that behalf can be given.
Before we conclude it may be pointed out that on the conclusion of hearing of this appeal in order to heal the wound caused by impaired dignity of the appellant as herein before mentioned, a suggestion was made to the Government to see if the present appellant could be accommodated in some way where he may not feel the humiliation which he claims he suffers.
Mr. P. Parameswara Rao, learned counsel for the Government promised to discuss the matter with the Government and ultimately on March 7.
1980, the Central Government offered the post of Director and Head of the Department for a programme concerned with vision impairment and amelioration thereof.
In that post the appellant would be the Head of the Department and would continue to be in supertime grade II.
This offer did not appeal to the appellant and the matter was left at that.
There is no substance in any of the contentions urged on behalf of the appellant and, therefore, this appeal fails and it is dismissed with no order as to costs.
V.D. Appeal dismissed.
[/INST]Section 7(3) of the East Punjab Essential Services (Mainten ance) Act, 1947, provides that "no court shall take cognisance of any offence under this Act except upon complaint in writing made by a person authorised in this behalf by the State Government".
Held, that the law does not require that the particular com plaint should have been authorised by the State Government and it is sufficient if it has been filed by a person authorised by the State Government to do so.
Neglect of duty as contemplated by section 29 of the , is quite different from abandoning an employment or absenting oneself from work without reasonable cause within the meaning of section 5(b) of the East Punjab Essential Services (Maintenance) Act.
The respondent, a constable, on account of physical infirmity was not assigned any "work" in the Police Lines within the meaning of el.
(b) of section 5 of the East Punjab Essential Services (Maintenance) Act.
He absented himself from the Police Lines without permission.
Held, that his absence from Police Lines during the relevant time may have amounted to neglect of duty but he could not be convicted under section 5(b).
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<s>[INST] Summarize the judgementivil Appeal No. 3 1543 155 of 1985.
From the Judgment and Order dated 26.3.
1985 of the Jammu & Kashmir High Court in L.P.A. (W) No. 59 of 1984.
For the Appellant In Person in Civil Appeal No. 3 154/85 M.N. Tiku, Rakesh Tiku and Pandey Associates for the Respondents.
431 M.N. Tiku, Rakesh Tiku and Pandey Associates for the Appellants.
For the Respondent In Person in Civil Appeal No. 3155/85.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Jammu & Kashmir Industries Limited (hereinafter called 'company ') is a company registered under the Indian and is wholly owned and managed by the State of Jammu & Kashmir.
Pyare Lal Sharma was employed by the company as Chemical Engineer.
His serv ices were terminated by the Managing Director of the company on June 14, 1983.
Sharma 's writ petition was allowed by a learned Single Judge of the Jammu & Kashmir High Court.
On appeal by the company the Letters Patent Bench upheld the judgment but denied back wages to Sharma.
This is how these two appeals, one by the.company and the other by Sharma, are before us.
We may briefly notice the necessary facts.
Pyare Lal Sharma joined the company as Assistant Chemical Engineer on July 12, 1972.
In 1974 he was sent to England as management trainee but he returned back without completing the train ing.
Sharma 's conflict with the company started in 1976 when he filed a suit against the company in Jammu & Kashmir High Court with various reliefs including a direction that he be again sent to England on company 's expense.
The suit was dismissed and further appeal to the Division Bench was also dismissed.
He then filed another suit in the Delhi High Court claiming Rs.50 lakhs as damages from the company but the same did not proceed on technical grounds.
Thereafter, it seems, Sharma started suspecting mala fide in every action of the company and resorted to court proceedings even on slight pretext.
He challenged the order of transfer from Baramulla to the headquarters by way of suit in the Jammu & Kashmir High Court.
Interim stay, initially granted, was vacated by the High Court.
In December, 1979 he applied for leave on medical grounds without disclosing the ailment.
He remained absent from December 7, 1979 to March 7, 1980 without any sanctioned leave.
Disciplinary proceedings were initiated against him on the charge of unauthorised absence and he was placed under suspension on March 8, 1980.
He filed Writ Petition No. 58/80 in the Jammu & Kashmir High Court against suspension.
Ultimately Sharma expressed re grets and he was reinstated into service by an order dated May 15, 1980.
In April, 1981 he was transferred from head quarters to one of 432 the units.
He again filed a writ petition in the Jammu & Kashmir High Court challenging the order of transfer but the same was dismissed.
Thereafter he filed Writ Petition No. 4086 of 1982 in this Court which was heard by Chinnappa Reddy, J. (Vacation Judge) on 1st of June, 1982.
The learned Judge passed the following order: "Issue notice returnable on June 15, 1982.
Notice be also served on the counsel for the State of Jammu & Kashmir Mr. Altar Ahmad.
Mr. Altar Ahmad will take instructions from his clients and assist this Court to know the precise facts of the case which it is impossi ble to find from the petitioner.
1 have sug gested to the petitioner that he may engage a counsel but he does not appear to be inclined to do so.
Nor is he willing to be assisted by the counsel engaged by the court.
" The writ petition was, however, dismissed as withdrawn on June 15, 1982.
Sharma filed two more writ petitions being 293 of 1982 and 410 of 1982 in the Jammu & Kashmir High Court challenging the promotions of some other officers.
Sharma absented from duty on September 8, 1982.
He was asked to explain his absence.
A para out of his reply is as under: "I have been submitting charge sheet against you since last one year to authorities about your corrupt practices, communal character, and illegal financial advancement you have made but no action has been taken against you since you utilise political pressure and bribed the chairman.
" Sharma was served with a charge sheet dated September 24, 1982 and he was placed under suspension.
Use of deroga tory language in various communications was one of the charges against him.
He submitted his reply to the charge sheet on October 7, 1982.
Part of the opening paragraph is as under: "You have become frustrated, lost balance of mind and to cover the various irregularities committed by you for example . .
You will be prosecuted for levelling false charge sheet and false charges against me.
Coming to the charge sheet with above reverence I have to say as under." On October 22, 1982 an enquiry officer was appointed to enquire 433 into the charges against Sharma.
He challenged the order of suspension by way of Civil Writ Petition 661 of 1982 in the Jammu & Kashmir High Court.
The High Court stayed the sus pension by its order dated December 20, 1982.
The order of suspension having been stayed by the High Court it was incumbent on Sharma to have joined duty.
But inspite of company 's letters asking him to do so he remained absent.
Sharma filed Writ Petition 471/82, Writ Petition 129/83 and Letters Patent Appeal 24/83 for payment of his salary and allowances for various periods which were granted by the High Court.
It is also on record that while in service Sharma unsuc cessfully fought assembly elections on two occasions.
He filed his nomination papers for contesting elections to the Lok Sabha from Baramulla constituency.
But the nomination papers were rejected.
Regulation 16.14 of Jammu & Kashmir Industries Employees Service Rules and Regulations before amendment was as under: "The service of the permanent employee shall be terminated by the company, if (a) his post is abolished or (b) he is declared on medical grounds to be unfit for further service after giving three months ' notice or pay in lieu thereof.
For similar reasons the service of a temporary employee also be dispensed with after giving him one month 's notice or pay in lieu thereof.
" The above quoted regulation 16.14 was amended on April 20, 1983.
Amended regulation is as under: "16.14.
the services of an employee shall be terminated by the Company if: (a) his post is abolished, or (b) he is declared on medical grounds to be unfit for further service, or (c) if he remains on un authorised absence, or(d) if he takes part in active politics.
In the case of (a) and (b) above the services shall be terminated after giving three months notice to a permanent 434 employee and one month 's notice to a temporary employee or pay in lieu thereof.
In the case of (c) and (d) above the services of an employee shall be terminated if he fails to explain his conduct satisfactorily within 15 days from the date of issue of notice.
The management shall be empowered to take a decision without resorting to further enquiries.
By order of the Board of Directors.
" The company issued a show cause notice dated April 21, 1983 in terms of clause (c) of amended regulation 16.
The notice was in the following terms: "In compliance to the orders of the Hon 'ble High Court Your suspension was stayed till further orders vide Order No. JKI/319/82 dated 21.12.82 issued vide endorsement No. Adm.(P) 80 65/4866 dated 21.12.82.
From that date also you have continuously remained absent unautho risedly from your duties.
You are, therefore, served this notice to show cause within a period of 15 days as to why your services should not be terminated under rules of the Corporation." No reply to the show cause notice was submitted by Sharma.
By an order dated June 14, 1983 the Managing Direc tor of the company terminated his service,.
The termination order is reproduced as under: "Shri Pyare Lal Sharma Chemical Engineer, Jammu and Kashmir Industries Limited has remained on unauthorised absence continuously from 21.12.82 (since the date of his suspen sion was stayed as per orders from the Hon 'ble High Court).
Shri Sharma was served with a notice under Jammu & Kashmir Industries Limit ed Employees Service Rules to show cause within a period of 15 days as to why his services should not be terminated.
This notice was served to him under registered post but the same was received back in this office and later on delivered to him in person on 7.5.83 as per his request.
Shri Sharma has failed to explain his position.
It has now also been established that Shri Sharma was 435 taking part in active politics during the period of his un authorised absence and has filed nomination papers for contesting elec tion from 1 Baramulla Parliamentary Con stituency.
Now that his unauthorised absence as well as his taking part in the active politics has been established, and in exercise of the powers vested in the management under Jammu & Kashmir Industries Employees Services Regulations the services of said Shri Pyare Lal Sharma Chemical Engineer J & K Industries Limited are hereby terminated.
" Sharma challenged the order of termination by way of Writ Petition No. 70 of 1984 before the Jammu & Kashmir High Court.
Learned Single Judge by his judgment dated October 16, 1984 allowed the writ petition on three grounds.
The learned Judge found the impugned order violative of Rules of Natural Justice as no opportunity to show cause was afforded to Sharma in respect of the ground of taking part in active politics.
It was also held that the Board of Directors having appointed Sharma, The Managing Director who is subordinate authority could not terminate his services.
Finally, the learned Judge held regulation 16.14 to be arbitrary and as such violative of Article 14 of the Consti tution of India.
The Letters Patent Bench of the High Court dismissed the appeal of the company but denied back wages to Sharma.
The Bench held that Sharma 's services could not be terminated by an authority subordinate to the authority which appointed him.
The Bench also found that either three months notice or salary in lieu thereof under regulation 16.14 was mandatory.
The Division Bench did not agree with the other reasons given by the learned Single Judge in support of his judg ment.
Mr. Pyare Lal Sharma appeared in person and argued his case.
He has been of no assistant to us.
During the course of arguments we suggested to Mr. Sharma to engage a counsel which de declined.
We also repeatedly offered to him to have the services of a counsel engaged by the Court but he did not agree and insisted on arguing the case himself.
From the pleadings of the parties, documents on the record, the judgment of the learned Single Judge and of the Letters Patent Bench 436 and from Sharma 's arguments the following points arise for our consideration: 1.
Whether Regulation 16.14 is arbitrary and as such ultra vires Article 14 of the Constitution of India.
Whether three months ' notice or pay in lieu of the notice period was required to be given under Regulation 16.14.
The termination order having been passed by the Managing Director who was an authority subordinate to the Board of Direc tors which appointed Sharma, the order was bad on that ground.
Whether the impugned order is viola tive of rules of natural justice so much so that the ground of taking part in active politics was not mentioned in the show cause notice whereas it was relied upon in the termination order.
Whether the period of absence, which was prior to the date of coming into force of the amended Regulation 16.14, could be taken into consideration for invoking ground (c) of the Regulation.
We see no arbitrariness in Regulation 16.14.
The Regula tion has been framed to meet four different eventualities which may arise during the service of a company employee.
Under this regulation services of an employee may be termi nated (a) if his post is abolished or (b) if he is declared on medical grounds to be unfit for further service or (c) he remains on unauthorised absence or (d) if he takes part in active politics.
In the case of (a) and (b) three months notice to a permanent employee and one month notice to temporary employee or pay in lieu thereof is to be given.
In case of (c) and (d) a show cause notice, to explain his conduct satisfactorily, is to be given.
So far as grounds (a) and (b) are concerned there cannot be any objection.
When a post is abolished or an employee is declared medical ly unfit for further service the termination is the obvious consequence.
In the case of abolition of post the employee may be adjusted in some other post if legally permitted.
Ground (c) has also a specific purpose.
"Remains on un authorised absence" means an employee who has no respect for discipline and absents himself repeatedly and without any justification 437 or the one who remains absents for a sufficiently long period.
The object and purport of the regulation is to maintain efficiency in the service of the company.
The provision of show cause notice is a sufficient safe guard against arbitrary action.
Regarding ground (d) "acting politics" means almost whole time in politics.
Company job and active politics cannot go together.
The position of the civil servants who are governed by Article 311 is entirely different but a provision like grounds (c) and (d) in Regu lation 16.14 concerning the employees of companies/corpora tions/public undertakings is within the competence of the management.
We do not agree with the Division Bench of the High Court that three months ' notice or pay in lieu thereof was to be given to Sharma under Regulation 16.14.
It is clear from the plain language of the regulation that three months notice or pay in lieu, is only required when termination is under ground (a) or (b).
Regarding (c) and (d), the regula tion provides for a 15 days notice to explain the conduct satisfactorily and there is no requirement of any other notice or pay in lieu thereof.
We may now take up the third point.
Sharma was appointed as Chemical Engineer by the Board of Directors.
The powers of the Board of Directors to appoint officers of Sharma 's category were delegated to the Managing Director on Septem ber 12, 1974 and as such from that date the Managing Direc tor or became the appointing authority.
Needless to say that employees of the company are not civil servants and as such they can neither claim the protection of Article 311(1) of the Constitution of India nor the extension of that guaran tee on parity.
There is no provision in the Articles of Association or the regulations of the company giving same protection to the employees of the company as is given to the civil servants under Article 311(1) of the Constitution of India.
An employee of the company cannot, therefore, claim that he cannot be dismissed or removed by an authority subordinate to that by which he was appointed.
Since on the date of termination of Sharma 's services the Managing Direc tor had the powers of appointing authority, he was legally competent to terminate Sharma 's services.
The learned Single Judge allowed the writ Petition on the fourth point though the same did not find favour with the Division Bench.
Grounds (c) and (d) in regulation 16.14, exclusively and individually, are sufficient to terminate the services of an employee.
Once it is established to the satisfaction of the authority that an employee 438 remains on unauthorised absence from duty, the only action which can be taken is the termination of his services.
Similar is the case when an employee takes part in active politics.
The finding in the termination order regarding taking part in active politics cannot be sustained because no notice in this respect was given to Sharma but the order of termination can be supported on the ground of remaining unauthorised absence from duty.
This Court in State of Orissa vs Vidyabhushan Mohapatra, [1963] 1 Supp.
SCR 648 and Railway Board vs Niranjan Singh, has held that if the order can be supported on one ground for which the punishment can lawfully be imposed it is not for the courts to consider whether that ground alone would have weighed with the authority punishing the public servant.
Thus there is no force in this argument.
This takes us to the last point which we have discovered from the facts.
Regulation 16.14 before amendment consisted of only clauses (a) and (b) relating to abolition of post and unfitness on medical ground.
The company had no authori ty to terminate the services of an employee on the ground of unauthorised absence without holding disciplinary proceed ings against him.
The regulation was amended on April 20, 1983 and grounds (c) and (d) were added.
Amended regulation could not operate retrospectively but only from the date of amendment.
Ground (c) under which action was taken came into existence only on April 20, 1983 and as such the period of unauthorised absence which could come within the mischief of ground (c) has to be the period posterior to April 20, 1983 and not anterior to that date.
The show cause notice was issued to Sharma on April 21, 1983.
The period of absence indicated in the show cause notice is obviously prior to April 20, 1983.
The period of absence prior to the date of amendment cannot be taken into consideration.
When prior to April 20, 1983 the services of person could not be terminat ed on the ground of unauthorised absence from duty under Regulation 16.14 then it is wholly illegal to make the absence during that period as a ground for terminating the services of Sharma.
It is basic principle of natural justice that no one can be penalised on the ground of a conduct which was not penal on the day it was committed.
The date of show cause notice being April 21, 1983 the unauthorised absence from duty which has been taken into consideration is from December 20, 1982 to April 20, 1983.
Whole of this period being prior to the date of amendment of regulation 16.14 the same could not be made as a ground for proceeding under ground (c) of Regulation 16.14.
The notice served on the appellant was thus illegal and as a consequence the order of termination cannot be sustained and has to be set aside.
439 When the termination order is set aside by the courts normally the servant becomes entitled to back wages and other consequential benefits.
This case has a chequered history.
From 1976 onwards there has been continuous litiga tion and mistrust between the parties.
The facts which we have narrated above go to show that Sharma has equally contributed to this unfortunate situation.
In view of the facts and circumstances of this case we order that sixty per cent of the back wages be paid to Sharma.
Money already received by Sharma under orders of this Court or the High Court shall be adjusted and the balance paid to him.
If the money already paid to Sharma is more than what we have ordered then there shall be no recovery from him.
Civil Appeal 3154/85 is allowed to the extent indicated above, Civil Appeal 3155/85 filed by the company is dis missed.
C.M.P. 1213/ 88 is dismissed as infructuous.
There shall be no order as to costs.
[/INST]The appellant plaintiff, who was an employee of the respondent company, was dismissed from service on the bais of a domestic enquiry held against him in respect of certain charges of misconduct.
Thereupon, he filed a civil suit before the Court of Munsiff and sought the relief of back wages and injunction not to give effect to the order of dismissal The respondents in their written statement raised inter alia the plea that the suit was not maintainable as the relief sought was available to the plaintiff under section 2A of the .
The Trial Court came to the conclusion that the Civil Court had the jurisdiction to try the suit.
The High Court, in revision, held that the nature of the relief which was sought by the appellant plaintiff was such which could only be granted under the , and therefore the civil court had no jurisdiction to try the suit.
Before this Court it was contended on behalf of the appellant (i) on the basis of the language of section 9 of the Code of Civil Procedure the civil court had jurisdiction to try all kinds of suits except those which were either expressly or impliedly barred, and the High Court was not right in reaching the conclusion that it was impliedly barred; (ii) as the remedy under the was discretionary, it could not he said that there was a remedy available to the appellant under the scheme of the Act and thus the jurisdiction of the civil court could not be barred by implication.
On the other hand, it was contend ed on behalf of the respondents that (i) the relief sought by the appellant in substance was the relief of reinstate ment with backwages which relief was available only in the ; (ii) the Act itself provided the procedure and remedy and it was not open to the appellant to approach the civil court for getting the relief which he could get only under the scheme of the Act; and (iii) the discretion of the Government to make a reference or not was not arbitrary.
Dismissing the appeal, this Court.
641 HELD: (1) It is clear that wherever the jurisdiction of the civil court was expressly or impliedly barred, the civil court will have no jurisdiction.
[644B] (2) It is clear that except under the industrial law, under the law of contract and the civil law, an employee whose services are terminated could not seek the relief of reinstatement or backwages.
At best, he could seek the relief of damages for breach of contract.
(3) The manner in which the relief has been framed by the appellant in this case, although he seeks a declaration and injunction but in substance it is nothing but the relief of reinstatement and backwages.
This relief could only be available to a workman under the .
[644C D] (4) The discretion of the State Government for making a reference under section 12(5) of the is not arbitrary and it would not be said that the reference to the labour court or tribunal is not available to a worker who raises an industrial dispute.
[646G] Bombay Union of Journalists & Ors.
vs The State of Bombay & Anr., ; ; Calcutta Electric Supply Corporation Ltd. vs Ramratan Mahato, AIR 1973 Cal 258; Dhulabhai etc.
vs State of Madhya Pradesh; , ; Nanoo Asan Madhavan vs State of Kerala, [1970] Vol.
I LLJ Kerala 272, referred to.
(5) In view of the language of section 10, read with section 12(5) of the , an adequate remedy was available to the appellant under the scheme of the itself which is the Act which provides for the relief of reinstatement and backwages which in fact the appellant sought before the civil court by filing a suit.
[648B] (6) The scheme of the clearly excludes the jurisdiction of the civil court by implication in respect of remedies which are available under the Indus trial Disputes Act and for which a complete procedure and machinery has been provided in this Act.
[649F G]
</s>
|
<s>[INST] Summarize the judgementAppeals No&323 and 324 of 1956.
Appeal from the judgment and orders dated April 27, and July 13, 1956, of the Madras High Court in Writ Appeals Nos.
42 and 88 of 1956 arising out of the orders dated March 23, and July 9, 1956, of the said High Court in Writ Petitions Nos. 333 and 564 of 1956.
A. V. Viswanatha Sastri, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellant.
Daphtary, Solicitor General of India,, R. Gan.
pathy Iyer and R. Gopalkrishnan, for respondents Nos. 3 and 4.
665 1957.
February 19.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
These are appeals against the judgment of the High Court of Madras on a certificate given under article 133 (1) (c) of the Constitution, and they raise a question of some importance as to the true legal character of a permit when it is renewed under the provisions of the (IV of 1939) hereinafter referred to as the Act.
In order to appreciate the contentions of the parties, it is necessary to state the material facts leading up to the present dispute.
Towards the end of 1952, the appropriate authorities under the Act decided to grant two additional permits for stage carriages in the Ondipudur Agricultural College route in the town of Coimbatore in the State of Madras,, and invited applications therefor under section 57 of the Act.
There were as many as 39 applicants, and by his order dated December 3, 1952, the Regional Transport Authority granted one permit to applicant No. 24, the Thondamuthur Trading Company Ltd., and another to applicant No. 30, the V.C.K. Bus Service.
There were appeals by some of the unsuccessful applicants to the Central Road Traffic Board, which by its order dated February 19, 1953, set aside the order of the Regional Transport Authority and granted the permits, one to Stanes Transports Ltd., and another to Thirumalaiswami Goundar.
Revisions were preferred against this order by the aggrieved applicants under section 64 A of the Act, and by its order dated July 9, 1953, the Government confirmed the grant of the permit to Stanes Transports ,Ltd., but set aside the permit given to Thirumalaiswami Goundar, and granted it instead to Annamalai Bus Transport Ltd. Thereupon, applicants Nos. 24 and 30 moved the High Court of Madras under Aft. 226 for a writ of certiorari to quash the order of the Central Road Traffic Board dated February 19, 1953 and of the Government dated July 9, 1953; but the applications were dismissed by Rajagopala Ayyangar J. on March 8, 1954.
Against the orders of dismissal, Writ Appeals Nos. 31 and 32 of 1954 were preferred, and they were 666 dismissed by Rajamannar C. J. and Panchapakesa Ayyar J. on March 21, 1956.
It should be mentioned that the operation of 'the order dated February 19, 1953 was stayed pending the disposal of the revision under section 64 A and the writ proceedings in the High Court, with the result that both Thondamuthur Trading Company Ltd. and V.C.K. Bus Service which had been granted permits by the Regional Transport Authority on December 3, 1952, continued to run their buses notwithstanding cancellation of those permits on February 19, 1953.
It should also be mentioned that in June 1954 the business of the V.C.K. Bus Service which was the grantee of one of the permits under the order of the Regional Transport Authority dated December 3, 1952, was taken over by a Company called the V.C.K. Bus Service Ltd., which is the appellant before us, and by an order of the Regional Transport Authority dated July 7, 1954, it was recognised as the transferee of the permit granted to V.C.K. Bus Service.
To continue the narrative, the permit which was the subject matter of the litigation aforesaid was for a period of one year and a half, and it expired on June 30, 1954.
Before its expiry, the appellant applied on April 15, 1954, for a renewal thereof for a period of three years.
This application was duly notified under s.57, and objections to the grant were preferred by both Stanes Transports Ltd., and Annamalai Bus Transport Ltd. On September 5, 1954, the Regional Transport Authority granted a permit to the appellant for a period of one year from July 1, 1954 to June 30, 1955, obviously in the expectation that Writ Appeals Nos. 31 and 32 of 1954 would by then have been decided.
On March 19, 1955,the appellant again applied for a renewal of the permit, and that was also notified under section 57, and no objections having been filed to the grant thereof, the Regional Transport Authority by his order dated June 23, 1955, renewed the permit for a period of three years from July 1, 1955 to June 30, 1958.
It is this permit that forms the subject matter of the present litigation.
It has been already stated that Writ Appeals Nos. 31 and 32 of 1954 were dismissed on March 21, 1956.
667 Apprehending that the Regional Transport Authority might, in view of the judgment of the High Court, cancel the permit which was renewed on June 23, 1955, the appellant filed Writ Petition No. 333 of 1956 for a Writ of Prohibition restraining the Regional Transport Authority from Cancelling the permit, and that was dismissed by Rajagopala Ayyangar J. on the ground that when the original permit was set aside, the renewal thereof fell to the ground.
The appellant filed Writ Appeal No. 42 of 1956 against this order, and that was heard by Rajamannar C. J. and Panchapakesa Ayyar J. who by their judgment dated April 27, 1956, held, following a previous decision of that Court in K. Muthuvadivelu vs Regional Transport Officer(1) that the renewal having been obtained on the basis of a permit which had been subsequently cancelled, it could not be regarded as a fresh permit, that when the original permit was set aside, it must be taken to be non est for all purposes, and that the renewal must therefore be held to be a nullity.
In the result, they dismissed the appeal, but granted a certificate under article 133(1)(c), observing that the case raised a point of general importance, which was stated by them in these terms: When an application for renewal of a permit is made and granted and eventually it is held that the original permit was itself wrongly granted, does the renewed permit subsist for the period for which it was renewed, or does it automatically cease to be in force when it is finally decided that the original permit was not granted validly ? This matter now comes before us in Civil Appeal No, 323 of 1956.
After the High Court delivered its judgment in Writ Appeal No. 42 of 1956 on April 27, 1956, the respondents herein, viz., Stanes Transports Ltd., and Annamalai Bus Transport Ltd., applied to the Regional Transport Authority to grant them permits in accordance with the decisions of the High Court, and on May 5, 1956, the Regional Transport Authority cancelled the permit granted by him on June 23, 1955, in favour (1) A.I.R. 1956 Mad.
86 668 of the appellant, and granted permits instead to the respondents.
Thereupon, the appellant filed Writ Petition No. 554 of 1956 for a writ of certiorari to quash the order dated May 5, 1956, on the grounds which had been put forward in Writ Petition No. 333 of 1956 and Writ Appeal No. 42 of 1956.
That petition was dismissed by Rajagopalan J. on July 9, 1956, and the Writ Appeal No. 88 of 1956 filed against that order was dismissed by Rajamannar C. J. and Panchapa kesa Ayyar J. on July 13, 1956.
Leave to appeal against that judgment was also given under article 133 (1) (c), as the subject matter thereof was the same as that of Writ Appeal No. 42 of 1956 in respect of which leave had already been granted.
Civil Appeal No. 324, of 1956 relates to this matter.
Thus, both the appeals relate to the same matter, and raise the same point for determination.
Mr. A. V. Viswanatha Sastri, learned counsel who appeared in support of the appeals, contends that the view taken by the learned Judges of the High Court that when a permit is set aside by higher authorities, it should be treated as wholly non existent, and that, in consequence, a renewal thereof must be held to be void, is not sound, that on a correct interpretation of sections 57 and 58, a renewal is practically in the nature of a new grant, that the permit which was granted to the appellant for the period July 1, 1955 to June 30, 1958, though styled a renewal, was in substance a fresh permit, and that the fact that the old permit was set aside did not therefore affect the rights of the appellant under this permit.
He also argues that the Act and the rules framed thereunder contain elaborate provisions as to when a permit could be cancelled, forming in themselves a complete code on the subject, that the cancellation of the original permit is not one of the grounds on which a renewed permit could be set aside, and that the order of the Regional Transport Authority dated May 5, 1956, was therefore ultra vires.
The contention of the learned Solicitor General for the.
respondents is that when a permit is renewed, the renewal is, on a true construction of the provisions of the Act, in substance as in name a continuation of the 669 previous permit, and that, in consequence, when the, grant of a permit is set aside by a higher authority, the renewal thereof must also stand automatically set aside, and that further even if a renewed permit is not to be regarded as a continuation of the original permit,, seeing that it is granted on the basis of that permit it should be held to be subject to an implied term that it should cease if the original permit is cancelled.
The two points that arise for decision on these contentions are: (1) when a permit is renewed, is it a continuation of the original permit, or is it, in fact, a new one? and (2) if a renewed permit is not a continuation of the original permit, is the grant of it subject to the implied condition that it is liable to be cancelled, if the original permit is cancelled ? On the first question, it is necessary to refer to certain provisions of the Act material thereto.
Section,57 prescribes the procedure to be followed in the grant of stage carriage permits.
Under sub section
(2), applications therefor have to be made not less than six weeks before the date appointed by the Regional Transport Authority therefor.
Sub section (3) requires that they should be: published in the prescribed manner, and provision is made for representations being made in connection therewith.
When any representation is so received, sub section
(5) provides that the person making it is to be given an.
opportunity of being heard thereon in person or by a, duly authorised representative, and that the application for permit is to be disposed of at a public hearing.
Section 58 deals with renewals, and is as follows: (1) " A permit other than a temporary permit issued under section 62 shall be effective without renewal for such period, not less than three years and not more than five years, as the Regional Transport Authority may in its discretion specify in the permit: Provided that in the case of a permit issued or renewed within two years of the commencement of this Act, the permit shall be effective without renewal for such period of less than three years as the Provincial Government may prescribe.
670 (2) A permit may be renewed on an application made and disposed of as if it were an application for a permit: Provided that, other conditions being equal, an application for renewal shall be given preference over new applications for permits.
" The contention of the learned counsel for the appellant based on section 58 (2) is that under the Act an application for renewal is to be dealt with exactly as an application for a new permit, that it is to be notified under section 57 and representations have to be called for in connection herewith and considered at a public hearing, that though the grant of the previous permit furnishes a ground of preference, it is subject to the limitation that the other conditions are equal and is thus only one of several factors to be taken into account, and that therefore when a renewal is actually granted, it is on an independent consideration of the merits and it cannot be distinguished from a fresh grant.
It was further argued that the proviso to section 58(2) meant little, because it was well established that the grant of a permit was not a matter of right, and the authorities under the Act would be acting within their powers if they refused an application for renewal and granted a fresh permit to a new applicant.
It was also contended that though the statute spoke of a renewal of a permit, that expression did not accurately bring out the true position, because in legal terminology, renewal imports that the transaction which is renewed, as for example, a lease, is to operate for a further period but on the same terms, but that when a permit was renewed, it was open to the authorities to impose new conditions, to alter the period during which it was to operate and generally to modify its terms, and that therefore the use of the word ,renewal " should not lead to the.
inference that it was the original permit that was being continued.
There is force in these contentions, but there are other provisions bearing on this question, and when they are reviewed as a whole, it is abundantly clear that the intention of the legislature was to treat a renewal as a continuation of the previous permit.
To 671 start with, section 58(1) enacts that a permit shall be effective for the period specified therein, but this is qualified by the words " without renewal ".
Therefore, when there is a renewal, the effective period is not the original period specified, but the period up to which the renewal is granted.
That indicates that the life of a renewed permit is one and continuous.
The matter is placed beyond doubt when we turn to the rules which have been framed under the Act.
Rule 184 (1) provides that when a renewal is granted, it shall be endorsed on the permit itself, and Form No. 33, which is prescribed therefor is as follows: " This permit is hereby renewed up to the day of. . 19 Thus, what is renewed is " this permit".
In this connection, reference must be made to the definition of " permit " in section 2(2) of the Act 'as " the document issued by a Provincial or Regional Transport Authority Rule 1985 is very material for the purpose of the present discussion, and it runs as follows: If an application for the renewal of a permit has been made in accordance with these rules and the prescribed fee paid by the prescribed date, the permit shall continue to be effective until orders are passed on the application or until the expiry of three months from the date of receipt of the application whichever is earlier.
If orders on the application are not passed within three months from the date of receipt of the application, the permit holder shall be entitled to have the permit renewed by the Transport Authority for the period specified in the application or for one year whichever is less and the Transport Authority shall call upon the permit holder to produce the registration certificate or certificates and Part B or Parts A and B of the permit, as the case may be, and endorse the renewal in Parts A and B of the permit accordingly and return them to the permit holder ".
Under this rule, when an application for renewal is made, the permit already granted is to be in force 'until an order is passed thereon, and what is more important, if no order is passed within three months, 672 the permit 'becomes automatically renewed for the ,,period mentioned in the rule.
This goes a long way to support the contention of the respondents that on the scheme of the Act, renewal is a continuation of the original permit.
It should also be mentioned that the rules provide for different forms for an application for fresh permit and one for renewal, and the fee to be paid along with those applications is also different.
A reading of the relevant provisions of the Act and of the rules leads indubitably to the conclusion that a renewal is a continuation of the permit previously granted.
The fact that the grant of renewal is not a matter of course, or that it is open to the authorities to impose fresh conditions at the time of renewal does not, when the permit is in fact renewed, alter its character as a renewal.
We shall now consider the authorities cited by learned counsel for the appellant as supporting the view that a renewal under the Act is in the same position as a fresh permit.
In Mahabir Motor Co. vs Bihar State(1), the point for decision was whether an appeal lay under section 64 (f) against an order granting a renewal of a permit.
The contention before the Court was that the Act made a distinction between the grant of a permit and a renewal thereof, and that as section 64 (f), provided only for an appeal against an order granting a permit, no appeal lay against an order granting a renewal.
In repelling this contention the Court observed "Both grant.
and renewal stand more or less on the same footing by reason of sections 47, 57 and 58 of the . .
This observation has reference to the procedure to be followed in the renewal of a permit and the right of appeal given under a. 64 as part of that procedure.
It has, no bearing on the character of a permit when it is renewed.
Another decision on which the appellant strongly relied is Anjiah vs Regional Transport Officer, Guntur There, the, facts were that an order of suspension had been passed for breach of one of the (1) Patna 429.
(2) [1956] Andhra Law Times 347. ] 673 conditions of the permit.
The correctness of the order was challenged before higher authorities, but without success.
Meantime, the period fixed in the permit had expired, and it had been renewed.
The question was whether the period of suspension could be enforced against the renewed permit.
It was held by the Andhra High Court that it could not be, because the renewal was, in essence, a new permit and not a mere continuance of the old one.
The reason for ' this decision was thus stated in the judgment: " There is no right of renewal as such and when a permit is renewed, there is no right either, on the part of the permit holder to insist upon the continuance of the old terms.
It would be undesirable that there should be any such restrictions upon the right of the authorities to grant the permit to anybody they choose or subject to any conditions that they think it to be necessary to impose, provided that they are acting all the time in the public interest and subject to the provisions of the and the.
Rules made thereunder.
" These considerations, though not without force, can.
not, in our opinion, outweigh the inference to be drawn from the other provisions to which we have made reference and for the reasons already given, we are unable to agree with this decision.
In the view that we have taken that under the provisions of the Act and the rules, a renewal is a continuation of the original permit, there can be no doubt as to what the rights of the appellant are.
When the proprietor of V. C. K. Bus Service was granted a permit by the Regional Transport Authority on December 3, 1952, that grant was subject to the result of the decision of the higher authorities.
On September 5, 1954, when the permit was renewed in favour of the appellant, that was subject to the decision of the High Court in Writ Appeal No. 32 of 1954, which was then pending.
When the renewed permit dated September 5, 1954, was again renewed on June 23, 1955, that was likewise subject to the result of the decision in Writ Appeal No. 32 of 1954.
When the High Court by its judgment dated March 674 21, 1956, passed in the said Writ Appeal upheld the cancellation of the permit which had been granted by the Regional Transport Authority on December 3, 1952 to V. C. K. Bus Service, the permit renewed on June 23, 1955, became ineffective at least as from that date.
The Regional Transport Authority was therefore right in treating it as having become void, and granting by his order dated May 5, 1956, permits to the respondents.
The second question arises on the alternative contention advanced by the respondents that even if the renewal is to be regarded, not as a continuation of the original permit but as an independent grant, it must be held to have been subject to an implied condition that if the original permit is ultimately set aside, the renewal thereof should come to an end.
Mr. Sastri, learned counsel for the appellant, disputes the correctness of this contention.
He argues that when there is a document embodying the terms ' of a contract, it is not permissible to imply therein a condition, if that will contradict or vary any terms contained in it, that to read into the permit a condition that it is to cease if the decision of the High Court went against the appellant, ' would be to modify the terms contained therein that it is to be effective upto June 30, 1958, and that it could not therefore be implied.
He also relies on the following observation of Lord Parker in P. A. Tamplin Steamship Company Limited vs AngloMexican Petroleum Products Company Limited (1) : " This principle is one of contract law, depending on some term or condition to be implied in the contract itself and not on something entirely dehors the contract which brings the contract to an end.
It is, of course, impossible to imply in a contract any term or condition inconsistent with its express provisions, or with the intention of the parties as gathered from those provisions.
" It is undoubted law that when the terms of a contract or grant are reduced to writing, no condition can be implied therein, which will be inconsistent with its express terms.
But the contention of the respondents (1) , 422. 675 involves no conflict with this principle.
They do not seek to obtain any modification or alteration of the terms of the permit, leaving it to operate subject to such modification or alteration.
They want that the whole permit with all its terms as to duration and otherwise should be held to have become inoperative.
What they are pleading is a condition subsequent on the happening of which the permit will cease, and to that situation the observation quoted above has no application.
Reference may be made in this connection to the following observation occurring later in the speech of Lord Parker in F. A. Tamplin Steamship Company Limited vs Anglo Mexican Petroleum Products Company, Limited (supra): " Moreover, some conditions can be more readily implied than others.
Speaking generally, it seems to me easier to imply a condition precedent defeating a contract before its execution has commenced than a condition subsequent defeating the contract when it is part performed." Thus, there is no legal obstacle to implying a condition that the renewal should stand cancelled if the right of the appellant to the original permit was negatived by the High Court.
That brings us on to the question of fact, whether on an examination of the permit and of the circum.
stances under which it came to be granted, we can infer that it was the intention of the Regional Transport Authority to renew the permit subject to the result of the decision of the High Court in the appeal which was then pending before it.
The permit granted to the V. C. K. Bus Service on December 3, 1952, had been cancelled on February 19, 1953, and it was only by reason of the stay orders that the bus was permitted to run.
When the appellant applied for renewal on April 15, 1954, there was opposition to the grant thereof from both the respondents herein, based on the decision of the Government dated July 9, 1953, and it was in view of their objection that the Regional Transport Authority renewed the permit for one year from July 1, 1954 to June 30, 1955.
It is true that 87 676 when the appellant applied again for renewal on March 19, 1955, the respondents did not raise objection thereto, but as the appeals in the High Court were still pending, they had good reason to believe that the renewal would not affect whatever rights might be declared in their favour by the High Court.
As all the papers relating to the grant of the original permit and the subsequent proceedings were part of the record before the Regional Transport Authority when he renewed the permit on June 23, 1955, it is impossible to resist the conclusion that he really intended to renew the permit only subject to the decision of the High Court.
It is of the utmost importance in this connection to bear in mind that the appellant applied not for a fresh permit but for a renewal, and in sanctioning it, the Regional Transport Authority expressly acted in exercise of his powers under Rule 134 A read with section 58 of the Act, and if he did not expressly provide that it was subject to the decision of the High Court, it must be because he must have considered that that was implicit in the fact of its being only a renewal.
That that is how the appellant understood it is clear beyond doubt from the proceedings taken by it immediately after the High Court pronounced its judgment.
But it is argued for the appellant on the strength of the decision in Veerappa Pillai vs Raman & Raman Ltd.(1) that the mere knowledge on the part of the authorities that the rights of the parties were under litigation is not a sufficient ground to import a condition in the permit that it is subject to the result of that litigation, when in its terms it is unconditional.
We do not read that decision as authority for any such broad contention.
There, the question related to five permits, which had been originally granted to one Balasubramania.
Raman and Raman Ltd. obtained a transfer of the relative buses, and applied to the transport authorities for transfer of the permits to itself.
Then, Veerappa having subsequently obtained a transfer of the same buses from Balasubramania, (1) ; 677 applied to have the permits transferred in his name.
On October 3, 1944, he also instituted a suit in the Sub Court, Kumbakonam, to establish his title to the buses against Raman and Raman Ltd., and that was decreed in his favour on May 2, 1946.
Raman and Raman Ltd. appealed against this decision to the Madras High Court, which by its judgment dated September 2, 1949, reversed the decree of the Sub Court and held that it was entitled to the buses.
While these proceedings were going on, the transport authorities suspended on March 28, 1944, the permits which had been granted to Balasubramania and instead, they were issuing temporary permits from time to time to Veerappa, who had been appointed receiver in the suit in the Sub Court, Kumbakonam.
On March 29, 1949, the Government decided to discontinue the policy of granting temporary permits indefinitely, and accordingly granted permanent permits, to Veerappa.
Then on October 14, 1949, Veerappa applied for renewal of these permanent permits, and that was granted by the Regional Transport Authority on January 3,1950.
The question was whether this order was bad on the ground that it was inconsistent with the decision of the High Court that it was Raman and Raman Ltd., that had obtained a valid title to the buses.
This Court held that the ownership of the buses was only one of the factors to be taken into account in granting the permits, and that as the Regional Transport Authority granted the renewal on an appreciation of all the facts, his decision was not liable to be questioned in proceedings under article 226.
It should be noted that the renewal which was granted on January 3, 1950, was of permanent permits granted in pursuance of the, order of the Government dated March 29, 1949, which had quite plainly declared as a matter of policy that notwithstanding the pendency of litigation between the parties, permanent permits should be granted to Veerappa.
There can be no question of implying thereafter a condition that they were subject to the decision of the Court.
Moreover, the renewal was granted on January 3, 1950, after the litigation had ended on September 2, 1949, and any attack on that order could only be by 678 way of appeal against it, and that had not been done, We are of opinion that the decision in Veerappa Pillai vs Raman & Raman Ltd. (1) is of no assistance to the appellant.
In the result, we affirm the decision of the High Court both on the ground that the renewal dated June 23, 1955, is a continuation of the permit granted on December 3, 1952, and must fall to the ground when that stood finally set aside by the judgment of the High Court in Writ Appeal No. 32 of 1954 dated March 21, 1956, and on the ground that it was an implied condition of that renewal that it was to be subject to the decision of the High Court in that appeal, and that in the event which had happened, it had ceased to be effective.
These appeals fail, and are dismissed with costs in Civil Appeal No. 323 of 1956.
Appeals dismissed.
[/INST]On the basis of the investigation made on a First Information Report that one Brindaban the deceased son of PW 1 was kidnapped in a jeep from village Budha to the village Rampura where he was done to death, five persons were put on trial in Sessions Trial No. 107 of 1973.
but they were acquitted by Judgment dated 29.1.1974.
The trial court held that the investigation was defective and the real accused had not been brought on trial.
After a lapse of three years in 1977 a fresh investigation was undertaken and it resulted in the prosecution of the present appellants in the Court of Sessions as killers of Brindaban.
Prosecution examined seven eye witnesses.
The Trial Court assessed the evidence in a fair way and was not prepared to rely on it and therefore directed acquittal of the appellants.
In the State appeal against acquittal, the High Court heavily relying upon two documents The first being exhibit
P. 1 a letter sent by PW 1 Sunderlal to the Superintendent of Police on 29.4.1973 and the second being exhibit P 9 a confidential letter of the Superintendent of police to the Deputy Inspector General of the Department found support for the prosecution case as corroborative evidence with the ocular evidence, and reversed the acquittal, by convicting the appellants under section 148 and 367 IPC.
Hence the appeals by special leave.
Allowing the appeals, the Court ^ HELD: 1.
When in the first trial on the charge of murder and abduction the prosecution had alleged that the deceased had been murdered by a set of five persons different from the present appellants and let in evidence of three eye witnesses being PWs.
1, 3 and 24 of the Second Trial and who are pamittedly close relations of deceased to the effect that those five accused 94 persons and no others including the appellants were responsible for the death of the deceased, acceptance of the evidence of the very same three eye witnesses in the second trial conducted after a lapse of three years implicating the present appellants as murderers will be highly improper.
The fact that these alleged eye witnesses were prepared to implicate the five persons who were acquitted on the earlier occasion and the present appellants on the subsequent occasions in a serious charge like murder is indicative of the fact that no credence can be given to the evidence of these witnesses and they were willing to lend their oath to any story that the prosecution advanced.
Therefore, in an appeal against acquittal the High Court in whose hands there has been a reversal of the acquittal ought not to have found the remaining evidence to be good basis for conviction of the appellants.[96H; 97A D] 2.
The High Court fell into error in relying on the letter of PW 1 Sunderlal to the Superintendent of Police dated 29.4.1973 which is subsequent to the commencement of the investigation of the basis on the First Information Report.
Such a letter written by PW 1 who stood in the place of the prosecutor would not at all be admissible in evidence.
[97E F] Kali Ram vs State of Himachal Pradesh. ; ; followed.
To rely on the contents of the letter exhibit P. 9 written by the Superintendent of police to his superior officer, without examining the writer of the letter and without affording an opportunity to the defence to cross examine the writer, is totally misconceived.
The document was not available to be relied upon for any purpose and the High Court in the instant case was wrong in seeking support from it by way of corroboration of the oral evidence.
[97G H] 4.
In view of the express words in the definition of "abduction" in Section 362 of the I.P.C., the offence of abduction against the accused has not been fully proved, since the name of Vinod the leader of the party has not been mentioned at all during the investigation and even according to the majority of witnesses, on the persuation of the accused (appellants) he went inside his house and came properly dressed and to accompany the group to village Rampura.
[98C D] 5.
The appellants were not liable to be convicted under section 367 of the Penal Code because from the non acceptance by the High Court of the story of murder of the deceased by the appellants and non recording a finding that the grievous hurt leading to death was caused by them, it will be clear that the act of picking of the deceased from his village was unconnected with what happened later.
[98F G] 6.
The charge under section 148 I.P.C. has been conceded by the counsel for the State to relate to what followed at Rampura and is not connected with the accusation of abduction.
The common object as stated by the prosecution would not be available for sustaining the conviction under section 148 I.P.C. in that background.
[98G H] 95
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<s>[INST] Summarize the judgementivil Appeal No. 672 of 1962.
Appeal by special leave from the judgment and order dated December 10, 1958, of the Patna High Court in Appeal from Appellate Decree No. 716 of 1954.
S.P. Varma, for the appellants.
Sarjoo Prasad and Mohan Behari Lai, for the respondents.
107 October 10, 1963.
The Judgment of P.B. Gajendragadkar, K. Subba Rao, K.N. Wanchoo and J.C. Shah JJ., was delivered by Subba Rao J. Raghubar Dayal J. delivered a separate Opinion.
SUBBA RAO J.
This appeal by special leave is directed against the judgment of the High Court of ' Judicature at Patna and raises mainly the question of the scope of the right of pre emption under the Mohamedan law as applied by custom in Bihar.
The facts lie in a small compass.
On June 17, 1930, Chathilal Sah of Sahebganj, who was the owner of a house and two golas bearing holdings Nos. 184 and 185 situated in mahalla Sahebganj, executed a will bequeathing the said property to his daughter Parbati Kuer and nephew Ram Swarup in equal shares.
Under the said will Ram Swarup was to get the entire property in case Parbati Kuer died unmarried or issueless.
On July 18, 1940, Ram Swarup sold one half of the said property to the plaintiff respondent 1.
On July 27, 1942, the plaintiff respondent 1 acquired under a patta some lands adjoining the said property.
On October 10, 1949, defendant 3 (respondent 3 herein), alleging to be the husband of the said Parbati Kuer, sold the remaining half of the disputed property to defendants 1 and 2.
It may be mentioned at this stage that the land on which the said house and golas stand is Dih Basgit Lagani (rent paying) land.
On December 10, 1949, respondent 1 filed Title Suit No. 214 of 1949 in the First Court of the Munsif at Chapra for a declaration that he has a right to pre empt the property purchased by appellants 1 and 2 and for directing them to transfer the said property to him.
To that suit, the first appellant and his two sons were made defendants 1, 2 and 2A and their vendor was made defendant 3.
The defendants contested the suit, inter alia, on the ground that the ceremonies of pre emption were not performed and that under the Mohamedan, law the plaintiff was not entitled to pre emption, as the land on which the said house and golas stood was "rent paying" land.
The learned Munsif dismissed the suit.
But, on appeal the Subordinate 108 Judge of Chapra allowed the appeal and granted a decree for pre emption in favour of the plaintiff respondent 1.
On appeal, the High Court agreed with the Subordinate Judge and dismissed the appeal.
Defendants 1, 2 and 2A have preferred the present appeal by 'special leave against the Judgment of the High Court.
Mr. Varma, learned counsel for the appellants, raised before us the following four points: (1) the right of pre emption infringes the fundamental right of a citizen under article 19(1) (f) of the Constitution and it is not saved by cl.
(5) thereof: (2) the first respondent failed to establish his title and, therefore, his suit should have been dismissed on that ground; (3) the ceremonies of pre emption were performed only on October 11, 1949 whereas the sale deed in favour of the appellants was executed and registered on October 20, 1949 and, as the said performance of the ceremonies was premature, they having been performed before the sale was completed, the right of pre emption could not be enforced; and (4) there is no right of pre emption in respect of leasehold interest and, therefore, there cannot be a right of pre emption in respect of a house standing on such land, as Mohamedan law does not recognize a right of pre emption in mere super structure.
Mr. Sarjoo Prasad, learned counsel for the respondents controverts the correctness of the said propositions.
We shall deal with his arguments in the course of the judgment.
To appreciate the first contention, some dates may be recapitulated.
Respondent 1 purchased one half share of the property by a sale deed dated July 18, 1940.
Appellants 1 and 2 purchased the other half of the property on October 10, 1949.
The suit was filed on December 10, 1949.
The Munsif dismissed the suit on April 14, 1953.
The Constitution came into force on January 26, 1950.
The appellants had no fundamental right on the date when they purchased the property.
But it is said that under the law of pre emption a person who seeks the assistance of a court with a view to enforce the right of pre emption is bound to establish that the 109 right existed on the date of the sale, on the date of the institution of the suit, and also on the date of the decree of the primary court See Nuri Mian vs Ambica Singh(1) and, therefore, the restriction on the appellants ' fundamental right to acquire the property was not finally imposed before the Constitution, but became crystallized into an irrevocable restriction only at the time of the passing of the decree which was subsequent to the coming into force of the Constitution.
We need not express our opinion on this question, as it has been held by this Court in Bhau Ram vs Baij Nath(2) that a right of pre emption vis a vis co sharers was not an unreasonable restriction on the fundamental right of a person to acquire, hold and dispose of property.
But learned counsel contends that decision should be confined to a case of co sharers who are related to each other, and should not be extended to co sharers who are not related to each other.
Reliance is placed upon the following observations in that judgment found at p. 1483: "If an outsider is introduced as a co sharer in a property it will make common management extremely difficult and destroy the benefits of ownership in common.
" This sentence does not, in our view, sustain the distinction sought to be made by the learned counsel between co sharers who are relatives and co sharers, who are not relatives.
The word "outsider" in the said passage can only mean a person who is not a co sharer.
The judgment of this Court finally settled the question as between co sharers.
Following the decision we hold that the law of pre emption vis a vis co sharers does not infringe the fundamental right conferred under article 19 (1) (f) of the Constitution.
The second question, namely, that of the plaintiff 's title does not call for consideration by us.
It was not raised in the courts below, and it being a pure question of fact, we cannot allow it to be raised for the first time before us.
We, therefore, disallow it.
(1) Cal.
(2) ; 110 The next point raised by the learned counsel is that the ceremonies of pre emption performed in this case were premature, as the sale was completed only on October 20, 1949 whereas the ceremonies were performed on October 11, 1949.
This Court, by a majority, held in Ram Saran vs Domini Kuer(1) that the registration under the Registration Act is not complete till the document to be registered has been copied out in the records of the Registration Office as provided in section 61 of that Act.
Learned counsel contends that a perusal of the sale deed dated October 10, 1949, ex facie shows that it was copied only on October 20, 1949.
The question as to when a document was copied out in the concerned register is certainly a question of fact.
The argument was not raised either before the trial court or before the first appellate court.
No issue was framed on the point.
It was raised for the first time before the High Court.
The learned Judges of the High Court pointed out that if the appellants wanted to take advantage of the said point, it was their duty to have raised it either in the trial court or in the first appellate court and to have adduced evidence by calling for the register from the registration department to show on what date the actual copying of the record was made under section 61 of the Registration Act.
In the circumstances, the learned Judges refused to allow the appellants to raise the point.
The High Court, in our opinion, was certainly right in disallowing the appellants from raising the question of fact for the first time in second appeal.
If the plea had been taken at the earliest point of time, the respondents might have had many defences and might have explained the various dates found on the documents.
We cannot allow the appellants to raise the said plea.
Now we come to the substantial point raised in the appeal.
The right of pre emption is sought to be enforced in respect of a rent paying land with a house thereon.
Learned counsel for the appellants contends that the right of pre emption does not arise (1) ; 111 on the sale of a leasehold interest in land and that in the absence of such a right there cannot be a right of pre emption in respect of the super structure alone.
Learned counsel for the respondents, on the other hand, contends that under Mohamedan law the right of pre emption exists in the case of akar i.e., a house or mansion, to enable the co sharer to have peaceful enjoyment thereof and that the fact that there is no right of pre emption in respect of a leasehold interest in land does not in any way detract from that right.
He further contends that whatever might have been the strict incidents of the right of pre emption under Mohamedan law, this Court cannot ignore the modern evolution of law recognizing the transferability and heritability of leasehold interest in land.
Before we consider the problem thus presented for our decision, it would be convenient at the outset to notice certain general principles relevant to the present enquiry.
It has not been disputed that Hindus in the Province of Bihar came to adopt the Mohamedan law of pre emption as a custom.
This was because under the Muslim rule the law of pre emption under the Mohamedan law was administered as a rule of common law of the land in those parts of the country which came under their domination.
We must, therefore,.
look to Mohamedan law to ascertain the incidents of the right of pre emption unless it is established in a particular case that by custom the said law has been modified to any extent.
Being a customary law, it is not permissible for courts to extend the custom beyond the limits within which upto now it has been recognized.
The concept of rationalization is out of place in the ascertainment of the customary incidents of the right of pre emption.
This Court in Bishan Singh vs Khazan Singh(1) considered the law on the subject and laid down the propositions flowing from the discussion.
The following propositions are relevant to the present enquiry: (1) The right of pre emption is simply a right of sub (1) 78.
112 situation, but not of re purchase i.e., the pre emptor takes the entire bargain and steps into the shoes of the original vendee; (2) it is a right to acquire the whole of the property sold and not a share of it; and (3) the right being a very weak right, it can be defeated by all legitimate methods, such a.s the vendee allowing the claimant of a superior or equal right being substituted in his place.
It is, therefore, settled law that the pre emptor must take the entire bargain: he cannot split up the bargain and claim to be substituted in respect of a portion of it either on the ground that he does not require a part of it or for the reason that he is entitled to claim pre emption only in respect of a part of it.
Further, the right being a weak one, a court need not be astute to rationalize the doctrine so as to make it fit into modern trends of property law.
Indeed, it should be reluctant to extend it beyond the incidents clearly recognized by Mohamedan law or by custom.
With this background let us now turn to the question that arises in this case.
The subject can conveniently be considered under three heads: the pre emptor; (ii) the vendor; and (iii) the property in respect of which the right is claimed.
In Baillie 's "Digest of Moohummudan Law" the following passage appears at p. 478: "When it is said that akar (such as mansions, vine yards and other kinds of land) are proper objects of the right of pre emption, it is by virtue of a right of milk, or ownership, that they are so.
" Mahmood 3.
in Gobind Dayal vs Inayatullah(1) observed at p. 779 thus: "pre emption is a right which the owner of certain immovable property possesses, as such, for the quiet enjoyment of that immovable property, to obtain, in substitution for the buyer, proprietary possession of certain other immovable property, not his own, on such terms as these 113 on which such latter immovable property is sold to another person.
" The same learned Judge in Sakina Bibi vs Amiran(1) states that in the pre emptive tenement (the tenement by the ownership of which the pre emptor wants to exercise his right of pre emption ), the pre emptor should have vested ownership and not a mere expectancy of inheritance or a reversionary right, or any other kind of contingent right, or any interest which falls short of full ownership.
Beaumont C.J. in Dashrathlal vs Bai Dhondubai(2), after considering the law on the subject, accepted the view that the custom of preemption only exists as between free holders, that is to say neighbouring lands in respect whereof the custom is claimed to apply must be freehold and that the land sought to be pre empted must also be free hold.
This Court, in Shri Audh Bihari Singh vs Gajadhar Jaipuria(3), has laid down the correct legal position thus: ". . the benefit as well as the burden of the right of pre emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre emptor does not amount to an interest in the land itself." This legal requirement of the full ownership of the pre emptor may be traced either to the fact that "in ancient times Mohamedan law did hot recognize leases although it recognized hire of|and for the purpose of user, or to the circumstance that the right was conferred to enable the pre emptor to prevent an undesirable person from becoming his neighbour" which would not be the case if he was only a temporary occupant of the property in respect whereof the right arose.
Whatever may be the reason, it may safely be held now that the pre emptor must be the owner of the property in respect whereof he claims the right of pre emption.
(1) (1888)I.L.R.10 All. 472, 477.
(2) A.I.R. 1941 Bom.262.
(3) ; , 80. 1 SCI/64 8 114 The next question, namely, the quantum of interest which the vender shall possess in the land sought to be pre empted depends upon the doctrine of reciprocity.
Unless the land in respect of which the custom is claimed and the land sought to be pre empted are freeholds, the principle of reciprocity will be defeated.
To illustrate: "A" has full ownership in a land in respect of which he claims the right of pre emption;the co sharer vendor has only a leasehold interest in respect of the land sought to be pre empted; if the pre emptor had sold the land earlier, the vendor having only a leasehold interest in his land, could not have claimed the right of pre emption in respect of his land, for he had no full ownership in the land.
The absence of this reciprocity gives an advantage to one of the sharers which the Mohamedan law does not permit.
This doctrine of reciprocity has been succinctly stated by Mahmood J. in Gobind Dayal vs Inavatullah(1) in the passage we have extracted earlier.
In Mt. Bibi Saleha vs Amiruddin(2) the said doctrine was restated.
It was held therein that a mukarraridar holding under a co sharer had no right to pre empt as against another co sharer and as a mukarraridar could not claim pre emption, the co sharer on the doctrine of reciprocity, which is well understood in the Mohamedan law, could not claim pre emption against the mukarraridar.
A Full Bench of the Bombay High Court in Deshrathlal vs Bai Dhondubai(3) has given its approval to the said principle.
This Court in Shri Audh Behari Singh vs Gajadhar Jaipuria(4) succinctly put the legal position in the following words: "The crux of the whole thing is that the benefit as well as the burden of the right of pre emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre emptor does not amount to an interest in the land itself.
" That leasehold interest is not subject to the law of pre emption has been well settled: see Baboo Ram (1) All.
(2) [1929] I.S.R. 8 pat 251.
(2) A.I.R. 1941 Bom.
(4) ; ,80. 115 Golam Singh vs Nursingh Sabey(1), Mohammad Jamil vs Khub Lal Raut(2); Sakina Bibi vs Amiran(3); Phul Mohammad Khan vs Qazi Kutubuddin(4); Moorooly Ram vs Baboo Hari Ram(5); Rameshwar Lal vs Ramdeo Jha(6); and Nathuni Ram vs Gopinath(7).
Indeed this legal position has not been controverted by learned counsel for the respondents.
Now let us address ourselves to the main contention of the respondents, namely, that the right of pre emption exists in the Mohamedan law in respect of akar which includes a building, that the main purpose intended to be served by the said right is to prevent an undesirable person from becoming the sharer of the house and that, therefore, it would be unrealistic to negative that right in the case of a house on the ground that the land on which the house stands is a leasehold interest.
Reliance is placed upon the following passage in Charles Hamilton 's "The Hedaya", 2nd Edn., at p. 558: "It is observed, in the abridgment of Kadooree, that Shaffa does not affect even a house or trees when sold separately from the ground on which they stand.
This opinion (which is also mentioned in the Mabsoot) is approved; for as buildings and trees are not of a permanent nature, they are therefore of the class of movables.
" Relying upon this passage it is contended that, as in the present case the house was sold along with the ground, the doctrine of "Shaffa" applies to the house.
But this passage must be understood on the assumption that the right of pre emption exists in respect of the land on which the house stands.
In Baillie 's "Digest of Moohummudan Law", the legal position is made clear.
Therein the author says at pp.
479 480: "When a person has purchased a palm tree to cut it down, or when he has purchased it absolutely, there is no right of pre emption in it.
But (1) (2) [1921] 5 Pat.
L.J. 740.
(3)[1888] I.L.R. 10 All. 472, 477.
(4) A.I.R. 1937 Pat.
(5) [1867] 8 W.R.106.
(6) A.I.R. 1957 Pat.
(7) A.I.R. 1962 Pat.
226 (F.B.) 116 if it be purchased with its roots and the ground on which it stands, it is liable to the right.
The rule is the same with regard to buildings purchased for removal, and the same buildings purchased with their foundations; and there is no preemption in the former case, while there is in the latter.
" This passage indicates that a building sold as a superstructure is not subject to the right of pre emption, for it would be in effect a sale of a movable.
Unless the house is sold with its foundations, that is to say with the land on which it stands, there is no right of pre emption in regard thereto.
Though it may be said that in the present case the house was sold with its foundations, the same principle will have to be applied, for the right of pre emption cannot be invoked in the case of a leasehold interest.
In effect and substance the right is sought to be invoked in the case of the building decors the foundations which the law does not permit.
Reliance is placed upon the proposition found in para.
370 of Wilson 's Anglo Muhammadan Law, which reads: "If a house is sold apart from the ground on which it stands with a view to being pulled down, so that it is in fact a sale of the materials, no right of pre emption arises with respect to it.
If it is sold for occupation as a house, then preemption can be claimed on the ground of vicinage by the owner of any adjoining land or house (and perhaps by the owner of the site itself, supposing him to be a different person from the vendor of the house, even though he should happen to own no land except that covered by the house).
" It is said that the words in the brackets conceding the right of the owner of a site to pre empt the house sold as a house indicates that the real principle is whether the house is sold as a habitate or only as materials and that in the former case irrespective of the ownership of the land or the existence of the right of pre emption in respect thereof, the sale of the house can be pre empted.
The opening word 117 of the passage, namely, "perhaps", shows that the author himself is not sure of the legal position.
That apart, the illustration only deals with a land in respect of which there can be a right of pre emption, i.e., the owner of the land has a freehold interest therein.
Strong reliance is placed upon the decision of a Division Bench of the Allahabad High Court in Zahur vs Nur Ali(1).
There, a dwelling house was sold as a house to be inhabited as it stood with the same right of occupation as the vendor had enjoyed, but without the ownership of the site.
It was held that the right of pre emption under the Mohamedan law attached to such house.
The judgment is not a considered one.
The learned Judges observed at p. 100 thus: "The seller not only sold the materials of the house, but such interest as he possessed as an occupier of the soil.
The house was sold as a house to be inhabited on the spot with the same right of occupation as the seller had enjoyed. ' ' The learned Judges distinguished the texts cited on the ground that they applied only to the sale of the materials of a house or a house capable of and intended to be removed from its site.
This judgment no doubt supports the contention of learned counsel for the respondents; but the learned Judges have not considered the well settled principle that there cannot be a right of pre emption in respect of a land over which the vendor has no full ownership.
The decision suffers from the infirmity that the said well settled principle has escaped the attention of the court.
Reliance is also placed on the decision of a Division Bench of the Patna High Court in Chariter Dusadh vs Bhagwati Pandey(2).
There, the question was whether the pre emptor had the milkiyat or ownership in the property on account of which he claimed the right of pre emption.
The pre emptor was birtdar though he was described as a tenant in the Record of Rights for a particular purpose.
The court held (1) (1880)I.L.R. 2 All.
(2) A.I.R. 1934 Pat.
596. 118 that he was a full owner.
This decision does not really support the respondents.
There is a direct decision of a Full Bench of the Patna High Court on the question now raised, in Nathuni Ram vs Gopinath(1).
There, as here, a right of pre emption was claimed in respect of a house which stood on a leasehold land.
After a full discussion of the subject, Choudhary J., speaking for the Full Bench, came to the following decision, at p. 229: "On a careful consideration of the authorities and the principle of law involved in the case, my concluded opinion is that,in case of a sale of different properties, the.
right of pre emption cannot be exercised with respect to one or some of them only if the enjoyment thereof is dependent on the property over which that right is not and cannot be exercised in law and consequently, where the land is sold with a house thereon, pre emption cannot be allowed.
with respect to the house only apart from the land over which the right could not be exercised on account of its being a leasehold property.
The sale of a house for inhabitation or occupation, without the sale of its foundations and the land over which the foundations stand, is inconceivable, except, as pointed out in Hedaya, in case of the sale of the upper story of a house.
" We agree with the conclusion.
As this judgment has considered the earlier decisions on the subject, we need not again refer to them.
To summarize: A right of pre emption is annexed to full ownership of property of co sharers.
It is not attached to property held on subordinate tenure, such as leases etc.
It is an incident of the co sharer 's property operating both as a right and as a burden in different situations.
It is a right of substitution taking in the entire bargain.
It must take the whole or nothing.
It does not matter if the inability to take the whole arises out of a voluntary act or out of a legal limitation inherent in the nature of the (1) A.I.R. 1962 Pat. 226 (F.B.) 119 property transferred.
It is reciprocal in operation, that is, if the situation was reversed and the vendor became the pre emptor, he should be in a position to pre empt the co sharer 's whole bargain.
The two doctrines which may, for convenience, be referred to as "entire bargain" and "reciprocity" cannot ' operate unless both the co sharers are full owners of their respective properties.
Akar or a house standing on a freehold land is subject to the right of preemption, but a house on a leasehold land stands on a different footing.
As there is no right of preemption in respect of a land held on a subordinate tenure, the right of pre emption cannot be enforced against the house either, as the pre emptor cannot be substituted for the entire bargain.
The right must fall also on the ground that the super structure disannexed from the land would be movable property and it is well settled that the right of pre emption cannot be enforced in respect of movables.
We, therefore, hold that the first respondent has no right to pre empt the sale executed in favour of the appellants.
In the result, the appeal is allowed, the decrees of the Subordinate Judge 's Court and the High Court are set aside and that of the trial Court is restored.
The appellants will have their costs throughout.
RAGHUBAR DAYAL J.
I agree that the law of pre emption regarding co sharers does not infringe the fundamental right conferred under article 19(1)(g), that the pre emptor must be the owner of the property in respect whereof he claims the right of pre emption, that the vendor must have proprietary right in the property sold and sought to be pre empted, that the sale of lease hold interest is not subject to the law of pre emption and that the sale of the super structure of a house is not pre emptible.
I also agree that the pre emptor must pre empt for the entire property sold if that be pre emptible.
I would, however, not like to express an opinion upon the point whether, in certain circumstances, the pre emptor can or cannot 120 pre empt part of the property sold.
There have been cases where partial pre emption has been allowed.
Some of the exceptional cases have been referred to at p. 778 of 'Muslim Law as Administered in India & Pakistan ' by K.P. Saksena, IV Edition.
In Zainab Bibi vs Umar Havat Khan(1) the preemptor was allowed to pre empt that part of the property sold which was pre emptible and in support of the decision it was stated at p. 457: "So far as the Mohammedan Law is concerned, there is no doubt that where several properties are sold in portions of which a pre emptor has the right of pre emption, he is entitled to preempt that portion only on payment of a proportionate price.
On this point there was a consensus of opinion among the three Imams as quoted in the Fatawa Alamgiri, referred to in Omur Khan vs Mooras Khan (1865 N.W.P. H.C.R. 173, 174)" This Court did express an opinion in Bishan Singh vs Khazan Singh(2): "The general law of pre emption does not recognize any right to claim a share in the property sold when there are rival claimants.
It is well established that the right of pre emption is a right to acquire the whole of the property sold in preference to other persons (See Mool Chand vs Ganga Jal: ILR 11 Lah.
258, 273) " In that case the dispute lay between two rival preemptors and arose in these circumstances.
One preemptor pre empted the entire sale and obtained the decree on condition that he would deposit a certain amount within a certain time.
But, before he could deposit the amount, the rival pre emptor instituted another suit for the pre emption of the entire property sold and impleaded in that suit the first pre emptor.
The rights of the two pre emptors were found to be equal.
The entire property sold was clearly pre emptible.
It was, in this context, that the observation (1) (2) ; ,884.
121 was made.
It would be a matter for consideration at the appropriate time whether there can be any exception to this general rule that the entire property sold must be pre emptor by the pre emptor in his suit.
I would therefore rest my decision on the facts that the sale of the lease hold interest in land is not pre emptible and that the super structure of the house is also not pre emptible and that therefore the plaintiff pre emptor cannot pre empt the sale of the property sold.
I therefore agree that the appeal be allowed, the decrees of the Subordinate Judge and the High Court be set aside and that of the trial Court be restored and that the appellants would have their costs throughout.
Appeal allowed.
[/INST]One Rajkumar Singh was the proprietor of three properties A,B and C.
He borrowed a loan from Rabindra Nath and mort gaged properties A and B and by the deed of mortgage undertook personal liability to pay the dues and agreed that in default of payment by the due date the mortgagee do recover his dues by sale of properties A, B and C.
He created a second mortgage t secure another sum borrowed from Sasindra Nath and Indra Nath stipulating that he would repay the loan on or before a fixed date, and further stipulating that the mortgagees may receive royalty from the terms of property C.
Five years later he assigned his interest in property A and about three months thereafter he assigned his interest in property Subsequent to this assignment an endorsement of part payment was recorded on the first mortgage deed.
The mortgagor 's right title and interest in property C were sold at a court auction and the purchaser took possession of that property.
But before this date the mortgagor had made another part payment and an endorsement was made to this effect on the mortgage bond.
Sometime later the appellant obtained assignments of the rights of the mortgagees under the mortgage deeds and filed a suit for a decree enforcement of the two mortgages by sale of the mortgage properties.
This suit was filed more than twelve years after t date on which the mortgage amounts became payable.
The trial court rejecting the pleas of limitation raised by t defendants decreed the suit.
On appeal by the fourth defend the High Court reversed the decree and dismissed the suit.
Held: (i) The High Court was in error in holding that t mortgagor 's interest in properties A & B only was mortgaged.
(ii) A mortgagor whose interest in the equity of redemption transferred by assignment sale or otherwise to another person not a "person liable to pay the debt" within the meaning of section of the Limitation Act.
Part payment in the mortgagor a transfer or assignment of his interest in the mortgaged property will not therefore extend the period of limitation under section 20 of the Limitation Act.
Pavai vs Palanivela Goundan I.L.R. 636 (iii) The right conferred by section 68 of the Transfer of Property Act is not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security.
A suit for enforcement of the personal covenant in such a case is governed by article 116 of the Limitation Act, 1908 and a suit for enforcement of a claim for compensation is governed by article 120 of the Act.
Unichaman vs Ahmed, I.L.R.
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<s>[INST] Summarize the judgementition No. 8991 of 1983.
(Under Article 32 of the Constitution of India.) Petitioner in person alongwith Mukul mudgal K. Parasran, Attorney General, K. G. Bhagat Addl.
Solicitor General, R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Shri Shiv Dayal Shrivastava, the petitioner before us in this application under Article 32 of the Constitution praying for a writ of mandamus to the Union of India, retired as Chief Justice of the Madhya Pradesh High Court with effect from February 28, 1978.
At the time of retirement he was drawing salary of Rs. 4,000 per month as provided under Constitution.
This Court in the case of Union of India vs Gurnam Singh(1) decided that under the ( 'Act ' for short), Judges were entitled to cash equivalent of leave salary in respect of the period of earned leave at their credit on the date of retirement as provided in Rule 20B of the All India Services (Leave) Rules, 1955 ( 'Leave Rules ' for short).
The Accountant General of Madhya Pradesh authorised the petitioner to draw cash equivalent of leave, salary amount as to Rs. 15,240 by his communication dated July 17, 1982.
The petitioner informed the Accountant General that he was drawing the amount as indicated in the communication without prejudice to his right to claim Rs. 24,000 to which sum under the law he was entitled.
On July 19, 1982, the petitioner was authorised to draw a further sum of Rs. 750 thus in all Rs. 15,990 only.
On February 2, 1983, the Union of India in the Ministry of Law, Justice & Company Affairs indicated to the several authorities including the Registrars of all the High Courts that while in view of the decision of this Court referred to above, the Central Government were advised that Judges of the High Courts were entitled to payment of cash equivalent of leave salary in respect of the period of earned leave at their credit, the expression 'earned leave ' does not occur in the Act.
On the analogy of the Leave Rules the cash equivalent of leave salary to be paid would be the cash equivalent of the unutilised leave due on 855 full allowances as defined in sections 3 and 9 (1) of the Act.
In making calculations of the cash equivalent of the leave salary the ceiling of five months mentioned in section 5 (3) of the Act would be applicable.
Relying on the aforesaid letter of the Central Government, the Accountant General of Madhya Pradesh on March 25, 1983, intimated the petitioner that he was entitled to payment of cash equivalent of unutilised earned leave subject to the ceiling of five months; leave and, therefore, he had been paid an excess sum of Rs. 2,220 which should be refunded.
That has led the petitioner to move this Court.
Rule nisi was issued to the Union of India and this Court directed separate notice to the Attorney General.
A return has been made to the rule by the Union of India.
No dispute has been raised to payability of the cash equivalent on the basis of Rule 20B of the Leave Rules Reliance has been placed on the provisions of the Act to justify the circular letter of February 18, 1983.
Learned Attorney General has been heard and he has furnished written submissions also.
The decision of this Court in Gurnam Singh 's case has been accepted by the Union of India and steps have been taken to implement the same.
In that case this Court held: ". . it must be regarded as a provision absorbed by rule 2 of the High Court Judges Rules, 1956, into the statutory structure defining the conditions of service of a Judge of a High Court.
We may observe that even as a right to receive pension, although accruing on retirement, is a condition of service, so also the right to the payment of the cash equivalent of leave salary for the period of unutilised leave accruing on the date of retirement must be considered as a condition of service".
Two questions require decision, viz., (1) whether in view of the provisions of section 5 (3) of the Act, the limit has to be confined to five months equal to 150 days and not 180 days as in Rule 20B; and (2) whether for calculating the equivalent of leave salary admissible to a Judge the provisions of section 9 (1) of the Act would apply ? We may now refer to rule 20B of the Leave Rules as also to the two provisions of the Act: 856 "20B Payment of cash equivalent of leave salary The Government shall suo motu sanction to a member of the service who retires from the service under sub rule (1) of rule 16 of the All India Services (Death cum Retirement Benefits) Rules, 1958, having attained the age of 58 years on or after the 30th September, 1977 the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement subject to a maximum of 180 days.
" Section 5 (3) of the Act reads: "5 (3).
Subject to the provisions of sub section (2) of section 5A, the maximum period of leave which may be granted at one time shall be, in the case of leave on full allowances, five months and in the case of leave with allowances of any kind, sixteen months.
" Section 9 (1) provides: "9 (1).
The monthly rate of leave allowances payable to a Judge while on leave on full allowances shall be for the first forty five days of such leave, a rate equal to the monthly rate of his salary, and thereafter two thousand two hundred and twenty rupees.
Provided that where leave on full allowances is granted to a Judge on medical certificate the monthly rate of leave allowances shall, for the first one hundred and twenty days, of such leave, be a rate equal to the monthly rate of his salary." Chapter II of the Act deals with leave.
Section 3 provides the kinds of leave admissible to a Judge.
Section 4 makes provision for a leave account to be maintained.
Section 5 deals with agree gate amount of leave which may be granted.
Section 5A make provision for commutation of leave on half allowances into leave on full allowances while sections 6, 7 and 8 deal with grant of leave of specific kinds.
These provisions in the Act deal with leave which has to be asked for and taken during the tenure of working as a Judge.
Leave necessarily implies authorised absence from duty or employment (see Webster 's Third New International Dictionary).
Rule 20B makes provision for payment of cash equivalent of leave 857 due under the appropriate provisions but subject to a maximum of 180 days.
We have already indicated that the ratio of Gurnam Singh 's case has not been disputed.
It would necessarily mean acceptance of the position that the Act did not make provision for payment of the retirement benefit contemplated under rule 20B; otherwise rule 20B could not have been applied.
The scheme in rule 20B is that the payment would be made suo motu and without any application for it.
Leave referred to under the Act is one which has to be asked for and is intended to meet a different situation.
For calculating the benefits under rule 20B, section 5 (3) of the Act is not relevant and in case in the leave account maintained under section 4 of Act leave is due, the benefit under rule 20B has to be worked out subject to the upper limit of 180 days, equal to six months.
The claim made by the petitioner that he was entitled to the benefit of six months is, therefore, justified subject, of course, to admissibility of leave to the extent of 180 days in the leave account.
No dispute was raised before us that as a fact petitioner had to his credit more than 180 days of leave.
Once we hold that the benefit under rule 20B is not controlled by Chapter II of the Act, the manner of calculation indicated in section 9 (1) of the Act would also apply.
The petitioner would thus become entitled to cash equivalent of six months ' salary which would work out at Rs. 24,000.
As he has been paid a sum of Rs. 15,990 he is entitled to Rs. 8,010.
A writ in the nature of mandamus be issued to the Union of India to pay him the said amount within one month from today.
Parties are left to bear their own costs before us.
We would like to add that it is manifest that in view of the enunciation of law by us in this judgment, the principles governing the cash equivalent of leave would apply not only to the petitioner but also to Judges who have already retired or who may retire hereafter, from the date from which this facility was made available to the members of the Central Services holding the rank of Secretary to the Government of India or its equivalent.
H.S.K. Petition allowed.
[/INST]In Union of India vs Gurnam Singh ; , this Court decided that under the Judges were entitled to cash equivalent of leave salary in respect of the period of earned leave at their credit on the date of retirement as provided under rule 20B of the All India Service (Leave) Rules, 1955.
The two question which arose for consideration in this petition under article 32 filed by a retired Chief Justice of Madhya Pradesh High Court were (1) whether in view of the provisions of section 5(3) of the Act, the limit has to be confined to five months equal to 150 days and not 180 days as in Rule 20B; and (2) whether for calculating the equivalent of leave salary admissible to a Judge the provisions of section 9 (1) of the Act would apply ? Allowing the petition and answering the questions in the negative. ^ HELD: The ratio of Gurnam Singh 's case has not been disputed.
It would necessarily mean acceptance of the position that the Act did not make provision for payment of the retirement benefit contemplated under rub 20B; otherwise rule 20B could not have been applied.
For calculating the benefits under rule 20B, section 5 (3) of the Act is not relevant and in case in the leave account maintained under section 4 of the Act leave is due, the benefit under rule 20B has to be worked out subject to the upper limit of 180 days, equal to six months [857 B C] Once it is held that the benefit under rule 20B is not controlled by Chapter II of the Act, the manner of calculation indicated in section 9 (1) of the Act would also not apply.
[857 E] The principles governing the cash equivalent of leave would apply not only to the petitioner but also to Judges who have already retired or who may retire hereafter, from the date from which this facility was made available to the members of the Central Services holding the rank of Secretary to the Government of India or its equivalent.
[857 E G] 854
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<s>[INST] Summarize the judgementAppeal No. 100 of 1.959.
Appeal from the judgment and order dated February 11, 1957, of the Bombay High Court in Income tax Reference No. 53 of 1956.
R. J. Kolah, Dwarkadas, section N. Andley; J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
K. N. Rajagopal Sastri and D. Gupta, for the respondent.
May 3.
The Judgment of the Court was delivered by S.K. DAS, J.
This is an appeal on a certificate granted by the High Court of Bombay, under section 66A (2) of the Indian Income tax Act, 1922.
The short facts are these.
The Cotton Agents Limited, Bombay, are a limited liability company registered under the Indian Companies Act and will be called the assessee Company in this judgment.
It held a substantial number of shares of the New Swadeshi Mills of Ahmedabad, Ltd. (hereinafter called the Mills Company).
Messrs. Shivnarayan Surajmal Nemani (called the Nemani group) also held a block of shares of the Mills Company along with its managing agency.
The assessment year was 1946 47, and the year ending with Diwali, 1945 (October 18, 1944, to November 4, 1945) was the accounting year.
Sometime in 1944 some differences arose between the assessee Company and the Nemani group; these differences were referred to one Govindram Seksaria, who decided that the Nemani group should sell its block of shares to the assessee Company at an agreed price, It was further decided 813 that a sum of Rs. 5,00,000 be paid by the assessee Company to the Nemani group as the price of the, managing agency rights.
This arrangement was approved by the share holders of the Mills Company by a resolution dated January 4, 1945, and came into effect immediately.
The agreement further was that the assessee Company would come in as managing agents of the Mills Company in place of the Nemani group and would be entitled to the emoluments of the managing agents as from April 1, 1944.
The managing agency commission from April 1, 1944, to December 31, 1944, amounted to Rs. 2,20,433 and from January 1, 1945, to March 31, 1945, to Rs. 67,959.
The case of the assessee Company was that for the assessment year 1946 47 it was liable to pay tax only on the commission of Rs. 67,959 which it had earned by working as managing agent of the Mills Company and it was not liable to pay tax on the sum of Rs. 2,20,433.
This contention of the assessee Company was not accepted by the departmental taxing authorities; but the Tribunal decided in its favour.
The assessee Company 's case before the Tribunal was that as the managing agency commission was based on the sales, the com mission accrued to the managing agents as and when the sales were made and furthermore the sum of Rs. 5,00,000 paid by the assessee Company to the retiring managing agents included the purchase price of the managing agency commission which had accrued in the hands of the retiring agents.
The Tribunal expressed the view that on a true construction of the relevant managing agency agreement, the 31 per cent.
commission on sales made when the Nemani group was the managing agent accrued to that group and not to the assessee Company and thus a debt was created in favour of the Nemani group on every sale during its period of managing agency and only the payment of the debt was deferred till the accounts of the Mills Company were passed at a general meeting; therefore, the commission prior to the close of the year 1944 was assessable in the hands of the Nemani group and thereafter in the hands of the assessee Company.
The Department, however, contended that the whole 106 814 of the managing agency commission accrued to the assessee.
Thereupon, at the instance of the Department, the Tribunal referred the following question of law to the High Court for decision : " Whether on the facts and circumstances of the case the managing agency commission at 3 1/2 on sales made by the New Swadeshi Mills of Ahmedabad Ltd., between April 1, 1944, and December 31, 1944, accrued to Shivnarayan Surajmal Nemani, or to the assessee ?" The High Court held that the matter was concluded by the decision of this Court in E. D.Sassoon and Company Ltd. vs Commissioner of Income tax, Bombay City (1).
With reference to the argument of learned counsel for the assessee Company that the commission was payable on the sale proceeds and not on the profits as in Sassoon 's case (1), it said: " We would have given serious thought to this aspect of the matter but for the view we take that the decision of the Supreme Court with regard to the question of creation of the debt and with regard to the serving by the managing agents for a term of one year being a condition precedent for their being entitled to receive payment, is indistinguishable on the facts of this case.
We may point out that here as in the Sassoon 's case (1) the commission of 31 per cent.
is to be earned in any year, and also by clause 3 of the agreement the commission is to become due to the managing agents at the end of each financial year.
Therefore, till the end of the financial year there is no debt whatsoever created in favour of the managing agents and also their right to receive payment depends upon their having served for a whole year.
Under the circumstances we must hold, following the decision of the Supreme Court, that the assessees are liable to pay tax on the whole of the commission as the commission accrued due on March 31, 1945, and they became entitled to receive it at the end of the year.
We do not agree with the view of the Tribunal that according to the agreement of the managing agents the debt was (1) ; 815 created in favour of the agents when the goods were sold by the company and that the payment was deferred to a date after the accounts having been passed by the shareholders in the general meeting of the company.
In no view of the case can it be said that the debt was created in favour of the agents when the goods were sold ".
The answer to the question really depends on a construction of the relevant terms of the managing agency agreement dated March 15, 1925, entered into between the Mills Company and the Nemani group.
Before we proceed to a consideration of those terms it is necessary to state that the Department has assessed the Nemani group also to tax in respect of the commission for the period April 1, 1944, to December 31, 1944.
That circumstance has, however, no bearing on the question of construction and learned counsel for the Department has stated before us that there is no intention to tax two parties for the same income and if the tax has been realised from both for the same income, it will have to be refunded to one of the two parties after the decision of this Court.
We are not considering in this case the validity or otherwise of what are known as protective or precautionary assessments, and nothing said in this judgment has any bearing on that question.
We go at once to the Managing Agency Agreement dated March 15, 1925.
Under that agreement the managing agents were appointed for a period of fifty.
one years, but with liberty to them to resign the appointment and retire from the agency at any time by twelve calendar months ' notice in writing, such notice to expire at the end of any financial year of the Mills Company.
Then came cls.
(2) and (3) of the agreement, which are material and must be quoted so far as they are necessary for our purpose: ", (2) The remuneration of the Agents as such Agents of the Company as aforesaid shall be as follows: A commission at the rate of three and a half per cent.
on the gross proceeds of all sales of the yarn, cloth, waste and other articles manufactured 816 by the Company earned in any year or other period for which the accounts of the Company are made up and laid before the General Meeting." Provided, etc., (it is unnecessary to quote the proviso).
" (3) The said commission shall become due to the Managing Agents at the end of each financial year or other period for which the accounts of the Company are to be laid before the General Meeting and shall be payable and paid immediately after such accounts have been passed by the General Meeting".
Clauses (6) to (11) recited the rights and duties of the managing agents, one of such rights being to retain, reimburse and pay themselves " all sums due to the agents for commission ".
Clauses (13) and (14) dealt with the right to assign the remuneration and the managing agency, and said inter alia that " it shall be lawful for the agents to assign this agreement and the benefit thereof and their rights and privileges, etc., to any person or firm or company having authority by its constitution to become bound by the obligations undertaken by the agents. . . . . and the Company shall be bound to recognise the person, firm or company aforesaid as the agents of the Company".
It is unnecessary to read the other clauses of the managing agency agreement, The controversy before us hinges really on the scope and effect of clauses (2) and (3), read in the context of the agreement as a whole.
On behalf of the assessee Company the argument is that under el.
(2) the managing agency remuneration accrued at the rate of 31 per cent.
on the gross proceeds of all sales; the word " all " is emphasised, and it is argued that the remuneration accrued as each sale took place, the totality of sales giving the gross sale proceeds.
It is argued that embedded in each sale was the managing agency commission of the assessee Company.
It is further suggested on behalf of the assessee Company that though cl.
(3) uses the word " due ", it merely indicated the time of payment and not that of accrual.
817 We do not think that this reading of the two clauses is correct.
In our view, cl.
(3) is the accrual clause;( it shows that the commission became due at the end of each financial year or other period for which the accounts of the Mills Company were to be laid before the General Meeting.
Significantly enough, the clause consists of two parts; one part says when the commission becomes due and the other says when it is to be payable and paid.
In very clear terms, the clause says that the commission becomes due normally at the end of the financial year, but is payable after the accounts have been passed by the General Meeting.
Let us contrast el.
(3) with cl.
Clause (2) states how the remuneration has to be calculated.
It says in effect that the remuneration has to be calculated at the rate of 3 1/2 per cent.
on the gross proceeds of all sales, etc., earned in any year or other period for which the accounts of the Mills Company are made up.
Putting the two clauses side by side, the conclusion at which we have arrived is that in their true scope and effect cl.
(3) determines the time of accrual of the managing agency remuneration and cl.
(2) determines the rate at which the remuneration is to be calculated; and as to the time of payment, that is determined by the second part of cl.
This view of the managing agency agreement of March 15, 1925, concludes the appeal.
If the remuneration accrued at the end of the financial year, then undoubtedly it accrued in the hands of the assessee Company.
It remains now to refer briefly to some of the decisions cited at the Bar.
As to the decision in Sassoon 's case(1) it is pointed out that the commission there payable by way of remuneration was a percentage on the net profits and this, it is argued for the assessee Company, distinguishes that decision from the present case.
Indeed, it is true that in Sassoon 's case (1) the remuneration was fixed at a percentage on the net profits, but the real point of the decision was as to when the remuneration accrued.
On this point the majority of learned Judges said: (1) ; 818 " It is clear therefore that income may accrue to an assessee without the actual receipt of the same.
If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained.
The basic conception is that he must have acquired a right to receive the income.
There must be a debt owed to him by somebody.
There must be as is otherwise expressed debitum in presenti, solvendum in futuro: see W. section Try Ltd. vs Johnson(1) and Webb vs Stenton (2).
Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he had acquired a right to receive the income or that income has accrued to him".
It has been argued before us that the decision requires reconsideration because it failed to make a further distinction, a distinction which it is stated arises in law, between the right to receive payment and the creation of a debt.
We consider it unnecessary to consider such a distinction, if any such exists, in the present case.
On our view of the managing agency agreement, the commission of the managing agents became due at the end of the financial year and that is when it accrued; and there were neither any debt created nor any right to receive payment when each transaction of sale took place.
We were also addressed at some length on the further question whether managing agency is service and if so, whether it must be for one full year or whether apportionment is permissible.
These questions do not fall for decision in the present case and we express no opinion thereon.
We have proceeded in this case on the footing that the managing agency work of the assessee Company constituted business within the rule of the decision in Lakshminarayan Ram Gopal and Sons Ltd. vs The Government of Hyderabad (3) and on that footing we have decided the question of accrual.
In Commissioners of Inland Revenue vs Gardner Mountain & D 'Ambrumenil Ltd. (4), on which learned counsel for the appellant placed reliance, the facts were quite (1) , 539.
(2) , 522,527.
(3) ; (4) 819 different and on a true construction of the agreements there, it was held that the commission payable under certain under writers ' agreements arose in the year in which the policies were underwritten.
That decision proceeded on a construction of the agreements there considered; and it is no authority for construing other agreements of a different character.
Learned counsel for the appellant relied on Turner Morrison & Co. Ltd. vs Commissioner of Income tax, West Bengal(1) for his contention that in the sale proceeds of each transaction of sale were embedded the income, profits or gains to be earned by the managing agents and, therefore, the accrual took place on each transaction, of sale.
The observations at page 160 of the report on which reliance was placed were made in a different context, namely, in the context of the place of receipt of income in relation to the provisions of section 4(1)(a) of the Income tax Act.
Learned counsel for the respondent has pointed out to us that the observations of Lord Justice Fry in Colquhoun vs Brooks (2) were not very accurately reproduced in Rogers Pyatt Shellac and Co. vs Secretary of State for India (3).
He submitted that Lord Justice Fry did not say that the words " accrual " or " arising " represented a stage anterior to the point of time when the income becomes receivable and connote a character of the income which is more or less inchoate.
He has argued that there is nothing inchoate about the income when it arises or accrues.
We consider it unnecessary to embark on a discussion as to how far the aforesaid observations require consideration by us.
It is enough to say that on the view which we have taken of the relevant clauses of the managing agency agreement, no income arose or accrued on the sale proceeds at the time of each transaction of sale; the income accrued at the end of the financial year at the rate of 31 per cent.
on the gross proceeds of all sales of yarn, cloth, waste, etc., earned in any one year.
In that view of the matter, the High Court correctly answered the question.
The appeal fails and is dismissed with costs.
Appeal dismissed.
(1) (2) , 59.
(3) , 372.
[/INST]The appellant, who was employed in the Punjab Police, was found while working as a Police Censor to have detained certain letters illegally and later to have made use of copies and photographs of the them for blackmail.
He was consequently reverted to his substantive post of head constable on January 14, 1944.
Thereafter an enquiry was started against him by the Superintendent of Police and eventually he was dismissed from service on January 25, 1944.
His representations to higher authorities having failed he instituted a suit challenging the legality of the order of dismissal on the grounds, inter alia, (1) that section 240(3) of the Government of India Act, 1935, had not been complied with, and (2) that as the appellant was alleged to have committed a criminal offence the Superintendent of Police could not hold a departmental enquiry in respect of such allegations in view of SS. 29 and 35 of the .
Held : (1) that section 243 of the Government of India Act, 1935, 65 which was a special provision with regard to the subordinate ranks of police forces in India, excluded the operation of section 24G(3) of the Act to the appellant, who was, therefore, governed by the conditions of service as provided under the Police Regulations, and that the substance of section 240(3) which was brought into the Police Regulations in September 1946 long after the appellant had been dismissed was not applicable to him.
Accordingly, he was not entitled to the second notice, under section 240(3), giving him a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
North West Frontier Province vs Suraj Narain Anand and High Commissioner for India and High Commis sioner for Pakistan vs I. M. Lal, , referred to.
(2) that the provisions of the , relating to offences committed by a police officer above the rank of a constable do not bar a departmental enquiry in respect of a matter where it is also possible to prosecute such an officer under that Act.
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<s>[INST] Summarize the judgementCivil Appeal No. 1095 of 1970.
and 1677 of 1973.
From the Judgment and Order dated 26/27 9 1968 of the Gujarat High Court in Estate Duty Reference No. 3/67.
S.C. Manchanda and R.N. Sachthey, for the Appellant (In CA 1095/70).
K.B. Kazi and 1.
N. Shroff, for the Respondents in CA 1095/70.
S.T. Desai and J. Ramamurthi, for the Intervener.
S.T. Desai and J. Ramamurthi, for the Appellants in CA 1677/73.
S.P. Nayar, for the Respondent in CA 1677/73.
73 KRISHNA IYER, J. Is it permissible for judges to specu late on the philosophical edge of a human problem hidden by the litigative screen before settling down to examine its forensic facet ? If it is, we may make an observation about the question posed in this case without pejorative impli cations.
For many men in advancing age arrives a stage in life when to be or not to be stampedes them into doing things 11 dubious before God and evasive before Caesar and we have a hunch both the appeals before us smack of such a disposition as will be evident when the narration of facts and discus sion of law unfold the story.
A brief statement of the circumstances leading to the single critical legal issue, proliferating into a plurality of points, may now be made.
We begin with the facts in the Gujarat Appeal [Kantilal Trikamlal(1)] since the Madras Appeal [Ranganayaki Ammal(2)] raises virtually the same question, is plainer on the facts and may conveniently be narrated immediately after.
To appreciate the complex of facts we choose to enunciate the principal proposition of law canvassed before us by the Revenue in the two appeals.
Does a relinquishment by a decedent of a slice of a share or a partition of joint property in such manner that he takes less than his due effected within two years of his death with a view to relieve himself of a part of his wealth and pro tanto to benefit the accountable person, a near relation have to suffer estate duty under the (for brevity, the Act) ? One Trikamlal Vadilal (hereinafter referred to as the deceased) and his son Kantilal (referred to later as the accountable person) constituted a Hindu undivided family.
They continued as members of a joint and undivided Hindu family until November 16, 1953 when an instrument styled 'release deed ' was executed by and between the deceased and Kantilal.
Considerable controversy between the parties turns on the interpretation of this instrument and it will therefore be necessary for us to refer to its terms briefly later.
Suffice it to state for the present that, under this instrument, a sum of rupees one lakh out of the joint family properties was taken by the deceased in 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, in his turn, 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.
Within two years from 7 3 died and on his death the question arose as to what was the estate duty chargeable on his estate.
Kantilal, who is the accountable person before us, filed a return showing the status of the deceased as individual and the principal value of the estate as Rs. 1,0.6,724.
The Assistant Con troller was, however, of the view that the instrument dated November 16, 1953 operated as relinquishment by the deceased of his interest in the joint properties in favour of Kanti lal and that the consideration of rupees one lakh for which the one half share of the deceased in the joint family properties at the date of the said instrument was Rs. 3,44,058 and there was, therefore, a disposition by the deceased in favour of a relative for partial consideration and it was, accordingly by reason of section 27, sub section
(1 ), liable to be treated as a gift for the purpose of section 9, sub section
(1), and its value, viz., Rs. 3,44,058 after deducting Rs. 1,06,724 (being the amount received by the deceased together with interest) was includable in the principal value of the estate of the (1) (2) 12 deceased.
The Assistant Controller, accordingly, included a sum of Rs. 2,37,334/ being the difference between Rs. 3,44,058/ and Rs. 1,06,724/ in the principal value of the estate of the deceased.
On appeal by the accountable person, the assessment made by the Assistant Controller was confirmed by the Central Board of Revenue.
Though the main ground on which the Cen tral Board based its decision was the same as that which found favour with the Assistant Controller, viz., that under the instrument there was a disposition by the deceased of his interest in the joint family properties in favour of Kantilal for partial consideration and it was therefore by reason of section 27, sub section
(1 ), liable to be treated as a gift for the purpose of section 9, sub section
Another argument also appealed to the Central Board and that was one based on section 2(15), Explanation 2.
The 'Board held that, in any event, under the instrument there was extinguishment at the ex pense of the deceased of his interest in the joint family properties and there was therefore a deemed disposition by the deceased of the benefit which accrued to Kantilal as a result of such extinguishment and the charge to estate duty was accordingly attracted under section 9, sub section
(1), read with section 27, sub section
On reference, the High Court held in favour of the assessee and the Revenue has appealed hopefully, relying on a ruling of the Madras High Court which itself is the sub ject matter of the sister appeal.
Here the tables were 7 3 High Court as contrary to the ratio of this Court 's pro nouncements.
Were it so, it were bad; but judgments, even of the summit court, are not scriptural absolutes but rela tive reasonings and there is in them, read as a human whole, more than meets the legal eye which looks at helpful lines here and there.
We will examine them closely, especially because several High Courts are split on the construction of 'disposition ' in the Act, and seek to resolve the conflict of views and values.
Behind everyone 's attitude to tax is an unspoken value judgment! Before we move into the arena of argument we may silhou ette the facts of the Madras case.
The deceased, Bheema Naidu, and his predeceased son 's widow and children consti tuted a Hindu undivided family.
A little within the two year pre mortem line drawn by the Act he effected a partition and turnnig abnegator took a smaller share instead of his legal half, benefiting the others to the extent of the difference.
This difference was taxed as disposition of property under the Act and fiscal hierarchy was upheld by the High Court.
The assessees assail that decision before us.
The forensic focus has been rightly turned on the inter pretation of the critical provisions in the Act bearing on this controversy.
The social design, the legislative intent and the grammar of statutory construction visa vis the Act may have to be briefly surveyed while studying the language of the text and the impact of the context.
The scheme and spirit of the Act need to be understood first, for every social legislation has a personality and taxing statute a fiscal 13 philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained.
Over four centuries ago Plowden said: "Each law consists of two parts viz., of body and soul; the letter of the law is the body of the law and the sense and reason of the law is the soul of the law.
" It is well known that death duties imposed on richer estates have a socialistic savour being motivated by the State 's policy of paring of unearned accumulation of inheritances and of diminishing glaring disparities of wealth.
This comprehensive but slow egalitar ian purpose fulfils itself fully only when it operates on property at death and near death; nor is there any rational ground to save some types of disposition or subtle transfer ence of wealth from exigibility, having due regard to the plain language of estate duty measures.
The broad object also includes inhibition of dispositions, unsupported by reasonable consideration, made on the eve of death or within 7 3 or manoeuvres, though sincere, being manifestly likely to defeat death duties posthumously flowing from properties covered thereby.
The fiscal policy is dual: (i) the collec tion of revenue; and (ii) reduction of the quantum of inher itance on a progressive basis directed towards a gentle process of equalisation.
The draftsman 's efforts have been exerted to use words of the widest import and, where the traditional use of words iS likely to limit, to use legal fictions, by deeming devices, to expand the semantics there of and to rope in all kinds of dealings with property for inadequate or no consideration within the statutory prox imity of death.
The sweep of the sections which will be presently set out must therefore be informed by the lan guage actually used by the legislature.
Of course, if the words cannot apply to any recondite species of property, courts cannot supply new logos or invent unnatural sense to words to fulfil the unexpressed and unsatiated wishes of the legislature.
Law, to a large extent, lives in the language even if it expands with the spirit of the statute.
It is good to remember that the Indian Act has some English genetic touch, being largely based on the English Finance Acts of 1854 Onwards.
This historical factor has current relevance for one reason. 'We may usefully refer to, although we may not be blindly bound by, English authorities under the corresponding statute and both sides have sought trans Atlantic light on this footing.
A skletal projection of the Act to the extent that concerns us here may now be made.
This Act exacts estate duty.
The charging section (section 5) authorizes the levy of a duty upon all property which passes on the death of a person dying after the commencement of the Act.
Two questions immediately arise.
What is property as envisaged in the charging section ? When does property pass on the death of a person ? The answer to the first question is furnished in an inclusive definition of 'property ' in section 2(15).
It is a wide ranging definition supplemented by two expansive definitions.
Of immediate moment is Explanation 2 which reads: "Explanation 2.
The extinguishment at the expense of the deceased of a debt or other rights shall be deemed to have been a disposition made by the deceased in favour of the 14 person for whose benefit the debt or fight was extinguished, and in relation to such a disposition the expression 'property ' shall include the benefit conferred by the extinguishment of a debt or 7 3 What property passes on the death of a person is indicated in an inclusive definition set out in section 2(15).
It covers property passing either immedi ately on the death or after any interval and 'on the death ' includes 'at a period ascertainable only by reference to the death '.
A glance at sections 9 and 27 gives more comprehension.
Section 9, among other provisions, introduces a legal fiction and since the meaning and implication of this section has been the subject of some disputation we had better allow the provision, in the first instance, to speak for itself: "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, settle ment 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.
" Both the appeals deal with deceased persons who are mem bers of joint Hindu families and the subject matter of the dispositon was linked up with their share in the HUF (acro nymically speaking).
For this reason our attention has to be rivetted to sections 7 and 39 which resolve a likely difficul ty in ascertaining the interest in property which ' passes on the death of a deceassed coparcener in the joint family property the pristine rule of Hindu law being his share lapses in favour of the survivors and is not a descendible estate or a predictable fraction.
Sections 7 and 39, by a deeming process, circumvent this contretemps and crystallize a clear share in the coparcener at the point immediately before death.
Had the properties of the coparcener been partitioned immediately before the death what share in the joint family property would have been allowed to the de ceased represents the principal value of such share for the purposes of computation of death duty.
Section 27 is a strategic provision which deems as a gift all dispositions made by the deceased person in favour of his relations unless such disposition was made for full consideration or the deceased was concerned in a fiduciary capacity with the property. 'Relative ' means, in this context, near rela tions set out in section 27(2) and it is sufficient, for our pur pose, to know that in both the appeals the accounting persons are relatives failing within the statutory compass.
One more provision is pertinent to our enquiry and that deals with gifts within a certain period before death.
While there are other provisions dealing with gifts before 7 3 already been read and will later be explained.
Now to the boxing ring.
The bout has been fought over the import and amplitude of 'property ' as widened by section 2(15), especially Explanation 2 thereto.
Sri section T. Desai, appearing for the accountable per 15 son in the Madras case, and Shri Manchanda, arguing for the Exchequer in the Gujarat case, have levelled multi pointed attacks, but the crucial issue which is decisive of both cases is the same.
What is 'property ' for the purpose of this fiscal law ? Is it a misfortune for any legal system that a battle of semantics, where able judges and erudite advocates fundamen tally disagree on meanings of words pivotal to the very levy, should be a bonanza of the draftsman ? Simplicity and certainty is basic to the rule of law but is a consummation devoutly to be wished in our corpus juris.
Here we find ranged on both sides more than one High Court taking con trary but scholarly views.
A radically new legislative art is the urgent contemporary need if comprehensibility to the laity is to be a democratic virtue of law.
We will first unlock Explanation 2 to section 2(15), discover the signification of 'property ' expanded by the deeming clause and then read it in that wider sense along with the comprehensive provisions of sections 9, 27 and 5.
The key con cept that underlies this fasciculus of sections is property, the tax being charged on property passing on death.
Consid erable controversy has raged not only on the boundaries of the notion of 'disposition ' as specially defined, by import ing a legal fiction, but on the slightly ticklish and tricky placement in section 9 of the expression 'bona fide made two years or more before the death of.
the deceased '.
If we surmount these constructional difficulties, the answer to the core question arising in these appeals fol lows without much ado.
In fairness to counsel we must, at the threshold, set out the seven propositions formulated by Shri Desai for pin pointing the discussion.
They are: "1.
Partition is merely a process in and by which joint enjoyment is transferred into an enjoyment in severalty.
Since in such a case each one of the coparceners had an antecedent title which extended to the whole of the joint family properties and had therefore full interest 7 3 his share, no creation of right or interest in such specific property takes place in his favour nor does any extinguishment of any right or interest in the other property take place to his detriment.
Sections 9(1) and 27(1) form part of a single scheme.
The word 'disposition ' in section 27 (1 ) cannot be treated in isolation and must take its colour and meaning from the sense in which the word has been used in sec.
9 (1).
3. 'Disposition ' means 'giving away or giving up by a person of something which was his own , 606 SC).
No meaning howsoever wide and comprehensive of the expression 'disposition ' can possibly take in its ambit or coverage, parti tion , SC).
The mere fact that on a partition a copar cener takes a lesser share than he could have demanded does not mean 16 that there is 'disposition ' as contemplated in Explanation 2 to section 2(15) which defines 'proper ty '.
In such a partition, there is no extinguish ment, at the expense of such coparcener of any 'debt ' or 'other right '.
In a partition whether equal or unequal, there is no disposition by a coparcener in favour of any relative nor can it be said that there is any purported gift nor can it be treated as a gift.
Of course, the partition must be bona fide and not to evade duty.
The scope and ambit of Explanation 2 to section 2(15) becomes more clear when it is read in juxtaposi tion with Explanation 1.
The 'extinguishment ' contemplated in Expla nation 2 can be only in respect of any debt or other right which could have been created by the deceased and could have been enforced against him.
In a partition, no such thing takes place.
A definition is not a substantive rule of law operative by itself.
The definition of 'property ' in section 2(15) has to be read along with sections 9 and 27 and not in isolation.
Disposition, in section 9, even if read along with Explanation 2 to section 2(15), can only be of something the disponer had as his own at the time of the alleged extinguishment.
If it is of any interest in property it must be of an interest which was already vested in the disponer at the time of the disposition.
If of any other right, it must be of a right which had vested in him even when he gives it up.
" This 7 point programme of submission really brings out all the issues and sub issues, legal and factual, and the last two, over lapping in some respects, deserve first attention.
Before that, we must state, in precis form, the facts with reference to which the statute must speak.
The life of the law is not idle abstraction or transcendental meditation but fitment to concrete facts to yield jural results a synergetic action, not isolated operation.
Our discussion will therefore be conditioned by the material facts found in the two cases.
They are, tersely, though simplistically put, that the deceased person, being a member of a joint Hindu family, within two years before his death, entered into a partition of family properties bona fide, not as colourable or sham transaction, whereby he received towards his share an allotment substantially lower in value than would be his legal entitlement thus gladly suffering a diminution which would to that extent benefit the account able person by giving him a larger slice of the joint cake than was his due.
We assume, for the purpose of argument, that the divi sion in status and the partition made by metes and bounds have taken place simultaneously on the execution of the deed in question.
We also take it that the release, relinquish ment or division in the cases on hand has been bona rule made in the sense that one sharer has not over reached the other or played fraud or together the sharers have not gone through a mere simulacrum of a partition or exercise in colourable division.
We proceed on the further footing and that is law well established 16 now that 'partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in several ty.
Each one of the sharers had an antecedent title and, therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary '.
Now to the 7 points of Shri Desai.
The 6th point is a shade platitudinous and the other side does not dispute its soundness.
Certainly the ' definition of 'property ' in section 2(15) has to inform and must be read along with section 9 and section 27 and cannot be functional in isolation.
It is not a substantive rule of law operative by itself.
Similarly, point No. 7, stated the way it has been, may not be and has not been disputed before us, for the expression 'disposi tion ' in section 9 must be read with the definition in Explana tion 2 to section 2(15) since that is the whole purpose of a"deeming provision ' in the shape of a definition.
Granting that, the disponer cannot extinguish or part with what is not his rather a trite statement though since A can give or give up only what he has at the time of alienation or abnegation.
Shri Desai contends, and rightly, that the deceased could not dispose of any interest in property which did not earlier vest in him or at least at the time of the disposition.
No right can be given up without its being vested in him when he gives up.
This hypothesis in law turns the searchlight on the existence, at the time of the release or partition, of what has been disposed of under that deed.
What then was disposed of ? And did the deceased own at the time of disposition what he thus made over or extinguished ? An answer to these twin questions may be readily given, once we clear the confusion that has crept in at certain stages of the argument, by a process of inept importation and imperfect understanding of the rule of Hindu law regarding coparcenary.
The proposition is trite that in an undivided Hindu family coparceners have no predictable or defined shares but each has an antecedent title in every parcel of property and is jointly the owner and in enjoyment with the others.
But surely it is well established that at the very moment mem bers decide upon a partition eo instanti, a division in status takes place whereupon the share of the demanding members gets crystallised into a definite fraction and if there is division by metes and bounds the allotment of properties vivifies and specifies such shares in separate ownership.
These two processes or stages may often get telescoped when by consensus the coparceners jointly divide the properties.
Unequal divisions of properties knowingly made may not spell invalidity and mathematical equality may not be maintained always in a partition while, ordi narily, substantial fairness in division is shown.
Granting these legal positions, the more serious question which has been agitated before us is as to whether a willing, al beit ' bona fide, arrangement whereby a substantially reduced share is taken by the decedent consequentially vesting a proportionately larger estate in the recipient is a dispo sition falling within Explanation 2 to section 2(15) and there fore 'property ' within the substantive definition.
In this context we may have to read sections 9 and 27 for property taken under a disposition made.
by the deceased may be deemed to be a gift in favour of the accounting person in the circum stances mentioned in section 9.
Similarly, section 27 also tracks down certain dispositions made by deceased 18 persons in favour of relatives by treating them as 'gifts '.
The basic concept of disposition looms important in such circumstances.
This introductory statement of the law takes us to the other points of Shri Desai which we will tackle together, guided by the text of the sections aforesaid read in the light of the citations, aplenty, of cases Indian and Eng lish.
We may compendiously state, forgetting for a moment the complication in the Gujarat Case of the release deed executed by the decedent being either a relinquishmere or a partition that in both the appeals, the decedents and the recipients were members of an undivided Hindu family and within the two years proximity of death the partition ar rangement was effected where under a lesser share than due was allotted to the latter.
And indeed, it is this differ ence between what was due to the right of the deceased and what was actually taken that was treated as a 'gift ' by the Revenue based on the definition in section 2 (15 ), Explanation 2, plus sections 9 and 27.
The cornerstone of the whole case of the Revenue is thus the concept of 'disposition ' which we may point out, right at the outset, is not a term of art not legalese but plain English with wide import.
What is more, this word has acquired, beyond its normal ambit, an abnormal semantic expansion on account of a special definition with an Explanation super added.
In short, 'disposition ' in the Estate Duty law of India enjoys an extended meaning.
Even so, does it go so far as to cover a mere taking of a less than equal share by the deceased, the benefit on account of which has gone to the accountable person ? Before we enter the thicket of judicial conflict regard ing the meaning of 'property ' as extended by Explanation 2 to section 2(15), we may remind ourselves as courts that in a taxing statute one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
While the rulings on the point in the Act and in the allied Gift Tax Act will be adverted to presently, we may begin an incisive understanding of the Explanation 2 aforesaid.
The spirit thereof is obvious.
The framers of the Act desired by a deeming provision regarding 'disposition ' to cover extinguishments of debts and all other rights at the expense of and made by the deceased in favour of the beneficiary.
The substantive definition of 'property ' in section 2(15) is not exhaustive but only inclusive and the supplementary operation of Explana tion 2 takes in what is not conventionally regarded as 'disposition '.
Indeed, 'disposition ', even according to law dictionaries, embraces 'the parting with, alienation of, or giving up property. a destruction of property ' (Black 's Legal Dictionary).
The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener, can be called 'disposition ' in law.
Undoubtedly this operation, to use a neutral expression, is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains.
This legal result, produced by voluntary 'action, is 'disposition ' within the scope of Explanation 2 to section 2(15).
The assessee 's contention, effectively presented by counsel, takes a legalistic course, ignoring the purpose, language and amplitude of 19 Explanation 2.
Argues Shri Desai, in a partition, equal or unequal, there is no element whatsoever of consideration, partial or full, since in a partition there is only an adjustment of rights and substitution of joint enjoyment by enjoyment in severalty.
In his view it is a confusion to mix up unequal partition with inadequate consideration and it is a worse confusion to talk in terms of bona fide and main fide partition where the shares are merely unequal by choice.
What is forgotten in this chain of reasoning is the office of Explanation 2 which is deliberately designed to take into its embrace what otherwise may not be 'disposi tion '.
Once we reconcile ourselves to the enlargement of sense imported by the Explanation, we part company with the traditional concept.
We have also to stress the expression 'other right ' in the Explanation which is of the widest import and cannot be constricted by reading it ejusdem generis and 'debt '. 'Other right ', in the context, is expressly meant considerably to widen the concept and there fore suggests a somewhat contrary intention to the applica tion of the ejusdem generis rule.
We may derive instruction from Green 's construction of the identical expression in the English Act Is.
45(2).
The learned author writes: "A disclaimer is an extinguishment of a right for this purpose.
Although in the event the person disclaiming never has any right in the property, he has the right to obtain it, this inchoate right is a 'right ' for the purposes of section 45(2), The ejusdem generis rule does not apply to the words 'a debt or other right ' and the word 'right ' is a word of the widest import.
Moreover, the expression 'at the expense of the deceased ' is used in an ordinary and natural manner; and is apt to cover not only cases where the extinguishment involves a loss to the deceased of a benefit he already enjoyed, but also those where it prevents him from acquiring the benefit.
The words 'the person for whose benefit the debt or other right was extinguished ' do not neces sitate a conscious intention to benefit some per son; it is sufficient that some person was in fact benefited. 'The motive or purpose of the deceased appears to me to be immaterial ', provided the transaction was gratuitous and did in fact benefit the other person concerned.
The extinguishment of a right may also cover the release of his interest by one joint tenant in favour of another." (Green 's Death Duties, 7th Ed., Butterworths, p. 149) Shri Desai and also Shri Kazi, appearing for the 'ac counting persons ' in the respective cases, urged that this expansive interpretation taking liberties with traditional jural concepts is contrary to this Court 's pronouncement in Getti Chettiar(1).
That was a case under the Gift Tax Act, 1958 and the construction of section 2(xxiv) fell for decision.
Certainly, many of the observations there, read de hors the particular statute, might reinforce the assessee 's stand.
This Court interpreted the expression 'transfer of property ' in section 2(xxiv) and held that the expression 'disposition ' used in that provision should be read in the (1) 20 context and setting of the given statute.
The very fact that 'disposition ' is treated as a mode of transfer takes the legal concept along a different street, if one may use such a phrase, from the one along which that word in the is travelling.
Mr. Justice Hegde rightly observed, if we may say so with respect, that 'Words in the section of a statute are not to be interpreted by having those words in one hand and the dictionary in the other.
In spelling out the meaning of the words in a section, one must take into consideration the setting in which those terms are used and the purpose that they are in tended to serve." (p. 605 606) The word 'transaction ' in section 2(xxiv) of the Gift Tax Act takes its The word that is it must be a 'transfer ' of property colour from the main clause that is , it must be a 'transfer ' of property in some way.
Since a partition is not a 'transfer ' in the ordinary sence of law, the Court reached the conclusion that a mere partition with unequal allotments not being a transfer, cannot be covered by section 2(xxiv).
A close reading of that provision and the judgment will dissolve the mist of misunderstanding and discloses the danger of reading observations from that case for application in the instant case.
The language of section 2 (15 ), Explanation 2, is different and wider and the reasoning of Getti Chettiar (supra) cannot there fore control its amplitude.
It is perfectly true that in ordinary Hindu law a partition involves no conveyance and no question of transfer arises when all that happens is a severance in status and the common holding of property by the coparcener is converted into separate title of each coparcener_as tenant in common.
Nor does subsequent partition by metes and bounds amount to a transfer.
The controlling distinction consists in 'the difference in definition between the Gift Tax Act [section 2(xxvi)] and the is.
2(15).
The Madras High Court in Valliammai Achi(1) took the correct view when it said on similar facts: "The facts of this case, in our opinion, seem to square with the second Explanation to section 2(15).
That, no doubt, is an Explanation to the inclusive definition of property.
But the language of it seems to go further and coins a deemed disposition in the nature of a transfer.
The mechanics of the transfer for the purposes of Explanation 2 consist in the extinguishment at the expense of the deceased of a right and the accrual of a benefit in the form of the right so given up in favour of the person benefited.
Transfer in a normal sense and as understood with reference to the Transfer of Property Act connotes a movement of property or interest or right therein or thereto from one person to another in praesenti.
But in the kind of disposition contemplated by the second Explanation, one can hardly trace such a transfer because of the mere fact of extinction of a certain right of the deceased which does not involve a movement, a benefit is , 808.
21 created in favour of the person benefited thereby.
In the present case the son who was a quondam coparcener had a pre existing right to every part of the coparcenary property, and if by a partition or a relinquishment on the part of one or more of the coparceners, the joint ownership is severed in favour of severalty, the process, having regard to the peculiar conception of a coparcenary, in volves no transfer .
But Explanation 2 is concerned not with that kind of situation, but an extinguishment of a right and creation of a bene fit thereby and this process is statutorily deemed to be a disposition which is in the nature of a transfer.
" This line of reasoning has our general approval.
From what we have said, the bold lines of opposing views emerge and they hinge on the conno tation of 'disposition '.
The High Courts, in their divergent stands, have lined up before both strands of reasoning.
Madras, a Full Bench of the Punjab High Court, and the classic observations in In re Stratton 's Disclaimer(1) support the point of view championed in Ranganayaki Ammal.
The contrary thinking finds support in Andhra Pradesh and Punjab as welt as in Gujarat (Kantilal).
The sense of our statutes modelled as they are on a series of English Acts, is best expressed so far as the concept of 'disposition ' is concerned, by Jenkins L.J., in In re: Stratton 's Disclaimer(1) relating to section 45 of the Finance Act, 1940 [which runs similar in strain to s.2(15).
Noting the strength of the sweeping and unparticularized reference to 'a debt or other right ', Jenkins L.J., repelled the application of the ejusdem generis rule and impart ed to the word 'right ' the widest import: "Mr. Russel did not seek to limit the effect of the words 'debt or other right 'by an applica tion of the ejusdem generis rule, and, in my view, it would not be possible to do so.
In the absence of any such restriction on its meaning the word 'right ' is a word of the widest import, and if, in accordance with my view, Mrs. Stratton can properly be held to have had a right in respect of the specific bequest and devise pending disclaimer, I see no ground for holding that it was not a right within the meaning of section 45 (2).
" * * * * "I confess that I am disposed to deprecate recourse in revenue legislation to sweeping gener alities of this kind, but the mere fact that an enactment is couched in general and comprehensive terms affords no ground for excluding from its operation transactions falling fairly within its provisions, general though they may be.
Roxburgh J., emphasized the impact of the legal fiction and observed: "A certain state of facts is to be deemed to be a different state of facts, and the line between fact and hypothesis seems to me to be drawn by the word 'deemed '.
If this be (1) [1958] 34 I.T .R. (Estate Duty) 47. 22 so, only three actual facts are expressed to be necessary in order to involve the hypothetical situation, (1) the existence of a right, (2) its extinguishment, (3) its extinguishment at the expense of the deceased.
When those three facts concur, the hypothesis goes into action, and the hypothesis is that these facts are equivalent to a disposition made by the deceased in favour of the person for whose benefit the right was extin guished.
These words, ill my opinion, all form part of the hypothesis and the concluding words are necessary to define the hypothetical disponee.
" The conventional construction of 'disposition ' has to submit to the larger sweep of the hypothetical extension by defini tion.
The Gujarat High Court has gravitated towards the nar rower construction of 'disposition ' and 'or right '.
It makes no specific reference to Stratton 's Disclaimer (supra) and the learned judges have insisted on transfer of inter est as a necessary indicium of every disposition.
Partition does not involve a transfer and therefore, cannot be a disposition, runs the logic of the Gujarat judgment.
Like wise, 'other right ', in Explanation (2), it is argued, cannot cover the case of partition as in the learned Judges ' view a transfer is a sine qua non.
We cannot agree, for reasons already stated, with this approach which defeats the intendment of the Act and the express object of Explana tion 2 to section 2(15).
The peculiar definition of 'disposi tion ' injecting a triple hypothesis and fictional expan sion covers the diminution in the share taken by the copar cener and augmentation of the share taken by the other and impresses the stamp of property on this process by the "deeming ' provision.
Sections 9 and 27 strengthen this conclusion.
We were confronted by Shri Desai with Kancharla Kesava Rao(1) for contending that giving away or giving up could not in all cases be disposition where the transaction is a partition.
This Court, in the above ruling, held that a partition in a coparcenary was just an adjustment of rights, not a transfer in the strict sense.
Shri Justice Hegde, speaking for the Court, placed on section 24 of the Act more or less the same intepretation as was put in Getti Chettiar (supra) by this Court.
Whatever might be the interpretation 'disposition ' in section 24 of the Act, we are satisfied that the only straight forward construction of that expression in section 27 is as we have explained at length above.
Section 9, dealing with gifts takes in property under a disposition made by a deceased, throwing up the question 'What is a gift? '.
Section 27 supplies the answer: 'an dispsition made by the deceased in favour of a relative of his shll be treated for the purposes of this Act as a gift '.
Unless: of course, it is made for full considera tion.
There is no limitation, environmental or by the society of words, warranting the whittling down of the unusually wide range of explanation 2 to section 2(15).
Kesava Rao (supra) cannot cut back on the liberality of section 27.
In the realm of legal fiction, law cannot be confined within traditional (1) 23 concepts.
It is pertinent that as between the Gift Tax Act and the there is basic difference in that the tax effect in the first is on transaction inter vivos and in the second on the generating source of transmission by death.
Comparisons in construction cannot therefore be pushed too far.
Before winding up tihis part of the discussion, we may refer to Grimwade vs Federal Commissioner of Taxation (1) where Williams J., dealing with the expression 'disposition of property ' defined somewhat in similar lines as in our Act, observed: "The whole emphasis of paragraph (f) is upon ' a transaction entered into by one person, which seems to me to mean that where there is an act done by one person with the requisite intent, and as a result there is a transfer of value from any property of that person to the property of another person, the conditions of liability are satisfied.
Each statute has its own mint and the coinage of words bears a special stamp.
That is our only comment when we depart semantically from other judicial ' annotations of the expres sion 'disposition '.
If A is entitled to a moiety in property worth rupees five lakhs (or let us assume that much of cash in the till belongs jointly to A and B) and by a partition relinquishment, disclaimer or otherwise A accepts something substantially less than his due, say rupees one lakh as against rupees two and a half lakhs and the remainder goes to.
the benefit of B who gets four lakhs as against two and a half lakhs, commonsense, concurrently with Explanation 2, draws the inference that A has made over at his expense and to the benefit of B a sum of rupees one and ahalf lakhs which may be designated a 'disposition ' by him in favour of B. Shri Desai rightly stressed in construing section 9 we should not confess between a mala fide transaction and unequal partition.
He is right.
But the simpIe scheme of section 9 may be stated to erase misapprehension.
What the provision declares is that if the disposition made by the deceased is more than two years before death.
,, the property covered thereby shall not pass on the death unless it shall not have been bona fide.
That is to say, even if the transaction were more than two years before the death, if it were entered into in bad faith, estate duty may still attach to that property.
So far as dispositions made within two years of the death of the deceased are concerned, there is no question of mala fides or bona fides.
All such transactions are caught within the coils of section 5 read with sections 9 and 27.
The re quirement of 'bona fides ' has nothing to do.
with disposi tions within 2 years and has much to do with those beyond 2 years.
The marginal obscurity in section 9 is due perhaps to compressed draftsmanship.
Now to costs.
We have already indicated how serious arguments have appealed in contrary ways to several fudges of the High Courts and certain observations of this Court have themselves been capable of different shade of sense from what we have read into them.
Indeed the point involved in the case is of general public importance which (1) ; 24 on account of the conflict in the High Courts, needs to be decided by the Supreme Court.
One of the major functions of this Court is to declare the law for the country under article 141 of the Constitution, although under our adversary system it is only when litigation spirals up the Court acts and declares the law.
While dealing with a similar situation, this Court in Trustees Port, Bombay(1) observed: "Is it fair in these circumstances that one party, albeit the vanquished one, should bear the burden of costs throughout for providing the occa sion not provocation for laying down the correct law in a controversial situation ? Faced with a similar moral legal issue, Lord Reid observed: "I think we must consider separately costs in this House and costs in the Court of Appeal.
Cases can only come before this House with leave, and leave is generally given because some general question of law is involved.
In this case it enabled the whole vexed matter of non est factum to be reexamined.
This seems to be a typical case where the costs of the successful respondent should come out of public funds.
The Evershed Committee on Supreme Court Practice and Procedure had suggested in England that the Attorney General should be empowered to issue a certificate for the use of public funds in appeals to the House of Lords where issues of outstanding public importance are involved.
" Maybe, a scheme for a suitors ' fund to indem nify for costs as recommended by a Sub Committee of Justice is the answer, but these are matters for the consideration of the Legislature and the Executive.
We mention them to show that the law in this branch cannot be rigid.
We have to make a compromise between pragmatism and equity and modify the loser pays all doctrine by exercise of a flexi ble discretion.
The respondent in this case need not be a martyr for the cause of the certainty of law under section 87 of the Act, particularly when the appellant wins on a point of limitation.
(The trial Court had even held the.
appellant guilty of negligence).
In these circumstances we direct that the parties do bear their costs throughout.
" We adopt the same course and while.
allowing Civil Appeal No. 1095 of 1970, and dismissing Civil Appeal No. 1677 of 1973 the parties in both the appeals are directed to bear their respective costs throughout.
V.P.S. C,4.
1095 of 1970 allowed.
CA 1677 of 1973 dismissed.
(1) ; , 738.
[/INST]Under section 3(b), , a sale or purchase of goods is deemed to take place in the course of inter State trade or commerce if the sale or purchase is effected by a transfer of documents of rifle to the goods during their movement from one State to another.
Section 7(3 ) provides that on the application of the dealer the prescribed authority shall register the applicant and grant him a registration certificate which shall specify the class or classes of goods for the purpose of section 8(1); and the Form prescribed by r. 3, Central Sales Tax (Registration and Turnover) Rules, 1957, for application for registration, requires the purposes for which the goods were purchased by the dealer to be specified, resale being one such purpose.
Section 8(1)(b) provides that every dealer who, in the course of inter State trade or commerce sells to a regis tered dealer other than the Government, goods of the de scription referred to in sub section
(3) shall be liable to pay 3.%_ of his turnover as.tax under the Act; whereas, under section 8(2), the tax payable with respect to goods which do not fall within sub section (1) shall be, in the case of declared goods, at the rate applicable to to the sale or purchase of such goods inside the appropriate State and in the case of other goods 10%, or the rate applicable in the State, which ever is higher.
Prior to April 1, 1963, section 8(3) stated, that the goods referred to in section 8(1)(b), "(a) in the case of declared goods, are goods Of the class or classes speci fied in the certificate of the registered dealer purchasing the goods as being intended for resale by him; and (b) in the case of goods other than declared goods are goods of the class or classes specified in the certificate of registra tion of the registered dealer purchasing the goods, as being intended for resale by him.
" By the Amendment Act (8 of 1963), cl.
(a) was omitted and the opening words in cl.
(b), "in the case of goods other than declared goods" were also omitted; so that, after April 1, 1963, the goods referred to in section 8(1)(b) are specified in sub section
(3) as goods of the, class or classes specified in the certificate of registra tion of the registered dealer purchasing the goods as being intended for resale by him.
Section 8(4)(a) says that the provisions of section 8(1) shall not apply to any sale in the course of inter State.
trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration in the prescribed.
Form, duly filled and.signed by the registered dealer to whom the goods are sold containing the prescribed particu lars.
Section 9(1) contains a general rule that the tax payable by any dealer on sales effected in the course of inter State trade or commerce would be levied by the Govern ment of India and collected in the State from which the movement of the goods commenced.
The proviso to the sub section qualifies this rule in the case of a subsequent sale which is not exempted from tax under section 6(2).
and states, .that the tax on such subsequent sale would be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained, or could have Obtained, the Form prescribed for the purpose of section 8(4)(a).
Coal is one of the declared goods having been declared under section 14 to be of special importance in inter State trade or commerce.
The appellant was a Company carrying on business as coal agents and was registered in U.P. under the U.P. Sales Tax Act, 1948, and the .
The appellant arranged for the supply of coal from collieries in W. Bengal and Bihar to consumers in U.P.
The collieries sent the coal by 4 1003 SCI/76 26 rail, the railway receipts either in the name of the.appel lant or in the name of the consumer in U.P., and sent the bills and invoices to the appellant 's head office in Calcut ta.
The appellant forwarded the railway receipts to the consumers in cases where the receipts were in the names of the consumers, and in cases where the receipts were in the appellant 's name also endorsed them in favour of the consum ers.
There was thus, in the latter cases, a subsequent sale of goods in the course of inter State trade or commerce by the transfer of documents of title by the appellant to the consumers in U.P.
For the assessment year 1966 67 the appellant claimed that the turnover in cases where the railway receipts had been subsequently endorsed in favour of the consumers in U.P. was not taxable in U.P.
The Sales tax Officer by order dated March 27, 1971, accepted the conten tion, relying on a decision of the High Court.
But, in subsequent decisions, the High Court held that in cases where a regisetred dealer effected a second sale in the course of inter State trade and commerce, sales tax on the turnover was to be realised in the State where the dealer effecting the sale was registered; and in one of the deci sions it was observed that the decision on which the Sales tax Officer relied had overlooked the proviso to section 9(1 ) of the Central Act.
The Sales tax Officer accordingly proposed to rectify the error committed by him and after following the procedure prescribed for rectification of errors appar ent on the face of the record in section 22 of the U.P. Act, passed an order on March 26, 1974, rectifying the mistake and served it on the appellant on March 31, 1974.
The appellant challenged the order unsuccessfully in the High Court.
In appeal to this Court it was contended: (1) That the declaration prescribed under section 8(4)(a) is necessary when section 8(1) was applicable, but that, after the omission in section 8(3), reference to 'declared goods ' is omitted in that section, so that when section 8 (1)(b) refers to the sale of goods mentioned in section 8(3) the reference is only to goods other than declared goods and hence, when a dealer sells declared goods, he could not have obtained the prescribed declaration and so the proviso to section 9(1) did not apply; (2) Section 22 'of the U.P. Act was not ap plicable as there was no mistake apparent on the face of the record; and (3) The order under section 22 was barred by limi tation, because it was effective only when it was served on the appellant.
Dismissing the appeal to this Court, HELD: (1) The 1971 assessment order was wrong.
[46 G] The Act and the rules and the prescribed Forms make no distinction between declared goods and other goods, except for the purpose of the rate of tax.
Under section 7(3) the regis tration certificate granted to a dealer has to specify the class or classes of goods for the purposes of section 8(1) and it makes no distinction between declared goods and other goods.
Sub sections 8(1) and (3) also show that all sales to a registered dealer other than the Government, whether of declared goods or other goods, are covered by section 8(1).
Clause (a) was omitted from section 8(3) presumably because it was considered unnecessary to retain it when cl.
(b) apparently covered all goods both declared and other than declared.
The declaration referred to in section 8(4)(a) is necessary for the dealer to avail himself of the benefit of the rate of tax mentioned in section 8(1).
There is no valid reason why the appellant could not have obtained the decla ration in the prescribed Form as required by the proviso to section 9(1 ).
Since no .claim for exemption under section 6(2) is made by the appellant, the first order of assessment was contrary to the proviso of section 9(1) and the sales in question were taxable within the respondent State, where the appel lant was registered as a dealer.
[45 D H] (2) The 1971 order of assessment was patently errone ous in that it failed to take into consideration the proviso to section 9(1).
Therefore, it could be rectified under section 22, U.P. Act.
[46 G] 27 (3) The order rectifying the mistake was recorded with in 3 years of the date of the original order as required by section 22 of the U.P. Act.
The fact that the order was communi cated, to the appellant on March 31, 1974 could not make any difference.
The order of rectification is deemed to be made on the date of communication only for the purpose of count ing the period of limitation for filing the appeal, under section 9 of the U.P. Act.
Therefore, in the instant case, the appellant was not affected by the order under section 22 being communicated to it after the expiry not of 3 years from the date of the original order.
[47 B; 48 B] Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer [1962].
3 S.C.R. 676 and Madan Lal vs State of U.P. explained & distinguished.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 440 of 1974.
314 Appeal by Special leave from the Judgment and Order dated the 17th September, 1974 of the Patna High Court in Crl.
Appeal No. 579 of 1969.
Davendra N. Goburdhan & D. Goburdhan for the Appellant.
S.N. Jha for the Respondent The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by special leave is filed against the judgment dated September 17, 1974 passed in Criminal Appeal No. 579 of 1969 on the file of the High Court of Patna confirming the conviction of the appellant of the offence punishable under section 376 of the Indian Penal Code and the sentence of rigorous imprisonment for five years imposed on him on December 20,1969 in Sessions Trial No. 107 of 1968 on the file of the Assistant Sessions Judge at Purnea in the State of Bihar.
The appellant was committed to face the trial for an offence punishable under section 376 of the Indian Penal Code by the order of the Munsiff Magistrate, 1st Class, Purnea on the basis of a complaint filed by the complainant Barki Devi (P.W. 3) before the Sub Divisional Officer, Sadar, Purnea on August 9,1968 who took cognizance of the Offence and transferred the case to the file of the aforesaid Magistrate.
The allegations made in the complaint are briefly these: That on August 1, 1968 at about 5.00 P.M, the complainant, who was a married woman of about 25 years, was engaged in the work of uprooting of the paddy seedlings on her field situated on the southern side of her house in Dhumra Badh situated in Mouza Dhamdaha, Police Station Dhamdaha, District Purnea.
There was a canal to the east of the field and there were no houses nearby.
When she was working on her field the appellant came near her and started cutting jokes and suggested that she should have sexual intercourse with him.
On the complainant protesting at his suggestion, the appellant suddenly caught hold of her, threw her down on the ground, removed her clothes and committed rape on her.
On hearing her cry for help, some persons arrived at the place.
The appellant immediately ran away.
Thereafter the complainant went to her house and narrated the incident to her husband, Jitrai (P.W. 4).
The complainant and her husband then went to the local Mukhiya who asked them to file 315 a complaint in the Court.
Then they went to the police thana to give information about the crime but the police officer declined to record the information as the appellant was an influential person.
Then the complainant went to the court on August 8, 1968 to lodge a complaint but as the time for lodging complaint was over by the time the complaint was drafted, she filed it on August 9, 1968 in the court.
The complaint contained the names of some witnesses.
At the trial the complainant was examined as P.W. 3.
She belongs to the Santhal tribe.
In her evidence she described the incident as disclosed in her complaint.
She stated that the appellant forcibly had sexual intercourse with her against her will.
She stated that on hearing her cry, Sheikh Lafid (P.W. I) came there and on seeing him, the appellant ran away.
She also stated that she narrated the incident to Juman Nadaf (P.W. 2), Chanda Kisku and Makbool who also came there and that she showed the stains of semen on her clothes and also the trampling marks on the ground to them.
She also stated that she narrated the incident before her husband and the Mukhiya of the village.
She further stated that when she and her husband went to the police station, they were threatened and driven away by the police officer there.
She also told about her going to Purnea and lodging the complaint.
Sheikh Lafid (P.W. 1) corroborated the evidence of the complainant by deposing that when he reached the scene of occurrence he saw the appellant lying on top of the body of the complainant.
Juman Nadaf (P.W. 2) stated that when he went near the scene of occurrence he saw the appellant fleeing away from there.
He stated that the complainant had narrated before him the details of the crime committed by the appellant.
Jitrai (P.W. 4) the husband of the complainant stated that in the evening of the day of occurrence the complainant told him about the manner in which she had been ravished by the appellant and also gave evidence about his going to the Mukhiya and to the police station and what happened there as narrated by the complainant.
Rama Kant Thakur (P.W. 5) was the lawyer who drafted the complaint.
He has stated that the complaint had been prepared under the instructions of the complainant.
The trial court on a consideration of the material before it found that the appellant was guilty of rape and accordingly convicted the appellant of the offence punishable under section 376 of the Indian Penal Code and imposed on him a sentence of rigorous imprisonment for five years.
The High Court dismissed 316 the appeal filed by the appellant.
This appeal by special leave is filed against the judgment of the High Court.
When the appeal was heard by this Court on March 6, 1980, it was ordered that the trial court should record the evidence of the Mukhiya, Makbool and Chanda Kisku and to submit the record to this Court.
The evidence of the Mukhiya and of Makbool was accordingly recorded and has been submitted to this Court.
Chanda Kisku is reported to be dead.
The other two witnesses have not supported the prosecution case.
It is apparent that these two witnesses who had been mentioned as witnesses in the complaint itself were not willing to support the prosecution even at the time of the trial as otherwise they would have been examined.
It is not quite strange that some witnesses do turn hostile but that by itself would not prevent a court from finding an accused guilty if there is otherwise acceptable evidence in support of the prosecution.
In the instant case, both the trial court and the High Court have believed evidence of the prosecutrix and the evidence of the other prosecution witnesses who had been examined at the trial.
The point for consideration in this case is whether the approach adopted by the High Court and the trial court to the case is correct and whether the material is sufficient to warrant the conviction recorded by them.
In the case before us the complainant has given her version of the incident in her deposition and the High Court and the trial court have not found it to be unreliable.
The case of the appellant, however, was that on account of a land dispute between one Mohamed Halim and Mohamed Naiyeem on the one hand and himself on the other which ultimately had ended in his favour this false case had been got filed by them through the complainant and her husband Jitrai who were working as servants under them.
The non examination of the Mukhiya and the police officer who had declined to record the information alleged to have been given by the complainant and her husband is stated to be fatal to the prosecution.
It is further stated that in the absence of a medical examination report given by a doctor after examining the person of the complainant immediately after the occurrence it was not possible to conclude whether the complainant had been raped.
The trial court has negatived the contentions of the appellant.
The trial court held that it had not been established that the complainant and her husband were under the thumb of Mohamed Halim and 317 Mohamed Naiyeem.
The husband of the complainant owned some lands and the complainant and her husband were also working as labourers.
The trial court was of opinion that the complainant had not given a false complaint in order to oblige Mohamed Halim and Mohamed Naiyeem.
It further held that the proceeding relating to land filed by Mohamed Halim and Mohamed Naiyeem was one instituted in the year 1964 nearly four years before the incident and that there was no immediate provocation for them to engineer the filing of a false case against the appellant.
The High Court has concurred with the conclusions of the trial court.
As regards the non examination at the trial of the Mukhiya who is now examined pursuant to the order of this Court it is to be observed that it has turned out to be inconsequential.
The Mukhiya has now stated that the complainant and her husband had not gone to him to complain about the incident.
He does not give any version about the incident.
It has to be borne in mind that he was examined nearly twelve years after the incident.
It is significant that his name figured in the complaint as a witness.
The complainant could not have taken the risk of including his name if he had not been actually contacted by her.
The complainant and her husband have stated in their depositions that they had gone to him on the date of occurrence.
He was cited as a witness to show that immediately after the occurrence the complainant had made a statement regarding the crime before him which would be corroborating evidence.
An interval of twelve years is a sufficiently long period and particularly for persons of easy conscience to make half hearted statements in courts.
In the circumstances it is difficult to hold that the evidence of the other witnesses before the court is in any way affected by the evidence of the Mukhiya.
The same criticism applies to the evidence of Makbool who is the other witness examined in the year 1980 along with the Mukhiya.
Makbool 's evidence is that he did not go near the scene of occurrence on the date on which it is alleged to have taken place.
As regards the non examination of the policeman who declined to record the information said to have been given by the complainant, it has to be stated that it would be asking the complainant to do something which would be almost impossible to perform.
How many police officers who have in fact not performed their duty would come before court as witnesses and admit that they had failed to discharge their duty ? The court may safely presume that notwithstanding the allegation of the complainant being true she would not have even able to secure the evidence of such a negligent police official.
The fact remains the complainant has referred to 318 this in her complaint on the very next day and she and her husband ran a grave risk in making such an allegation of dereliction of duty against the police in the complaint.
Nothing however turns on the non examination of the said police official in this case.
In so far as non production of a medical examination report and the clothes which contained semen, the trial courts has observed that the complainant being a woman who had given birth to four children it was likely that there would not have been any injuries on her private parts.
The complainant and her husband being persons belonging to a backward community like the Santhal tribe living in a remote area could not be expected to know that they should rush to a doctor.
In fact the complainant has deposed that she had taken bath and washed her clothes after the incident.
The absence of any injuries on the person of the complainant may not by itself discredit the statement of the complainant.
Merely because the complainant was a helpless victim who was by force prevented from offering serious physical resistance she cannot be disbelieved.
In this situation the non production of a medical report would not be of much consequence if the other evidence on record is believable.
It is, however, nobody 's case that there was such a report and it had been withheld.
A reading of the deposition of the complainant shows that it has a ring of truth around it.
Section 133 of the Indian Evidence Act says that an accomplice shall be a competent witness against an accused person and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice.
But the rule of practice is that it is prudent to look for corroboration of the evidence of an accomplice by other independent evidence.
This rule of practice is based on human experience and is incorporated in illustration (b) to section 114 of the Indian Evidence Act which says that an accomplice is unworthy of credit unless he is corroborated in material particulars.
Even though a victim of rape cannot be treated as an accomplice, on account of a long line of judicial decision rendered in our country over a number of years, the evidence of the victim in a rape case is treated almost like the evidence of an accomplice requiring corroboration.
(Vide Rameshwar vs The State of Rajasthan,(1) Gurucharan Singh vs State of Haryana(2) and Kishan Lal vs State of Haryana).(3) It is accepted by the Indian courts 319 that the rule of corroboration in such cases ought to be as enunciated by Lord Reading C.J. in King vs Baskerville.(4) Where the case is tried with the aid of a jury as in England it is necessary that a Judge should draw the attention of the jury to the above rule of practice regarding corroboration wherever such corroboration is needed.
But where a case is tried by a judge alone, as it is now being done in India, there must be an indication in the course of the judgment that the judge had this rule in his mind when he prepared the judgment and if in a given case the judge finds that there is no need for such corroboration he should give reasons for dispensing with the necessity for such corroboration.
But if a conviction is based on the evidence of a prosecutrix without any corroboration it will not be illegal on that sole ground.
In the case of a grown up and married woman it is always safe to insist on such corroboration.
Wherever corroboration is necessary it should be from an independent source but it is not necessary that every part of the evidence of the victim should be confirmed in very detail by independent evidence.
Such corroboration can be sought from either direct evidence or circumstantial evidence or from both.
The trial court has in the case before us found that the evidence of the complainant had been corroborated in material particulars by the evidence of Sheikh Lafid (P.W. 1), Juman Nadaf (P.W. 2) and Jitrai (P.W. 4) the husband of the complainant.
The High Court also has acted on the evidence of these witnesses.
Sheikh Lafid (P.W. 1) has stated that he saw the appellant on the body of the complainant and that the complainant had also told him about the crime.
Juman Nadaf (P.W. 2) has stated that when he heard the cry of the complainant at the time of occurrence, he saw the appellant fleeing away from that place.
The trial court and the High Court have not found any good ground to discard their testimony.
Jitrai (P.W. 4) has told the court that the complainant had mentioned to him all the details of the incident within a short while after it took place.
Rama Kant Thakur (P.W 5.), the lawyer who drafted the complaint has stated that he had prepared the complaint which contains all the particulars of the offence under the instructions of the complainant.
Apart from the evidence of Sheikh Lafid (P.W. 1) and Juman Nadaf (P.W. 2) about what they saw, the statement made by the complainant to her husband immediately after the incident is admissible under section 157 of the Indian Evidence Act and has a corroborative value.
After considering carefully the entire material 320 before us including the evidence of the witnesses examined pursuant to the order made by this Court earlier in the light of the submissions made at the Bar we are of the view that the judgment of the High Court does not call for any interference under Article 136 of the Constitution.
The appeal therefore, fails and it is dismissed.
The appellant who is on bail is directed to surrender and to undergo the remaining part of the sentence imposed on him.
H.L.C. Appeal dismissed.
[/INST]The appellant was convicted under section 376, I.P.C., for raping a tribal woman mainly on the evidence of the victim who was the complainant, her husband and two other witnesses, one of whom had deposed that he had seen the appellant on the body of the victim while the other had stated that he had seen the appellant fleeing away from the scene of occurrence.
The High Court dismissed the appeal and confirmed the conviction.
The appellant submitted that the local Mukhiya to whom the complainant and her husband were alleged to have gone to complain about the incident immediately after its occurrence, the police officer who was alleged to have refused to record the complaint and also two other witnesses mentioned in the complaint had not been examined by the prosecution and this, together with the absence of a medical examination report given by a doctor after examining the person of the complainant immediately after the occurrence, was fatal to the prosecution case.
The Mukhiya and one of the two other witnesses mentioned in the complaint who had not been examined earlier were examined pursuant to the orders made by the Court and they did not support the prosecution case.
Dismissing the appeal, ^ HELD: Even though a victim of rape cannot be treated as an accomplice, on account of a long line of judicial decisions the evidence of the victim in a rape case is treated almost like the evidence of an accomplice requiring corroboration.
Section 133 of the Evidence Act says that an accomplice shall be a competent witness against an accused person and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice.
But the rule of practice is that it is prudent to look for corroboration of the evidence of an accomplice by other independent evidence.
This rule is based on human experience and is incorporated in illustration (b) to section 114 of the Act.
There must be an indication in the course of the judgment that the judge had this rule in his mind when he prepared the judgment 313 and if in a given case the judge finds that there is no need for such corroboration he should give reasons for dispensing with the necessity for such corroboration.
But if a conviction is based on the evidence of a prosecutrix without any corroboration it will not be illegal on that sole ground.
In the case of a grown up and married woman it is always safe to insist on such corroboration.
Wherever corroboration is necessary it should be from an independent source but is not necessary that every part of the evidence of the victim should be confirmed in every detail by independent evidence.
Such corroboration can be sought from either direct evidence or circumstantial evidence or from both.
[318 E H; 319 A D] Rameshwar vs State of Rajasthan, ; ; Gurucharan Singh vs State of Haryana, ; Kishan Lal vs State of Haryana, ; ; King vs Baskerville , referred to.
In the instant case a reading of the deposition of the complainant shows that it has a ring of truth around it.
Her evidence has been corroborated in material particulars by the evidence of her husband and the other two witnesses.
The statement made by the complainant to her husband immediately after the incident is admissible under section 157 of the Act and has a corroborative value.
[319 F H] The Mukhiya has not given any version about the incident but has merely stated that the complainant and her husband had not gone to him to complain.
It is significant that his name figured in the complainant as a witness.
The complainant could not have taken the risk of including his name if he had not been actually contacted by her.
He was cited as a witness to show that immediately after the occurrence the complainant had made a statement regarding the crime before him which would be corroborating evidence.
It has to be borne in mind that he was examined nearly 12 years after the incident and it is a sufficiently long period and particularly for persons of easy conscience to make half hearted statements in courts.
In the circumstances it is difficult to hold that the evidence of the other witnesses before the court is in any way affected by the evidence of the Mukhiya.
The same criticism applies to the evidence of the other witness examined along with the Mukhiya.
The non examination of the police officer who declined to record the information said to have been given by the complainant is found to be not fatal to the prosecution.
[317 C H] The complainant and her husband being persons belonging to backward community like the Santhal tribe living in a remote area could not be expected to know that they should rush to a doctor.
The absence of any injuries on the person of the complainant may not by itself discredit the statement of the complainant.
Merely because the complainant was a helpless victim who was by force prevented from offering serious physical resistance she cannot be disbelieved.
[318 B D]
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<s>[INST] Summarize the judgementCriminal Appeal No. 532 of 1976.
From the Judgment and Order dated 9.2.
1976 of the Punjab and Haryana High Court in Crl.
Writ No. 13 1 of 1975.
Baldev Atrey, K.B. Rohtagi, R.A. Gupta, V.K. Jain, S.K. Gupta and C.S. Vaidyanathan for the Appellant.
M.S. Rao, R.S. Sodhi, B. Parthasarathi and Ms. A. Subha shini for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
These four appeals have been filed against judgments of the High Court of Punjab and Haryana rejecting the claims of the appellants who have been con victed by the General Court Martial for offences under the and are undergoing their sentences of varying terms of imprisonment for the grant of benefit to them of the provision for set off contained in Section 428 of the Code of Criminal Procedure.
The High Court has granted certifi cates of fitness under Article 134A of the Constitution and it is on the strength of those certificates that these appeals have been preferred to this Court.
The common question of law that arises in these appeals concerns the applicability of Section 428 of the Code of Criminal Procedure to persons sentenced to undergo imprison ment by General Court Martial under the .
The posi tion under the will equally govern persons sen tenced to undergo imprisonment by Court Martial under the Navy Act and the Air Force Act.
In the judgments under appeal, the High Court has fol lowed an earlier ruling of a Division Bench of the same High Court in Ram 87 Labhaya Sharma vs Union of India and Others, in Criminal Writ No. 40 of 1975 decided on December 12, 1975 wherein it was held that the benefit under Section 428 of the Code of Criminal Procedure is not available to convicts, who are tried, convicted and sentenced by Court Martial.
There is a divergence of views between different High Courts on this question.
The High Court of Madras in P.P. Chandrasekaran vs Government of India and Ors., [1977] Cri.
L.J. 677 (a case of courtmartial under the Navy Act) and in T.S. Ramani vs The Superintendent of Prisons, [1982] Cri.
L.J. 892 (court martial under the ) has taken the view that the benefit of Section 428 of the Code of Criminal Procedure cannot be claimed by persons convicted by Court Martial.
The same view has been taken by the High Court of Delhi in F.R. Jesuratnam vs Chief of Air Staff, [1976] Cri.
L.J. 65 dealing with a case of court martial under the Air Force Act.
A Single Judge of the High Court of Kerala has however, taken a contrary view in Subramanian vs Officer Commanding Armoured Static Workshop, and the said decision was referred to and followed by a Division Bench of the Calcutta High Court in the case of Anand Singh Bishit vs Union of India and Ors., An examination of the relevant provisions of the Code of Criminal Procedure and the (as well as the corre sponding provisions in the Navy Act and the Air Force Act) makes it abundantly clear that Section 428 of the Criminal Procedure can have no applicability whatever in respect of persons convicted and sentenced by Court Martial.
Section 5 of the Code of Criminal Procedure lays down that nothing contained in the said Code shall, in the ab sence 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.
The relevant Chapters of the , the Navy Act and the Air Force Act embody a completely self contained comprehensive Code specifying the various offences under those Acts and prescribing the procedure for detention and custody of offenders, investigation and trial of the offend ers by Court Martial, the punishments to be awarded for the various offences, confirmation and revision of the sentences imposed by Court Martial, the execution of such 88 sentences and the grant of pardons, remissions and suspen sions in respect of such sentences.
These enactments, there fore, constitute a special law in force conferring special jurisdiction and powers on Courts Martial and prescribing a special form of procedure for the trial of the offences under those Acts.
The effect of Section 5 of the Code of Criminal Procedure is to render the provisions of the Code of Criminal Procedure inapplicable in respect of all matters covered by such special law.
Since in the four cases before us we are concerned with convictions by General Court Mar tial under the provisions of the , we shall refer specifically to the relevant provisions contained in the (hereinafter called the 'Act ').
Sections 34 to 68 contained in Chapter VI of the Act specify the different categories of offences under the Act including abetment of offences under the Act.
Chapter VII of the Act which comprises Sections 71 to 89 of the Act deals with the punishments awardable by Court Martial in respect of the different offences.
Sections 10 1 to 107 contained in Chapter IX of the Act deal with the arrest and custody of offenders and the proceedings prior to the trial.
Chapter X of the Act describes in Sections 108 to 118, the different kinds of court martial, the authorities competent to convene them, their composition, and respective powers.
In Chapter XI consisting of Sections 128 to 152, we find detailed provisions laying down the procedure to be followed by Court Martial in conducting the trial of offenders.
Chapter XII contains provisions relating to confirmation and revi sion of the findings entered and sentences imposed by the different categories of courtmartial.
Sections 166 to 176 contained in Chapter XIII deal with the execution of sen tences and the establishment and regulation of military prisons etc.
The subject of granting pardons, remissions and suspensions of sentences is dealt with in Sections 179 to 190 comprised in Chapter XIV of the Act.
Thus we find that the Act contains elaborate and comprehensive provisions dealing with all the stages commencing from the investiga tion of offences and the apprehension and detention of offenders and terminating with the execution of sentences and the grant of remissions.
suspensions etc.
Section 167 of the Act specifically lays down that whenever a person is sentenced by a Court Martial under the Act to imprisonment, the term of his sentence shall, whether it has been revised or not, be reckoned to commence on the day on which the original proceedings were signed by the Presiding Officer or, in the case of a summary Court Mar tial, by the Court.
In the face of this categorical provi sion laying down that the sentence of imprisonment shall be 89 deemed to have commenced only on the day when the court martial proceeding was signed by the Presiding Officer or by the Court as the case may be, it is in our opinion futile to contend that the is silent with respect to the topic as to the date with effect from which the period of imprisonment covered by the sentence is to be reckoned.
We state this only for the reason that an ingenious argument was advanced before us by Counsel for the appellant that Section 5 of the Code of Criminal Procedure only lays down that nothing in the Code shall "affect" any special or local law and hence in the absence of any specific provision in the special or local law covering the particular subject matter, the provisions of the Code would get attracted.
Even if this argument is to be assumed to be correct (which assumption we shall presently show iS wholly unwarranted), inasmuch as Section 176 of the Act specifically deals with the topic of the date of commencement of the sentence of imprisonment, there is absolutely no scope for invoking the aid of Section 428 of the Code of Criminal Procedure in respect of prisoners convicted by Court Martial under the Act.
As we have already indicated, we are unable to accept as correct the narrow and restricted interpretation sought to be placed on Section 5 of the Code by the Counsel appearing on behalf of the appellants.
In our opinion the effect of Section 5 of the Code is clearly to exclude the applicabili ty of the Code in respect of proceedings under any special or local law or any special jurisdiction or form of proce dure prescribed by any other law.
Whatever doubt might otherwise have existed on this point is totally set at rest by Section 475 of the Code of Criminal Procedure which furnishes a conclusive indication that the provisions of the Code are not intended to apply in respect of proceeding before the Court Martial.
That Section is in the following terms: "475.
Delivery to commanding officers of persons liable to be tried by Court martial (1) The Central Government may make rules consistent with this Code and the (46 of 1950), the (62 of 1957), and the (45 of 1950) and any other law, relating to the Armed Forces of the Union, for the time being in force, as to cases in which persons subject to military, naval or air force law, or such other law, shall be tried by a Court to which this Code applies or by a Courtmar tial; and when any person is brought before a Magistrate and charged with an offence for which he is liable to be tried either by a Court 'to which this Code applies or by a Court martial, such Magistrate shall have regard to such 90 rules, and shall in proper cases deliver him, together with a statement of the offence of which he is accused, to the commanding officer of the unit to which he belongs, or to the commanding officer of the nearest military, navel or air force station, as the case may be, for the purpose of being tried by a Court martial.
Explanation In this section (a) "unit" includes a regiment, corps, ship, detachment, group, battalion or company, (b) "Court martial" includes any tribu nal with the powers similar to those of a Court martial constituted under the relevant law applicable to the Armed Forces of the Union.
(2) Every Magistrate shall, on receiving a written application for that purpose by the commanding officer of any unit or body of soldiers, sailors or airmen stationed or employed at any such place, use his utmost endeavors to apprehend and secure any person accused of such offence.
(3) A High Court may, if it thinks fit, direct that a prisoner detained in any jail situated within the State be brought before a Court martial for trial or to be examined touching any matter pending before the Court martial.
" The distinction made in the Section between "trial by a Court to which this Code applies" and by a Court Martial conclusively indicates that Parliament intended to treat the Court Martial as a forum to the proceedings before which the provisions of the Code will have no application.
Further, there is also intrinsic indication contained in the very wording of Section 428 of the Code of Criminal Procedure that the section cannot have any application in respect of persons tried and sentenced by Court Martial.
Section 428 of the Code reads "428.
Period of detention undergone by the accused to be set off against the sentence of imprisonment Where an accused person has, on conviction, been sentenced to imprisonment for a term, not being imprison ment in 91 default of payment of fine, the period of detention, if any, undergone by him during the investigation, inquiry or trial of the same case and before the date of such conviction, shall be set off against the term of imprison ment, imposed on him on such conviction, and the liability of such person to undergo im prisonment on such conviction shall be re stricted to the remainder, if any, of the term of imprisonment imposed on him.
" The section provides for set off of the period of deten tion undergone by an accused person during "the investiga tion, inquiry or trial" of the same case before the date of conviction.
The expression "investigation" has been defined in Section 2(h) of the Code as follows: "2.(h) "investigation" includes all the pro ceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than a Magistrate) who is authorised by a Magistrate in this behalf." In the case of persons tried by Court Martial there is no investigation conducted by any police officer under the Code or by any person authorised by Magistrate in that behalf.
Similarly, the expression "inquiry" has been defined in Section 2(g) of the Code as meaning "every inquiry, other than a trial, conducted under this Code by a Magistrate or Court." No inquiry is conducted under the Code by any Magis trate or Court in respect of the offences committed by persons which are tried by the Court Martial.
The trial is also not conducted by the Court Martial under the Code but only in accordance with the special procedure prescribed by the Act.
Such being the position, the provision for set off contained in Section 428 of the Code of Criminal Procedure can never be attracted in the case of persons convicted and sentenced by Court Martial to undergo imprisonment.
In the light of the foregoing discussion we uphold as correct the view taken by the High Court of Punjab and Haryana in the judgments under appeal.
We also approve of the decisions of the High Courts of Madras and Delhi cited above wherein the view has been taken that the benefit of Section 428 of the Code of Criminal Procedure cannot be claimed by persons tried and sentenced by the Court Martial.
The decision in Subramanian vs Officer Commanding Armoured 92 Static Workshop (supra) rendered by a learned Single Judge of the High Court of Kerala does not contain any discussion of the relevant provisions of the two concerned statutes and what little reasoning is found in the judgment does not appeal to us as correct or sound.
The Division Bench of the Calcutta High Court in its decision in Anand Singh Bishit vs Union of India and Ors.
(supra) has merely followed the aforesaid ruling of the Single Judge of the High Court of Kerala.
We hold that these two decisions do not lay down the correct law.
It follows from the foregoing discussion that these appeals are devoid of merits and they will accordingly stand dismissed.
P.S.S. Appeals dismissed.
[/INST]Sub section (1) of section 4 of the requires every establishment in public sector to notify vacancy in any employment to the employment exchange.
Sub section (2) lays down similar requirement in respect of every establish ment in private sector, while sub section
(4) lays down that nothing in sub sections
(1) and (2) shall be deemed to impose any obligation upon any employer to recruit any person through the employment exchanges to fill any vacancy merely because that vacancy has been notified.
An 'establishment ' is de fined in section 2(e) of the Act to mean any office or any place where any industry, trade, business or occupation is carried on, an 'establishment in public sector 'in section 2(f) as an establishment owned, controlled or managed by the Government or a Department of the Government, and an 'establishment in private sector ' in section 2(g) as an establishment which is not an establishment in public sector.
Instructions issued by the Government of India from time to time enjoined upon employers Central Government offices, quasiGovernment institutions and statutory organi sations and establishments in the private sector to restrict their field of choice for vacancies to which the Act applied in the first instance, to candidates sponsored by employment exchanges.
A question arose as to whether an 'establishment in the public sector ', or an 'establishment in the private sector ', as defined in the Act, could make appointments to posts to which the Act applies, of 911 persons not sponsored by the employment exchanges, and whether the Act covers Government establishments also.
The High Court held that the Act had no application to Government establishments, that it casts no obligation either on the public sector establishments or on the private sector establishments to make the appointment from among candidates sponsored by the employment exchange only, and that any insistence that candidates sponsored by the employ ment exchanges alone should be appointed would be contrary to the right guaranteed by articles 14 and 16 of the Constitu tion.
Disposing of the Appeal of the Union of India, the Court, HELD: 1.
The High Court was wrong in holding that the Act was not applicable to Government establishments.
If the definition of 'establishment ' in section 2(e).
which includes an 'office ', is read alongside the section 2(1 '), it will be clear that Government offices are also included in the expression 'establishment in public sector '.
[914E] 2.1 There is no provision in the Act which obliges an employer to employ those persons only who have been spon sored by the employment exchanges.
Section 4(4) of the Act makes it explicitly clear that the employer is under no obligation to recruit any person through the employment exchanges to fill in a vacancy merely because that vacancy has been notified under sections 4(1) and 4(2).
The compulsion extends only to notification of vacancies that may occur in the establishment before filling them up.
[915G H; 916G] 2.2 The object of the Act is not to restrict, but to enlarge the field of choice so that the employer may choose the best and the most efficient and to provide an opportuni ty to the worker to have his claim for appointment consid ered without having to knock at every door for employment.
[918B C] 3.
The Government is at perfect liberty to issue in structions to its own departments and organisations to adhere to the rule that not merely vacancies should be notified to the employment exchanges but the vacancies should also be filled by candidates sponsored by the employ ment exchanges, provided the instructions do not contravene any constitutional provision or any statute.
But these instructions cannot bind other bodies which are created by statute and which function under the authority of statute.
In the absence of any statutory presumption, the statutory authority may adopt and follow such instructions if it thinks 912 fit.
Otherwise, the Government may not compel statutory bodies appointment of persons from among candidates spon sored by employment exchanges only.
Private employers cannot be so compelled by any instructions issued by the Govern ment.
[921C E] 4.
Any restriction that employment in Government Depart ments should be through the medium of employment exchanges does not offend articles 14 and 16 of the Constitution.
In public employment, it is necessary to eliminate arbitrari ness and favouritism and introduce uniformity of standards and orderliness.
There has to be an element of procedural fairness in the recruitment.
A public employer cannot choose to receive applications for employment where and when he pleases and to make appointments as he likes.
The insistence on recruitment through employment exchanges therefore, advances rather than restricts the rights guaranteed by articles 14 and 16.
[922E; B D]
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<s>[INST] Summarize the judgementCivil Appeal No. 1048 of 1979.
From the Judgment and order dated 15.12.
1978 of Patna High Court in Second Appeal No. 215 of 1978 L.N. Sinha, B.P. Singh, Ranjit Kumar and Ravi Prakash for the appellants.
D. Goburdhan for the respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI J.
The short question that arises for consideration in this appeal by special leave concerns the true scope and application of Section 80 of the Civil Procedure Code.
The appellants herein are the plaintiffs in a suit instituted in the Munsiff 's Court, Bihar Sharif, seeking the reliefs of declaration of title and delivery of possession with mesne profits in respect of the properties described in the plaint.
The State of Bihar the 1st respondent herein is the main defendant in the suit.
Prior to the institution of the suit, the plaintiffs had issued a notice to the 1st 311 respondent State under section 80 C.P.C. on 18.2.1969 and Exhibit 2 is a copy of the said notice.
However, without waiting for the statutory period of two months, the plaintiffs instituted the suit on 2.4.1969.
In the written statement filed on behalf of the State of Bihar, it was contended, inter alia, that the suit was not maintainable for want of proper notice under Section 80 C.P.C.
This contention was upheld by the trial court which also recorded findings against the plaintiffs on the remaining issues concerning the title to the property and their entitlement to reliefs of declaration and delivery of possession.
The first appellate court which the matter was carried in appeal by the plaintiffs dismissed the appeal on the ground that the plaintiffs ' suit was not maintainable inasmuch as due notice under Section 80 C.P.C. had not been given.
A second appeal preferred by the appellants to the High Court at Patna did not meet with any success and it was dismissed in limine.
Hence this appeal by the plaintiffs.
We are concerned in this case with Section 80 C.P.C. as it stood prior to its amendment, by Act 104 of 1976 (Even under the amended provision, the position remains unaltered insofar as a suit of this nature is concerned).
We shall extract the Section as it stood at the material time: "80.
No suit shall be instituted against the Government (including the Government of the State of Jammu and Kashmir) or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months next after notice in writing has been delivered to, or left at the office of (a) in the case of a suit against the Central Government, except where it relates to a railway, a Secretary to that Government; (b) in the case of a suit against the Central Government where it relates to a railway, the General Manager of that railway; (c) in the case of a suit against the Government of the State of Jammu and Kashmir, the Secretary to that Government or any other officer authorised by that Government in this behalf; 312 (d) in the case of a suit against any other Government, a Secretary to that Government or the Collector of the district; * * * * * and, in the case of a public officer, delivered to him or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and relief which he claims; and plaint shall contain a statement that such notice has been so delivered or left.
" The effect of the Section is clearly to impose a bar against the institution of a suit against the Government or a public officer in respect of any act purported to be done by him in his official capacity until the expiration of two months after notice in writing has been delivered to or left at the office of the Secretary to Government or Collector of the concerned district and in the case of a public officer delivered to him or left at his office, stating the particulars enumerated in the last part of sub section (1) of the Section.
When we examine the scheme of the Section it becomes obvious that the Section has been enacted as a measure of public policy with the object of ensuring that before a suit is instituted against the Government or a public officer, the Government or the officer concerned is afforded an opportunity to scrutinise the claim in respect of which the suit is proposed to be filed and if it be found to be a just claim, to take immediate action and thereby avoid unnecessary litigation and save public time and money by settling the claim without driving the person, who has issued the notice, to institute the suit involving considerable expenditure and delay.
The Government, unlike private parties, is expected to consider the matter covered by the notice in a most objective manner, after obtaining such legal advice as they may think fit, and take a decision in public interest within the period of two months allowed by the Section as to whether the claim is just and reasonable and the contemplated suit should, therefore, be avoided by speedy negotiations and settlement or whether the claim should be resisted by fighting out the suit if and when it is instituted.
There is clearly a public purpose underlying the mandatory provision contained in the Section insisting on the issuance of a notice setting out the particulars of the proposed suit and giving two months time to Government or a public officer before a suit can be insti 313 tuted against them.
The object of the Section is the advancement of justice and the securing of public good by avoidance of unnecessary litigation.
When the language used in the Statute is clear and unambiguous, it is the plain duty of the Court to give effect to it and considerations of hardship will not be a legitimate ground for not faithfully implementing the mandate of the legislature.
The Judicial Committee of the Privy Council had occasion to consider the scope and effect of Section 80 C.P.C. in an almost similar situation in Bhagchand Dagadusa and ors.
vs Secretary of State for India in Council & Ors.(1) In that case, though a notice had been issued by the plaintiffs under Section 80 C.P.C. on 26th June 1922, the suit was instituted before the expiry of the period of two months from the said date.
It was contended before the Privy Council, relying on some early decisions of before the Privy Council, relying on some early decisions of High Court of Bombay, that because one of the reliefs claimed in the suit was the grant of a perpetual injunction and the claim for the said relief would have become infructuous if the plaintiffs were to wait for the statutory period of two months prescribed in Section 80 C.P.C. before they filed the suit, the rigour of the Section should be relaxed by implication of a suitable exception or a qualification in respect of a suit for emergent relief, such as one for injunction.
That contention did not find favour with the Privy Council and it was held that Section 80 is express, explicit and mandatory and it admits no implications or exceptions.
The Judicial Committee observed: "To argue as appellants did, that the plaintiffs had a right urgently calling for a remedy, while section 80 is mere procedure, is fallacious, for section 80 imposes a statutory and unqualified obligation upon the Court." This decision was subsequently followed by the Judicial Committee in Vellayan vs Madras Proince.(7) The dictum laid down by the Judicial Committee in Bhagchand Dagadusa vs Secretary of State for India.(3) was cited with approval and followed by a Bench 314 of five Judges of this Court in Sawai Singhai Nirmal Chand vs Union of India.(1) It must now be regarded as settled law that a suit against the Government or a public officer, to which the requirement of a prior notice under Section 80 C.P.C. is attracted, can not be validly instituted until the expiration of the period of two months next after the notice in writing has been delivered to the authorities concerned in the manner prescribed for in the Section and if filed before the expiry of the said period, the suit has to be dismissed as not maintainable.
On behalf of the appellants, strong reliance was placed on the decision of a learned Single Judge of the High Court of Kerala in Nani Amma Nannini Amma vs State of Kerala.(2) Therein the learned Judge has expressed the view that Sec. 80 is not a provision of public policy and there is nothing in the Section expressly affecting the jurisdiction of the Court to try a suit instituted before the expiry of the period prescribed therein.
The reasons stated by the learned Judge in justification of his taking the said view despite the clear pronouncement of the Judicial Committee of the Privy Council in Bhagchand 's case do not appeal to us as correct or sound.
In the light of the conclusion expressed by us in the foregoing paragraphs about the true scope and effect of Section 80 C.P.C., the aforecited decision of the learned Single Judge of the Kerala High Court cannot be accepted as laying down good law.
In the result, we confirm the judgment and decree of the High Court and dismiss this appeal.
The parties will bear the respective costs in this appeal.
[/INST]The Petitioner in a writ petition sought relief in respect of Veterinary Assistant Surgeons working in the Delhi Administration, alleging that the Veterinary Assistant Surgeons have been denied the benefit of the principle of`equal pay for equal work ' incorporated in Article 39 (d) of the Constitution and that there has been violation of the fundamental rights guaranteed under Articles 14 and 16, because their scale of salary (Rs. 550 990) was lower than the pay scale of Veterinary Assistant Surgeons employed by the Union Territory of Chandigarh (850 1700), or by the Central Government in the Indo Tibetan Boarder Police and by the Border Security Force (Rs. 650 1200).
The writ petition was opposed by the Union of India denying many of the allegations in the petition, while the Development Commissioner, while the Delhi Administration contested the writ petition by justifying the impugned pay scale and also by pleading that the matter should be allowed to be examined by the Fourth Pay Commission.
Dismissing the writ petition, ^ HELD: 1.
The question of the fixation of pay scale for Veterinary Assistant Surgeons should be left to be decided by the Government on the basis of the recommendation of the Fourth Pay Commission.
The question of discrimination cannot be decided in isolation.
Having regard to the long delay in approaching this Court after the fixation of the pay scale, no relief can be granted in respect of the period between 1973 and 1984.
The petitioner is at liberty to make its representation before the Fourth Pay Commission.
[434 H E] 430 2.
In addition to the principle of `equal pay for equal work ', the pay structure of the employees of the Government should reflect many other social values.
Apart from being the dominant employer, the Government is also expected to be a model employer.
It has, therefore, to follow certain, basic principles in fixing the pay scales of various posts and cadres.
The degree of skill, strain of work, experience involved, training required, responsibility undertaken, mental and physical requirements disagreeableness of the task, hazard attendant on work and fatigue involved are some of the factors which should be taken into consideration in fixing pay scales.
The method of recruitment, the level at which the initial recruitment is made in the hierarchy of service or cadre, minimum educational and technical qualification prescribed for the post, the nature of dealings with the public, avenues of promotion available and horizontal and vertical relativity with other jobs in the same service or outside are also relevant factors.
[432F H; 433A] 3.
Wile fixing the pay scales, the paying capacity of the Government, the total financial burden which has to be borne by the general public, the disparity between the incomes of the Government employees and the incomes of those who are not in government service and the net amount available for government at the current taxation level, after paying the salaries and allowances to the Government servants have also to be borne in mind.
[433B C] 4.
It is imperative that there should be an evolution and implementation of a scientific national policy of incomes, wages and prices which would be applicable not merely to Government services but also to the other sectors of the national economy.
As far as possible the needs of a family unit have to be borne in mind in fixing the wage scales.
The `needs ' are not static.
They include adequate nutrition, medical facilities, clothing, housing, education, cultural, activities etc.
Care should also be taken to see that what is fixed today as an adequate pay scale does not become inadequate within a about period by providing an automatic mechanism for the modification of the pay scale.
[433E G]
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<s>[INST] Summarize the judgementAppeal No. 67 of 1956.
Appeal from the judgment and decree dated March 20, 1950, of the Bombay High Court in first Appeals Nos. 142 and 211 of 1947.
S.P. Varma, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
324 H.R. Khanna, R. H. Dhebar and T. M. Sen, for the respondent No. 1.
C.B. Agarwala and Naunit Lal, for the respondents Nos. 2 and 5. 1962.
September 26.
The judgment of the Court was delivered by AYYANGAR, J.
This appeal comes before us on a certificate of fitness granted by the High Court of Bombay under article 133 (1) (a) of the Constitution.
The appeal was heard by us in November last and judgment was reserved on 9/11/1961.
Within a short time thereafter, learned Counsel for the Appellant intimated the Registry that the 2nd respondent had died on November 5, 1961, and that steps were being taken to have the legal representative brought on record.
The certificate under O. XVI r.13 was received by this Court and on its basis substitution was ordered at the end of August 1962.
The appeal was subse quently reported for hearing and we have now heard the learned Counsel for the parties.
The facts giving rise to the appeal are briefly as follows: The plaintiff who is the appellant brought a suit in the Court of the Civil judge at Jalgaon for a declaration that the sale of certain of his lands which were held by the Revenue Authorities in circumstances which we shall detail later was void, and to recover possession of the lands from the defendants who had purchased these lands in revenue auction.
In view of the prayer for the declaration regarding the invalidity of the sale, the Province of Bombay was impleaded as a defendant to the suit.
The plaintiff 's father was an excise contractor and he and the plaintiff were licensees of certain opium shops in 1931 32.
By the end of March 1934 a sum of about Rs. 8,500/ were due to the Government in respect of the excise dues from these opium shops.
For the realisation of these dues the lands 325 belonging to the plaintiff were brought to sale and among others Survey Field No. 35, 40 and 80 in Mauje Therole, Peta Edalabad and a house bearing Survey No, 23A in the village of Kurhe was brought to sale and sold.
The three items of lands were purchased by government at the sale for a nominal bid of Re. 1/ for each item for realisation of these dues.
The sale was confirmed and possession taken by government of these lands.
Later the government sold the land bearing Survey No. 80 to the second defendant for Rs. 2,000/ and Survey Nos. 35 and 40 to the fifth defendant for Rs. 1,750/ .
Possession of these properties was delivered to the respective defendants in 1939.
As substantially the arrears due to government still remained undischarged, because the sales were for nominal amounts, the house property at Kurhe was attached and brought to sale and was sold on November 6, 1940, but the purchase in the case of the house was not by the government but the property was bid for and purchased by the second defendant for Rs. 76/ .
A certificate of sale was issued to him on February 13, 1941.
It was the validity of these sales that was challenged in the suit which has given rise to this appeal.
The suit was substantially decreed in favour of the plaintiff by the trial judge but on appeal the plaintiff 's suit was dismissed in respect of the relief in regard to the three plots above named which were the subject of sale on September 21, 1938, and of the house which was sold on November 6, 1940.
The learned trial judge had held that these sales were not in accordance with the provisions of the Bombay Land Revenue Code and were consequently void.
The learned judges of the High Court, on the other hand, were of the opinion that the sales and the purchase by government for a nominal sum of Re. 1/ for each of the plots were authorized by the Code and were therefore valid and binding on the plaintiff.
It is the correctness of this view of the High Court that is raised for consideration in the appeal.
326 Before dealing with the arguments addressed to us regarding the validity of the sales it is necessary to set out the statutory provisions which bear upon the power of government to effect sales for the realisation of arrears due to them.
Section 34 of the Bombay Abkari Act enables arrears of excise revenue to be recovered as an " arrear of land revenue".
Chapter XI of the Bombay Land Revenue Code lays down the procedure for the realisation of land revenue and other revenue demands.
Among the provisions of this Chapter it is necessary to refer to s.155 reading : "155.
The Collector may also cause the right, title and interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold.
" Section 165 directs the Collector to issue a proclamation, in the vernacular language of the district of the intended sale, specifying the time and place of sale, while the section following requires that a written notice of the intended sale should be affixed in the public offices named therein.
Section 167 enacts that sales shall be made by auction by such persons as the Collector may direct.
Section 171 is the next relevant section and this reads: "When the sale is finally concluded by the officer conducting the same, the price of every lot shall be paid for at the time of sale, or as soon after as the said officer shall direct, and in default of such payment the property shall forthwith be again put up and sold.
On payment of the purchase money the officer holding the sale shall grant a receipt for the same, and the sale shall become absolute as against all per sons whomsoever.
" As some point was made before us of a violation in the instant case of the provisions of sections 172 and 173, we shall read these also 327 "172.
When the sale is.
subject to confirma tion, the party who is declared to be the pur chaser shall be required to deposit imme diately twenty five per centum on the amount of his bid, and in default of such deposit the property shall forthwith be again put up and sold.
The full amount ' of purchase money shall be paid by the purchaser before sunset of the day after he is informed of the sale having been confirmed, or, if the said day be a Sunday or other authorized holiday, then be fore sunset of the first office day after such day.
On payment of such full amount of the purchase money, the purchaser shall be granted.
, a receipt for the same, and the sale shall become absolute as against all persons whomsoever." "173.
In all cases of sale of immovable pro perty, the party who is declared to be the purchaser shall be required to deposit imme diately twenty five per centum on the amount of his bid, and in default of such deposit the property shall forthwith be again put up and sold.
" Section 175 sets out the effect of a default in payment of purchase money and this runs: "175.
In default of payment within the prescribed period of the full amount of pur chase money, whether of movable or immovable property, the deposit, after defraying therefore the expenses of the sale, shall be forfeited to the Provincial Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.
" Section 178 enables sales to be set aside for irregularity and this section runs 328 "178.
At any time within thirty days from the date of the sale of immovable property application may be made to the Collector to set aside the sale on the ground of some material irregularity, or mistake, or fraud, in publishing or conducting it; but, except as is otherwise provided in the next following section, no sale shall be set aside on the ground of any such irregularity or mistake, unless the applicant proves to the satisfaction of the Collector that he has sustained substantial injury by reason thereof.
If the application be allowed, the Collector shall set aside the same and direct a fresh one.
" The consequential provision is in section 179 which reads: "179.
On the expiration of thirty days from the date of the sale, if no such application as is mentioned in the last preceding section has been made, or if such application has been made and rejected, the Collector shall make an order confirming the sale; provided that, if he shall have reason to think that the sale ought to be set aside notwithstanding that no such application has been made, or on grounds other than those alleged in any application which has been made and rejected, he may, after recording his reasons in writing, set aside the sale." and section 182 enacts : "182.
The certificate shall state the name of the person declared at the time of sale to be the actual purchaser; and any suit brought in a Civil Court against the certified purchaser on the ground that the purchase was made on behalf of another person not the certified purchaser, though by agreement the name of the certified purchaser was used, shall be dismissed.
" 329 Section 214 of the Code empowers a State Government by a notification published in the official gazette to make rules not inconsistent with the provisions of the Act to carry out the purposes and objects of the Act and for the guidance of all persons in matters connected with the enforcement of the Act or in cases not expressly provided for therein.
In the Rules framed under the Code Ch.
XVIII is concerned with making provision for sales.
Rule 128 which is the second of the Rules in this Chapter.
prescribes "Where any land or other property is sold by public auction, an upset price shall, if the Collector thinks fit, be placed thereon; Provided that where in the opinion of the Collector difficulty is likely to be experienced in effecting speedy recovery of the arrears or bidders are likely to be deterred from offering bids, no such upset price shall be placed.
" Rule 129 has a new sub r.
(4) added after the sales which are now in controversy were effected reading : "Where in the opinion of the Collector difficulty is likely to be experienced in effecting speedy recovery of the arrears or bidders are likely to be deterred from offering bids, it shall be lawful for the Collector or his nominee to bid at the auctio n and purchase the land or other property for a bid of rupee one.
" We shall now proceed to narrate the proceedings that preceded the impugned sales where are stated to be in contravention of statutory provisions.
Before doing so, however, we might point out that in regard to the sale of the house in the village of Kurhe no irregularity which would vitiate the sale as pointed out, and the only complaint was that the house which was estimated to the worth about Rs. 200/ was sold for an inadequate sum of Rs. 76/ .
Obviously standing alone this could not be a ground for holding 330 the sale void.
In the rest of this judgment, therefore, we shall confine our attention to the sale of the three plots bearing Survey Nos. 35, 40 and 80 which were purchased by the Government for a nominal bid of Re. 1/ .
The relevant facts in relation to the sale of these three plots were these: In January 1934 the Mahalkari of Edalabad brought to the notice of the Collector of East Khandesh that an amount of over Rs. 9,000/ was due in respect of excise transactions from the plaintiff and his father and he pointed out that the amount remained unrecovered notwithstanding that the defaulter 's movable property was put up for sale eighteen times and his immovable property eight times.
He suggested to the Collector that " 'in order to bring home a sense of responsibility to the defaulters and to make them realise the need for quickly paying up the arrears", the procedure laid down in a Government order dated August 30, 1933, might be applied to them.
The procedure indicated was that contained in a Government resolution in the Revenue department bearing No. 474 of 1933 that "if defaulters were contumacious the Collector would have authority to purchase on behalf of Government the defaulter 's property on a nominal bid.
" By this letter the Mahalkari desired to have the permission of the Collector to make a nominal bid of Re. 1/ at the next auction of ' the defaulter 's property.
The principal question raised in this appeal is whether or not the procedure indicated in this resolution is in accordance with the provisions of the Land Revenue Code.
Before continuing the narrative it is necessary to refer to a further resolution No. 4135 of April 16, 1936, which ran "The procedure of purchasing on behalf of Government a defaulter 's property nominal bid should be adopted in order a speedy recovery of Government by offering a order to effect dues in cases where a real difficulty is experienced in making 331 such recoveries and no purchaser is forthcoming to buy the land. .
It should not be adopted except as a last resort when various remedies for the recovery of dues have failed or unless it is clear that bidders are deterred from offering bids by other reasons than purely economic considerations.
" The reason for the adoption of this procedure was stated to be that it would produce a good deterrent effect and would put a stop to any obstructive tactics on behalf of defaulting licensees.
The permission sought was granted by the Collector enabling the Mahalkari to bid at the auction.
Thereafter the Mahalkari intimated the defaulters the plaintiff and his father that if no bidder came forward at the time of the public auction sale and nobody bid, the lands mentioned in the proclamation would be sold at a nominal price of Re. 1/ and it was after this notice that the purchase by Government on the above terms was effected.
The sales were held, no stranger bid at the sale and thereupon the Mahalkari acting under the resolution of Government and the terms of the permission granted by the Collector, made a nominal bid of Re. 1/ for each lot on behalf of the Government and the bids were accepted and thereafter the sales were confirmed.
The validity of the sale was attacked before us on several grounds : (1) that under r. 128 the Collector was bound to have fixed an upset price and that his failure to do so rendered the sale void.
, (2) Rather inconsistently with this that the Collector had actually fixed an upset price and that in the face of this fixation the purchase by the Mahalkari on behalf of the Government for a nominal sum of Re. 1/ was illegal and rendered the sale void.
, (3) that on the terms of section 171, the sale price had to be paid for at the time of the sale and that as this was not done, the sale officer was statutorily bound to have put up 332 the property for sale again, (4) that sections 172 and 173 laid an obligation on the purchaser to deposit 25 per cent of the sale price immediately the bid was knocked down and further required him to pay the balance within 15 days thereafter and also prescribed the consequences of default, viz., the sale shall be avoided and that a resale shall take place and that in the present case the Mahalkari who bid on behalf of the Government, or the Government itself had not made either the deposit or the final payment with the result that the purchase stood automatically cancelled by reason of that default and (5) that the purchase by the Government on a nominal bid of Re.1/ was not a sale by public auction as was contemplated by section 167 of the Code and in consequence the sale was void and that no title passed by reason of that sale.
As regards the first four of the objections set out above, they have, in our opinion, no substance on the facts of the present case.
We do not however consider it necessary to deal with them because they were raised for the first time in this Court and they involve questions of fact which were not the subject of pleading or investigation in the Courts below.
We intimated to the learned Counsel that we would not permit him to urge those grounds before us.
It is only the last of these grounds that therefore requires to be considered.
This raises a question of some importance in the law relating to revenue sales.
The question of the validity of such sales was raised before the High Court of Bombay on an earlier occasion and the judgment of the Court is reported in Pumdu Dhansing vs Government for the Province of Bombay (1).
The Court was then concerned with an auction sale conducted by the Mamlatdar a revenue officer of the Government by which a property of a substantial value belonging to a surety for a toll contractor was sold to the Revenue Patel acting for and on behalf of the government for a nominal sum of Re. 1/ .
The (1) I. L. R. 333 contractor was in default and for the recovery of the amount due from him the provisions of Ch.
XI of the Bombay Land Revenue Code became applicable.
Several attempts were made to sell the property of the defaulter and the reserve prices which were fixed for the lots were never reached.
Subsequently at 'the next auction when no bids were forthcoming, the Patel acting under the orders of the Collector made a bid on behalf of Government, of Re. 1/ for each lot and this was accepted by the Mamlatdar who was conducting the auction, and this sale was confirmed later by the Collector and possession was thereafter taken of the property thus purchased.
It was the validity of this sale that was challenged in a suit filed by the defaulter.
Support for the validity of the sale was sought in the resolutions of the Government of 1933 and 1936 which we have extracted earlier.
On the facts of the case before the Court there were certain special features to which attention was drawn by the learned judges : (1) The first was that the proclamation of sale set out that a reserve price had been fixed and where a sale was subject to such a condition, "the conditions of sale" which are prescribed by the rules made a special provision invalidating the acceptance of bids below the reserve price, (2) there was no evidence that the defaulter had been served with any special notice that the different procedure of the purchase for a nominal price by government would be resorted to.
Though the learned judges pointed out these two features, the reasoning by which they held the sale void rested on wider grounds.
Stone C.J. speaking for the Court said: "The production of the nominal one rupee for all the property, cannot be regarded as bid at an auction sale for property lotted into five lots with a separate reserve price on each.
The word "nominal ' shows that there was nothing of substance about the offer and the endorsements 334 and formalities by which an attempt was made to give some semblance regularity to what was done cannot in my opinion cloak in legal guise that which was nothing better than a device to vest the appellant 's property in a Revenue Officer holding on behalf of Government.
The Bombay Land Revenue Code contains no power either to forfeit or to foreclose a defaulter 's property.
Yet the scheme formulated by the Resolutions referred to at the commencement of this judgment aims in effect at bringing about such a result, for, if effective it would achieve the extinguishment in favour of Government of all the appellant 's rights and ownership in his land.
In my judgment what took place at the alleged auction sale was of no effect and did not give to the Revenue Pail or to Government any right, estate or interest in the appellant 's property.
" When the present appeal was before the learned judges of the Bombay High Court it was pressed before the Division Bench which heard the appeal in the first instance that the reasoning of the decision in Tumdu Dhansing vs Government for the Province of Bombay (1) governed the present case also and entitled the plaintiff to succeed and that the appeal should be dismissed.
The learned judges observed: "It must be conceded that if the decision in Tumdu Dhansing vs Government for the Province of Bombay represents good law, the decision of the trial Court is correct".
They however, went on to say : "With respect however, to the learned judges who decided that case (Tumdu Dhansing vs Government for the Province of Bombay) we find great difficulty in understanding the reason ing and doubt whether the conclusion is correct".
(1) I. L. R. 335 They therefore suggested a reference to a Full Bench for an answer to the question : "Whether when at a sale held under section 153 of the Bombay Land Revenue Code the land is pur chased by the Government under a nominal bid the sale is either void or voidable": The learned Judges of the Full Bench however without deciding whether the decision in Tumdu Dhansing vs Government for the Province of Bombay was right or wrong, upheld the sale in the present case on certain distinguishing features : (1) the sale proclamation in the present case did not fix a reserveprice and therefore there was no purchase for a nominal sum in disregard of the price so fixed, (2) Before the bid for a nominal sum and a sale by the acceptance of such a bid notice had been given to the defaulter stating that the Government intended to pursue that course.
Though on these grounds they held the sale not to be void, the learned judges proceeded to point out that this practice of purchasing property for nominal bids was neither fair nor equitable.
With this answer the case came back to the Division Bench where the appeal by the defendant was allowed.
The question now for our consideration is whether a sale for a "nominal" bid of Re. 1/ is "a sale by auction" within the provisions of the Bombay Land Revenue Code.
Before entering on a discussion of the relevant provisions it is necessary to state that the Government Resolutions of 1933 and 1936 do not purport to have and have no statutory force at all.
They cannot authorise or render valid the transaction if otherwise it lacked a legal basis.
A further matter which requires to be pointed out is that para.
(4) of r. 129, already set out, which authorises the purchase by Government for a nominal price was added only in 1946 long after the sales in the present case and cannot serve as any basis for sustaining the validity (1) I. L. R. 336 of the sale.
In the circumstances it is not necessary to consider the scope or validity of this rule or its legal efficacy for authorising such a sale or purchase.
It is common ground that the power of Government to effect a sale by summary process for the recovery of amounts due to them has to be gathered from the four comers of Ch.
XI of the Code read in conjunction with the relevant rules in Ch.
XVIII.
Section 155 of the Code enables the Collector to cause the right, title and interest of the defaulter in the immovable property to be sold.
The manner in which those sales might take place is provided for by section 167 which enacts that "sales shall be by public auction by such person as the Collector may direct.
" Leaving aside for the moment the provisions which detail the procedure to be followed in the conduct of these sales, the point to be observed is that the realisation of the dues has to be by "sates" by public auction to be held in the manner prescribed.
This therefore does not and cannot authorise a forfeiture of the immovable property of a defaulter because of his contumacious conduct in not paying up his dues when demanded.
Nor does the Land Revenue Code contemplate or provide for any punishment of defaulters because of their conduct in either not paying up their dues or in not facilitating the realisation of the dues payable by them by co operating with the Government and securing a proper price for their property such as would be sufficient for the discharge of their dues.
While on this point it might be interesting to point out that section 58 of the Revenue Sale Law (Bengal Revenue Sale Law) Act 11.
of 1 859 enacts: " 'When an estate is put up for sale under this Act for the recovery of arrears of revenue due thereon, if there be no bid the Collector or other officer as aforesaid may purchase the estate on account of the Government for one rupee . . . . " 337 There is no provision corresponding to this in the Bombay Code.
The question then arises whether a purchase for a predetermined nominal price of rupee one for property, whatever its actual market value, is a sale by public auction within section 167 of the Code.
An auction has been described as " 'the proceeding at which people are invited to compete for the purchase of property by successive offers of advancing sums" and a sale by auction is a means of ascertaining what the thing is worth, viz., its fair market price.
If at the sale there are no bids there cannot be a sale.
A sale for a predetermined nominal sum cannot, in our opinion, be held to be a "sale by public auction" in the absence of any provision for such sales in the statute.
Such a sale appears to us to be somewhat analogous to what Sir Richard Couch described, though in a slightly different context. " 'The offer and acceptance of a rupee was a colorable attempt to obtain a title without paying for the land.
Virtually it was a present which it was not open to the authorities to make".
(vide Luchmeswar Singh vs the Chairman, of the Darbhanga Municipality(1).
It may not also be out of place to point out that it is the Collector who on behalf of Government sets in motion the machinery for the realisation of the arrears by bringing the defaulter 's property to sale and it is he who is by the Land Revenue Code invested with the power to make arrangements for the sale and section 178 constitutes him the authority to determine judicially any allegation about the irregularity in the conduct of the sale.
In these circumstances it looks to us somewhat anomalous that the Collector should of his own motion and without the authority of any statutory power claim the right to bid at the auction which his deputy is conducting on his behalf for the realisation of the dues which he as the executive authority is to recover and particularly when he is constituted the authority to consider the validity or irregularity in the auction conducted at his instance and the purchase made at his instance.
(1) (1890) 1.
R. , 106.
338 The next question for consideration is whether the fact that the defaulter was appraised that Government would bid for a nominal sum of one rupee for the property at the auction renders the sale valid.
We do not find it easy to discover the precise legal basis upon which prior notice to the defaulter would have the effect of validating the sale.
If a sale for a nominal bid of one rupee were "a sale by public auction" within section 167 of the Code, notice to the defaulter that such a procedure would be followed would be legally unnecessary and would not add to the legal efficacy of the sale.
If, on the other hand, such a sale or a sale in such circumstances was not a sale by public auction then notice to the defaulter could be of value only if (a) it operated as a waiver of the requirement of section 167, or (b) created an estoppel which precluded him from questioning the legality of the proceeding.
First as to waiver, the power of Government to effect the sale by summary process is a special provision resting on public grounds and being so very special it is clear that the limitations on the power thus conferred should be strictly construed.
In our opinion, it is an essential condition of the passing of property from the defaulter in invitem that there should be a sale by public auction and if a sale in the manner in which it has been conducted in the present case does not amount to a sale by public auction there is no question of the title to property passing by virtue of such a sale.
The plea of waiver cannot therefore be of any avail.
Nor is there any basis for any argument that by reason of the notice the defaulter is estopped from questioning the legality of the sale.
If waiver cannot cure the defect there is still less scope for invoking the rule as to estoppel, for the essential condition of estoppel, viz., representation by the person sought to be estopped and prejudice to the person seeking the benefit of the rule, would both be absent.
We therefore 339 come to the conclusion that the fact that the defaulter was informed that the Government would make a nominal bid of rupee one and purchase the property is really irrelevant for considering the validity of the sale.
The conclusion we have indicated earlier is in accord with the decision of the Bombay High Court in Tumdu Dhansing vs Government for the Province of Bombay(1) and we consider that that case is correctly decided.
We are further of opinion that the ratio of that decision would also cover the case where notice was served on the defaulter of the Govern ment 's intention to purchase the property for a nominal price.
Learned Counsel for the respondent raised several defenses besides seeking to support the judgment of the High Court on the reasoning of the learned judges and sought to sustain the impugned sale on various grounds.
His first submission was that the sale was at the worst irregular which rendered it voidable and that no suit having been brought within one year of the sale, the suit was barred by article 11 of the Indian Limitation Act.
We consider however that there is no substance in this contention because if, as we hold, a sale of the type now impugned was not authorised by the statutory provision in that regard then it was not a question of any mere irregularity in the conduct of a sale but a case where there was no sale at all with the consequence that no pro perty passed from the defaulter.
It was not disputed that article II of the Indian Limitation Act would only apply to a case where there is need for the setting aside of a sale and that it has no application to cases where no sale as contemplated by law has taken place.
It was next submitted that the appellants ' suit was barred by sections 4 (c) and II of the Bombay Revenue (1) 1.
L. R. 340 jurisdiction Act, 1876.
Section 4(c) runs: "4.
Subject to the exceptions hereinafter ' appearing, no Civil Court shall exercise jurisdiction as to any of the following matters: (a). . . . . . . (b). . . . . . . . (c). . . . . . . . claims to set aside, on account of irregularity, mistake or any other ground except fraud, sales for arrears of land revenue; and section 11 enacts: "11.
No Civil Court shall entertain any suit against the Government on account of any act or omission of any Revenue Officer unless the plaintiff first proves that previously to bringing his suit, he has presented all such appeals allowed by the law for the time being in force, as within the period of limitation allowed for bringing such suit, it was possible to present." As to the applicability of section 4 (c), it would be noticed that resort to the Civil Courts is barred only as regards certain specified classes of suits in which the validity of sales for arrears Land Revenue are impugned.
The classes so specified are those in which the plaintiff seeks to set aside a sale on account of irregularities etc.
, other than fraud.
The provision obviously assumes that there is in existence a sale though irregular under which title has passed to the purchaser and that sale has to be set side, on grounds other than fraud, before the plaintiff can obtain relief.
Where however there is only a purported sale which does not pass title and the suit is for recovery of possession of property ignoring 341 such a sale, the provision and the bar that it creates have no application.
Nor is there any scope on the facts of the present case to attract the application of section 11.
The section is based on the principle that a party must exhaust the remedies provided by the Act before he can seek the assistance of the Civil Court in respect of a claim against the Government.
It therefore posits three matters before its protection could be invoked.
(1) There must be an act or omission of a revenue officer which gives rise to a claim against the Government; (2) the Act must provide for appeals against the said act or omission; and (3) lastly the party should have failed to avail himself of the remedy by way of appeal to obtain redress for his grievance.
The only "act" of which, on the facts, the appellant could be said to complain would be the direction by the Collector anthorising the Mahalkari to offer the nominal bid of Re. 1/ and purchase the property.
The question that next arises is whether the Statute had provided an appeal against this "act" It was admitted that there was no such specific provision.
Learned Counsel for the respondent however drew our attention to section 203 of the Bombay Land Revenue Code.
In the absence of any express provision of this Act or of any law for the time being in force to the contrary, an appeal shall lie from any decision or order passed by a revenue officer under this Act or any other law for the time being in force, to that officer 's immediate superior, whether such decision or order may itself have been passed on appeal from a subordinate officer 's decision or order or not." In the present case however, there was no order by any authority which could be the subject of any appeal under section 203.
The Collector authorised administratively the Mahalkari to offer the bid and that is certainly not " 'a decision" which is capable of 342 appeal within section 203.
No other order which could by any stretch of language be construed to be a decision was pointed out in respect of which an appeal could have been filed.
In fact, there was no decision and except the sale which is complained of as void and of no effect nothing took place.
If section 203 is not attracted it was not suggested that section 1 1 of the Revenue jurisdiction Act created any bar to the entertainment of the present suit.
It was then suggested that the plaintiff was disentitled to any relief by reason of an estoppel raised by section 41 of the Transfer of Property Act.
The basis for this argument was that some time after the sale the second defendant had purchased the plot bearing Survey No. 80 for Rs. 2,600/ from the Government while the fifth defendant similarly purchased plots bearing Survey Nos. 35 and 40 for Rs. 1,750/ and that the inaction of the plaintiff without taking proceedings to set aside the sale constituted a representation to the world that the Government were properly the owners of the property which they had purchased for nominal bids and this was the reasoning by which section 41 of the Transfer of Property Act was sought to be invoked.
The argument has only to be stated to be rejected.
The respondent did not rely on any representation or any act or conduct on the part of the appellant but their belief that Government had acquired title by reason of their purchase at the revenue sale.
If the Government had no title to convey, it is manifest the respondents cannot acquire any.
They would clearly be trespassers.
In the circumstances we consider there is no scope for invoking the rule as to estoppel contained in section 41 of the Transfer of Property Act.
Lastly, it was submitted that the respondents had made improvements to the property since they had purchased them for which they were entitled to compensation under section 51 of the Transfer of Property Act.
But no basis was laid for this plea which is 343 one of pure fact.
No evidence was led and no issues struck before the trial judge and we do not therefore think it proper to entertain this point at this stage.
The Government of Bombay did not file any Written Statement before the trial judge, nor did they seek to support the sale before the High Court.
As we have stated, they were impleaded as the first respondent in the appeal before this Court.
In their statement of the case which they filed they did not oppose the appeal but left it to the Court to decide the matter and they took no part in the hearing except that learned Counsel appearing on their behalf made a statement that no order as to costs might be passed against them.
In the result the appeal is allowed and the suit decreed as regards the three items of land bearing Survey Nos. 35, 40 and 80.
The appeal will however stand dismissed as regards the,house in village Kurhe.
In view of the partial success of the appellant the appellant will be entitled to half of the costs of the appeal here to be paid by the respondents other than the State of Bombay (now Maharashtra).
Appeal partly allowed.
[/INST]A sum of about Rs. 9,000 was due from the appellant to the Government on account of excise dues.
The movable and immovable property of the appellant was several times put for sale by auction under Ch.
XI Bombay Land Revenue Code but the amount remained unrecovered and three items of lands remained unsold.
In view of a Government Order dated August, 30, 1933, which prescribed such a course, the Mahalkari sought permission of the Collector to make a nominal bid of Re. 1/for each item of land in the next auction.
The permission was granted and the Mahalkari informed the appellant that if no bidders came forward at the next auction the lands would be sold at the nominal price of Re. 1.
The auction was held and as no stranger came to bid the Mahalkari made the nominal bid of Re. 1 for each item of land.
The bid was accepted and the sales were later confirmed.
Subsequently, the Collector sold these lands for adequate consideration and the purchasers were put in possession.
The appellant filed a suit challenging the validity of these sales.
The purchasers contended that the suit not having been brought within one year of the sales was time barred, that the suit was barred by sections 4(c) and 1 1 of the Bombay Revenue jurisdiction Act and, that the appellant was disentitled to relief on the ground of acquiescence and estoppel.
Held, that the Sales were invalid and the suit was liable to be decreed.
The purchase for a predetermined nominal price of Re 1, irrespective of the actual market value was not a sale by public auction as contemplated by section 167 of the Bombay Land Revenue Code.
An auction is.
a proceeding at which people are invited to compete for purchase of property by successive offers of advancing sums and a sale by auction is a means of ascertaining what the property is worth i.e. its fair 323 market price If at the sale there are no bids there cannot be a sale.
The Government Order had no statutory force at all, and could not authorise or render valid the transaction if otherwise it lacked a legal basis.
There was no provision in the Code which authorised such a course which amounted to forfeiture of the property of a defaulter.
It was anomalous that the Collector who moved the machinery for realisation of arrears by sale and who was constituted the authority to determine judicially allegation of irregularity in the conduct of the sale should, without authority of any statutory power, bid at the auction conducted by his deputy.
The mere fact that the appellant had been informed before hand of the nominal bid did not render the sales valid.
Nor was the appellant estopped from questioning the legality of the sales.
Tumdu Dhansing vs Government for the Province of Bombay, I.L.R. , approved.
The suit was not barred by article 11 of the Limitation Act.
The article was applicable only to cases where there was need for setting aside a sale and not to cases where no sale as contemplated by law had taken place.
The provisions section 4(c) Bombay Revenue jurisdiction Act, 1876 applied to cases where there was a sale and it was sought to be set aside on the ground of irregularities other than fraud.
They did not apply where there was only a purported sale which did not pass title, Section 1 1 barred a suit when there was an appeal provided against the act or omission of a revenue officer and the party failed to avail of the remedy.
in the present case there was no order which was appealable under section 203 and section 1 I could not be applied.
There was no scope for invoking the aid of section 41 Transfer of Property Act.
The purchasers had not relied upon any representation, act or conduct of the appellants but on the belief that Government had acquired a good title to the lands.
If the Government had no title the purchasers could not acquire any.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 123 of 1952.
Appeal against the Judgment and Order, dated the 22nd March, 1951, of the High Court of Judicature at Calcutta (Harries C.J. and Banerjee J.) , in Reference No. 2 of 1951 in Civil Rules Nos. 20 and 21 of 1950.
December 11.
The Judgment of the Court was delivered by PATANJALI SASTRI C.J.
This is an appeal from a judgment, of the High Court of Judicature at Calcutta declaring certain provisions of the West Bengal Land Development and Planning Act, 1948, (hereinafter referred to as the "impugned Act ") unconstitutional and void.
The impugned Act was passed on October 1, 1948, primarily for the settlement of immigrants who had migrated into the Province of West Bengal due to communal disturbances in East Bengal,and it 560 provides for the acquisition and development of land for public purposes ' including the purpose aforesaid.
A registered Society called the West Bengal Settlement Kanungoe Co operative Credit Society Ltd., respondent No. 4 herein, was authorised to undertake a development scheme, and the Government of the State of West Bengal, the appellant herein, acquired and made over certain lands to the society for purposes of the development scheme on payment of the estimated cost of the acquisition.
On July 28, 1950, the respondents I to 3, the owners of the lands thus acquired, instituted a suit in the Court of the Subordinate Judge, 11 Court at Alipore, District 24 Parganas, against the society for a declaration that the impugned Act was void as contravening the Constitution and that all the proceedings taken thereunder for the acquisition aforesaid were also void, and of no effect and for other consequential reliefs.
The State of West Bengal was subsequently impleaded as a defendant.
As the suit involved questions of interpretation of the Constitution respondents 1 to 3 also moved the High Court under article 228 of the Constitution to withdraw the suit and determine the constitutional question.
The suit was accordingly transferred to the High Court and the matter was heard by a Division Bench (Trevor Harries C.J. and Banerjee J.) who, by their final judgment, held that the impugned Act as a whole was not .unconstitutional or void save as regards two of the provisions contained in section 8 which, so far as it is material here, runs as follows: "A declaration under section 6 shall be conclusive evidence that the land in respect of which the declaration is made is needed for a public purpose and, after making, such declaration, the Provincial Government may acquire the land and thereupon the provisions of the Land Acquisition Act, 1894, (hereinafter in this section referred to as%, the said Act), shall, so far as may be, apply: Provided that (b) in determining the amount of compensation to be awarded for land acquired in pursuance of this 561 Act the market value referred to in clause first of sub section (1) of section 23 of the said Act shall be deemed to be the market value of the land on the date of publication of the notification under sub section (1) of section 4 for the notified area in which the land is included subject to the following condition, that is to say if such market value exceeds by any amount the market value of the land on the 3 1 st day of December, 1946, on the assumption that the land had been at that date in the state in which it in fact was on the date of publication of the said notification, the amount of such excess shall not be taken into consideration.
" The provision making the declaration of the Government conclusive as to the public nature of the purpose of the acquisition and the limitation of the amount of compensation so as not to exceed the market value of the land on December 31, 1946, were declared ultra vires the Constitution and void.
The Attorney General, appearing for the appellant, rightly conceded that inasmuch as article 31(2) made the existence of a public purpose a necessary condition of acquisition the existence of such a purpose as a fact must be established objectively and the provision in section 8 relating to the conclusiveness of the declaration of Government as to the nature of the purpose of the acquisition must be held unconstitutional but he contended that the provision was saved by article 31(5)of the Constitution which provides: "Nothing in clause (2) shall affect (a) the provisions of any existing _ law other than a law to which the provisions of clause (6) apply, or. . . " Clause (6) reads thus: "Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the President for his certification; and, thereupon, if the President public notification so certifies, it shall not be called question in any court on the ground that it contract the provisions of clause (2) of this article, 562.
contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935.
" It was argued that the impugned Act having been passed within 18 months before the commencement of the Constitution and not having been submitted to the President for his certification, it was a law to which the provisions of clause (6) did not apply and, therefore, as an existing law, the impugned Act was not affected by clause (2) of that article.
The argument is manifestly unsound.
Article 31(6) is intended to save a State law enacted within 18 months before the commencement of the Constitution provided the same was certified by the President while, article 31(5) saves all existing laws passed more than 18 months before the commencement of the Constitution.
Reading the two clauses together, the intention is clear that an existing law passed within 18 months before January 26, 1950, is not to be saved unless it was submitted to the President within three months from such date for his certification and was certified by him.
The argument, if accepted, would reduce article 31(6) to ameaningless redundancy.
The only serious controversy in the appeal centred round the constitutionality of the " condition " in proviso (b) to section 8 limiting the compensation payable so as not to exceed the market value of the land on December 31, 1946.
The Attorney General, while conceding that the word " compensation " taken by itself must mean a full and fair money equivalent, urged that, in the context of article 31(2) read with entry No. 42 of List III of the Seventh Schedule, the term was not used in any rigid sense importing equivalence in value but had reference to what the legisla ture might think was a proper indemnity for the loss sustained by the owner.
Article 31(2) provides: No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken sesion of or acquired for public purposes under law authorising the taking of such possession acquisition, unless the law provides for 563 compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given.
and entry 42 of List III reads thus Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given.
It is argued that the term " compensation " in entry 42 could not mean full cash equivalent, for then, the power conferred on the legislature to lay down the principles on which compensation is to be determined and the form and the manner in which such compensation is to be given would be rendered nugatory.
On the other hand, the entry showed that the compensation to be "given " was only " such compensation " as was determined on the principles.
laid down by the law enacted in exercise of the power, and, as the concluding words used in article 31(2) are substantially the same as in the entry, the Constitution, it was claimed, left scope for legislative discretion in determining the measure of the indemnity.
We are unable to agree with this view.
While it is true that the, legislature is given the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated, such principles must ensure that what is determined as payable must be compensation, that is, a just equivalent of what the owner has been deprived of.
Within the limits of this basic requirement of full indemnification of the expropriated owner, the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable.
Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are 74 564 to be neglected, is a justiciable issue to be adjudicated by the court.
This, indeed, was not disputed.
Reference was made to certain Australian cases where the opinion was expressed that the terms of compulsory acquisition of property were matters of legislative policy and judgment.
The decisions largely turned on the absence of any constitutional prohibition in regard to deprivation of private property without compensation as in the Fifth Amendment of the American Constitution and on the use of the words " just terms " instead of " compensation " in section 51 (xxxi) of the Commonwealth Constitution which conferred power on the Parliament to make laws with respect to " the acquisition of property on just terms from any State or person. . " (cf.
Grace Brothers Pty. Ltd. vs The Commonwealth(1).
Those decisions, therefore, are of no assistance to the appellant here.
Turning now to the provisions relating to compensation under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market value of the land on December 31, 1946, no matter when the land is acquired.
Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came in.
to force, the fixing of the market value on December 31,1946, as the ceiling on compensat I ion, without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compliance in letter and spirit with the requirement of article 31 (2).
The fixing of an anterior date for the ascertainment of value may not, in certain circumstances, be a violation of the constitutional requirement as, for instance, when the proposed scheme of acquisition becomes known before it is launched and prices rise sharply in anticipation of the benefits to be derived under it, but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary.
The learned Judges (1) ; 565 below observe that it is common knowledge that since the end of the war land, particularly around Calcutta, has increased enormously in value and might still further increase very considerably in value when the pace of industrialisation increases.
Any principle for determining compensation which denies to the owner this increment in value cannot result in the ascertainment of the true equivalent of the land appropriated.
We accordingly hold that the latter part of proviso (b) to section 8 of the impugned Act which fixes the market value on December 31, 1946, as the maximum compensation for lands acquired under it offends against the provisions of article 31 (2) and is unconstitutional and void.
The appeal is dismissed with costs.
Appeal dismissed.
Agent for respondents Nos. 1, 2 and 3: section C. Banerjee.
Agent for the intervener: G. H. Rajadhyaksha.
[/INST]The West Bengal Land Development and Planning Act, 1948, passed primarily for the settlement of immigrants who had migrated into West Bengal due to communal disturbances in East Bengal provides for the acquisition and development of land for public purposes including the purpose aforesaid: Held, that the provisions of section 8 of the West Bengal Act XXI of 1948 making the declaration of the Government.
conclusive as to the public nature of the purpose of the acquisition and the limitation of the amount of compensation so as not to exceed the market value of the land on December 31, 1946, are ultra vires the Constitution and void 559 (i)inasmuch as article 31(2) of the Constitution made the existence of a public purpose a necessary condition of acquisition, the existence of such a purpose as a fact must be established objectively ; (ii)that in view of the fact that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946, as the coiling on compensation without reference to the value of the land at the time of acquisition, is arbitrary and cannot be regarded as due compliance in letter and spirit with the requirements of article 31(2) (iii)the Act is not saved by article 31(5) from the operation of article 31(2) as it was not certified by the President as provided for by article 31(6).
Held, further, that while entry No. 42 of List III of the Seventh Schedule confers on the legislature the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner of the property appropriated, article 31(2) requires that such principles must ensure that what is determined as payable must be "compensation", that is, a just equivalent of what the owner has been deprived of.
Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected is a justiciable issue to be adjudicated by the Court.
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<s>[INST] Summarize the judgementCivil Appeal No. 1512 of 1971.
Appeal by Special Leave from the Judgment and order dated the 8th/9th December, 1970 of the Gujarat High Court in Sales Tax Reference No. 3/70.
section T. Desai and M. N. Shroff for the Appellant.
V. section Desai, Vimal Dave and Miss Kailash Mehta, for the Respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
This is an appeal by special leave against the Judgment of the Gujarat High Court dated 8th/9th December, 1970.
The respondent (hereinafter to be described as the assessee) entered into a contract with the Public Works Department of the Government of Gujarat on September 6, 1965 for manufacture and supply of kiln burnt bricks to the said Department for the construction of the Capital Project, Ghandhinagar.
Large quantities of bricks were manufactured and supplied under the contract and the applicant received payment for the same in accordance with the agreed rates.
The assessee made an application under section 52 of the Bombay Sales lax Act, 1959, on November 19, 1967, to the Deputy Commissioner of Sales Tax, to determine the question whether the said supplies of bricks by the assessee to the Public Works Department were sales or works contract.
The Deputy Commissioner held the supplied of bricks by the assessee as sales.
The assessee then appealed to the Tribunal against that order.
The Tribunal following the ratio of the decision of this Court in Chandra Bhan Gosain vs The State of orissa and others(1) came to the conclusion that the supplies of bricks were sales.
At the instance of the assessee, the Tribunal referred the following question of law to the High Court: "Whether on the facts and in the circumstances of the case the transaction envisaged by the contract entered into by the applicant with the Public Works Department of the Govern (1) 14 S.T.C. 766: 119641 2 S.C.R. 879.
160 ment of Gujarat on 6th September 1965 for the manufacture and supply of kiln burnt bricks to the said Department and the supply of bricks to the said Department in terms of their running Bill No. XI dated 28th October 1967 is a sale or a works contract ? The High Court answered the question in favour of the assessee holding that the transaction was a works contract.
In coming to that conclusion the High Court hold as follows: In our opinion the decision of the Supreme Court in Chandra Bhan Gosai 's case (supra) is clearly distinguishable on facts.
The contract in that case though prima facie word cd as regards the relevant clauses in similar fashion as the contract in the instant case is in fact cast in a different mould and it would be difficult to hold in the light of the special features and characteristics of the contract with which we are concerned that the decision of the Supreme Court in that case would completely govern the facts of this case.
" Mr. section T. Desai, the learned counsel for the appellant submits that the present case is squarely governed by the decision in Chandra Bhan Gosain 's case (supra) and the High Court is wrong in holding to the contrary.
Mr. V. section Desai learned counsel appearing on behalf of the assesee, on the other hand submits that the High Court is right in distinguishing the present case in view of certain distinguishing features of the contract With which we are concerned.
It is well settled that whether a particular transaction is a contract of sale or works contract depends upon the true construction of all the terms and conditions of the document when there is one.
The question will depend upon the intention of the parties executing the contract.
As we have observed ill our judgment in State of Gujarat vs Variety Body Builders(1) which we have just delivered there is no standard formula by which one can distinguish a contract of Sale from contract for work and labour.
The question is not always easy and has for all time vexed jurists all over.
The distinction between a contract of sale of goods and a contract for work and labour is often a fine one.
A contract of sale is contract whose main object is the transfer of the property in and the delivery of the possession of a chattel as a chattel to the buyer.
(Halsbury 's Laws of England Third Edition Volume 34 page 6.) The contract with which we are concerned in this appeal is found in a tender for the supply of materials containing a memorandum of the conditions.
The nature of work is described as manufacturing and supplying kiln burn bricks for construction of Gandhinagar .
The question will depend upon the true construction of the tender which on acceptance is treated here as the contract containing all the terms and conditions agreed upon between the two parties.
In the tender the assessee stated I/We chairman Sabarmati Rati Udyog Sahakari Mandi (1) 161 Ltd., the undersigned do hereby tender for the supply of the materials described in the Schedule attached herewith subject to the conditions annexed.
The schedule described materials as bricks and also stated quantities to be delivered", and "rate at which to be supplied".
The tender is described as "Supply of Materials Tender".
Although the above nomenclature, by itself, is not decisive, we find that the same is justified by the principal terms governing the contract to which we will presently refer. ` "Clause 6:The contractor shall give notice to the Executive Engineer or his Assistant of his intention of making delivery of materials and on the materials being approved, receipt shall be granted to him by the Executive Engineer or by his Assistant and no materials which is not so approved shall be considered to have been delivered.
Clause7: on the completion of the delivery of materials, the contractor shall be furnished with a certificate to that effect, but the delivery shall not be considered to be complete until the contractor shall have removed all rejected materials, and shall have the approved materials, stacked or placed in such position as may be pointed out to him.
Clause 8: The materials to be supplied shall be of the best quality and in strict accordance with the specification and the contractor shall receive payment for such materials only as are approved and passed by the Executive Engineer or his Assistant .
Should the Executive Engineer consider that any of the materials delivered are not of the best quality are not in strict accordance with the specification but that they may be accepted and made use of it shall be within his full discretion to accept the same at such reduced rates as he may fix thereon.
Clause 9: In the event of the material being considered by the officer in the charge OF the work to be inferior to that described in the specifications, the contractor shall on demand in writing, forthwith to remove the same at his own cost and in the event of his failure to do so, within such period as may be named by the Executive Engineer or his Assistant, the said officer may have such reject ed material removed at the contractor 's risk and expense, the expense so incurred being deducted from any sums due or which may become due to the contractor.
13 833 Sup.
C1/76 162 Clause 11: The contractor shall supply at his own expense all tools, plants and implements required for the due fulfilment of his contract, and the materials shall remain at his risk till the date of final deli very, except such portion as shall have been in the meantime removed for use by the Executive Engineer or his Assistant.
Clause 13:This contract shall not be sublet without the written permission of the Executive Engineer.
In the event of the contractor subletting his contract without such permission he shall be considered to have thereby committed a breach of the contract and shall forfeit his security deposit, and shall have no claim for any compensation for any loss that may accrue on account of the collection of the materials or engagements entered into.
Clause 16:No guarantee can be given that the total number of quantities of material indicated in the Schedule of the contract will be ordered during the period of the contract.
But, the Executive Engineer shall purchase from the contractor all such materials as are detailed in the Schedule which he may require to purchase during the period of the contract.
Clause 17:No claim or claims made by the contractor for increased rates on the grounds that the market or other rates included in the contract, have risen during the period of his contract, will be recognized that is to say, the contractor is bound to complete the work and or to supply materials at the rates mentioned in the contract.
Clause 22:ALL rates quoted by the contractors arc inclusive of sales tax and the contractor will pay the same himself, Clause24: The contractor hereby declares that the articles sold to the buyer under this contract shall be of the best quality (and workmanship) and shall be strictly in accordance with the specifications and particulars contained in the Schedule and accompaniments hereof and the contractor hereby guarantees that the said articles would continue to conform to the description and quality aforesaid for the period shown in the Schedule from the data of delivery of the said articles to the purchaser and that notwithstanding that fact that 163 the purchaser may have inspected and approved, the said articles if during the aforesaid period stated in the Schedule the said articles be discovered not to conform to the description and quality aforesaid or have deteriorated and the decision of the purchaser in that behalf shall be final and conclusive.
The purchaser will be entitled to reject the said articles on such portion thereof as may be discovered not to conform to the said description and quality on such rejection the articles will be at the sellers ' risk and all the provisions herein contained relating to rejection of goods, etc.
shall apply.
The cont tractor shall if so called upon to do, replace the articles etc.
Or such portion thereof as is rejected by the purchaser otherwise the contractor shall pay to the purchaser such damages as may arise by any of the breach of the condition herein contained, nothing herein contained shall prejudice any other right of the purchaser in that behalf under this contract or otherwise.
" Amongst some of the general conditions of the contract, we find the following: "Clause3: All the necessary arrangements of raw materials, equipment water, coal, labour etc.
required for supply and manufacture of bricks shall have to be made by the contractor at his own cost.
The Government shall give only land for excavating soil for manufacture of bricks to the contractors free of rent from the land reserved by the.
Government for this purpose.
The land shall have to be handed over back to the Government after the manufacturing of the brick work is completed.
* * * * Clause 10:The contractor shall have no right to sell these bricks, brick bats, chharas or any other mate rials manufactured on this site to any other private parties.
If, however, it is found that the materials have been sold by him to private parties or other bodies, he shall have to pay to Department at the rate of 10% of the value of materials at the tender rates.
" While giving the specifications Item No. l herein refers to "manufacturing and supplying of 1 Class kiln burnt bricks of standard size including stacking in regular consignments etc.
as directed".
164 Mr. V. section Desai brings to our notice the common as well as the distinguishing features of this case and of Chandra Bhan Gosain 's case (supra).
According to him the common features are the following: The land was given free for manufacture of bricks in both the cases.
The materials shall remain at the contractor`s risk till the date of final delivery.
in Chandra Bhan Gosain`s case (supra) the contractor could not sell the bricks to third parties without previous permission of the company .
Here also the contractor has no right to sell the bricks etc.
but if he does sell he will have.
to pay 10 percent of the value of the materials at the tender rates.
Both the Clauses are, therefore, permissive Clauses and are substantially the same.
In both the contracts the contracting parties have used the words such as sell, purchase, deliver or rate of supply etc.
in the contract.
In Chandra Bhan Gosain`s case (supra) dealing;, with those very common features this Court observed as follows: "lt may be presumed that it was understood that in quoting his rate for the bricks, the appellant would take into account the free supply of earth for making the bricks.
Again what was supplied to the company by the appellant was not the earth which he got from it but bricks, which, we think, are something entirely different.
It could not have been in intended that the property in the earth would continue in The company in spite of its conversion into such a different thing as bricks.
Further we find that the contract provided that the bricks would remain at the appellant`s risk till delivery to the company.
Now, obviously bricks could not remain at the appellants risk unless they were his property.
Another Clause provided that the appellant would not be able to sell the bricks to other parties without the permission of the company.
Apparently, it was contemplated that without such a provision the appellant could have sold the bricks to others.
Now he could not sell the bricks at all unless they belonged to him.
Then we find that in the tender which the appellant submitted and the acceptance of which made the contract, he stated, "I/we hereby tender for the supply to the Hindus than Steel Private Ltd.
Of the materials described in the undermentioned memorandum.
The memorandum described the materials as bricks, and also stated the 'quantities to be delivered ' and the 'rate at which materials are to be supplied '.
All these provisions plainly show that the contract was for sale of bricks.
If it were so, the property in the bricks must have been in the appellant and passed from him to the subject matter.
From the above extract, it is clear.
that the decision in Chandra Bhan Gosain 's case (supra) will govern the present case where terms and conditions are almost identical so far as relating to the relevant subject matter.
165 Mr. Desai, however, took pains to point out certain distinguishing features of the present case such as maintenance of qualified Executive Engineer for supervision of work subject to removal at the instance of the Government; restriction on employment of children under 12 years; labour welfare provisions regarding wages; workmen 's compensation, etc.; provisions in relation to prevention of cruelty to animals; non payment of royalty for excavating earth; use of tube wells standing on the Government site manner of execution of the work regarding moulding and drying and provision against subletting which shall constitute a breach of the contract resulting in forfeiture of security deposit.
All the above terms relate to a stage in the process of proper and efficient manufacturing of bricks and are not inconsistent in a contract of sale.
These terms do not appear to impinge on the character of the contract as one for sale of the bricks manufactured.
The Government in its overall interest and anxiety for general welfare could insist on compliance with certain beneficial legal measures.
It could also insist on certain terms which will ensure efficient production of the material.
Provision against subletting when the land was given free by Government is also understandable.
All the above features do not negate the concept of a contract of sale of the bricks that are ultimately manufactured.
The true test in this case is whether in making the contract to brick produced was transferred as a chattel for consideration and we are clearly of opinion that this has taken place in this case.
The property in the bricks was entirely of the assessee.
He had not only to manufacture that but also to stack them for facilitating delivery.
The essence of the contract was, therefore.
the delivery of the bricks after manufacture.
The present case cannot be distinguished from the decision of the Chandra Bhan Gosain`s case (supra).
We are, therefore, clearly of opinion that the contract in this case is a contract of sale and not a works contract.
The assessee is, therefore liable to sales tax.
The question is answered accordingly.
The High Court was not right in answering the question in favour of the assessee.
The decision of the High Court is set aside.
The appeal is allowed with costs.
S.R. Appeal allowed.
[/INST]The assessee made a full disclosure of his income and claimed expenses incurred for the maintenance of his immature rubber plantations as deductions.
The Agricultural Income Tax Officer, after considering the matter, allowed such deductions as he thought proper.
The appellant Commissioner, in exercise of his revisional powers under section 34, Kerala Agricultural Income Tax Act, 1950, issued notice to the respondent (widow of the assessee) proposing to revise the assessment on the ground that the deductions allowed were excessive.
The appellant, after considering the respondent 's objections, held that the deductions allowed were excessive and remanded the matter to the Agricultural Income Tax Officer for fresh disposal according to law.
At the instance of the respondent, the question whether the appellant had jurisdiction to pass the order under section 34 was referred to the High Court, and the High Court, on the view that it was a case of re opening escaped assessment held, relying on Maharajadhiraj Sir Kameshwar Singh vs State of Bihar, , that the power of revision vested in the Commissioner under section 34 could not be invoked for the purpose of assessing income that had escaped assessment, and that such income could be assessed only by resorting to the procedure prescribed by section 35.
within the time limit prescribed therein.
Allowing the appeal to this Court, ^ HELD:(1) Every case of under assessment is not a case of escaped assessment.
The Agricultural Income Tax Officer may have committed an error in allowing the deductions to the extent he did, but he did so after applying his mind to the claims.
This is not a case where the officer omitted to assess any item of income disclosed in the assessee 's return as in the case relied on by the High Court and as in kamal Singh vs C.I.T.
Therefore, it is not a case of reopening escaped assessment.
[662F H] Deputy Commissioner of Agricultural Income tax and Sales Tax, Quilon and another vs Dhanalakshmi Vils Cashew Co., (1969) 24 S.T.C. 491, followed.
(2) Since it is not a case of escaped assessment, the appellant had jurisdiction to make the order under section 34.
[663B]
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<s>[INST] Summarize the judgementminal Appeal No. 165 of 1960.
Appeal from the judgment and order dated July 22, 1960, of the Calcutta High Court in Criminal Appeal No. 448 of 1960.
A.S.R. Chari, N.S. Bindra, and D.N. Mukherjee, for the appellant.
B. Sen, section C. Mazumdar and P. K. Bose., for respondent.
April 22.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
The appellant Chittaranjan Das was charged with having commited an offence punishable under section 376 I.P.C.
This charge was framed against him on three counts.
It 240 was alleged that between November 18, 1958 and November 21, 1958 at 29A and B, Kailash Bose Street, Calcutta, lie committed rape on Sandhyarani Das Gupta alias Nirmala.
The second count was that he committed the same offence at the same place and in respect of the same girl between December 1, 1958 and December 6, 1958 ; and the third count related to the commission of the said offence between December 9, 1958 and December 15, 1958 at the same place and in respect of the same girl.
Along with the appellant, Ganesh De was charged with having abetted the appellant in the commission of the said offence, the charge framed against Ganesh De being under section 376 read with section 109 of the Indian Penal Code.
The learned Presidency Magistrate, 8th Court, Calcutta, held the commitment proceedings, and was satisfied that the evidence adduced by the prosecution before him made out a prima facie case against both the accused persons.
Since the offence in question was triable exclusively by the Court of Sessions, the learned Magistrate committed them to the Sessions on May 4, 1960.
The case of the appellant and his co accused was then tried by the City Sessions Court at Calcutta with the aid of jury.
The jury returned a verdict of guilty against the appellant in respect of all the three counts.
A similiar verdict was brought by the jury in respect of the co accused Ganesh De.
The learned Sessions judge took the view that the verdict of the jury was not perverse, and so, he decided to accept the said verdict and accordingly convicted the appellant under section 376 and sentenced him to suffer rigorous imprisonment for four years on the first charge.
No separate sentence was awarded in respect of the other charges.
Ganesh De was also sentenced to a similiar period of imprisonment.
This order was passed on July 9, 1960.
241 The appellant challenged the correctness of the order of conviction and sentence passed against him by the learned Sessions judge by preferring an appeal before the Calcutta High Court.
A Division Bench of the said High Court did not feel impressed by the points made on appellant 's behalf, and so, his appeal was summarily dismissed on July 22, 1960.
The appellant then applied for a certificate under Article 134 (1) (c) of theConstitution.
This application was allowed by Labiri C.J. and Bose J. on the ground that some of the points which the appellant wanted to raise before this Court by his appeal were substantial points of law, and so ' _they granted him a certificate under the said Article.
It is with this certificate that the appellant has come to this Court.
Before dealing with the points which fall to be considered in the present appeal, it is necessary to state briefly the material facts leading to the prosecution of the appellant.
Sandhyarani Das Gupta was a minor girl who was staying with her mother Soudamini in the Refugee Colony at Ghola.
It appears that one Maniprova alias Manibala Majumdar induced this young girl to go to her house 'at Ashutosh Mukherjee Road, Bhowanipur some time in the first week of November 1958.
Manibala induced Sandhya to go to her place with a promise that she would secure a nurse 's job for her.
The appellant was the Zonal Officer of the Refugee Rehabilitation Office at Tollygunge at that time and, according to the prosecution, the co accused Ganesh De was a Peon in the said office.
The prosecution alleged that in course of time, Sandhya was taken to the appellant in his house in about the middle of November 1958 on the representation that the appellant wanted to give her employment.
When Sandhya met the appellant, the appellant held out the hope of a job for her and he managed to ravish her.
Similarly, Sandhya was taken to the house of the appellant on two or three occasions within a 242 period of one month and each time the appellant had sexual intercourse with her.
Every time this happened the appellant promised that he would provide Sandhya with a job.
The prosecution case is that as a result of this sexual intercourse, Sandhya conceived and the appellant was anxious to cause her abortion.
In accordance with the plan, Mani bala attempted to cause her abortion but did not succeed, and so, the girl was taken to the Chittaranjan Sevasadan on February 11, 1959 where the abortion was completed.
Some time, thereafter, she was sent back to her own house on her insistance.
It appears from the evidence that Sandhya was again taken to the house of the appellant and was ravished by him.
This happened on two or three occasions again.
At one of these meetings with the appellant, Sandhya was introduced to a young man named Himangsu Ganguli.
This young man had approached the appellant for a job.
The appellant exploited the helpless position of both Himangsu and Sandhya, and asked them to go through a show of marriage.
Thereafter, the appellant wanted a photograph in proof of their marriage and a group photo was accordingly taken with Ganesh De, Manibala, Himangsu and Sandhya, the last two having posed as husband and wife.
Himangsu and Sandhya then went to the house of the appellant and gave him a copy of the photograph.
This time again Sandhya was ravished by the appellant.
That, in broad outlines, is the prosecution case against the appellant.
On June 6, 1959, Sandhya 's mother filed a complaint that her daughter had disappeared.
This complaint was investigated by the Enforcement Branch Calcutta, and in consequence, Sandhya was recovered from the house of Ganesh De on June 10, 1959.
She was then taken to the Tollygunge Police Station where her statement was recorded.
It, however, appeared that the offence which on 243 Sandhya 's statement seemed to have been committed by the appellant was within the jurisdiction of the Amherst Street Police Station, and so, the case papers were transferred to the said Police Station.
Sandhya 's statement was again recorded at this Police Station on June 12, 1959.
As a result of the statement, Challan was forwarded which specified November 14, 1958, May 30, 1959 and June 6, 1959 as the dates on which the appellant had raped Sadhya.
Subsequently, the appellant was arrested and he along with the co accused was charged before the Court of the Presidency Magistrate as we have already mentioned.
In 'granting certificate to the appellant, the High Court has held that the point which the appellant sought to raise in regard to the invalidity and illegality of the charge was a point of substance.
In fact, it has observed that the scheme of section 222 of the Criminal Procedure Code seems to suggest that the charge framed in the present case con travened the requirement of section 222 (1), and was therefore, invalid.
The High Court also appears to have thought that this contention received support from a decision of the Calcutta High Court in Ali Hyder vs Emperor, (1).
It is, therefore, necessary to examine this argument at the outset.
We have already set out the 3 counts of the charge framed against the appellant and we have noticed that in the three counts periods were mentioned within which the appellant was alleged to have committed rape on Sandhya.
The first period was between 18.11.1958 to 21.11.1958, second was 1.12.1958 to 6.12.1958 and the third was 9.12.1958 to 15.12.1958.
The argument is that section 222 (1) Cr.
P.C. requires that the charge must specify, inter alia, the particulars as to the time when the offence was committed, and this means that the precise date on which and the time at which the offence was committed must be stated (1) 244 in the charge.
Before dealing with this argument, it is necessary to read section 22 : "(1) The charge shall contain such particulars as to the time and place of the alleged offence and the person (if any) against whom, or the thing (if any) in respect of which, it was committed, as are reasonably sufficient to give the accused notice of the matter with which he is charged.
(2) When the accused is charged with criminal breach of trust or dishonest misappropriation of money, it shall be sufficient to specify the gross sum in respect of which the offence is alleged to have been committed, and the dates between which the offence is alleged to have been committed, without specifying particular items or exact dates, and the charge so framed shall be deemed to be a charge of one offence within the meaning of section 234 : Provided that the time included between the first and last of such dates shall not exceed one year.
" The appellant 's contention is that it is only in cases under section 222 (2) where the prosecution is not required to specify the precise date and time at which the offence is committed ; and that means that it is only in respect of the offences of criminal breach of trust or dishonest misappropriation of money to which the said sub section applies that liberty may be claimed by the prosecution not to mention the date and time of the offence.
In all other cases to which section 222 (1) applies, particulars as to the time and place of the alleged offence must be specifically mentioned.
In our opinion, this contention is not well founded.
In fact, Mr. Chari who appeared for the appellant himself fairly conceded that in almost every charge 245 to which section 222 (1) applies, it is usual to state that the particular offence was committed on or about a certain date.
In other words, it is not suggested by Mr. Chari that the specific date and the specific time must necessarily be stated in the charge in every case.
If it is permissible to say in a charge that a particular offence was committed on or about a specified date, without specifying the particular time, it is difficult to hold that because a period of four or five or six days is indicated in the charge within which the offence is alleged to have been committed section 222 (1) has been contravened.
It is true that sub section (2) specifically deals with two kinds of offences and makes a provision in respect of them, but that is not to say that in every other case, the time must be so specifically mentioned as to indicate precisely the date and the time at which the offence was committed.
It is quite clear that of the charge mentions unduly long period during which an offence is alleged to have been committed, it 'would be open to the criticism that it is too vague and general, because there can be no dispute that the requirement of section 222 (1) is that the accused person must have a reasonably sufficient notice as to the case against him.
The basic requirement in every criminal trial therefore, is that the charge must be so framed as to give the accused person a fairly reasonable idea as to the case which he is to face, and that validity of the charge must in each case be determined ' by the application of the test, viz., had the accused a reasonably sufficient notice of the matter with which he was charged ? It is quite conceivable that in some cases by making the charge too vague in the matter of the time of the commission of the offence an accused person may substantially be deprived of an opportunity to make a defence of alibi, and so, the criminal courts naturally take the precaution of framing charges with sufficient precision and particularity 246 in order to ensure a fair trial ; but we do not think it would be right to hold that a charge is invalid solely for the reason that it does not specify The particular date and time at which any offence is alleged to have been committed.
In this connection, it may be relevant to bear in mind that the . requirements of procedure are generally intended to subserve the ends of justice, and so, undue emphasis on mere technicalities in respect of matters which are not of vital or important significance in a criminal trial, may sometimes frustrate the ends of justice.
Where the provisions prescribed by the law of procedure are intended to be mandatory, the legislature indicates its intention in that behalf clearly and contravention of such mandatory provisions may introduce a serious infirmity in the proceedings themselves ; but where the provisions made by the law of procedure are not of vital importance, but are, nevertheless, intended to be observed, their breach may not necessarily vitiate the trial unless it is shown that the contravention in question has caused prejudice to the accused.
This position is made clear by sections 535 and 537 Cr.
P. C. Take, for instance, the case of murder where the prosecution seeks to prove its case against an accused person mainly on circumstantial evidence.
In such a case, investigation would generally begin with, and certainly gather momentum after the discovery of the dead body.
In cases of circumstantial evidence of this character, it would be idle to expect the prosecution to frame a charge specifying the date on which the offence of murder was committed.
All that the prosecution can do in such cases is to indicate broadly the period during which the murder must have been committed.
That means the precision of the charge in respect of the date on which the offence is alleged to have been committed will depend upon the nature of the information available to the prosecution in a given case.
Where 247 it is possible to specify precisely the necessary particulars required by 'section 222 (1), the prosecution ought to mention the said particulars in the charge, but where the said particulars cannot be precisely specified in the charge having regard to the nature of the information available to the prosecution, failure to mention such particulars may not invalidate the charge.
In this connection, it may be useful to refer to the facts in the present case.
The evidence of Sandhya shows that she and the members of her family had to face the terrible problems posed before the refugees in that part of the country, and in her anxiety to help her destitute family in its hour of need Sandhya was very easily persuaded by Manibala to adopt the course of earning money by selling her body.
In such a case, if the minor girl has been exposed to the risk of having sexual intercourse with several people from time to time, it is unreasonable to expect that she would be able to specify the precise dates on which particular individuals had intercourse with her.
If it is insisted that in a case of this kind, the charge of rape framed against the appellant must specify the date on which the offence was committed by him, it would really mean that the appellant cannot be charged with the offence because the unfortunate victim would, in the ordinary course of things, not be able to state precisely the dates on which she was made to submit to the appellant.
Therefore, in dealing with the question as to whether the charge framed in a criminal trial has contravened section 222 (1), the Court will have to examine all the relevant facts and if it appears to the Court that having regard to them, the charge could and ought to have been framed more precisely, the Court may reach that conclusion and then enquire whether the defective charge has led to the prejudice of the accused.
That, in our opinion, is the reasonable course to adopt in dealing 248 with contentions like the one raised by the appellant before us.
The question of prejudice did not impress the High Court, because it has summarily dismissed the appeal.
It is not a matter on which the appellant can be permitted successfully to challenge the view taken by the High Court.
In this connection we ought to add that the decision in the case of Ali Hyder (1) to which the High Court has referred in granting a certificate on this point does not support the contention in question.
The next ground on which the High Court has granted certificate to the appellant is that the Division Bench should not have summarily dismissed his appeal, and in coming to the conclusion that this argument amounted to a substantial point of law, the High Court has referred to two decisions of this Court in Mushtak Hussein vs The State of Bombay, (2 ) and Shreekantiah Ramayya Municipalli vs State of Bombay (3).
In Mushtak Hussein 's case, this Court has no doubt observed that it is riot right for the High Court to dismiss an appeal preferred by the accused to that Court summarily where it raises some arguable points which require consideration.
It was also added that in cafes which prima facie raise no arguable issue, that course is, of course, justified.
It is in the light of this conclusion that this Court stated that it would appreciate it if in arguable cases the summary rejection orders give some indications of the views of the High Court on the points raised.
In the case of Shreekantiah Ramayya it appeared that out of the two appeals filed separately by two different accused persons against the same judgment, one was summarily dismissed by one Bench of the High Court and the other was admitted by another Bench.
It is in the light of this somewhat anomalous position that this Court repeated its observation made in the case of Mushtak Hussein (2), that summary rejections of appeals (1) (1939) 40 Cr.
L .T. 280.
(2) A I.R. 1953 $.C. 282.
(3) A. I. R. , 249 which raise issues of substance and importance are to be disapproved.
With respect, there can be no9 doubt whatever that in dealing with criminal appeals brought before them the High Courts should not summarily reject them if they raise arguable and substantial points and it would be stating the obvious if we were to add that no High Court summarily dismisses a criminal appeal if it is satisfied that it raises an arguable or substantial question either of fact or of law.
In this connection, it is, however, necessary to bear in mind that it is for the High Court which deals with the criminal appeal preferred before it to consider whether it raises any arguable or substantial question of fact or law, or not.
Section 421 (1) of the Code provides that on receiving the petition and copy under section 419 or section 420., the appellate court shall peruse the same, and, if it considers that there is no sufficient ground for interfering, it may dismiss the appeal summarily.
The proviso to this section requires that no appeal presented under section 419 shall be dismissed unless the appellant or his pleader has had a reasonable opportunity of being heard in support of the same.
Sub section (2) empowers the appellate court to call for the record of the case before dismissing the appeal under sub section (1) but it does not make it obligatory on the court to do so.
Therefore, the position under section 421 is clear and unambiguous.
When a criminal appeal is brought before the High Court, the High Court has to be satisfied that it raises an arguable or substantial question; if it is so satisfied, the appeal should be admitted; if, on the other hand, the High Court is satisfied that there is no substance in the appeal and that the view taken by the Trial Court is substantially correct, it can summarily dismiss the appeal.
It is necessary to emphasis that the summary dismissal of the appeal does not mean that before summarily dismissing the appeal, the High Court has not applied 250 its mind to all the points raised by the appellant.
Summary dismissal only means that having considered the merits of the appeal, the High Court does not think it advisable to admit the appeal because in its opinion, the 'decision appealed against is right.
Therefore, we do not think the High Court was right in granting certificate to the appellant on the ground that his appeal should not have been summarily dismissed by another Division Bench of the said High Court.
If the High Court in dealing with criminal appeals takes the view that there is no substance in the appeal, it is not necessary that it should record reasons for its conclusion in summarily dismissing it.
The third ground on which the certificate has been granted by the High Court is in regard to an alleged misdirection in the charge delivered by the learned Sessions judge to the jury.
It appears that in dealing with the argument of the defence that the charge was vague and that the dates specified in the charge did not correspond to the dates given by Sandhya in her evidence, the learned Judge told the jury that if the statement of the girl in her cross examination is taken as the basis, the dates on which the girl was ravished by the appellant would not be covered by the three sets of dates mentioned in the charge, and then he added that "in case you hold that the charges are in order, in that case you shall proceed to consider the evidence.
" It was urged by the appellant before the Division Bench of the High Court which granted the certificate that the last statement constituted a misdirection.
The argument was that whether or not a charge is valid is a question of law which the learned judge should have decided himself and given a direction to the jury in accordance with his decision; inasmuch as he left that question to the jury, he failed to exercise his jurisdiction and to discharge his duty, and as such the 251 charge must be held to suffer from a serious misdirection.
This argument appears to have appealed to the Division Bench which granted the certificate and has been pressed before us by Mr. Chari.
In our opinion, there is no substance in this argument.
We should have stated earlier that after the committal order was passed by the presidency Magistrate, the appellant moved the High Court in its revisional jurisdiction and urged that the charge framed against him was defective and invalid and should be quashed.
The High Court rejected this contention and held that the charge was valid within the meaning of section 222 and section 234 of the Cole.
Therefore, the true position is that at the time when the learned Sessions judge delivered his charge to the jury, the question about the validity of the charge had been considered by the High Court and so far as the learned Sessions Judge was concerned, the finding of the High Court was binding on him, so that when the learned Sessions judge told the jury that they may consider whether the charges were in order, he was really leaving it open to the jury to consider the matter which had been decided against the appellant and in favour of the prosecution.
If there can be any grievance against this part of the charge, it would be in the side of the prosecution and not on the side of the appellant.
That leaves to be considered certain other alleged misdirections to which Mr. Chari has referred.
Mr. Char; contends that in explaining the true legal position with regard to the evidence of a prosecutrix in cases of rape, the learned judge did not cell the jury that in view of the contradictions brought out in the evidence of Sandhya and in view of her past career and record, her evidence should not be believed.
Mr. Chari argues that when criminal courts require corroboration to the evidence of the prosecutrix in such cases, as a matter of prudence, it necessarily means that in the first instance, the 252 prosecutrix must appear to the court to be a reliable witness.
If the prosecutrix does not appear to be a reliable witness, or if her evidence suffers from serious infirmities, corroborations in some particulars would not help the prosecution, and according to Mr. Chari, this aspect of the matter was not properly brought to the notice of the jury by the learned Sessions judge.
We do not think there is any substance in this contention.
We have carefully read the charge and we are satisfied that on the whole, the charge has not only been fair, but has.
been more in favour of the appellant than in favour of the prosecution.
In fact, the whole tone of the charge indicates that the learned Sessions judge was not satisfied that the prosecution had really made out a case against the appellant beyond a reasonable doubt.
But in delivering charge to the jury, the learned Sessions judge can never usurp the function of the jury.
He cannot pronounce on the reliability or otherwise of any witness.
The requirement as to corroboration in regard to the evidence of a prosecutrix like Sandhya has been elaborately explained by the Sessions judge to the jury.
He told them that the most important witness in the case was Sandhya and that there was hardly any corroborative evidence to her story.
He also warned them that though it was not illegal to act upon the evidence of a prosecutrix, it was unsafe to adopt that course and he said that before convicting the appellant on the uncorroborated testimony of Sandhya, the members of the jury should ask themselves whether they were so much convinced about the truthfulness of the girl as to accept her evidence in its entirety.
He referred to the broad and material contradictions brought out in her evidence and asked them to bear that fact in mind in deciding whether they should accept her testimony or not.
Having regard to the several statements made by the learned judge in his charge on this topic we find it difficult to accept Mr. Chari 's grievance that the charge was materially defective in this matter.
253 The next misdirection or) which Mr. Chari has relied is in regard to the prosecution evidence about the age of the girl.
The prosecution alleged that the girl was below If) years of age, whereas the defence contended that she was above 16 and was a consenting party.
As usual, evidence was given by the prosecution in support of its case as to the girl 's age.
This evidence consisted of the testimony of the girl 's mother Saudamini and of Dr. Nag as well as Dr. Saha.
Having summarised the material evidence fairly and accurately, the learned judge told the jury that the said evidence was no doubt somewhat conflicting and he warned them that they had to decide as a question of fact whether the age of the girl at the relevant time was above or below 16.
Mr. Chari contends that at this stage, the learned judge should have told the jury that the onus to prove the fact that the girl was below 16 was on the prosecution and that if there was any doubt about her age, the benefit of the doubt must go to the appellant.
We do not think there is any substance in this argument.
In the first part of his charge, the learned judge explained to the jury the essential requirements which had to be proved by the prosecution in support of its charge under section 376, and there the learned judge had made it clear to the jury that the prosecution had to show that the girl was below 16. 'That being so, we do not think that his failure to mention the point about onus once again when he dealt with the actual relevant evidence, can be said to constitute a misdirection, much less a material misdirection which may have led to the prejudice or the appellant.
The last misdirection on which Mr. Chari has relied is the statement of the learned judge that the previous statements made by the girls which had been brought on the record do not constitute substantive evidence but are intended only to contradict the actual evidence given by her in court.
It appears that on behalf of the appellant the evidence given 254 by the girl on a previous occasion had been brought out under s.145 of the Indian Evidence Act.
In that statement the girl had sworn that Anil Chatterjee had sexual relations with her day after day and that she had sexual relations with others also.
The girl admitted in her cross examination that her statement had been recorded on a previous occasion by the Magistrate, Alipore, but when the contents of the statement were put to her, she said she did not remember whether she had made those statements or not.
Now, it is clear that when a previous statement is put to a witness in cross examination under s.145 of the Indian Evidence Act, its primary purpose is to contradict the witness by reference to the evidence he gives at the trial, and so, it cannot be said that the learned judge was wrong in law in telling the jury that the previous statement on which the defence relied may help the defence to contend that the girl was not a straightforward witness and was changing her story from time to time, but the said previous statement cannot be treated as substantive evidence at the trial.
That is the true legal position and no grievance can be made against the charge for stating the said position in the terms adopted by the learned Sessions judge.
Therefore, we do not think that the grievance made by Mr. Chari that the charge suffered from serious misdirections is well founded.
There is one more point which we may mention before we part with this appeal.
After the verdict was returned by the jury, the learned Sessions Judge considered the question as to whether he should accept the said verdict, or should make a reference.
In that connection, he observed that the verdict that the jury had returned against the appellant, was practically based on the uncorroborated testimony of the prosecutrix but he thought that the said course adopted by the jury cannot be said to be illegal and he was not prepared to take the view that the verdict of the jury was in any way perverse.
255 Mr. Chari contends that having regard to the general tone of the charge delivered by the learned judge to the jury, the learned judge should have treated the verdict as perverse and not acted upon it.
We do not think that this contention can be accepted.
In his charge, the learned judge no doubt indicated that the evidence of the girl was not satisfactory, that it was not corroborated and that there were other circumstances which showed that the prosecution case might be improbable, but having done his duty, the learned judge had to leave it to the jury to consider whether the prosecution had established its charge against the appellant beyond reasonable doubt or not.
The jury apparently considered the matter for an hour and half and returned the unanimous verdict of guilty.
In the circumstances of this case, we cannot accede to Mr. Chari 's argument that the Session Judge was required by law to treat the said verdict as perverse.
In a jury trial where questions of fact are left to the verdict of the jury, sometimes the verdicts returned by the jury may cause a disagreeable surprise to the judge, but that itself can be no justification for characterising the verdict as perverse.
In the result, the appeal fails and is dismissed, the appellant to surrender to his bail bond.
Appeal dismissed.
[/INST]One Raja Sahib took a lease from the District Board, Allahabad,.
with respect to the realisation of bayai and bazar dues on the sale of commodities in the bazar.
The appellant was his employee to collect these dues.
A peon of Raja Sahib asked Shyam Lal, P.W. 2, who had sold linseed to Mewa Lal, respondent No. 2, to come to the Munim and pay the beyai dues.
Mewa Lal asked Shyam Lal not to pay those dues.
The peon took Shyam Lal to the appellant.
The respondent No. 2 armed with a lathi, came there and on appellant 's asking him as to why he was creating obstruction in the realisation of the dues, filthily abused him and threatened to kill him.
The appellant, thereafter, on obtaining sanction of the District Magistrate, instituted a complaint against Respondent No. 2 for prosecuting him for an offence under section 107 of the United Provinces District Board Act.
The trial Magistrate convicted him of the offences under sections 504 and 506 of the Indian Penal Code and also of an offence under section 107 of the Act.
On appeal, Sessions judge acquitted him of all the charges.
Against acquittal, the appellant filed an appeal to the High Court which was dismissed.
On appeal by certificates three contentions were raised by the appellant in this Court: (i) The order of the Sessions judge aquitting Mewa Lal was bad as no notice of hearing of the appeal was issued to the appellant, on whose complaint the Magistrate convicted him, (ii) The High Court was wrong in holding that the Raja could not collect the Tah Bazari dues through his agents, and (iii) that the appellant had requisite sanction under section 182 of the Act, for prosecuting Mewa Lal, respondent No. 2.
Held that section 107 of the Act does not make obstruction or molestation of an employee of the person under contract with 359 the Board, an offence.
The section speaks of the obstruction or molestation of two classes of persons.
One class consists of persons employed by the District Board under the Act.
The Raja or the appellant is not an employee of the District Board.
The second class consists of those persons who are under contract with the Board under the Act.
Surely, the person under contract with the Board is the Raja and not the appellant.
The appellant is only an employee of the Raja.
In view of these considerations, the acquittal of the respondent No. 2 could not be interfered with merits.
The appeal, therefore, must be dismissed.
The appeal was not heard on merits.
If was considered not necessary to decide the first contention and the Court did not express any opinion on the second contention as the terms of the lease were not known.
The third contention was held to be correct.
</s>
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<s>[INST] Summarize the judgementAppeal No. 2221 of 1993.
From the Judgment and Order dated.5.5.
1993 of the Madhya ' Pradesh High Court in M.P. No. 4420 of 1991.
Harish N. Salve and L.R. Singh for the Appellant.
Anoop Choudhary, A.K. Sanghi, S.V. Deshpande and section K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by Mohan, J.
Leave granted in SLP filed by Indian Medical Council, Jabalpur.
All these appeals are dealt with under a common judgment since they arise out of the same judgment passed in Misc.
Petition No.4420 of 1991 by the Madhya Pradesh High Court, Jabalpur Bench.
One Dr.
Nelson ,father of respondent1 was serving in Madhya Pradesh State Public Health in the Department of Surgery in the Medical College at Jabalpur.
His wife, Dr. (Mrs.) Shobha Nelson was also working as a Lecturer in the Department of Obstetrics and Gynecology in Medical College in a purely temporary capacity.
Nelson applied for foreign assignment.
He was selected for the same.
Therefore.
a request was made by the Government of India (Department of Personnel and Administrative Reforms) vide its letter dated 2nd of January.
1975 790 requesting the State Government to spare the services of Dr .
S.K. Nelson for foreign assignment with Zanzibar Government.
The Under Secretary to the Government of Madhya Pradesh, Department of Public Health and Family Planning replied on 15.4.1975 that it was not possible for the State Government to spare his services.
However, Dr. Nelson proceeded on two months ' vacation with effect from 1.5.75.He wrote a letter to the Dean of Medical College Jabalpur that he was proceeding, on long leave owing, to unavoidable family circumstances.
Even after the expiry of the period of leave he did not rejoin the post.
His request for further extension of leave was rejected.
Notwithstanding the same Dr. Nelson and his wife proceeded to Tanzania and the first respondent, Silas Nelson, also accompanied them.
It also requires to be mentioned in passing that a request was made to the Government of madhya Pradesh to spare the services of Dr. Shobha Nelson.
It was pointed out by tile State Government that she being ;A temporary servant she had no lien and she will have to resign the State service before joining her duties in Zanzibar.
She also absented unauthorisedly and proceeded to Tanzania along with her husband.
The first respondent claimed to have passed G.C.E. 'O ' level as well as 'A ' level examinations from the University of London conducted by the Education Council of the Government at Dar es Salam in Tanzania.
He also claimed that he had obtained credits in 'A ' level in three subjects i.e. Biology, Physics and Chemistry and 'O ' level in six subjects i.e. Biology, Chemistry, English language.
English Literature, Mathematics and Physics.
On this basis he claimed that he was entitled to admission in any Medical College in India.
According to him these examinations are considered to be equivalent qualifying examinations and pre requisite for admission to any Medical College.
It was also stated that Rani Durgawati University of Jabalpur had given an equivalence certificate.
He obtained admission in Muhmbili Medical College in the Faculty of Medicine.
which is affiliated to the University of Dar es Salam, in the year 1989.
lie had completed one year at the same college and University.
Thereafter he was pursuing his study in the second year.
Having regard to the fact that he had studied the subjects in Anatomy, Physiology, Biochemistry, Preventive and Social Medicine including, Behavioural Science and Biostatistics, Medical Psychology and Developmental Studies and Medical Surgery, he had undergone a wider course.
Therefore, according to him, he possesses the eligibility criteria for admission to the MBBS Degree Course at Jabalpur.
A request was made by the father of the first respondent to nominate the first respondent to MBBS Course directly under Central Government quota.
This request related not only to the first respondent but also his sister.
However, the Central Government advised Dr. Nelson to approach the Medical Council oflndia 791 and the concerned University in jabalpur seeking their concurrence to the migration of his two children from the University of Dar es Salam.
Tanzania to Medical College in jabalpur.
On 20th December, 1989, Dr. nelson approached the appellant, Medical Council of India (hereinafter referred to as the Council) for grant of no objection to the transfer.
This request was turned down on 12.1.90 as migration was not permissible under the Rules.
The position was further made clear by the letter of the appellant dated 28.12.90.
Aggrieved by this the first respondent and his sister Kumari Divya Nelson filed Writ Petition Misc.
Petition No. 2535 of 1990 before the Madhya pradesh high Court at Jabalpur.
The prayer was for a writ of mandamus to direct the respondents to grant admission to them to the 2nd year of MBBS Degree Course at Medical College jabalpur.
It was contended that the Council had not authority to object or refuse the issue of no objection certificate since its primary function is to prescribe minimum standards of medical education.
It is the University alone which should be concerned about the admission.
The High Court by its judgment dated 12.7.91 allowed the writ petition.
It directed the appellant and other authorities to consider the case of respondent 1 and his sister within a period of two months for their admission in the Medical College, jabalpur in the light of clause 'E ' of the mandatory recommendations approved under Section 33 of the .
It was also held that though the Council had considered the case of the candidates yet it had not looked into the individual merits regarding their eligibility for transfer to Medical College,jabalpur which affiliated to Rani Durgawati Vishwa vidyalaya, jabalpur.
Besides teh impugned letter of the council does not show any application of mind as it is not speaking order.
In complete with the above directions the Executive Committee of the appellant (Council) reconsidered the case on 20.8.91.
The question was whether the migration of the respondent on individual merit to Medical College.
jabalpur under clause v 'e ' of the Migration Rules was permissible.
It was concluded that the migration could not be allowed since the ground were not sufficient for such migration.
It was also of the view that the facts stated for considering the individual case on merits were not relevant.
What is important to be considered is the course of study the student had already undergone vis a vis the course being taught in the Medical College in Which the migration is sought.
The candidate had not also finished enough materials to make comparison with 792 the course of study conducted in medical College at jabalpur.
For these reasons the request for migration was rejected.
The same was reiterated by a letter dated 4.1.92.
After this, a review petition was filed to recall the order dated 12.7.91 of the High Court.
However the review petition was dismissed by the High Court.
An application for contempt was also dismissed.
There upon Misc, Petition No. 4420 of 1991 came to be filed seeking admission in the 2nd year or the 1st professional M.B.B.S. Course at Medical College, Jabalpur on the same grounds as were alleged previously.
direction was issued on 23.12.1991 to give provisional admission.
After admission of the writ petition the same order was continued.
Though an application was preferred by the respondents 2 to 4 to have the order vacated on the ground that migration from an unrecognized Medical College to a recognised Medical College was not permissible, the same was dismissed.
Some interesting development took place during this stage.
The candidates did not produce the required document.
Hence provisional admission was not granted to them by the respondents 2 to 4.
That led to the filing of Interlocutory Application No. 2805 of 1992 for further direction.
Respondents 2 to 4 also filed an application for direction on 26.3.92 inter alia pointing out that before grant of provisional admission, the writ petitioners were required to submit proof of their having passed 1st year course at Tanzania.
In the absence of such proof the admission was impossible.
Further in which year of the MBBS course the first respondent was to be admitted, was not free from difficulty.
it was averred that even without passing the first year from the university of Dar es Salam the claim is made for admission to the second year.
This is nothing but fraud the High Court strangely permitted the writ petitioner.
Kumari Divya Nelson to withdraw herself from the petition and it directed respondent 1 alone could prosecute his studies.
The authorities were directed to grant provisional admission his filing necessary forms and depositing admission fees without insisting on the production of any other certificate or testimonials or syllabus of Dar es Salam University.
For non compliance with this direction a contempt application was taken but by the first respondent.
On peril of contempt the Dean (Respondent 4) had not other option but to comply with the order of provisional admission.
Against this order directing provisional admission without insisting on the production of any other documents SLP (C) No. 10498 of 1992 was preferred.
Leave was granted on 7.9.92 by this court staying the operation of the order dated 18.5.92 of the High Court.
This Court directed that the interim order well subsist 793 till the disposal of the writ petition before the High Court and requested the High Court to dispose of the writ petition of the respondent I expeditiously.
By the impugned judgment dated 5th March, 1993 the writ petition was allowed The resolution dated 20th August, 1991 refusing to accede to the request of the writ petitioner respondent (1) for migration was quashed holding that there was no application of mind by the Council.
lt is under these circumstances these appeals by special leave to appeal have come to be preferred.
Mr. harish N. Salve, learned counsel for the appellant would submit the following grounds attacking the impugned judgment: The High court erred in directing admission to respondent I in recognised medical college in India from an unrecognized college by way of migration/ transfer.
WI the more so.
when such impermissibility has been recognised by this Court in Medical Council of India, New Delhi vs Rajendra section Sankpal and Ors.
(C. A Nos. 3 4 of 1991 dated 21.10.92) and order dated 6.12.1990 of this Court passed in Medical Council of India vs Ms. Sunita Anant Chavan & Ors.
(I.A. Nos. 2 7 in Transfer Petition (Civil) Nos. 230 235 of 1989).
The High Court misread Regulation V. Under that Regulation migration is allowed from a recognised medical college to another recognised college and that too within three moths after passing of the first professional examination.
In so far as the first respondent has neither undergone study in a medical college recognised by the Council nor has he passed the first professional examination, he could not he admitted to the second year.
The first respondent failed in the subject of Anatomy which is one of the papers taught in the first year at Dar es Salam University.
Under the Examination Regulation of the said University he was required to sit in the supplementary examination in the failed subject before the beginning of the next academic year.
Thus he was required to clear the said paper within six weeks.
Should he fails in the supplementary examination he ceases to be a student of the College/University.
In so far as the first respondent did not take the supplementary examination he ceased to be a student of Dar es Salam University.
Therefore, the question of migration could not arise at all.
The first yen course of Dar es SalamlJniversitv is not equivalent to the first phase of MBBS Examination in India.
794 Equivalence has to be decided by only an expert body, that too, on technical and academic matters.
It is not in the domain of assessment or evaluation by the Court.
The High Court should not have embarked on the determination of equivalence on the basis of sketchy materials placed before it.
The High Court erred in relying on.
Minakshi Malik, vs University of Delhi; , There, the candidate was not, in any matter, ineligible while here, the first respondent is ineligible.
The High Court erred overlooking that an administrative authority like the appellant is not required to pass reasoned orders.
The decree awarded by Dar es Salam University is not recognised and :Is not included under any of the Schedules of the Medical Council of India Act, 1956.
Therefore, there was no occasion for the appellant to decide the equivalence.
Should the first respondent be anxious he should have placed all the materials.
In opposition to this, learned counsel for the respondents, argues that the Council has taken a self contradictory stand.
In one breath, it will contend that there are no materials to decide the equivalence and in the other breath it would say it is not equivalence.
Under these circumstances, in view of the cryptic order passed, the High Court itself decided finding that the Council had not applied its mind.
The High Court was satisfied on the basis of documents there is equivalence.
The High Court is well entitled to do so.
More so, having regard to the ruling of Minakshi Malik 's case (supra) Equity also must weigh in favour of the first respondent.
In any event, the first respondent had passed his pre Medical test successfully in the year 199 1.
He also belong s to scheduled tribe.
Therefore, on the basis of these two documents his candidature could be considered for admission to first year MBBS Course for the ensuing academic year of 1993 94 as otherwise, the career of a young man would be completely ruined.
The factual position with regard to study of the first respondent in Dar es Salam University requires to be carefully analysed.
The claim of the first respondent is that he has passed G.C.E. 'O ' level as well as 'A ' level examinations from the University of London conducted by the Education Council of the Government at Dar es Salam in Tanzania.
He claims to have obtained credits in 'A ' level in the following three subjects (i) Biology, (ii) Physics; and 795 (iii) Chemistry In `O ' level he claim.
,; to have obtained credits in the following six subjects (i) Biology, (ii) Chemistry, (iii) English Language, (iv) English Literature, (v) Mathematics; and (vi) Physics On this basis, he claims admission to any Medical College in India as these are considered to be equivalent qualifying examinations and prerequisite for admission to any Medical College.
It is claimed on behalf first respondent at Rani Durgawati University of Jabalpur has given an equivalence certificate.
That is extracted below "With reference to your above cited letter, it is to inform you that students have passed in five subjects at least at the G.C.E. (Ordinary Level) and two subjects at the (Advanced Level) from University of London, are treated as having successfully completed the 12 year Pre University/Higher Secondary in India.
Hence, if your son Shri Silas Supragya Nelson has passed above examination then he may appear in Pre Medical test examination as desired by you." According to first respondent, he was admitted in Muhmbili Medical College in the Faculty of Medicine which is affiliated to the University of Dar es Salam in the year 1989 and has completed one year at the same College and University.
In the First year he had studied subjects in Anatomy, Physiology Biochemistry, Preventive and Social Medicine which includes Behavioural Science and Bio statistics, Medical.
Psychology and Development Studies & Medical Surgery whereas at Rani Durgawati University, the subjects taught in the first year are Anatomy, Physiology, and Biochemistry.
Thus the courses followed at Dar es Salam University are much wider.
It was further claimed that his course in the said Medical College is equivalent to first year course of MBBS Degree awarded by Rani Durgawati University, Jabalpur and, therefore, he possesses the eligibility criteria for admission to the MBBS Degree Course at Jabalpur.
796 On the said basis migration is sought.
Dar es Salam University is not recognised by the Medical Council of India.
Therefore, front all unrecognised institution admission is sought to a recognised institution.
With the object of maintaining and regulating, standards of medical education in the country, the Parliament enacted "the ".
Under Section 6 of the Act.
the Medical Council of ' India has been incorporated, which is a body corporate having a perpetual succession and a common seal Section 12 of the Act makes provisions for recognition of medical qualifications granted by medical institutions in countries with which there is a scheme of reciprocity.
Under this section, the schedules are given providing list of recognised medical institutions & qualifications.
The first schedule gives list of recognised medical qualifications granted by universities/medical institutions in India; whereas schedule second gives the list of recognised medical qualifications granted by medical institutions outside India.
University of Dar es Salam & its medical institution is not included in the second schedule and therefore the qualifications imparted by that institution are not recognised.
That apart, section 14 of the Act makes provisions for recognition of medical qualifications (granted by countries in which there is not scheme of reciprocity.
The Central Government has not considered Dar es Salam University for such recognition.
It was in this context the following order came to be passed by the appellant "The Director, Medical Education, Madhya Pradesh, Bhopal Subject: Migration of Silas Nelson and Divya Nelson from Dar es Salam Medical College, Tanzania to Medical Collage, Jabalpur.
Sir, With reference to your letter No. 6151/DME/IV dated 12.5.1990 I am to state that the matter regarding, Migration of Silas Nelson and Divya Nelson from Dar es Salam Medical College, Tanzania to Medical College,Jabalpur was duly placed before the Executive Committee of this Council at its meeting held on 20th August, 1991 for consideration.
The Committed decided as under: 797 The Executive Committee considered the matter with regard to the migration of the above candidates on individual merit to Medical College Jabalpur under Clause V(e) of the migration rules and did not allow these migration since the grounds are not sufficient for migration and the facts stated in the individual cases are not very relevant for grant of permission for migration.
For considering any such cause of migration, it is important to consider the cause of study the student has already undergone vis a vis the course being taught in the Medical Colleges in which the migration is sought.
Further it is observed that the candidates seeking their migration have also brought no records to show the course of study being conducted at their medical college for making comparison with the study being conducted in Medical College, Jabalpur.
Hence the applications for migration of the above candidates are rejected.
Your faithfully, (Mrs. M. Sachdeva) Off.
Secretary.
" Concerning migration the rule also is to the effect that the same can be allowed by the University concerned within three months after the passing of the first professional examination.
Then, the question of equivalence arises.
The equivalence came to be decided in the following manner: "Reference Letter dated 28.12.1991 of Dy.
Registrar (General) R.D. University, Jabalpur.
Regarding letter of ku.
Divya Nelson and 2/ Silas Nelson to the University.
I have gone through prospectus of University of Dar es Salam (1990 90) For M.D. degree which is equivalent to M.B.B.S. of Universities abroad (as per letter No. H/Q/G.N/17862 dated 2nd May, 1990 of Director of Training and Occupational Health Service, attached in the file).
For examination at the end of first year in Dar es Salam University the subjects are: 798 Anatomy/Histology Behavioural Sciences Only one Biochemistry Year study.
Physiology Development studies Where in Indian Universities the First MBBS Course which is of 18 months the subjects examined are (As premedical Council of India) Anatomy Physiology one and half, Biochemistry Year study As the detailed syllabus of the 5 subjects taught in one year at Dar es Salam University is not given in the Prospectus, it is difficult to know whether the course is equal as only three subjects are taught in Indian University for one and half years indicating that these subjects are taught in more detail here in our University.
However, in general the subjects taught there in first year included Anatomy, Physiology and Biochemistry (along with other two subjects) which are also the subjects of first M.B.B.S. (one and half years course) here also.
For mote clarification, the Medical Council of India may be consulted because they are the main authority in India in this respect.
Dean, Faculty of Medicine of our University was also consulted in this matter/ sd/ Protessor & Head.
Dept. of Biochemistry Medical College & Chairman Board of Studies for Anatomy, Physiology & Biochemistry.
This may be put up before the standing for confirmation.
" We cannot understand when this was the position with reference to equivalence how the High Court had donned the role of an expert body and would say as follows "The petitioner has filed documents showing that Dr. R.K. Gupta, Reader in Pharmacology of the Medical College, Jabalpur was sent on deputation for teaching in the medical college affiliated to Dar es Salam University.
The petitioner, by filing the documents, wants to show that persons having requisite qualifications for teaching in the Medical College, Jabalpur were posted or appointed at the medical college affiliated to Dar es Salam University.
The documents filed by the petitioner show that the subjects taught in the first year M.B.B.S. at Muhibili Medical 799 College, Dar es Salam University and the subjects taught at the Medical College, Jabalpur are the same.
to us the material consideration is the qualifications necessary for admission to the first year M.B.B.S. course.
The documents on record show that the educational qualifications for admission to the Medical College, Jabalpur and the Muhbili Medical College of Dar es Salam University are the same and there is equivalence of courses.
As there is equivalence of courses required for admission to the first year M.B.B.S. courses in Muhibili Medical College and the Medical College, Jabalpur, the petitioner is entitled to be transferred to the first year M.B.B.S. course of the Medical College, Jabalpur and should be permitted to appear in the examination conducted by the Rani Durgawati University, Jabalpur.
" This is totally unwarranted because the High Court does not have the necessary expertise in this regard.
As to the equivalence we have already extracted the opinion of the Chairman of Board of Studies for Anatomy, Physiology and Biochemistry.
From the above extract it is clearly seen that the Council is the main authority in this respect.
Then again, the High Court had gone wrong in concluding that the individual cases are relevant for the grant of permission for migration.
In our considered view, as rightly concluded by the Council, what is material is the course of study which a student has undergone vis a vis the courses being taught in the Medical College in which the migration is sought.
What the Council was endeavouring to point out was the materials placed before it by the present first respondent were not sufficient to decide the equivalence.
The criticism of the Council, by the High Court, is also not warranted.
First of all, no certificate was produced by the first respondent that he had completed the first year course in Dar es Salam.
Unless and until that is done the question of admission to the second year MBBS could not arise.
The first respondent had not appeared in the supplementary examination.
If that is so, according to the Regulations of Dar es Salam University, he is deemed to have discontinued from that Course.
In such a case the question of giving admission to Medical College at Jabalpur could never arise.
Therefore, looked at from any point of view, the Medical Council of India which is the authority to decide the equivalence, has come to the correct conclusion, in that, there cannot be a migration from unrecognised institution to a recognised Medical College.
The judgment of the High Court is wholly unsupportable.
Once we have arrived at this conclusion the question arises whether the case of the first respondent could be considered for the academic year 1993 94 based on his performance in the pre Medical test for the year 1991.
The statement of 800 marks obtained in pre Medical Test, 1991 is as under: "Subjects Max.
Marks Marks Obtained Physics 300 127 Chemistry 300 220 Botany 300 160 Zoology 300 214 English 300 217 1200 721" He also claims that he belongs to Scheduled Tribe.
We do not have material to show as to whether he was granted admission to any Medical College on the basis of his performance in the pre Medical test for the year 199 1.
However, in the petition for special leave to appeal the appellant has made the following averments "In the said Count er affidavit, on oath the respondent no.1 deliberately, knowingly an d willfully made a false statement that he had never appeared in the Pre Medical Test held in the year 1991 and failed.
It was further stated that in fact it was his younger brother Sushrut who had appeared in the T.M.T Examination of 1992.
The petitioner herein has made an inquiry and has come to know that the respondent no.1 appeared in the Pre Medical Test, 1991 vide application No. 27811 and was allotted Roll No. 624227 but failed to qualify and complete in the said test. .
Since the writ petitioner respondent no.1 appeared in the Pre Medical Test, 1991 vide application No. 27811 and was allotted Roll No. 624227 but failed to qualify and complete, he was not at all eligible for admission to the undergraduate medical course in India.
" If this be the correct position, he would not be entitled to be considered for admission for the academic year 1993 94 on the basis of his performance in the Pre Medical test held in the year 199 1.
It is for the concerned authority to verify the factual situation and decide the matter.
801 We make it clear that if his case has already been considered for admission on the basis of performance in the Pre Medical test 1991 and rejected there is no need to consider his case once again for the year 1993 94.
Otherwise, it may be considered on the basis of performance in the pre Medical test for the year 1991 as against the quota intended for Scheduled Tribe, if his status as belonging to Scheduled Tribe is established provided there is no legal impediment in doing so.
Subject to the above directions, civil appeals will stand allowed.
However, there shall be no order as to costs.
I.A. No. 1 of 1993 in SLP (C) 6161 of 1993 is also allowed.
U.P. Appeal allowed.
[/INST]On the death of H, who as the mother of the last male owner had succeeded to the estate, the respondents claimed the estate and brought a suit for its recovery on the strength of the pedigree which they set up that they were the sons of the halfsisters of the last male owner and therefore came before the agnates.
The suit was contested by some of the agnates, of whom the appellant was one, who challenged the correctness of the pedigree, and maintained that the respondents ' mothers were not the half sisters of the last male owner.
The trial court agreed with the respondents ' case and decreed the suit and this was confirmed by the High Court.
The High Court relied on exhibit 1, a petition dated November 2, 1917, which S, one of the brothers of the third plaintiff, on his own behalf and on behalf of his brothers had filed in Suit NO. 31 Of 19I7 which was a suit instituted by some of the agnates of H 's husband questioning the alienations made by H. In the petition,, S alleged that the applicants were the legal claimants to the properties in the suit and prayed to be added as co defendants to the suit.
The petition contained a pedigree which supported the pedigree set up 815 by the respondents, and the High Court held that exhibit I was admissible under section 32(5) of the Indian Evidence Act.
The oral evidence of P.W. 2 and P.W. 4 supported the respondents ' case as to the pedigree set up by them and the High Court held that their evidence was admissible under section 50 Of the Indian Evidence Act.
On appeal to the Supreme Court, it was contended for the appellant (1) that exhibit I was not admissible under section 32(5) Of the Indian Evidence Act because (a) the statement therein was a joint statement of three persons of whom one alone was dead, and (b) it was not made before disputes had arisen ; and (2) that the testimony of P.W. 2 and P.W. 4 did not fall within the purview Of section 50 Of the Indian Evidence Act and that the High Court erred in admitting and accepting such evidence.
Held: (1) that section 32(5) Of the Indian Evidence Act was applicable to the statements as to pedigree in exhibit I because : (a) they were really made by S for self and on behalf of his brothers, and that, in any case, they were as much statements of S as of the other two brothers who are alive.
Chandra Nath Roy vs Nilamadhab Bhattacharjee, (1898) I.L.R. , approved.
(b) they were made before the precise question in dispute in the present litigation had arisen, as the respondents were not preferential heirs at the time of the previous suit and no question arose or could have arisen then as to the relationship between them and the last male owner.
(2) that the evidence of P.W. 2 and P.W. 4 that they were present at the marriage of the mother of plaintiffs 1 and 2 as also at the Upanayanam ceremonies of plaintiffs 1 and 2, showed the opinion of those witnesses as to the relationship as expressed by their conduct, and was admissible under section 50 Of the Indian Evidence Act.
The word " opinion " in section 50 Of the Indian Evidence Act means something more than mere retailing of gossip or hearsay; it means judgment or belief, that is, a belief or a conviction resulting from what one thinks on a particular question.
Such belief or conviction may manifest itself in conduct or behaviour which indicates the existence of the belief or opinion.
Under section 50 such conduct or outward behaviour as evidence of the opinion held is relevent and may be proved.
Chander Lal Agarwala vs Khalilay Rahman, I.L.R. , approved.
Conduct, as an external perceptible fact, may be proved either by the testimony of the person himself whose opinion is evidence under section 50 or by some other person acquainted with the facts which express such opinion, and as the testimony must relate to external facts which constitute conduct and is given by persons personally acquainted with such facts, the testimony is in each case direct within the meaning of section 60 of the Indian Evidence Act.
816 The observations 'of Hutchins, J., in Queen Empress vs Subbarayan, Mad. 9, that section 50 of the Indian Evidence Act seems to imply that a person whose opinion is a relevant fact cannot be called to state his own opinion as expressed by his conduct and that his conduct may be proved by others only when he is dead or cannot be called, disapproved.
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<s>[INST] Summarize the judgementAppeals Nos. 272 to 274 of 1966.
Appeals by special leave from the judgment and order dated July 28, 1961 of the Madras High Court in O.S.A. Nos. 65, 70 and 71 of 1956.
K.N. Balasubramaniam and R. Thiagarajan, for the appel lant (in all the appeals).
R.Gapalakrishnan, for respondents Nos. 2 to 4 (in C.A. No. 272 of 1966), respondents Nos. 1 and 2 (in C.A. No. 273 of 1966) and respondent No. 1 (in C.A. No. 274 of 1966).
The Judgment of the Court was delivered by Bachawat, J.
On February 23, 1953 the appellant instituted C.S. No. 56 of 1953 on the Original Side of the Madras High Court under the summary procedure of Order 7 of the Original Side Rules against Hajee Ahmed Batcha claiming a decree for Rs. 40,556/1/2/ and Rs. 8,327/12/9/ said to be due under two I promissory notes executed by Haji Ahmed Batcha.
On March 9 1953, Hajee Ahmed Batcha obtained leave to defend the suit on condition of his furnishing the security for a sum of 516 Rs. 50,000 to the satisfaction of the Registrar of the High Court.
On March 26, 1953 Hajee Ahmed Batcha executed a security bond in favour of the Registrar of the Madras High Court charging several immoveable properties for payment of Rs. 50,000.
The condition of the bond was that if he paid to the appellant the amount of any decree that might be passed in the aforesaid suit the bond would be void and of no effect and that otherwise it would remain in full force.
The bond was attested by B. Somnath Rao.
It was also signed by K. section Narayana Iyer, Advocate, who explained the document to Hajee Ahmed Batcha and identified him.
All the properties charged by the bond are outside the local limits of 'the ordinary original jurisdiction of the Madras High Court.
The document was presented for registration on March 29, 1.953 and was registered by D. W. Kittoo, the Sub Registrar of Madras Chingleput District.
Before the Sub Registrar, Hajee Ahmed Batcha admitted execution of the document and was identified by Senkaranarayan, and Kaki Abdul Aziz.
The identifying witnesses as also the Sub Registrar signed the document.
Hajee Ahmed Batcha died on February 14, 1954 and his legal representatives were substituted in his place in C.S. No. 56 of 1953.
On March 19, 1954 Ramaswami, J. passed a decree for Rs. 49,891/13/ with interest and costs and directed payment of the decretal amount on or before April 20, 1954.
While passing the decree, he observed : "It is stated that the defendant has executed a security bond in respect of their immoveable properties when they obtained leave to defend and this will stand enured to the benefit of the decree holder as a charge for the decree amount.".
Clauses 3 and 4 of the formal decree provided "(3) that the security bond executed in respect of their immoveable properties by defendants 2 to 4 in pursuance of the order dated 9th March 1953 in application No. 797 of 1953 shall stand enured to the benefit of the plaintiff as a charge for the a amounts mentioned in clause 1 supra; (4).that in default of defendants 2 to 4 paying the amount mentioned in clause 1 supra on or before the date mentioned in, clause 2 supra the plaintiff shall be at liberty to apply for the appointment of Commissioners for, sale of the aforesaid properties.
" The appellant filed an application for (a) making absolute the charge decree dated March 31, 1954 and directing sale of the properties; and (b) appointment of Commissioners for selling them.
On April 23, 1954 the Court allowed the application, appointed Commissioners for selling of the properties and directed that the relevant title deeds and security bond be handed over 5 17 to the Commissioners.
The Commissioners sold the properties on May 29 and 30, 1954.
The sales were confirmed and the sale proceeds were deposited in Court on July 2, 1954.
All the three respondents are simple money creditors of Hajee Ahmed Batcha.
The respondents Venkata Sastri & Sons filed O.S. No ' 13 of 1953 in the Sub Court, Vellore, and obtained a decree for Rs. 5,500 on March 27, 1953.
Respondent H.R. Cowramma instituted O.S. No. 14 of 1953 in the same Court and obtained a money decree on April 14, 1953.
The two decree holders filed applications for execution of their respective decrees.
One Rama Sastri predecessors of respondents H.R. Chidambara Sastri and H.R. Gopal Krishna Sastri obtained a money decree against Hajee Ahmed Batcha in O.S. No. 364 of 1951/52 in the Court of the District Munsiff, Shimoga, got the decree transferred for execution through the Court of the District Munsiff, Vellore, and filed an application for execution in that Court.
On June 7, 1954 the aforesaid respondents filed applications in the Madras High Court for (i) transfer of their execution petitions pending in the Vellore courts to the file of the High Court and (ii) an order for rateable distribution of the assets realized in execution of the decree passed in favour of the appellant in C.S. No. 56 of 1953.
The appellant opposed the applications and contended that as the properties were charged for the payment of his decretal amount, the sale proceeds were not available for rateable distributing amongst simple money creditors.
The respondents contended that the security bond was invalid as it was not attested by two witnesses and that the decree passed in C.S. No. 56 of 1953 did not create any charge.
Balakrishna Ayyar, J. dismissed all the applications as also exemption petitions filed by the respondents.
He held that the decree in C.S. No. 56 of 1953 did not create a charge on the properties.
But following the decision in Veerappa Chettiar vs Subramania(1) he held that the security bond was sufficiently attested by the Sub Registrar and the identi fying witnesses.
The respondents filed appeals against the orders.
On March 28, 1958 the Divisional Bench hearing the appeals referred to a Full Bench the following question "Whether the decision in Veerappa Chettiar vs Subramania lyer (I.L.R. requires reconsideration.
" The Full Bench held "In our opinion, such signatures of the registering officer and the identifying witnesses endorsed on a mortgage document can be treated as those of attesting witnesses if ' (1) the signatories are those who have seen the execution or received a personal acknowledgment (1) I.L.R. 518 from the executant of his having executed the document, (2) they sign their names in the presence of the executant and (3) while,so doing they had the animus to attest.
The mere presence of the signatures of the registering officer or the identifying witnesses on the registration endorsements would not by themselves be sufficient to satisfy the requirements of a Valid attestation; but it would be competent for the parties to show by evidence that any or all of these persons did in fact intend to and did sign as attesting witness as well.
" The Full Bench held that the decision in Veerappa Chettiar 's Case(1) can be held to, be correct to this limited extent only and not otherwise.
At the final hearing of the appeals, the Divisional Bench held that ( 1 ) a charge by act of parties could be created only by a document registered and attested by two witnesses; (2) the security bond was not attested by two witnesses and was therefore invalid; (3) the decree in C.S. No. 56 of 1953 should be construed as containing nothing more than a recital of the fact of there having been a security bond in favour of the plaintiff; and the sale in execution of the decree must be regarded as a sale in execution of a money decree; and (4) tie respondents were entitled to an order for rateable distribution.
Accordingly, the Divisional Banch allowed the appeals, directed attachment of the sale proceeds and declared that the respondents were entitled to rateable distribution along with the appellant.
The present appeals have been filed after obtaining special leave from this Court.
The following questions arise in these appeals : (1) Is the security bond attested by two witnesses; (2) if not, is it invalid? (3) does the decree in C.S. No. 56 of 1953 direct sale,of the properties for the discharge of a charge thereon, and (4) are the respondents entitled to rateable distribution of the assets held by court.? As to the first question, it is not the case of the appellant that K.S. Narayana Iyer is an attesting witness.
The contention is that the Sub Registrar D.W. Kittoo and the identifying witnesses Senkaranarayana and Kaki Abdul Aziz attested the document.
In our opinion, the High Court rightly rejected this contention.
Section 3 of the gives the definition of the word "attested" and is in these words : "Attested", in relation to an instrument, means and shall be deemed to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the (1) I.L.R. 519 direction of the executant, or has received from the executant a personal acknowledgment of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present it the same time and no particular form of attestation shall be necessary.
" It is to be noticed that the word "attested", the thing to be defined,.
occurs as part of the definition itself.
To attest is to bear witness.
to a fact.
Briefly put, the essential conditions of a valid attestation under section 3 are : (1 ) two or more witnesses.
have seen the executant sign the instrument or have received from him a personal acknowledgment of his signature; (2) with a view to attest or to bear witness to this fact each of them has.
signed the instrument in the presence of the executant.
It is essential that the witness should have put his signature animo attestandi, that is, for the purpose of attesting that he has seen the executant sign or has received from him a personal acknowledgment of his signature.
If a person puts his signature on the document for some other purpose, e.g., to certify that he is a scribe or an identifier or a registering officer, he is not an attesting witness.
"In every case the Court must be satisfied that the names were written animo attestandi", see Jarman on Wills, 8th ed. 137.
Evidence is admissible to show whether the witness had the intention to attest.
"The attesting witnesses must subscribe with the intention that the subscription made should be complete attestation of the will, and evidence is admissible to show whether such was the intention or not," see Theobald on Wills, 12th ed.
p. 129.
,In Giria Datt vs Gangotri (1)the Court held that the two persons who had identified the testator at the time of the registration of the will and had appended their signatures at the foot of the endorsement by the Sub Registrar, were not attesting witnesses.
as their signatures were not put "animo attestandi".
In Abinash Chandra Bidvanidhi Bhattacharya vs Dasarath Malo(2) it was held that a person who had put his name under the word "scribe" was not an attesting witness as he had put his signature only for the purpose of authenticating that he was a "scribe".
In Shiam Sundar Singh vs Jagannath Singh (3) the Privy Council held that the legatees who had put their signatures on the will in token of their consent to its execution were not attesting witnesses and were not dis qualifled from taking as legatees.
The Indian lays down a detailed pro cedure for registration of documents.
The registering officer is; (1) A.I.R. 1955 S.C. 346,351.
(3) (2) I.L.R. 5 under a duty to enquire whether the document is ' executed by the person by whom it purports to have been executed and to satisfy himself as to the identity of the executant, section 34(3).
He can register the document if he is satisfied about the identity of the person executing the document and if that person admits execution, [section 25(1)].
The signatures of the executant and of ,every person examined with reference to the document are endorsed on the document, (section 58).
The registering officer is required to affix the date and his signature to the endorsements (section 59).
Prima facie, the registering officer puts his signature on the document in discharge of his statutory duty under section 59 and not for the purpose of attesting it or certifying that he has received from the executant a personal acknowledgment of his signature.
The evidence does not show that the registering officer D.W. Kitto put his signature on the document with the intention of attesting it.
Nor is it proved that he signed the document in the presence of the executant.
In these circumstances he cannot be regarded as an attesting witness see SurendraBahadur Singh vs Thakur Behari Singh(1).
Like identifying witnesses Senkaranarayana and Kaki Abdul Aziz signatures on the document to authenticate the fact that they have identified the executant.
It is not shown that they put their signatures for 'the purpose of attesting the document.
They cannot therefore be regarded as attesting witnesses.
It is common case that B. Somnath Rao attested the document.
It follows that the document was attested by one witness only.
As to the second question, the argument on behalf of the respondents is that section 100 of the attracts section 59 and that a charge can be created only by a document signed, registered and attested, by two witnesses in accordance with section 59 where the principal money secured is Rs. 100 or upwards.
The High Court accepted this contention following its earlier decisions in Viswanadhan vs Menon(2) and Shiva Rao vs Shanmugasundara swami (3) and held that the security bond was, invalid, as it was swami attested b one witness only.
We are unable to agree with this opinion.
Section 100 is in these terms "Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property ', and all the provisions hereinbefore contained which apply to a simple mortgage shall, so" far as may be, apply to such charge.
(1) (2) I.L.R. [1939].Mad.
(3) I.L.R. [1940] mad.
521 Nothing in this section applies to the charge of a trustee on the trust property for expenses property incurred.
in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.
The first paragraph consists of two parts.
The first part concerns the creation, of a charge over immoveable property.
A charge may be made by act of parties or by operation of law.
No restriction is put on the manner in which a charge can be made.
Where such a charge has been created the second part comes into play.
It provides that all the provisions hereinbefore contained which apply to a simple mortgage shall; so far as may be, apply to such charge.
The second part does not address itself to the question of creation of a charge.
It does not attract the provisions of section 59 relating to the creation of a mortgage.
With regard to the applicability of the provisions relating to a simple mortgage, the second part of the first paragraph makes no distinction between a charge created by act of parties and a charge by operation of law.
Now a charge by operation of law is not made by a signed, registered and attested instrument.
Obviously, the second part has not the effect of attracting the provisions of section 59 to such a charge.
Likewise the legislature could not have intended that the second part would attract the provisions of section 59 to a charge created by act of parties.
Had this been the intention of the legislature the second part would have been differently worded.
If a charge can be made by a registered instrument only in accordance with section 59, the subsequent transferee will always have notice of the charge in view of section 3 under which registration of the instrument operates as such a notice.
But the basic assumption of the doctrine of notice enunciated in the second paragraph is that there may be cases where the subsequent transferee may not have notice of the charge.
The plain implication of this paragraph is that a charge can be made without any writing.
If a non testamentary instrument creates a charge of the value of Rs. 100 or upwards, the document must be registered under section 17 (1) (b) of the Indian .
But there is no provision of law which requires that an instrument creating the charge must be attested by witnesses.
Before section 100 was amended by Act 20 of 1929 it was well settled that the section did not prescribe any particular mode of creating a charge.
The amendment substituted the words "all 522 the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge," for the words "all the provisions hereinbefore contained as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the person having such charge.
" The object of the amendment was to make it clear that the rights and liabilities of the parties in ,case of a charge shall,, so far as may be, the same as the rights, and liabilities of the parties to a simple mortgage.
The amendment was not intended to prescribe any particular mode for the creation of a charge.
We find that the Nagpur High Court came to a similar conclusion in Baburao vs Narayan(1).
It follows that the security bond was not required to be attested by witnesses.
It was duly registered and was valid and operative.
As to the third question, we find that the decree dated March 19, 1954 declared that the security bond in respect of the immovable I properties would enure for the benefit of the appellant as a charge for the decretal amount.
This relief was granted on the ,oral prayer of the plaintiffs.
We are unable to agree with the High Court that in view of the omission to amend the plaint by adding a prayer for enforcement of the charge, the decree should be construed as containing merely a recital of the fact that a security bond had been executed.
In our opinion, the decree on its true construction declared that the security bond created a charg e over the properties in favour of the plaintiffs for payment of the decretal amount and gave them the liberty to apply for sale of the 'properties for the discharge of the encumbrance.
Pursuant to the decree the properties were sold and the assets are now held by the Court.
The omission to ask for, an amendment of the plaint was an irregularity, but that does not affect the construction of the decree.
It was suggested that the decree was invalid as the High Court had no territorial jurisdiction under clause 12 of its Letters Patent to pass a decree for sale of properties outside the local limits of its ordinary original jurisdiction.
For the purpose of these appeals, it is sufficient to say that the respondents cannot raise this question in the present proceedings.
If the decree is invalid and the sale is illegal on this ground, the respondents cannot maintain their applications for rateable distribution of the assets.
They ,,can ask for division of the sale proceeds only on the assumption that the properties were lawfully sold.
It is therefore unnecessary to decide whether the objection as to the territorial jurisdiction of the High Court has been waived by the judgment debtor and cannot now be agitated by him and persons claiming through him, having regard to the decisions in Seth Hiralal Patni vs Sri Kali (1)I.L.R. ,1819 822., 523 Nath(1), Behrein Petroleum Co. Ltd., vs P. J. Pappu (2) , Zamindar of Etiyapuram vs Chidambaram Chetty(1).
As to the 4th question we find that the immoveable properties have been sold in execution of a decree ordering sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73(1) proviso (c) therefore applies and the proceeds of sale after defraying the expenses of the sale must be applied in the first instance in discharging the amount due to the appellant.
Only the balance left after discharging this amount can be dis tributed amongst the respondents.
It follows that the High Court was in error in holding that the respondents were entitled to rateable distribution of the assets along with the appellant.
In the result, the appeals are allowed, the orders passed by the Divisional Bench of the Madras High Court are set aside and the orders passed by the learned Single Judge are restored.
There will be no order as to costs.
G.C. Appeals allowed.
(1) ; ,751 2.
(2) ; ,462 3.
[/INST]The appellant filed suit No. 56 of 1953 against H for recovery of certain monies on the basis of promissory notes.
As the suit was under 0. 7 of the Madras High Court Original Side Rules H was given leave to defend it on furnishing certain security.
Accordingly H executed in favour of the Registrar, Madras High Court, a security bond charging certain properties 'for the payment of Rs. 50,000,.
The document was attested by only one witness.
At the time of registration it was signed by two identifying witnesses and the Sub Registrar.
The trial Judge decreed the appellant 's suit and the decree mentioned that the charge created by H 's security bond would enure for the benefit of the decree holder.
In execution proceedings the properties in question were sold and the proceeds deposited in court.
At this stage the three respondents who also held money decrees against H applied to the Court for ratable distribution of the assets realised in the execution of the appellant 's decree in suit No. 56 of 1953.
The trial Judge dismissed their applications.
In Letters Patent Appeals the High Court held that in the absence of attestation by the two witnesses the security bond executed by H was invalid inasmuch as a charge on property created under section 100 of the attracted the provisions of section 59.
As to the decree passed in suit No,.
56 of 1953 the High Court held that in view of the decree holder 's omission to amend the plaint by adding a prayer for enforcement of the charge the decree should be construed as containing merely a recital of the fact that a security bond had been executed.
On these findings the High Court held that the respondents were entitled to rateable distribution.
Against the High Court 's orders the appellant filed appeals in this Court.
On the question of attestation he contended that the sub Registrar and the two identifying witnesses must also be treated as having attested the security bond.
HELD : (i) The essential conditions of a valid attestation under section 3 of the are : (1) two or more witnesses have seen the executant sign the instrument or have received from him a personal acknowledgment of his signature; (2) with a view to attest or to hear witness to this fact each of them has signed 'the instrument in the presence of the executant.
It is essential that the witness should have put his signature animo attestendi, that is, for the purpose of attesting that he has seen the executant sign or has received from him a personal acknowledgment of his signature.
If a person puts his signature on the docu 514 meat for some other purpose, e.g., to certify that he is a scribe or an identifier or a registering officer, he is not an attesting witness.
[519 C D] Prima facie the registering officer puts his signature on the document in discharge of his statutory duty under section 59 of the and not for the purpose of attesting it or certifying that he has received from the executant a personal acknowledgment of his signature. [520 B C] In the present case the evidence did not show that the registering officer and the identifying witnesses signed the document with the intention of attesting it.
Nor was it shown that the registering officer signed it in the presence of the executant.
The document could not therefore be said to have been attested by these witnesses and must be held to have been signed by one attesting witness only.
[520 D] Veerappa Chettiar vs Subramania, I.L.R. , Girja Datt vs Gangotri, A.I.R. 1955 S.C. 346, Abinash Chandra Bidyanidhi Bhattacharya vs Dasarath Malo, I.L.R. 56 Cal.
598, Shiam Sundar Singh vs Jagannath Singh, 54 M.L.J,.
43 and Surendra Bahadur Singh vs Thakur Behari Singh, , referred to.
(ii)Section 100 of the does not attract the provisions of section 59.
[521 C D] The first paragraph of section 100 consists of two parts.
The first part concerns the creation of a charge over immovable property which may be by act of parties or by operation of law.
No restriction is put on the manner in which a charge can be made.
[521 C] When such a charge has been created the second part comes into play.
It provides that all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge.
The second part does not address itself to the question of creation of a charge.
It does not attract the provisions of section 59 relating to the creation of a mortgage.
The second part moreover makes no distinction between a charge created by act of parties and a charge by operation of law.
Obviously the provision of section 59 are not attracted to a charge by operation of law.
Likewise the legislature could not have intended that the second part would attract the provisions of section 59 to a charge created by act of parties.
[521 D E] If a charge can be made by a registered instrument only in accordance with section 59, the subsequent transferee will always have notice of the charge in view of section 3 of the Act.
But the basic assumption of the doctrine of notice enunciated in the second paragraph is that there may be cases when the subsequent transferee may not have notice of the charge.
The plain implication of this paragraph is that A charge can be made without any writing.
[521 F G] If a non testamentary instrument creates a charge of the value of Rs. 100/ or upwards the document must be registered under section 17(1) (b) of the Indian .
But there is no provision of law which requires that an instrument creating the charge must be attested by witnesses.
[521 G H] The object of the second part of the first paragraph of section 100 is to make it clear that the rights and liabilities of the parties in case of a charge shall so far as may be the same as the rights and liabilities of the parties of a simple mortgage.
It was not intended to prescribe any particular mode for the creation of a charge.
[522 B] 515 It followed that the security bond in the present case was not required to be attested by witnesses.
It was duly registered and was valid and operative.
[522 C] Viswanadhan vs Menon, I.L.R. and Shiva Rao vs Shanmugasundaraswami I.L.R. , disapproved.
Baburao vs Narayan, I.L.R. , 819 822, approved.
(iii)The decree in suit No. 56 of 1963 on its true construction declared that the security bond created a charge over the properties in favour of the plaintiffs for payment of the decretal amount and gave them the liberty to apply for sale of the properties for the discharge of the encumbrance.
Pursuant to the decree the properties were sold and the assets were held by the court.
The omission to ask for an amendment of the plaint was an irregularity, but that did not affect the construction of the decree.
[522 D E] (iv)The immovable properties had been sold in execution of a decree ordering sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73(1) proviso (c) therefore applied and the proceeds of the sale after defraying the expenses of the sale must be applied in the first instance in discharging the amount due to the appellant.
Only the balance left after discharging this amount could be distributed among the respondents.
[523 B] (v)Since the respondents ' own case rested on the assumption that the properties were lawfully sold they could not be allowed to raise the objection that the High Court had no territorial jurisdiction for sale of properties outside the local limits of its ordinary original jurisdiction.
[522 G] Seth Hiralal Patni vs Sri Kali Nath, ; , 751 52, Bahrein Petrolium Co. Ltd. vs P. J. Pappu, ; , 462 63 and Zamindar of Etiyapuram vs Chidambaram Chetty, I.L.R. 43 Mad . 675 (F.B.), referred to.
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<s>[INST] Summarize the judgementAppeal No. 300 of 60.
Appeal from the judgment and order dated November 13, 1958, of the Rajasthan High Court in D.B.C. Writ Application No. 58 of 1957.
Chand Mal Lodha and Brijbans Kishore, for the appellant.
section K. Kapur and D. Gupta, for the respondent.
April 19.
The Judgment of the Court.
was delivered by GAJENDRAGADKAR, J.
The appellant, Firm Ghulam Hussain Haji Yakoob &.
Sons, moved the Rajasthan High Court by a petition under article 226 of the Constitution for the issue of a writ in the nature of prohibition or other writ or appropriate order, declaring that it was not liable to pay the customs duty sought to be levied on it by the Controller of Sirohi by his order of the 9th Feb., 1956.
It appears that one Mohammad Sagir had taken a contract for cutting forest of Haranj Amrapura from the Thakur of Nibaj on the 12th July, 1946.
The duration of this contract was five years and the purpose of the contract was to enable the contractor to prepare charcoal.
This contract was subsequently transferred to the appellant by the said Sagir on the 13th September, 1948.
In due course, the contract was extended by the Thakur of Nibaj by two years and on endorsement was made on it to that effect on the 15th April, 1950.
Under this contract, the appellant prepared charcoal and exported it out of the State of Sirohi.
The Assistant Commissioner, Customs and Excise, Sirohi, took the view that the appellant was liable to pay 257 customs duty @ As.
/8/ per maund on the quantity of charcoal exported by it.
The Asstt.
Commissioner found that the charcoal thus exported by the appellant was 2 7, 003 mds.
Accordingly, the said Asstt.
Commissioner made a report to the Commissioner on the 11th February, 1954.
The matter was then dealt with by the Dy.
Commissioner, Customs & Excise, and he passed on order that the appellant had exported charcoal without payment of duty.
This order was made on the 17th December, 1954.
According to the finding made by the Dy.
Commissioner, the charcoal exported by the appellant after the 30th November, 1948, amounted to 48,650 maunds.
On this basis, the appellant was asked to pay Rs. 24,325 / on account of the duty on export of charcoal @ As. /8/ a maund.
The appellant challenged the correctness of this order by preferring an appeal to the Government, but its appeal was rejected on the 24th May, 1956.
The appellant came to know about this order on the 5th April, 1957, when it was asked by the Tehsildar 'to deposit the duty assessed on it along with interest.
Since the appellant did not deposit the amount, the Customs authorities had, in the meanwhile, made a requisition to the Collector of Sirohi for recovery of the said amount, and the Collector had issued a notice on the appellant under the Public Demand Recovery Act on the 9th February, 1956.
It is the validity of this notice that the appellant challenged by its present writ petition.
The appellant 's case was that the order purported to have been passed by the State Council of Sirohi by which the customs duty @ As.
/8/ was levied on charcoal was invalid and ultra vires and so, it was not competent to the Customs authorities to levy any duty on the charcoal exported by the appellant and it was not competent to the Collector to issue a demand notice for the recovery of the said duty under the Public Demand Recovery Act.
On the other hand, the respondent, the State 258 of Rajasthan, disputed the correctness of, the appellant 's allegation that the duty had been illegally levied.
It was urged by the respondent that the said duty had been levied validly by the resolution passed by the State Council which had been approved by Her Highness Shri Rajmata Saheba, Since the said resolution had been duly passed by a competent authority, the levy of the duty imposed on the appellant was valid and the Collector was justified in issuing the notice of demand under the Public Demand Recovery Act.
The High Court has upheld the plea made by the respondent, with the result that the writ petition filed by the appellant has been dismissed with costs.
The appellant then applied for and obtained a certificate from the High Court and it is with the said certificate that it has come to this Court by its present appeal.
The customs tariff had been prescribed in the State of Sirohi by the Sirohi Customs Act of 1944 Section 14 of the said Act lays down that : " 'except as hereinafter ' provided, customs duties shall be levied at such rates as are prescribed in the Sirohi Customs Tariff on all goods mentioned therein, at the time of import or export of goods (including those belonging to the State) into or out of Sirohi State by rail, road or air".
It would thus be seen that section 14 which is the charging section provides that customs duties shall be levied on the goods mentioned in the Tariff at the rates prescribed by it.
The result is that it is only in respect of goods mentioned in the Tariff and at the rates.
specified therein that customs duties could be leived.
Section 15 of the said Act conferred upon the Darbar power to fix and alter tariff rates.
It says that the Darbar may, from time to time, by 259 notification in the Sirohi State Gazette, save in emergency cases, alter the rates prescribed in the Tariff and such altered rates shall come into force from the date mentioned in the notification or, in the event of the notification not reaching any customs post concerned, on a subsequent date from such date.
" The effect of this section is that the power to fix and alter tariff rates has been conferred on the Darbar which is required ordinarily to issue a notification in that behalf.
The High Court thought that as a result of reading sections 14 and 15 together, it was open to the Darbar not only to alter rates at which customs could be levied but, also to include new items under the taxable articles mentioned in the Tariff.
This view is clearly erroneous.
The power conferred on the Darbar by s 15 is to fix and alter tariff rates.
No ,power has been conferred on the Darbar to add to the list of taxable commodities in the Tariff itself The goods on which customs duties could be levied have been specified in the Tariff attached to the Act and no addition could be made to the said Tariff in that behalf by the Darbar by virtue of the authority conferred on it by section 15.
There is no doubt about this position.
At this stage, it is relevant to add that in the Tariff prescribed by the Act of 1944, charcoal is included in the list of commodities, the import of which is liable to pay the customs duty.
It is however, not included in the list of commodities the export of which is liable to pay customs duty.
This position is not disputed.
Therefore, in order that export of charcoal should be made liable to pay the customs duty, the respondent ought to be able to rely upon some legislative enactment in that behalf.
It appears that in 1940, the Ruler of the Sirohi State brought into existence the Council of 260 State and its functions and duties and its rights were duly notified in the State Gazette.
The Council which was designated as the Council of State, Sirohi, was to consist of His Highness as President, the Chief Minister as Vice President and such other member as His Highness may appoint from time to time.
The general working of the Council had to be under the control of the President who, under rule 9, was empowered, if the matter was urgent, to act on behalf of the Council, provided that the Council was duly informed about the action taken by the President as soon as possible.
Rule I I of the notification provided that all cases of the kind enumerated in Schedule I shall be referred to the Council for decision before final orders are passed, save as provided in rule 9.
Now, amongst the matters specified in Schedule I is included the topic of any new taxation, or alteration or abolition of taxation.
This is entry 7 in the said Schedule.
It would thus appear that it was within the competence of the Council to consider the proposal for any new taxation or alteration or abolition under rule 11 and it was for the Ruler to pass final orders in the light of the decision by the Council on that point.
Rule 11 makes it clear that though it wag competent to the Council to reach a decision on topics covered by entry 7 in Schedule 1, it was for the Ruler to pass final orders which would make the decision effective.
In other words, there can belittle doubt that the power of the Council in respect of the matters covered by Schedule I were no more than advisory ; it was always for the Ruler to decide what final orders should be passed in respect of the matters referred to the Council for its decision.
That is the nature and scope of the power conferred on the Council.
Since the Ruler of the State, His Highness Maharajadhiraja Maharao Taj Singhji Bahadur, was 261 a minor in 1947, His Excellency the Crown Representative was pleased to sanction the passing of the Regency Act for the Sirohi Minority Administration on the 14th August, 1947.
This Act provided that it was to come into force on the 14th August, 1947 and was to continue until the Ruler attained the age of 18 years.
Section 3 of the Act prescribes that for the purpose of the Constitution of the Sirohi State, the word "Ruler" wherever occurring in the Constitution shall be deemed to be the Board of Regency.
Section 4 provided for the constitution of the Board of Regency.
It was to consist of Her Highness the Dowager Maharani Saheba of Sirohi, Maharana Shri Sir Bhawani Singhji Bahadur of Danta and Raj Saheban Shri Bhopalsinghji of Mandar.
Section 6 of the Act provided that the Board of Regency shall be legal guardian of the Ruler.
After this Act was passed, the functions of the Ruler were discharged by the Board of Regency which, for all constitutional and legal purposes, represented the Ruler during his minority.
In pursuance of the material provisions of this Act, notification was issued on the same clay constituting the Board of Regency.
Thus, it would be clear that when the impugned order levying a duty on coal was passed on the 31st May, 1948, the constitutional position was that the governance of the State was entrusted to the Board of Regency; and under the Board of Regency was functioning the State Council which had been constituted by the previous Ruler in 1940.
It is in the light of this constitutional position that the question about the validity of the impugned levy of customs duty on the appellant has to be judged, On the 31st May, 1948, an order was passed which purports to have been issued in pursuance of the Council Resolution dated 15th May, 1948, for which approval had: been obtained from Her Highness Shri; Raj Mata Saheba.
As a result of this Order, the duties imposed on goods specified 262 in the Tariff attached to the earlier Act were enhanced in respect of bones, wool, timber and fire wood, and a fresh duty was imposed in respect of export of charcoal.
This duty was imposed @ As.
/8/ per maund.
As we have already soon, it is common ground that according to the Tariff prescribed by the Act of 1944, charcoal was not included in the list of articles, the export of which was liable to customs duty.
The question which calls for decision in the present appeal is whether the order thus issued is valid; and the answer to this question depends upon whether or not the imposition of the customs duty on charcoal has been levied by an authority which was legislatively competent to issue such an order.
If the levy has been ordered only by the State Council without the approval of the Board of Regency, then it would be invalid because it was not competent to the State Council to pass a law.
It was open to the State Council to reach a decision on the question about the imposition of customs duty on any new article, but that decision had to be approved and accepted by the Board of Regency which alone was clothed with the requisite legislative power.
Therefore, the validity of the order can be sustained only if it is shown that it has been passed with the approval of the Board of Regency of which Shri Raj Mata Saheba was the President.
In dealing with this question, it is necessary to bear in mind that the order does not formally recite that Shri Raj Mata Saheba had approved of the order as the President of the Board of Regency.
The order has been issued by the Secretary of the State Council and does not purport to have been issued by the executive officer of the Board of Regency.
The order does not refer to the Board of Regency at all and does not purport to say that Shri Rajmata Saheba, when she gave her approval, was acting on behalf of the Board.
If the order had formally been passed as on behalf 263 of the Board of Regency, it would have been open to the respondent to contend that the assumption should be that it was duly passed by the Board of Regency and has been promulgated according to the rules of business prescribed by the said Board.
But since the order does not purport to have been issued either on behalf of the Board of Regency or on behalf of Shri Raj Mata Saheba acting for the Board of Regency, it is necessary to enquire whether, in fact, the Board of Regency has approved of this order, and it appears that so far as this enquiry is concerned, the respondent has placed no material before the Court which would assist it in coming to the conclusion in favour of the validity of the impost.
Indeed, the plea taken by the respondent is disputing the correctness of the appellants claim before the High Court, was that Shri Raj Mata Saheba was the President of the Board of Regency and that whenever she acted, she did so on behalf of the Board and it was for her to take counsel from the other members.
It was, therefore, urged that in the circumstances, it would be presumed that she has passed the orders in consultation with other members till the contrary is proved.
It is significant that this plea proceeds on the assumption that it was at the option of Shri Raj Mata Saheba either to consult the Board of Regency or not.
The respondent 's case appears to be that the Raj Mata being the President of the Board of Regency could act on her own in matters relating to the government of the State either executively or legislatively and that it was for her to decide whether she should consult the other members of the Board or not.
The case set out by the respondent is not that the Raj Mata as the President of the Board always consulted the Board before she acted on its behalf.
On the contrary, the plea taken seems to suggest that the Raj Mata was not bound 264 to consult the Board and could have acted independently of the Board in passing orders either executive or legislative.
That being the plea, it is difficult for us to accept the argument that the approval of the Raj Mata to which the impugned order makes a reference, can be safely taken to be the approval of the Raj Mata after she had consulted the Board in that behalf.
There is no doubt that as a result of the Sirohi Regency Act, the governance of the State was left in the hands of the Board of Regency and it was the Board of Regency alone acting collectively that could legislate or pass executive orders.
If the Raj Mata took the view that she could act on her own without consulting the Board.
that was clearly inconsistent with the material provisions of the Act.
Therefore, we are not inclined to accept the conclusion of the High Court that the impugned order can be said to have been passed as a result of the decision of the Board of Regency, since the Board of Regency alone was clothed with the necessary legislative authority, Unless the Board passed the resolution, it could not take effect as a law in the State of Sirohi.
The approval of the Raj Mata to the resolution passed by the State Council cannot cure infirmity arising from the fact that the State Council had no legislative power.
The High Court seems to have taken the view that since the Raj Mata entered into the agreement of merger, she can be treated at the de facto Ruler of the State and as such, she was competent to exercise the necessary legislative power to pass the impugned order.
we are not inclined to accept this view.
It is clear that the document of merger has been signed by the Raj Mata describing herself as the President of the Regency Board; but the High Court thought that since the document had not been signed by the Board itself, the Raj Mata could be treated as the de facto Ruler of the State.
265 This view is clearly erroneous.
Since the Raj Mata was the President of the Board of Regency, it was competent to her to sign the document on behalf ' of the Board and she purported to sign it as the; President of the Board of Regency obviously because she had consulted the Board and it was as a result of the decision of the Board that she proceeded to execute the document and sign it as the Board 's President, Therefore, there is no substance in the contention that, the Raj Mata alone, without the concurrence of the Board, could have validly given sanction to the passing of the impugned order.
In the result, we must hold that the impugned order has not been validly passed and no levy of customs duty can be legally imposed on the appellant in regard to the charcoal which it has exported out of the State of Sirohi.
It is, however, urged that the duty levied against the appellant for the export of charcoal can be sustained under the provisions of Rajasthan Ordinance (No.16 of 1949).
Section 4(2) of the said Ordinance authorised the Government to issue any revised tariff and in exercise of this power, the Government of Rajasthan has issued a notification No. 211/SRD on the 10th August, 1949, whereby a revised tariff was imposed and it was directed that the duties of customs shall be levied and collected in accordance with the said revised Tariff.
According to item No.367 in the said Tariff, export duty on charcoal was As. /8/ per maund.
The respondent 's argument was that when Sirohi became a part of Rajasthan, the Ordinance in question applied to Sirohi and so, the claim for the customs duty made against the appellant was justified under the relevant provisions of the said Ordinance.
This Ordinance came into force on the 4th August, 1949.
In our opinion, this argument is not well founded.
When Ordinance XVI was passed and 266 same into force, it no doubt applied to the whole of Rajasthan as it was then constituted, but the State of Sirohi was at the relevant time not a part of Rajasthan and it became a part of Rajasthan as from the 25th January, 1950.
It appears that the Ministry of States issued a notification on the 24th January, 1950, in exercise of the powers conferred on the Government of India by subsection (2) of section 3 of the Extra Provincial Jurisdiction Act 1947 (47 of 1947) and it was as a result of this notification that the Central Government delegated to the Government of the United States of Rajasthan the extra provincial jurisdiction including the power conferred by section 4 of the said Act to make orders for the effective exercise of that jurisdiction.
It is thus clear that until the 25th, January, 1950, Sirohi was not a part of Rajasthan and was not amenable to the application of the Ordinance in question.
The respondent attempted to suggest that as soon as Sirohi became a part of Rajasthan, the Ordinance in question applied to it.
This argument is obviously falla cious.
When Sirohi became a part of Rajasthan, the laws applicable to Rajasthan prior to the merger of Sirohi could be made applicable to Sirohi only after an appropriate legislation had been passed in that behalf.
In fact, in 1953, the Rajasthan Laws (Application to Sirohi) Act (No.III of 1953) was passed to declare that certain Rajasthan laws applied to Sirohi.
Section 3 of this Act provided that the Rajasthan laws specified in the Schedule to the Act shall, in so far as they relate to any of the matters enumerated in Lists II and III in the Seventh Schedule to the Constitution of India, apply, and as from the appointed day, be deemed to have applied to Sirohi not withstanding any thing to the contrary contained in the Sirohi Administration Order, 1948, or in any other law, or instrument.
There is a proviso to this 267 section with which we are not concerned for the purposes of the present appeal.
The Ordinace in question is not included in the Schedule and so, it is clear that the said Ordinance was not intended to apply to Sirohi.
It is not suggested that any other law passed by the Rajasthan State or any other instrument executed in that behalf made the Ordinance in question applicable to Sirohi.
Therefore, we are satisfied that the respondent cannot rely upon the relevant provisions of the Rajasthan Ordinance 1949 to support the demand for customs duty against the State of Sirohi.
In the result, the appeal must be allowed and the writ issued in favour of the appellant declaring that the appellant is not liable to pay the customs duty in question and quashing the orders passed by the Dy.
Commissioner, Customs & Excise as well as the Minister of Excise & Taxation and the demand notice issued by the Collector at the instance of the excise authorities.
The appellant would entitled to its cost throughout.
Appeal allowed.
[/INST]Disputes which arose between the parties with respect to carrying out a contract were referred to the arbitration of the Bengal Chamber of Commerce in accordance with an agreement to refer disputes as and when they arose to the arbitration of the Chamber.
The award of the Tribunal of Arbitration was set aside by the High Court.
On an application for referring the matter for arbitration de novo another tribunal was constituted which made a fresh award.
The questions which arose for decision were whether after the first award was set aside the reference to arbitration was exhausted and the arbitrator had become functus offcio and whether without a fresh arbitration agreement it was not possible to have the same dispute decided again by the arbitrator.
^ HELD, that the arbitrator became functus officio after he gave the award but that did not mean that in no circumstances could there be further arbitration proceedings where an award was set aside or that the same arbitrator could never have anything to do with the award with respect to the same dispute.
Section 19 of the Arbitration Act empowered the Court not to supersede the reference and to leave the arbitration agreement effective even when it set aside the award and thereupon it would depend upon the terms of the arbitration agreement whether the arbitration proceedings could go on with respect to the same dispute or with respect to some other dispute arising under the arbitration agreement.
Barangore Jute Factory vs Hulas Chand Rupchand. , Rallis India Ltd. vs B. V. Manickam Chetty, A.I.R. 1956 Mad.
369, and Firm Gulab Rai Girdhari Lal vs Firm Bansi Lal Hansraj, A.I.R. 1959 Punj.
102, approved.
Morder vs Paimer, and Sutherland and Co .
vs Hannevig Bros. Ltd. , referred to.
In the present case the first award was set aside but as the reference had not been superseded and the arbitration 102 agreement subsisted it was open to the Chamber to appoint another tribunal under r. X of the Chamber Rules.
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<s>[INST] Summarize the judgementAppeal No. 1693 of 1967.
14 Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated September 21, 1967 of the Madhya Pradesh High Court in Election Petition No. 10 of 1967.
G. N. Dikshit and R. N. Dikshit, for the appellant.
C. B. Agarwala Uma Mehta, section K. Bagga and Shureshta Bagga, for respondent No. 1.
The Judgment of the Court was delivered by Hidayatullah, J.
This is an appeal against the, judgment of the High Court of Madhya Pradesh at Jabalpur, dated September 21, 1967.
dismissing the election petition filed by the appellant on the preliminary ground that a proper copy of the election petition was not served upon the answering parties.
The facts of the case are as follows The appellant was a candidate for election to the Sagar Lok Sabha Scheduled Castes constituency No. 24.
The election took place on February 20, 1967.
There were three other contesting candidates of whom the first respondent secured the largest number of votes and was declared elected.
The appellant secured the second largest number of votes, her votes being less by just under 300 than the successful candidate 's votes.
An election petition was thereafter filed by the appellant on April 5, 1967.
In this ,election petition the appellant challenged the election of the first respondent on four grounds.
They were (a) wrongful acceptance . ,of his nomination paper, (b) corrupt practice inasmuch as .he appealed to religion through a pamphlet marked Annexure (c) undue influence, and (d) breaches of the.
Act and Rules.
The pamphlet to which reference is made was styled Bhayankar Vajraghat and was published by Sarvadaliya Goraksha Mahabhiyan Samiti, Deori Kalan Branch.
It charged the party of the appellant namely the Congress with encouraging cow slaughter and ,offending.
the Hindu Sentiment.
Details were given in it of the number of animals slaughtered every day in Madhya Pradesh land elsewhere and blamed the Congress with being a party to the practice.
In the body of the election petition a translation in English of the Hindi pamphlet was incorporated.
The original pamphlet was attached to the election petition and was marked Annexure 'A '.
The election petitioner proceeded to say in her petition "it forms part of the petition".
When parties appeared the first respondent filed his written statement in great.
detail.
He dealt with this pamphlet and answered the allegations of the election petitioner in relation thereto paragraph by paragraph.
As a result of these pleas a number of issues were raised on July 18, 1967.
No issue was raised in 15 regard to the service of a defective copy of the election petition upon the respondents in general and the first respondent in particular.
However, on August 3, 1967, a special objection was made by the first respondent claiming that the copy of the pamphlet had not been annexed to the copy of the election petition served upon him and therefore the election petition was liable to be dismissed in accordance with the provisions of section 86 of the Representation of the People Act.
A detailed reply to this objection was given by the election petitioner.
She stated that this was an after thought inasmuch as the translation of the pamphlet was incorporated in the election petition and the allegations regarding the pamphlet had been answered in detail by the answering respondent.
The Court thereupon framed an additional issue on August 4, 1967.
The issue ran as follows "Whether the election petition is liable to be dismissed for contravention of section 81 (3) of the Representation of the People Act, 1951 as copy of Annexure A to the petition was not given along with the petition for being served on the respondents".
Parties first filed a number of affidavits pro and con.
Later the Court ordered attendance of the deponents for crossexamination.
In this way the appellant and her counsel who had filed affidavits earlier were examined.
Their.
case was that the copies of the election petition had been properly, put together including in each copy an original pamphlet for service on the respondents.
On the other side the first respondent and two others filed affidavits stating that when the copy of the election petition was received it was not accompanied by the pamphlet.
In their examination in Court all maintained the same position, and were cross examined.
The learned Judge trying the case also ordered the attendance of the Reader of the Deputy Registrar of the High Court who had dealt with the election, petition and he ' was examined as Court witness No. 1.
He stated that the copies of the petition were complete except that the pamphlet was not annexed to each copy.
He stated that he had noted at the time this fact but had treated the pamphlet as a document and not as an Annexure to the election petition.
The learned Judge, on an appraisal of this material held that the copies of the election petition served upon the respondents were not accompanied by the pamphlet which was an Annexure to the election petition.
After examining the law on the subject the learned Judge came to the conclusion that the election petition should be dismissed under section 86 of the Representation of the People Act and he accordingly dismissed it with costs.
No other 16 issue which was struck between the parties was gone into because the election petition failed at the very threshold.
In this appeal it is contended that the learned Judge was in error in thinking that the pamphlet ought to have accompanied the copies of the election petition or that the law required that it should have been annexed to the copy of the election petition served on the respondents.
In this connection our attention was drawn to the provisions of the Representation of the People Act to which we shall refer presently.
On the other side it was contended that whatever the meaning of the expressions "the election petition", "annexures" or "schedules" in the Act, the election petitioner by her own conduct had made this document a part Of the election petition and therefore it was incumbent upon her to have served the whole of the election petition and not only a part of it as she did and therefore the order now appealed against was correct.
Before we come to these rival contentions we find it necessary to refer first to the relevant provisions on the subject Section 81 of the Representation of the People Act occurs in Chapter 11 which is headed "Presentation of Election Petitions to Election Commission".
It provides as follows: "Presentation of Petitions (1) An election petition calling in question any election may be presented on one or more of the , rounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates.
Explanation : In this subsection, 'elector ' means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not.
(3) Every election petition shall be accompanied by as many copies thereto as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition." 17 The first respondent draws pointed attention to the third sub section which says that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
The dispute therefore is whether the pamphlet could be described in this case as, a part of the election petition.
The answering respondent says that it is so and was considered to be so by the election petitioner herself when she stated that it was to be read as a part of the election petition.
The matter, in our opinion, is not to be resolved on how the election petitioner viewed the matter but from the point of view of the requirement of the law on the subject.
For this purpose we have to turn to section 83 of the Representation of the People Act which provides what the contents of the election petition shall be.
It reads as follows (1) An election petition (a) shall contain a concise statement of the material facts on which,the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908), for the verification of pleadings.
Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the The answering respondent herein again draws pointed attention to the fact that the schedules and the annexures to the petition are mentioned and they have to be signed and verified in the same manner as the petition meaning thereby that as the election petitioner had made the pamphlet a part of the election petition she was required to sign and verify the pamphlet and also to serve a 18 copy of it as required by sub section
(3) of section 81 when the election petition was served. 'He then relies upon section 86 which provides that the High Court shall dismiss an election petition which does not comply with the provisions of section 81, section 82 or section 117.
An argument was raised in this case as to whether section 86(1) is mandatory or merely directory.
We need not go into this aspect of the case.
In our opinion the present matter can be resolved on an examination of the relevant facts and the contents of the election petition as detailed in section 83 reproduced above.
It may be pointed out here that the trial of election petition has to follow as.
far as may be ,the provisions of the Code of Civil Procedure.
We are therefore of opinion that it is permissible to look into the Code of Civil Procedure to see what exactly would have been the case if this was a suit and not a trial of an election petition.
Under the Code of Civil Procedure, a suit is commenced by a plaint.
This is provided by O.IV, r. 1 which says that every suit shall be instituted by presenting a plaint to the Court.
After the plaint, is received O.V provides the summoning of the defendants in the case and r. 2 of that order says that every summons shall be accompanied by a copy of the plaint, and if so permitted, by a concise.
statement.
We then turn to the provisions of O.VII Which.
deals with the contents of a plaint.
The first rule mentions the particulars which must be in a plaint.
It is not necessary to refer to them '.
The plaint has to be signed and verified.
Rule 9 then provides that the plaintiff shall endorse on the plaint and annex thereto a list of documents, if any, which he has produced along with it and, if the plaint is admitted, shall present as many .copies on plain paper of the plaint as there are defendants unless the Court by reason of the length of the plaint or the number of defendants, or for any other sufficient reason, permits him to present a like number of concise statements of the nature of the claims made,.
It will be noticed here that what is required to be provided are copies of the plaint itself or the concise statement according to the number of defendants.
There is no mention here of any, other documents of which a copy is needed to be presented to the Court for service to the defendants.
Then we come to r. 14 which states that where a plaintiff sues upon a document in his possession or power he shall produce it in court when the plaint is presented and shall at the same time deliver the document or a copy thereof to.
be filed with the plaint.
It will be noticed that he is required to file only one copy of the document and not as many copies as there are defendants in the case.
It would therefore follow that a copy of the document is not expected to be delivered with the copy of the plaint to the answering defendants when summons is served on them.
In the schedules to the Code of Civil Procedure we have got Appendix B which 19 prescribes the forms for summons to the defendants.
There is only one form of summons in Appendix B, (Form No. 4) in which the copy of the negotiable instrument is to accompany the copy of The plaint.
That is so, because of the special law applying to the negotiable instruments and the time limit within which pleas to that document have to be raised and this is only in summary suits.
No other form makes any mention of any document accompanying the summons with the, copy.
of the plaint.
We need not go into more details,.
It is clear that the documents which are filed with the plaint have to be accompanied by one copy of those documents.
This is because the copy is compared with the original and the copy is endorsed by the clerk of court and the document is sometimes returned to the party to be produced into Court later. 'the copy takes the place of the document concerned and is not to be sent out to the parties with the plaint.
We may now see whether the election law provides anything different.
The only provision to which our attention has been drawn is sub section
(3) of section 81 and sub section
(2) of section 83.
The first .provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the ;petition and that every such copy shall be an authenticated true copy.
The words.
used here are only "the election petition".
There is no mention of any document accompanying the election petition.
If the matter stood with only this sub section there would ;be no doubt that what was intended to be served is only a copy of the election petition proper.
Assistance is however taken from the provisions of sub section
(2) of section 83 which provides that.
any schedule or any annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition it is contended that since the pamphlet was an annexure to the petition it was not only necessary to sign and verify it, but that it should have been treated as a part of the election petition itself and a copy served upon the respondents.
in this way, non compliance with the provisions of section 86(1) is made Out.
In our opinion, this is too strict a reading of the provisions.
We have already pointed.
out that section 81(3) speaks only of the election petition.
Pausing here, we would say that since the election petition itself reproduced the whole of the pamphlet in a translation in English, it could be said that the averments with regard to the pamphlet were themselves a part of the petition and therefore the pamphlet was served upon the respondents although in a translation and not in original.
Even if this be not the case, we are quite clear that subs.
(2) of section 83 has reference not to.
a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in he accompanying schedules or annexures.
We can 20 give quite a number of examples from which it would be apparent that many of the averments of the election petition are capable of being put as schedules or annexures.
For example, the details of the corrupt practice there in the former days used to be set out separately in the schedules and which may, in some cases, be so done even after the amendment of the present law.
Similarly, details of the averments too compendious for being included in the election petition may be set.
out in the schedules or annexures to the election petition.
The law then requires that even though they are outside the election petition, they must be signed and verified, but such annexures or schedules are then treated as integrated with the election petition and copies of them must be served on the respondent if the requirement regarding service of the election petition is to be wholly complied with.
But what we have said here does not apply to documents which are merely evidence in the case but which for reasons of clarity ,and to lend force to the petition are not kept back but produced or filed with the election petitions.
They are in no, sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof.
The pamphlet therefor must be treated as a document and not as a part of the election petition in so far as averments are concerned.
When ,the election petitioner said that it was to be treated as part of her election petition she was merely indicating that it was not to be thought that she had not produced the document in time.
She was insisting upon the document remaining with the petition so that it could be available whenever the question of the election petition or its contents arose.
It would be stretching the words of sub section
(2) of section 83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper.
In this particular case we do not think that the pamphlet could be so treated.
We are, therefore, of the opinion that whether or not section 86(1) is mandatory or directory there was no breach of the provisions of the Representation of the People Act in regard to the filing of the election or the service of the copies thereof and the order under appeal was therefore erroneous.
We accordingly set aside the order and remand the case for trial from this stage.
The costs of the appellant will be costs in the cause.
The respondent will bear his own costs.
Y. P. Appeal allowed and case remanded.
[/INST]On the allegation that the appellant Havaldar and the second appellant a Subedar in the Rajasthan Armed Constabulary. were demanding certain amount from a person accusing him of indulging in blackmarketing and constantly visiting Pakistan and unless he paid the amount demanded he would be beaten and prosecuted, a police trap was successfully laid, and the appellants convicted under sections 161 and 120B I.P.C. and under section 5(2) read with section 5(1)(a) and section 5(1)(d) of the Prevention of Corruption Act.
In appeal, this Court.
HELD : The conviction of the appellants under section 120B and 161 as well as under section 5 (2) read with section 5 (1) (a) of the Prevention of Corruption Act must be set aside.
The second appellant 's conviction under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act must be sustained.
The first appellant 's conviction be altered to one under section 5(2) of the Prevention of Corruption Act read with section 114 I.P.C.
The first appellant was a subordinate of 'second appellant.
From the evidence it is clear that both the appellants were acting together.
It is ' obvious that the second appellant was mainly responsible for the extortions complained of and the first appellant was aiding him in his activities.
Hence there was no need to charge the appellants under section 120 B. I.P.C.
The evidence clearly showed that neither the appellants intended to show any official favour to the Persons from whom they extorted money nor those persons expected any official favour from them.
The amounts in question were paid solely with a view to avoid being ill treated or haras sed.
Therefore, it is dffficult to hold that the acts complained can be held to constitute offences under section 161 I.P.C. State of Ajmer vs Shivji Lal, [1959] Supp. 2 S.C.R. 739 and State of Uttar Pradesh vs Kuljas Rai.
A. No. 177 of.
1960 dated 22 8 62, referred to.
Before an offence can be held to come within section 5(1)(a) Of the Prevention of Corruption Act, the requirements of section 161 I.P.C., have to be satisfied.
If an offence does not fall under section 161 I.P.C. it cannot come.
within section 5(1)(a) of the Prevention of Corruption Act.
[196 C] But so far as section 5(1) (d) of the Prevention of Corruption Act is concerned, that stands on a different footing.
To bring home an offence under section 5(1) (d), it is not necessary to prove that the acts complained of were done by the appellants in the discharge of their official duties.
Clause 5(1)(d) is much wider in scope than cl.
5(1)(a).
[196 D 197 B] 190 State of Uttar Pradesh vs Kuljas Rai, Cr.
A. No. 177 of 1960 dated 22 8 62 and Dhaneshwar Narain Saxena vs The Delhi Administration, ; , referred to.
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<s>[INST] Summarize the judgementAppeal No. 196 of 1958.
Appeal by special leave from the judgment and order dated April 27, 1953, of the Assam High Court in Civil Rule No. 66 of 1953.
Sukumar Mitter and Sukumar Ghose, for the appel.
Veda Vyasa and Naunit Lal, for the respondents.
October 18.
The Judgment of the Court was delivered by SHAH J.
The appellants are dealers registered under the Assam Sales Tax Act XVII of 1947 hereinafter referred to as the Act.
For the account period April 1, 1948 to September 30, 1948, the appellants submitted a return of their turnover which included sales in Assam of all goods other than jute.
The Superintendent of Taxes, Dhubri, summarily assessed the appellants under sub section
4 of section 17 of the Act to pay tax on sales of jute despatched by them to Calcutta during the account period.
Appeals against the order of assessment to the Assistant Commissioner of Taxes and to the Commissioner of Taxes, Assam, proved unsuccessful.
The appellants then applied to the Commissioner of Taxes to refer certain questions arising out of the assessment to the High Court in Assam under section 34 of the Act.
The Commissioner referred the following questions and another to the High Court of Judicature in Assam: (1) Whether, in view of the aforesaid facts and circumstances the turnover from 20,515 maunds of 6 42 jute mentioned under item (i) is taxable under the Act ? (2) Whether, in view of the aforesaid facts and circumstances the turnover from 5,500 maunds of jute mentioned under item (ii) is taxable under the Act ? (3) Whether, in view of the aforesaid facts and circumstances, the turnover from 25,209 maunds of jute mentioned under item (iii) is taxable under the Act ? In respect of each of the three questions 1 to 3, the High Court recorded the following answer: section " Not being a sale within the meaning of sub12 of section 2 of the Act, the consignments are riot taxable ".
The High Court, however observed: " As to whether these consignments can hereafter be assessed if they fall within the purview of the Explanation to sub section
12 of section 2, we express no opinion ".
As required by section 32(8) of the Act, the Commissioner of Taxes by his order dated August 1, 1952, directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of the High Court.
The Superintendent of Taxes thereafter issued on January 30, 1953, the following notice to the appellants: " In view of the Hon 'ble High Court 's order in Sales tax Reference No. 3 of 1951, the assessment order dated 30th September, 1950, for the return period 30th September, 1948, has been set aside and you are directed to produce necessary evidence, con.
tract papers, account books, etc. . . in order to see whether the contract of sale involved in this case come within the purview of the Explanation to sub.s.
12 of section 2 of the Act ".
By their letter dated March 23, 1953, the appellants called upon the Commissioner of Taxes to direct the Superintendent of Taxes not to proceed with the notice.
The Commissioner having failed to direct as requested, the appellant petitioned the High Court in Assam under article 226 of the Constitution for a writ 43 prohibiting the Superintendent of Taxes from re opening and proceeding with the assessment of the appellants under the Assam Sales Tax Act and for a writ quashing the order dated August 1, 1952, passed by the Commissioner.
The High Court summarily dismissed the petition.
Against the order passed by the High Court, this appeal is filed with special leave under article 136 of the Constitution.
The High Court, in answering the questions submitted to it, was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax : it merely recorded its opinion that the transactions referred to in the questions were not sales within the meaning of section 2, sub section 12, of the Act and were accordingly not taxable.
Pursuant to the opinion of the High Court, the Commissioner directed the Superintendent of Taxes to dispose of the case " in accordance with" the judgment of the High Court; but the Superintendent of Taxes thought that he was entitled to re open the assessment proceedings and to assess the appellants in the light of the Explanation to section 2, sub section 12.
In so doing, the Superintendent of Taxes, in our judgment, acted without authority.
The Superintendent had made the assessment, and that assessment was confirmed in appeal by the Assistant Commissioner.
On the questions arising out of that assessment, the High Court had opined that the transactions sought to be assessed were not liable to tax.
The Superintendent of Taxes, on this opinion was right in vacating the order of assessment.
But any further proceeding for assessment which he sought to commence by issuing a notice requiring the appellants ' to produce evidence, contract papers, account books, etc.
so as to enable him to determine whether the transactions were taxable under the Explanation to sub section
12 of section 2 had to be supported by some authority under the Act.
The Superintendent of Taxes has not referred to the authority in exercise of which he issued this notice.
It is true that tinder section 19 of the Act, the " taxation Officer " if satisfied upon information coming into his possession that any 44 dealer has been liable to pay tax under the Act in respect of any period and has failed to apply for registration and to make the return required of him, may at any time within three years of the end of the aforesaid period serve on the dealer a notice containing all or any of the requirements which may be included in a notice under sub section 2 of section 16 and may proceed to assess the dealer in respect of such period.
But admittedly, the appellants were registered as dealers and had submitted their returns: the power to reassess could not therefore be exercised by virtue of section 19 of the Act.
Under section 19 A, the Commissioner has also power, if satisfied upon information coming into his possession, that any turnover in respect of sales of any goods chargeable to tax has escaped assessment during the return period, to serve at any time within three years of the aforesaid period, on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub section 2 of section 16 and may proceed to assess or reassess the dealer in respect of such period.
But the Commissioner bad not issued any such notice under section 19A. Nor had the Commissioner in exercise of his revisional authority under section 31 of the Act set aside the original order of assessment.
The Commissioner merely directed under section 32, sub section 8, that the case be disposed of in accordance with the judgment of the High Court, and acting under that direction, the Superintendent of Taxes had no power to reopen the assessment and to call upon the appellants to produce documentary evidence with a view to commence an enquiry whether the sales involved in the case fell " within the purview of the Explanation to section 2 sub section 12 ".
In any event, the account period as has already been observed was April 1, 1948 to September 30, 1948, and three years from the end of that period, expired before the date on which the notice was issued.
Fresh proceedings for reassessment could not be initiated by the Superintendent of Taxes under section 19 after the expiry of three years from the assessment period assuming that this could be regarded as a case of failure to apply for 45 registration and to make a return required of the appellants.
In support of his contention that the Superintendent of Taxes had authority to proceed to reassess the appellants in the light of the observations made in the judgment of the High Court, counsel for the appellants invited our attention to the judgment of the Privy Council in Commissioner of Income Tax, Bombay Presidency and Aden and others vs Bombay Trust Corporation Ltd. (1).
In that case, a foreign company was assessed by the Income Tax authorities in the name of a resident company for profits and gains received by the latter as its agent under sections 42(1) and 43 of the Indian Income tax Act, 1922.
In a reference under section 66 of the Income tax Act, the High Court at Bombay opined that the assessment was illegal.
The Commissioner of Income tax, thereafter sent back the case with a direction to set aside the assessment and to make a fresh assessment after making such further enquiry as the Income tax Officer might think fit.
Acting upon that order, the Income tax Officer requir ed the resident company as agent of the foreign company to produce or cause to be produced books of account for the year of assessment and also to produce such other evidence on which it might seek to rely in respect of its return, and the resident company having failed to produce the books of the foreign company, he proceeded to make an assessment under section 23(4) of the Income tax Act, 1922.
By its petition under section 45 of the Specific Relief Act filed in the High Court at Bombay, the resident company prayed for an order for refund of the taxes already Paid under the original assessment, and for an order for disposal of certain proceedings initiated by it before the Assistant Com missioner and the Income tax Officer.
The High Court made an order directing refund of tax paid, and further directing cancellation of assessment.
In an appeal preferred by the Commissioner of Income tax against the order of the High Court, it was observed by the Privy Council that the Commissioner was not obliged to discontinue proceedings against the resident 46 company as agent of the foreign company in respect of the year of assessment, and it was within the jurisdiction of the Commissioner under section 33(2) of the Income tax Act to direct further enquiry if he thought such an enquiry to be reasonable and to be profitable in the public interest.
The principle of this case has in our judgment no application to the present case.
The High Court at Bombay in its advisory jurisdiction had declared the assessment already made to be illegal.
But the Commissioner was under section 33 of the Indian Income tax Act invested with jurisdiction to direct further enquiry, and he purported to exercise that jurisdiction.
The Privy Council rejected the challenge to the exercise of that jurisdiction.
In the present case, no proceedings were started by the Commissioner of Taxes in exercise of his revisional authority.
The Commissioner of Taxes had directed the Superintendent of Taxes merely to dispose of the case according to the judgment of the High Court, and the Superintendent had to carry out that order.
If he was competent and on that question, we express no opinion he could, if the conditions precedent to the exercise of his jurisdiction existed, proceed to reassess the appellants.
But the proceedings for reassessment were clearly barred because the period prescribed for reassessment had expired.
The Superintendent therefore had no power to issue a notice calling upon the appellants to produce evidence to enable him to start an enquiry which was barred by the expiry of the period of limitation prescribed by the Act.
In the Bombay Trust, Corporation case (supra), the Income tax Officer acted in pursuance of the direction of the Commissioner lawfully given in exercise of revisional authority and reopened the assessment.
In the present case, no such direction has been given by an authority competent in that behalf: and the Superintendent had no power to reassess the income under section 19 assuming that the section applied to a case where the assessee though registered had failed to include his sales in a particular commodity in his turnover, because the period of limitation prescribed in that behalf had expired.
47 The appeal must therefore be allowed and the order passed by the High Court set aside.
In the circumstances of the case, no useful purpose will be served ' by remanding the case to the High Court.
We accordingly direct that a writ quashing the proceedings commenced by the Superintendent of Taxes, Dhubri, by his notice dated January 30, 1953, be issued.
The appellants will be entitled to their costs of the appeal.
Appeal allowed.
[/INST]The appellants who were dealers registered under the Assam Sales Tax Act, 1947, submitted a return of their turnover for the account period April 1, 1948 to September 30, 1948, which included sales in Assam of all goods other than jute.
The Superintendent of Taxes, however, summarily assessed the appellants under sub section
4 of section 17 of the Act by order dated September 30, 1950, to pay tax on sales of jute despatched by them to Calcutta during the account period.
The order of assessment was confirmed by the Commissioner of Taxes.
On an application by the appellants the Commissioner referred certain questions of law arising out of the assessment to the High Court, which then gave its opinion that as the consignments in question were not sales within the meaning of sub section
12 of section 2 of the Act, they were not taxable, and that as to whether the sales could thereafter be assessed if they fell within the purview of the Explanation to sub section
12 of section 2, it expressed no opinion.
On receipt of the opinion the Commissioner directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of.
the High Court.
The Superintendent of Taxes then set aside the order of assessment dated September 30, 1950, and issued a notice to the appellants on January 30, 1953, directing them to produce the necessary evidence in order in the case came within the purview of the Explanation to sub s.12 of section 2 of the Act.
The appellant claimed that the Superintendent had no jurisdiction to commence any further proceeding for assessment as the notice issued to him was beyond three years from the end of the assessment period as provided by section 19 of the Act.
Held, that the High Court in answering the questions referred to it was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax ; it merely gave its opinion that the transactions were not sales within the meaning of section 2, sub section
12 of the Act and were accordingly not taxable.
41 Held, further, that the Commissioner not having issued any notice under section 19A of the Act or exercised his revisional authority under section 31, but having merely directed the case to be disposed of in accordance with the judgment of the High Court, the Superintendent of Taxes had no jurisdiction to initiate fresh proceedings for reassessment under section 19 after the expiry of three years from the assessment period.
Commissioner of Income Tax, Bombay Presidency and Aden and others vs Bombay Trust Corporation Ltd., (1936) L.R. 63 1.
A. 408, distinguished.
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<s>[INST] Summarize the judgementAppeal No. 2065 of 1968.
Appeal from the judgment and order dated September 18, 1968 of the Calcutta High Court in F.M.A. No. 381 of 1967.
B. Sen, B. P. Maheshwari, A. N. Parikh and section M. Jain, for the appellant.
D. Narsaraju, R. H. Dhebar and section P. Nayar, for respondents Nos.
and 2.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal against the judgment of the High Court of Calcutta dismissing a writ petition filed by the appellant Debesh Chandra Das.
This appeal is by certificate against the judgment dated September 18, 1968.
The appellant is a member of the Indian Civil Service.
He qualified in 1933 and arrived in India in 1934 and was allotted to Assam.
In 1940 he came to the Government of India and became in turn Under Secretary and Deputy Secretary, Home Ministry.
In 1947 he went back to Assam where he held the post of Development Commissioner and Chief Secretary.
In 1951 he again came to the Government of India as Secretary, Public Service Commission.
In 1955 he became Joint Secretary to the Government of India and continued to hold that post till 1961.
From 1961 to 1964 he was Managing Director of Central Warehousing Corporation.
On July 29, 1964, he was appointed Secretary, Department of Social Security with effect from July 30, 1964 and until further, orders, On March 6, 1965 the, 222 Appointments Committee of the Cabinet approved the proposal to continue him as Secretary, Department of Social Security.
He continued in that Department, which is now renamed as the Department of Social Welfare.
On June 20, 1966 he received a letter from the Cabinet Secretary which was to the following effect: "My dear Debesh: For sometime, the Government has been examin ing the question of building up a higher level of administrative efficiency.
This is much more important in the context of the recent developments in the country.
The future is also likely to be full of problems.
In this connection, the Government examined the names of those who are at present occupying top level administrative posts with a view to ascertaining whether they were fully capable of meeting the new challenges or whether they should make room for younger people.
As a result of this examination, it has been decided that you should be asked either to revert to your parent State or to proceed on leave preparatory to retirement or to accept some post lower than that of Secretary of Govt.
I would be glad if you would please let me know immediately as to what you propose to do so that further action in the matter may be taken.
Yours sincerely, Sd/ (DHARMA VIRA)".
He asked for interview with the Cabinet Secretary and the Prime Minister and represented his case but nothing seems to have come of it.
On September 7, 1966 he received a second letter from the Cabinet Secretary which said inter alia as follows : ". .
I am now directed to inform you that after considering your oral and written representations in the matter Government has decided that your services may be placed at the disposal of your parent state, namely, Assam.
In case, however, you like to proceed on leave preparatory to retirement, will you please let me know ?.
" The appellant treated these orders as reduction in his rank ,and filed a writ petition in the High Court of Calcutta on September 19, 1966.
According to him the order amounted to a reduction in rank since the pay of a Secretary to the Government of India (I.C.S.) is Rs. 4,000 and the highest pay in Assam (I.C.S.) 22 3 is Rs. 3,500.
There being no equal post in the Government of Assam his reversion to the Assam Service meant a reduction not only in his emoluments but also in his rank.
He also contended that he held a 5 years ' tenure post and the tenure was to end on July 29, 1969 but was wrongly terminated before the expiry of five years.
He also alleged that there was a stigma attached to his reversion as was clear from the three alternatives which the letter of the Cabinet Secretary gave him.
The highest post in the Government of Assam being equivalent to the Joint Secretary of Government of India, his reversion to the highest post, i.e. Chief Secretary to the Government of Assam, amounted to a reduction in rank.
He contended, if this was the case, the procedure under article 311(2) of the Constitution ought to have been followed and without following that procedure the order was not sustainable.
When the appellant filed the writ petition he was appointed as a Special Secretary on October 15, 1966 but under one of his juniors.
It may be mentioned here that the appellant is next only to the Cabinet Secretary in the matter of seniority.
He also received a letter from the Government of India dated October 20, 1966 in which it was said that Government was considering giving him a post equal to that of a Secretary.
The writ petition was dismissed by Justice A. N. Ray on May 19, 1967.
The following day the appellant was again riposted to Assam but he filed an appeal and obtained a stay.
On March 21, 1968 he was appointed Secretary in the Department of Statistics in the Central Government.
The appeal was heard by Justice P. B. Mukharji and Justice A. N. Sen who differed, the former was in favour of dismissing the appeal while the latter was in favour of allowing it.
The appeal was then laid before Sankar Prosad Mitra, J. who agreed with Justice Mukherji and the appeal was dismissed on September 18, 1968.
On September 20, 1968 the appellant was reposted to Assam.
He, however, filed the present appeal and has proceeded on leave although no orders on leave application seemed to have been passed when we heard the appeal.
In this appeal also, it is contended that the reversion of the appellant to the Assam Service amounts to a reduction in rank.
This is on the ground that he held a higher post in the Government of India and there is no post equal to it under the Assam Government.
The post of the Chief Secretary in the Assam Government is equal to the post of a Joint Secretary in the Government of India and his reversion would therefore indirectly mean a reduction in his rank and also in his emoluments because the highest post in Assam does not carry a salary equal to that of a Secretary in the Government of India.
He also contends that under article 311(2) an enquiry had to be made and he had to be 224 given a chance of explaining his case in the reduction in rank amounted to a penalty.
He contends that the letters of the Cabinet Secretary speak for themselves and clearly show that he was being offered a lower post even in the Government of India if he was to continue here denoting thereby a desire to reduce him in rank.
The letters also speak of his unsatisfactory work and, therefore, cast a stigma on him and therefore his reversion must be treated as a penalty and if the procedure laid down under article 311(2) is not followed, the order of the Government of India could not be sustained.
This, in short, is the case which he had put up before the High Court and has now put up before us.
The Government of India contends that he was on deputation and the deputation could be terminated at any time; that his orders of appointment clearly show that the appointments were "until further orders" and that he had no right to continue in the Government of India if his services were not required and that his reversion to his parent State did not amount either to any reduction in rank or a penalty, and, therefore, the order was quite legal.
Prior to 1946 the members of the Indian Civil Service were in a Civil Service of the Secretary of State.
As a result of a conference between Chief Ministers and the Government of India an All India Administrative Service was constituted in October 1946.
This agreement was entered into under section 263 of the Government of India Act, 1935.
The Indian Administrative Service was common to the Centre and the Provinces.
On January 25, 1950 rules were framed under sections 241(2) and 247 of the Government of India Act, 1935.
These rules were known as the Indian Civil Administrative (Cadre) Rules, 1950.
Under these rules cadres were constituted.
A 'cadre ' is defined in Fundamental Rule 9(4) as the strength of a service or a part of a service sanctioned as a separate unit.
In these rules 'cadre officer ' meant an officer belonging to any of these categories specified in rule 4 and 'cadre post ' meant any duty post included in the Schedule to the Rules.
In rule 4, it was provided that every cadre post shall be filled inter alia by an officer who is a member of the Indian Civil Service. ' In the Schedule Assam was to have 20 senior posts under the Provincial Government, 6 senior posts under the Central Government and 37 posts for direct recruitment, and junior posts and certain services.
After 1954 a number of Rules were framed and we are concerned in this case with the Indian Administrative Service (Cadre) Rules 1954, Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 and Indian Administrative Service (Pay) Rules 1954.
Under the Pay Rules were shown the posts carrying pay above the time scale pay in the Administrative Service under the State Governments.
In Assam there were 225 four such posts.
Chief secretary (Rs. 3,000), Member, Board of Revenue, Commissioners and Development Commissioners (Rs. 2500 125/2 2750).
These four were the Only posts above the time scale and the highest pay possible was that of a Chief Secretary carrying Rs. 3,000/ p.m. [vide All India Service Manual (1967) p. 2481.
The lower posts in Assam were; Secretaries, Additional Secretaries, Joint Secretaries etc.
who were on a time scale with ceiling of Rs. 2,250 p.m. (ibid p. 263) As against this the posts carrying pay above the time scale or special pay in addition to pay in the time scale under the Central Government when held by Indian Administrative Service men were Secretaries to the Government of India with a pay of Rs. 3,500/ (Rs. 4,000 for Indian Civil Service men) and so on in a downward position There was no separate cadre in the Government of India as defined in the Fundamental Rule mentioned above.
There were only cadres in the States.
Posts beyond the State cadre limit were only to be found in the Government of India.
The Indian Administrative Service (Cadre) Rules 1954 provided as elaborate machinery for getting persons to fill the posts in the Government of India. ' Similarly, the Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 provided for these matters.
Rule 3 of the Indian Administrative Service (Cadre) Rules provided as follows; "3.
"Constitution of Cadres. (1) There shall be constituted for each State or group of States an Indian Administrative Service Cadre.
(2) The cadre so constituted for a State or a group of States is hereinafter referred to as a 'State Cadre ' or, as the case may be, a 'Joint Cadre.
Rule 4 next provided : "Strength of Cadres. (1) The strength and composition of each of the cadres constituted under rule 3 shall be as determined by regulations made by the Central Government in consultation with the State Governments in this behalf and until such regulations are made, shall be as in force immediately before the commencement of these rules.
(2) The Central Government shall, at the interval of every three years, re examine the strength and composition of each such cadre in consultation with the State Government or the State Governments concerned and may make such alterations therein as it deems fit : Provided that nothing in this sub rule shall be deemed to affect the power of the Central Government to alter the strength and composition of any cadre at any other time; 226 Provided further that the State Government concerned may add for a period not exceeding one year and with the approval of the Central Government for a further period not exceeding two years, to a State or Joint Cadre one or more posts carrying duties or responsibilities of a like nature to cadre posts.
" Rule 6 then provided for deputation of cadre officers.
It reads as follows: "6.
Deputation of cadre officers. (1) A cadre.
officer may, with the concurrence of the State Government or the State Governments concerned and the Central Government, be deputed for service under the Central Government, or another State Government or under a company, association or body of individuals, whether incorporated or not, which is wholly or substantially owned or controlled by the Government.
(2) A cadre officer may also be deputed for service under (i) a Municipal Corporation or a Local Body, by the State Government on whose cadre he is borne, or by the Central Government with the concurrence of the State Government on whose cadre he is borne, as the case may be and (ii) an international Organisation, an autonomous body not controlled by the Government, or a private body, by the Central Government in consultation with the State Government on whose cadre he is borne: Provided that no cadre officer shall be deputed to any Organisation or body of the type referred to in item (ii) of this sub rule except with his consent.
" It may be pointed out here that 'permanent post ' is defined by the Fundamental Rules as a post carrying a definite rate of pay and sanctioned without limit of time and a 'temporary pose is defined as a post carrying definite rate of pay sanctioned for a limited time and a 'tenure post ' means a permanent post which an individual Government servant may not hold for more than a limited period.
All cadre posts were to be filled by cadre officers (rule 8), but temporary appointments of non cadre officers to cadre posts were possible under certain circumstances (rule 9).
Under the Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 Assam was to have a total of 117 cadre posts.
Of these, 55 were under the Government of Assam 227 and 22 senior posts were to be under the Central Government.
19 were promotion posts and 58 were to be filled by direct recruitment.
There were certain reserved posts for leave reserves, deputation reserves, training reserves and finally there were 'junior posts.
By the agreement which formed an annexure to the Indian Civil Administrative (Cadre) Rules 1950, Assam was to have 20 senior posts under the Provincial Government and 6 senior posts under the Central Government with some provision for direct recruitment posts, junior posts and reserves.
These posts denoted combined Service between the Central Government and the Assam Government.
The arrangement allowed an officer to go from one post to another whether under the Centre or the State but not a lower post unless the exigency of the case so demanded.
The posts in the Government of India were held in the ordinary course and were not deputation posts.
They were not as a part of the deputation reserves.
Under article 312, these services must be considered common to the Union and the State : tinder section 4 of the All India Services Act 1951 all rules in force immediately before the commencement of the Act and applicable to an All India Service were continued, thus the Indian Civil Administrative (Cadre) Rules 1950 continued to remain in force.
The position that emerges is that the cadres for the Indian Administratively are to be found in the States only.
There is no cadre in the Government of India.
A few of these persons are, however,intended to serve at the Centre.
When they do so they enjoy better emoluments and status.
They rank higher in the service and even in the Warrant of Precedence of the President.
In the States they cannot get the same salary in any post as Secretaries are entitled to in the Centre.
The appointments to the Centre are not in any sense a deputation.
They mean promotion to a higher post.
The only safeguard is that many of the posts at the Centre are tenure posts.
Those of Secretaries and equivalent posts are for five years and for lower posts the duration of tenure is four years.
Now Das held one of the tenure posts.
His tenure ordinarily was five years in the post.
He got his secretaryship on July 30, 1964, and was expected to continue in that post for five years, that is, till 29th July, 1969.
The short question in this case is whether his reversion to the Assam State before the expiry of the period of his tenure to a post carrying a smaller salary amounts to reduction in rank and involves a stigma upon him.
Reversion to a lower post does not per se amount to a stigma.
But we have here evidence that the reversion is accompanied by a stigma.
In the first letter issued to him on June 20, 1969 by Mr. Dharma Vira (Cabinet Secretary) it was said 228 Government was considering whether the persons at top level administrative posts were capable of meeting the new challenges or must make room for younger men.
The letter goes on to say that he may choose one of three alternatives : accept a lower post at the Centre, go back to a post carrying lower salary in Assam or take leave preparatory to retirement.
The offer of a lower post in Delhi is a clear pointer to the fact of his demotion.
It clearly tells him that his reversion is not due to any exigency of service but because he is found wanting.
The three alternatives speak volumes.
This was not a case of reverting him to Assam at the end of a deputation or tenure.
He can be retained in the Central Services provided he accepts a lower post, and the final alternative that he may retire clearly shows that the Government is bent upon removing him from his present post.
In the next letter this fact is recognised because on September 7, 1966 he is offered only two alternatives.
The alternative of a lower post is advisedly dropped because it discloses too clearly a stigma.
If any doubt remained it is cleared by the affidavit which is now filed.
Paragraphs 7 and 10 of the affidavit read as follows: "7.
With reference to the allegations made in paragraphs 13 to 23 of the said application, I make no admission in respect thereof except what appears from relevant records.
I further say that the performance of the petitioner did not come to the standard expected of a Secretary to the Government.
of India." "10.
The allegations made in paragraph 26 of the said application are correct.
I further say that the said representation was rejected by the Prime Minister in view of the standard of performance of the petitioner.
" Now it has been ruled again and again in this Court that re duction in rank accompanied by a stigma must follow the procedure of article 311(2) of the Constitution.
It is manifest that if this was a reduction in rank, it was accompanied by a stigma.
We are satisfied that there was a stigma attaching to the reversion and that it was not a pure accident of service.
It remains to see whether there was a reduction in rank.
There is no definition of reduction in rank in the Constitution.
But we get some assistance from rule 3 of the All India Services (Discipline and Appeal) Rules, which provides: "3 Penalties.
The following penalties , may, for good and sufficient reasons, and as hereinafter provided, be imposed on a member of the Service, namely 229 (iii) reduction in rank including reduction to a lower post or time scale, or to a lower stage in a time scale.
We have shown above that he was holding a tenure post.
Nothing turns upon the words of the notification 'Until further orders ' because all appointments to tenure posts have the game kind of order.
By an amendment of F.R. 9(30) in 1967, a form was prescribed and that form was used in his case.
These notifications also do not indicate that this was a deputation which could be terminated at any time.
The notifications involving deputation always clearly so state the fact.
Many notifications were brought to our notice during the argument which bear out this fact and none to the contrary was shown.
Das thus held a tenure post which was to, last till July 29, 1969.
A few months alone remained and he was not so desperately required in Assam that he could not continue here for the full duration.
The fact that it was found necessary to break into his tenure period close to its end must be read in conjunction with the three alternatives and they clearly demonstrate that the intention was to reduce him in rank by sheer pressure of denying him a secretaryship.
No Secretary, we were told, has so far been sent back in this manner and this emphasises the element of penalty.
His retention in Government of India on a lower post thus was a reduction in rank.
Finally we have to consider whether his reversion to Assam means a reduction in rank.
It has been noticed above that no State Service (the highest being Chief Secretary 's) carries the emoluments which Das was drawing as a Secretary for years.
His reversion would have meant a big drop in his emoluments.
Das was prepared to go to Assam provided he got a salary of Rs. 4,000 per month but it was stated before us that that was not possible.
Das was prepared to serve the Centre in any capacity which brought him the same salary.
This too was said to be not possible.
This case was adjourned several times to enable Government to consider the proposal but ultimately it was turned down.
All that was said was that he could only be kept in a lower post.
If this is not reduction in rank we do not see what else it is.
To give him a Hobson 's choice of choosing between reversion to a post carrying a lower salary or staying here on a lower salaried post, is to indirectly reduce him in rank.
Therefore, we are satisfied that Das was being reduced in rank with a stigma upon his work without following the procedure laid down in article 311(2).
We say nothing about a genuine case of accident of service in which a person drafted from a State has to go back for any reason not connected with his work or conduct.
Cases must obviously arise when a person taken from 230 the State may have to go back for reason unconnected with his work or conduct.
Those, cases are different and we are not expressing any opinion about them.
But this case is clearly one of reduction in rank with a distinct stigma upon the man.
This requires action in accordance with article 311(2) of the Constitution and since none was taken, the order of reversion cannot be sustained.
We quash it and order the retention of Das in a post comparable to the post of a Secretary in emoluments till such time as his present tenure lasts or there is an inquiry against him as contemplated by the Constitution.
Before we leave this case we are constrained to say that the attitude in respect of this case was not very happy.
Das offered to take leave preparatory to retirement on the 29th July, 1969 if he was retained in Delhi on this or other post.
This coincided with his present tenure.
But vast as the Delhi Secretariat is, no job was found for him.
This confirms us in our view ' of the matter that he was being sent away not because of exigency of service but definitely because he was not required for reasons connected with his work and conduct.
The appeal is thus allowed with costs here and in the High Court.
R.K.P.S. Appeal allowed.
[/INST]The appellant, an unsuccessful candidate filed an election petition for setting aside the election of the respondent who got elected as a Congress candidate to a Parliamentary constituency.
The respondent was chraged with several corrupt practices, viz., (i) by an ordinance the Government of the State in which the Congress Party was in power, granted exemption to certain agriculturists ' holdings from payment of land revenue and the Chief Minister announced the benefit though the exemption was claimed for sometime past by the opposition parties the ordinance was passed prior to the election; the opposition parties started a campaign stating that the object of the exemption was to forfeit the land; the Chief Minister refuted the charge and told the voters that the exemption should be granted and that the opposition parties should be routed in the election; a member of the Congress Party D, published a pamphlet refuting the false propaganda that exemption was temporary and urging the electors to vote for the Congress; (ii) the Chief Minister on the eve of the election announced increased dearness allowance to certain Government employees; (iii) the respondent or his agent distributed dummy ballot papers with the respondent 's name and his election symbol, and also that of appellant 's name but without his election symbol printed thereon, thereby conveying an impression that the appellant had withdrawn his candidature, and further, that the respondent and his agents on the eve of the election told the voters that the appellant bad withdrawn, so the respondent had committed corrupt practice under section 123(4); and (iv) a member of the police force in the service of the Government with the consent of the respondent actively canvassed for the respondent, thereby committing corrupt practice under 'section 123(7).
High Court dismissed the petition, HELD: The appeal must be dismissed.
(i)On the materials, on the record, it was impossible to hold that the respondent committed the corrupt practice under section 123(1)A.
The ordinance was passed by the Government of Madhya Pradesh.
As a result of the ordinance a large number of agriculturists got exemption from land revenue.
Such an exemption did not amount to a gift, offer or promise of any gratification within the meaning of section 123(1)(A) nor was it possible to say that the Government was the agent of the respondent.
The Congress Party was then in power.
But the exemption was not given by the Congress Party.
It was given by the Ordinance which was passed by the Government.
Nor does the announcement of the declaration by the Chief Minister or by the pamphlet carry the matter any further.
It was not possible to say that either the Chief Minister or D acted as the agent of the respondent.
[815 G] 814 (ii)The grant of the increased dearness allowance could not be regarded as a gift, offer or promise of any gratification within the meaning of section 123 (1 ) (A) nor it was possible to say that the Government or the Chief Minister was the agent of tie respondent.
The employees of the Government had given notice to go on strike a week before the election and without their cooperation. the entire election would have been at a standstill.
The Government thought that the demand of the employees was legitimate and therefore announced it on the eve of the election to meet it.
[816 D F] (iii)The dummy ballot papers were in contravention of the instructions issued by the Election Commission of India.
The appellant 's name should not have been printed in them.
But it was impossible to say that the dummy papers conveyed to the voters the impression that the appellant had withdrawn his candidature.
The statement of the appellant 's witnesses could not be accepted that on the eve of the election the respondent and his agents informed the voters that the appellant had withdrawn his candidature.
The voters knew that there were two candidates in the field.
Even a few days prior to the election the Chief Minister stated that the appellant was contesting the election.
The respondent carried on rigorous election propaganda till the last day.
[816 H] (iv)On the evidence the charge that the member of the police force canvassed for the respondent was not established.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 262 of 1955.
Appeal by special leave from the, judgment and decree dated February 4, 1953, of the Calcutta High Court, in Appeal from original decree No. 68 of 1952 arising out of the judgment and decree dated ' January 14, 1952, of the said High Court, in Special Suit No. 2 of 1951.
571 N. C. Chatterjee, C. B. Agarwala and Sukumar Ghose, for the appellants.
B. Sen, section N. Mukherjee, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the respondents.
August 21.
The Judgment of the Court was delivered by WANCHOO J.
This is an appeal by special leave against the judgment of the Calcutta High Court.
The appellant is a company, incorporated in India, with its registered office in Calcutta dealing in jute.
It entered into a contract on June 18, 1945, with the respondent company, which is incorporated in England and has its registered office in London.
The contract was for the supply of five hundred bales of jute of crop 1945 46 to be shipped from Calcutta or Chittagong to Rio de Janeiro, when freight became available.
The contract provides that in the event of default of tender or delivery, the seller shall pay to the buyer as and for liquidated damages 10s.
per ton plus the excess (if any) of the market value over the contract price, the market value being that of jute contracted for on the day following the date, of default.
This date was to be the date in London on declaration of default by telegram or without such declaration if default was eventually made by lapse of time on the 21st day after expiry of the extended period.
There is also a provision for arbitration, which lays down that any claim or dispute whatever arising out of, or in relation to this contract or its construction or fulfilment shall be referred to arbitration in London in accordance with the bye laws of the London Jute Association, and it was open to either party to claim arbitration whenever and as often as disputes arose.
The contract also provides for an appeal by any party dissenting from an arbitration award to the London Jute Association in accordance with the regulations in force for the time being.
Lastly, it is provided that the contract would be construed according to the laws ,of England whatever the residence and nationality of the parties might be or become and would be deemed to be performed there.
The courts of England or 572 arbitrators, as the case might be, would have exclusive jurisdiction over all disputes which might arise under the contract, except for the purpose of enforcing in the Colonies or abroad any arbitration award made under this contract, On.
June 23, 1947, thirty nine bales of jute were consigned by the appellant to Rio de Janeiro in part performance of the contract and information of this was given to the respondent by letter on July 17, 1947.
It was said in this letter that difficulty had arisen because of the non availability of quota and it was hoped that the balance remaining under the contract would be shipped as soon as quota was available.
The respondent sent a reply to this letter on July 25, 1947, and the appellant wrote a further letter on August 1, 1947, in which it was said that the remaining amount of jute under the contract would be shipped as soon as the quota was available.
We do not know what happened thereafter till we come to August 1948.
It seems that the respondent received a cable on August 12, 1948, from the appellant stating that the contract stood cancelled long ago.
The respondent by its letter dated August 12, 1948, refused to %accept this position.
Thereafter there were disputes and differences between the parties and eventually the respondent claimed default on or about June 1949 in terms of the contract.
On or about July 14, 1949, the respondent referred the matter to the arbitration of the London Jute Association, which appointed two of its member as arbitrators.
The respondent filed its claim before the arbitrators on July 23, 1949.
On July 27, 1949, the arbitrators gave notice to the appellant to file its answer by August 19, 1949.
The appellant, however, filed no answer before the arbitrators.
What the appellant did in reply was to file an application under section 33 of the Indian (hereinafter called the ), on the original side of the Calcutta High Court, in which it made three prayers, namely (a) declaration that the arbitration agreement, if any, between the parties was void ab initio on the 573 ground of uncertainty and was not binding on the appellant; (b) declaration that there was in fact and in law no contract between the parties on account of mutual mistake of the parties; and (c) that the court might be pleased to adjudicate on the existence and/or validity of the alleged arbitration agreement and the effect of the same.
This application was moved on August 12, 1949.
It appears that on August 13, 1949, the appellant sent a cable to the respondent and the London Jute Association informing them that an application had been made in the Calcutta High Court challenging the submissions contained in the contract and that the arbitrators had become functus officio pending disposal of the application, which was fixed for August 29.
The appellant received a reply to its cable in which it was asserted that no such application as the appellant bad made to the Calcutta High Court could be made there and that the arbitrators would proceed with the adjudication on August 27 as already fixed.
On August 17, 1949, the appellant sent a letter to the London Jute Association in which it referred to its cable and the reply of the Association to that and reiterated its stand that any further steps taken in the arbitration proceedings pending disposal of the application under section 33 would be invalid under the .
The arbitrators, however, proceeded with the arbitration and gave their award on October 17, 1949.
No proceedings thereafter were taken by the appellant in London, nor does it appear that any steps were taken by it to have its application under section 33 decided, till we come to November 26, 1951.
On that date, an application was filed by the respondent in the Calcutta High Court under section 5 of the , (hereinafter called the Protocol Act).
Along with this application it filed the award dated October 17, 1949, and prayed that judgment be pronounced in accordance with the award and decree be passed accordingly.
Notice of this was issued to the appellant, which filed its reply on January 14, 73 574 1952, We do not think it necessary to set ' out the petition of the respondent under section 5 of the Protocol Act and the appellant 's reply thereto in detail, because when the matter came to be heard in court only two points were urged on behalf of the appellant, namely (1) that the award was made after the notice of filing of the petition dated August 10, 1949, under section 33 of the had been given to the respondent and the arbitrators, and consequently the award made after the receipt of the said notice and during the pendency of the said application was bad under section 35 of the ; and (2) that the award was bad on the face of it and could not therefore be enforced in view of the provisions of section 7(e) of the Protocol Act, which lays down that an award cannot be enforced in India if it is contrary to the law of India.
It was contended that the award was contrary to the law of India and this appeared on the face of it inasmuch as the arbitrators had purported to award such damages as could not be done under the provisions of the .
Both these contentions were negatived by the learned Single Judge and he ordered the award to be filed, in court and passed a decree in terms thereof.
The appellant then went up in appeal, which was heard by a Division Bench of the Calcutta High Court.
The grounds of appeal show that the same two points, which were urged before the learned Single Judge ' were reiterated therein.
When the matter came to be heard before the Division Bench, the same two points were raised on behalf of the appellant there also.
The Division Bench negatived the two contentions raised before it on behalf of the appellant and confirmed the judgment of the learned Single Judge.
It is curious, however ' to notice that though all these proceedings were being taken on the application under section 5 of the Protocol Act the appellant apparently took no steps to have its application under section 33 of the , which seems to have been adjourned sine die, decided along with the respondent 's application under section 5 of the Protocol Act, 575 This was followed by an application for a certificate to appeal to this Court, which was refused.
Then the appellant applied to this Court for special leave to appeal, which was granted.
In the special leave petition also the appellant raised the same to points, namely, (i) the construction of sections 33 and 35 of the and the application of these provisions to the facts of this case, and (ii) the construction of section 7 of the Protocol Act and the with respect to the damages awarded by the award.
In the statement of case also after narrating the facts and circumstances, the same two points were mentioned as the principal questions which arose for determination in the appeal, namely, (i) the effect of sections 33 and 35 of the on the facts and circumstances of this case, and (ii) the interpretation of section 7 of the Protocol Act in the light of sections 73 and 74 of the and their bearing on the damages awarded by the arbitrators and its effect on the validity of the award.
Learned counsel for appellant, however, wanted to raise before us other points arising out of section 7 of the Protocol Act.
We do not think that the appellant should be permitted to raise at this late stage any new point in addition to the two points which were urged before the learned Single Judge and which only have all along been raised in the appeal to the High Court and in the appeal before this Court.
We shall therefore confine the appellant to these two points only and proceed on the assumption in the same manner as has been done by the High Court, namely, that an application under section 33 of the would lie in the circumstances of this case and therefore the provisions of section 35 of the would be attracted.
The part of section 33 of the , relevant for our purpose, lays down that any party to an arbitration agreement desiring to challenge the existence or validity of an arbitration agreement or to have its effect determined shall apply to the court and the court shall decide the question.
It will thus be clear that 576 s.33 contemplates an application for three purposes, namely, (i) when it is desired to challenge the existence of an arbitration agreement, (ii) when it is desired to challenge its validity, and (iii) when it is desired to have its effect determined.
An arbitration agreement may come into existence in one of two ways; it may either arise out of an agreement which contains nothing else besides the arbitration agreement, or it may arise out of a term contained in a contract which deals with various other matters relating to the contract, which is the present case.
Where one is dealing with an arbitration agreement of the second kind, section 33 is concerned only with the term relating to arbitration in the contract and not with the other terms of the contract which do not arise for consideration on an application under that section.
Then we come to section 35.
It provides that no reference or award shall be rendered invalid by reason only of the commencement of legal proceedings upon the subject matter of the reference, but when legal proceedings upon the whole of the subject matter of the reference has been commenced between all the parties to the reference and a notice thereof has been given to the arbitrators or umpire, all further proceedings in a pending reference shall, unless a stay of proceedings is granted under section 34, be invalid.
It will be seen, therefore, 'that section 35 makes proceedings before the arbitrators invalid in the absence of an order under section 34 staying the legal proceedings, where whole of the subject matter of the reference is covered by any legal proceedings taken with respect to it.
In other words, an arbitrator can continue the proceedings and proceed to make the award on the reference, unless the whole of the subject matter of the reference is covered by the legal proceedings which have been instituted.
Assuming that the proceedings taken under section 33 are " legal proceedings ", mentioned in section 35, the question which immediately arises on the facts of the present case is whether the whole of the subject matter of the reference in this case was covered by the legal pro ceedings taken by the appellant by its application under section 33 of the .
577 In dealing with this aspect of the case, learned counsel for the appellant raised the question of frustration of the contract and the powers of the court and the arbitrator in that behalf.
It is true that the words " frustration of contract " have been used in paragraph 8 of the application.
But the prayers do not show that any relief was claimed on that ground, relief (c) being merely a repetition of the words of section 33 of the .
Learned counsel relied on Heymen vs Darwins Ltd. (1) in this connection.
We do not think we should permit the appellant to raise this contention at this late stage and would content ourselves by pointing out incidentally that even if the dictum in Heymen 's case (1) is accepted, it will not help the appellant, for on that dictum the question of frustration would be for the arbitrators to decide on the basis of the terms used in this contract which are of the widest amplitude and would not be a matter for consideration of the court.
On this basis there would be no identity of subject matter between what can be raised in an application under section 33 on the facts of this case and what can be decided by the arbitrators.
However, we do not propose to pursue this matter any further and to decide it.
Then we turn to prayers (a) and (b) of paragraph 9 of the application based on paragraphs 6 and 7 thereof.
These prayers undoubtedly cannot be the subject matter of arbitration, for they go to the very root of the contract and imply that there was no contract between the parties at all and therefore no arbitration agreement.
These prayers can certainly form the basis of an application under section 33, for they relate to the existence and validity of the arbitration agreement contained in the contract; but not being matters within the competence of the arbitrators, there can be no identity of the subject matter under reference to the arbitrators and the subject matter of prayers (a) and (b).
The conclusion, therefore, is that prayers (a) and (b) can be the subject matter of an application under section 33 but they cannot be the subject matter of the reference to the arbitrators.
Therefore, (1) [19421 2 A.C. 356.
578 the subject matter of the legal proceedings under section 33 in this case cannot and does not cover any part of the subject matter of the reference.
Section 35 in consequence can have no application and the award cannot be assailed as invalid on the ground that it violates section 35 of the .
The first contention, therefore, must fail.
The argument under this head is that the liquidated damages provided under cl.
(1 2) of the contract include not only the difference between the contract price and the market price on the date of default but also a further sum of 10s.
per ton.
Reference in this connection is made to sections 73 and 74 of the , and it is said that the extra amount of 10s.
per ton included in the sum of liquidated damages is against the provision of these, sections and therefore the award being against the law of India is bad on the face of it and should not be enforced in India.
Section 73 provides for compensation for loss or damage caused by breach of contract.
It lays down that when a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Section 74, provides for breach of contract where penalty is stipulated for or a sum is named and lays down that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.
What cl.
(12) of the contract provides in this case is the measure of liquidated damages and that consists of 579 two things, namely, (i) the difference between the contract price and the market price on the date of default, and (ii) an addition of 10s.
per ton above that.
There is nothing in section 73 or section 74 of the Contract Act, which makes the award of such liquidated damages illegal.
Assuming that the case is covered by section 74, it is provided therein that reasonable compensation may be awarded for breach of contract subject to the maximum amount named in the contract.
What the arbitrators have done is to award the maximum amount named in the contract.
If the appellant wanted to challenge the reasonableness of that provision in cl.
(12) it should have appeared before the arbitrators and represented its case.
It cannot now be heard to say that simply because cl.
(12) provided for a further sum of 10s.
per ton over and above the difference between the contract price and the market price on the date of the default, this was per se unreasonable and was therefore bad according to the law of India as laid down in sections 73 and 74, of the Contract Act.
Both these sections provide for reasonable compensation and section 74 contemplates that the maximum reasonable compensation may be the amount which may be named in the contract.
In this case the arbitrators have awarded the maximum amount so named and nothing more.
Their award in the circumstances cannot be said to be bad on the face of it, nor can it be said to be against the law of India as contained in these sections of the Contract Act.
The second contention must also fail.
We, therefore, dismiss the appeal with costs to the respondent.
Appeal dismissed.
[/INST]The appellant company, incorporated in India, entered into a contract on June 18, 1945, for the supply of five hundred bales of jute, with the respondent company which was incorporated in England and which had its registered office in London.
The contract, inter alia, provided that in the event of default of tender or delivery, the seller shall pay to the buyer as and for liquidated damages 10s.
per ton plus the excess (if any) of the market value over the contract price, the market value being that of jute contracted for on the day following the date of default.
There was a provision for arbitration, under which any claim or dispute whatever arising out of, or in relation to this contract or its construction or fulfilment shall be referred to arbitration in London in accordance with the bye laws of the London jute Association.
Disputes having arisen regarding the performance of the contract the respondent referred the matter to the arbitration of the London jute Association, who appointed two of its members as the arbitrators.
The appellant did not reply to the notice given by the arbitrators but filed an application on 570 August 10, 1949, under section 33 Of the , in the Calcutta High Court, praying, inter alia, (a) for a declaration that the arbitration agreement was void on the ground of uncertainty, and (b) for a declaration that there was in fact and in law no contract between the parties on account of mutual mistake of the parties.
Notice was given by the appellant to the respondent and the London jute Association that further steps in the arbitration proceedings should not be taken pending disposal of the application under section 33 Of the .
The arbitrators, however, proceeded with the arbitration and gave their award on October 17, 1949.
On November 26, 195i, an application was filed by the respondent in the Calcutta High Court under section 5 of the , praying that judgment be pronounced in accordance with the award.
The appellant contended that the award was invalid on the grounds, inter alia, (i) that the award was bad under section 35 of the , as it was made after the receipt of the notice of filing of the petition dated August 10, 1940, under section 33 of the , by the respondent and the arbitrators and during the pendency of the said application, and (2) that the liquidated damages provided under the award included not only the difference between the contract price and the market price on the date of default but also a further sum of 10s.
per ton, that the extra amount was against the provisions Of sections 73 and 74 of the , and that, therefore, the award was bad on the face of it and could not be enforced in view of the provisions Of section 7(e) of the , which lays down that an award cannot be enforced in India if it is contrary to the Law of India.
Held: (i) that the subject matter of the legal proceedings under section 33 Of the , which relates to the existence and validity of the arbitration agreement, are not matters within the competence of the arbitrators, and do not therefore cover any part of the subject matter of the reference.
Consequently, section 35 of the is inapplicable.
(2) The award does not violate the provisions of sections 73 and 74 Of the , as the arbitrators have only awarded the maximum amount named in the contract.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 326 of 1955.
1250 Appeal by special leave from the judgment and decree dated April 10, 1953, of the Madras High Court in Second Appeal No. 1815 of 1949, arising out of the judgment and decree dated January 28, 1949, of the Court of Subordinate Judge, Bapatla, in A. section No. 188 of 1947, against the judgment and decree dated December 23, 1946, of the District Munsif, Ongole, in O. section No. 139 of 1946.
M. C. Setalvad, Attorney General for India and R.Ganapathy Aiyar, for the appellants.
A. V. Viswanatha Sastri, M. R. Rangaswami Aiyangar, T. section Venkataraman and K. R. Choudhury, for the respondents.
September 4.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
This appeal arises out of a suit for partition of joint family properties instituted on April 2, 1942, in the Court of the District Munsif, Ongole, on behalf of one Kakumanu Ramanna, a minor of the age of about 2 1/2 years by his material grandfather, Rangayya, as his next friend.
The first defendant is his father.
The second and third defendants are the sons of the first defendant by his deceased first wife.
The fourth defendant is the second wife of the first defendant and the mother of the plaintiff .
The fifth defendant is the daugther of the first defendant by the fourth defendant.
In the plaint, three grounds were put forward as to why the minor plaintiff should have partition: (1) It was said that the mother of the plaintiff was ill treated, and there was neglect to maintain her and her children.
Both the District Munsif and the Subordinate Judge on appeal, held that this had not been established, and no further notice need be taken of it.
(2) It was then said that there had been a sale of the family properties to one Akkul Venkatasubba Reddi for Rs. 2,300, that there was no necessity for that sale, and that its object was only to injure the plaintiff.
That sale is dated May 9, 1939.
(3) Lastly, it was alleged that item 2 had been purchased on June 1, 1938, and item 11 on June 14, 1939, with joint family 1251 funds, but that the sale deeds had been taken in the names of the second and third defendants with a view to diminish the assets available to the plaintiff.
In addition to these allegations, it was also stated in the plaint that the family was in good circumstances, and that there were no debts owing by it.
On June 20, 1942, the defendants filed their written statements, wherein they claimed that the purchase of items 2 and 11 had been made with the separate funds of the second and third defendants, and that the joint family had no title to them.
They further alleged that the family had debts to the extent of Rs. 2,600.
Sometime in January 1943, the minor plaintiff died, and his mother who was the fourth defendant was recorded as his legal representative, and transposed as the second plaintiff.
The suit was in the first instance decreed, but on appeal, the Subordinate Judge remanded the case for trial on certain issues.
At the rehearing, it ",as proved that the first plaintiff was born on December 20, 1939.
On that, the District Munsif held that the sale of the family properties to Akkul Venkatasubba Reddi and the purchase of items 2 and II in the names of the second and third defendants having been anterior to the birth of the minor plaintiff, no cause of action for partition could be founded thereon.
The District Munsif also held on the evidence that the purchase of items 2 and 11 was not shown to have been made with separate funds, and that therefore they belonged to the joint family and further that the family owed no debts and that the allegations contra in the statements were not made out.
But he held, however, that this did not furnish a cause of action for partition.
In the result, he dismissed the suit.
There was an appeal against this judgment to the Court of the Subordinate Judge of Bapatla, who affirmed the findings of the District Munsif that items 2 and 11 belonged to the joint, family, and that there were no debts owing by it.
But he also agreed with him that as the sale and purchases in question were prior to the birth of the minor plaintiff, the suit for 159 1252 partition based thereon was not maintainable.
He accordingly dismissed the appeal.
The second plaintiff took the matter in second appeal to the High Court of Madras, and that was heard by Satyanarayana Rao J. who held that as the defendants had falsely claimed that items 2 and 11 were the separate properties of the second and third defendants, their interest was adverse to that of the minor and that the suit for partition was clearly beneficial to him.
He accordingly granted a preliminary decree for partition.
The present appeal has been brought against it on leave granted by this Court under article 136.
The learned Attorney General who appeared for the appellants advanced two contentions in support of the appeal: (1) that there was a concurrent finding by both the courts below that the suit was not instituted for the benefit of the minor, and that the High Court had no power to reverse it in second appeal; and (2) that, in any event, as the minor plaintiff had died before the suit was heard and before the court could decide whether the institution of the suit was for his benefit, the action abated and could not be continued by his mother as his legal representative.
On the first question, the contention of the appellants is that it is a pure question of fact whether the institution of a suit is for the benefit of a minor or not, and that a finding of the courts below on that question is not liable to be interfered with in second appeal.
But it must be observed that the finding of the Subordinate Judge was only that as the impugned sale and purchases were made before the minor plaintiff was born, no cause of action for partition could be founded by him thereon, and that, in our opinion, is a clear misdirection.
The transactions in question were relied on by the minor plaintiff as showing that the defendants were acting adversely to him, and that it was therefore to his benefit that there should be a partition.
It is no doubt true that as the plaintiff was not born on the date of those transactions, the defendants could not have entered into them with a view to injure him, though even as to this it should be noted that in May and June, 1253 1939 when the transactions were concluded, the first plaintiff was in the womb, and the first defendant admits knowledge of this, in his evidence.
But assuming that there was no intention to defeat the rights of the first plaintiff at the time when the transactions in question were entered into, that does not conclude the matter.
The real point for decision is whether the defendants were acting adversely to the minor, and if, after he was born, they used documents which might have been innocent when they came into existence, for the purpose of defeating his rights to the properties comprised therein, that would be conduct hostile to him justifying partition.
Now, what are the facts ? In the written statements which were filed shortly after the institution of the suit while the first plaintiff was alive, defendants I to 3 combined to deny his title to items 2 and I 1, and at the trial, they adduced evidence in support of their contention that they were the separate properties of defendants 2 and 3.
Even in the Court of Appeal, the defendants persisted in pressing this claim, and further maintained that the joint family had debts, and both the courts below had concurrently held against them on these issues.
These are materials from which it could rightly be concluded that it was not to the interest of the minor to continue joint with the defendants, and that it would be beneficial to him to decree partition.
In holding that as the transactions in question had taken place prior to his birth the minor could not rely on them as furnishing a cause of action, the courts below had misunderstood the real point for determination, and that was a ground on which the High Court could interfere with their finding in second appeal.
We accept the finding of the High Court that the suit was instituted for the benefit of the minor plaintiff, and in that view, we proceed to consider the second question raised by the learned Attorney General and that is the main ques tion that was pressed before us whether the suit for partition abated by reason of the death of the minor before it was heard and decided.
The contention on behalf of the appellants is that while in the case of an adult coparcener a clear and 1254 unambiguous expression on his part of an intention to become divided will have the effect of bringing about a division in status and the filing of a suit for partition would amount to such an expression, that rule can have no application in the case of a minor, as under the law he is incapable of a volition of his own.
It is conceded by the appellants that a suit for partition could be entertained on behalf of a minor plaintiff, and decreed if the court decides that it, is in the interests of the minor.
But it is said that in such a case, the court exercises on behalf of the minor a volition of which lie is incapable, that it is not until that volition is exercised by the court that there can be a division in status, and that, therefore, when a minor plaintiff dies before the court adjudicates on the question of benefit to him, he dies an undivided coparcener and his interest survives to the other coparceners and does not devolve on his heirs by inheritance.
The contention of the respondents, on the other hand, is that a suit for partition instituted on behalf of a minor coparcener stands on the same footing as a similar suit filed by an adult coparcener, with this difference that if the suit is held by the court not to have been instituted for the benefit of the minor it is liable to be dismissed, and no division in status can be held to result from such an action.
In other words, it is argued that a suit for partition on behalf of a minor effects a severance in status from the date of the suit, conditional on the court holding that its institution is for the benefit of the minor.
The question thus raised is one of considerable importance, on which there has been divergence of judicial opinion.
While the decisions in Chelimi Chetty vs Subbamma (1), Lalta Prasad vs Sri Mahadeoji Birajman Temple (2) and Hari Singh vs Pritam Singh(3), hold that when a suit for partition is filed on behalf of a minor plaintiff there is a division in status only if and when the Court decides that it is for his benefit and passes a decree, the decisions in Rangasayi vs Nagarathnamma (4), Ramsing vs Fakira (5) and Mandliprasad vs Ramcharanlal (6), lay down that when such a (1) 442.
(2) All.
(3) A.I.R. 1936 Lah.
(4) Mad.
(5) I.L.R. (6) I.L.R. 1255 suit is decreed, the severance in status relates back to the date of the institution of the suit.
While Chelimi Chetty vs Subbamma (1) decides that when a minor on whose behalf a suit is filed dies before hearing, the action abates, it was held in Rangasayi vs Nagarathnamma (2) and Mandliprasad vs Ramcharanlal (3) that such a suit does not abate by reason of the death of the minor before trial, and that it is open to his legal representatives to continue the suit and satisfy the court that the institution of the suit was for the benefit of the minor, in which case there would be, a division in status from the date of the plaint and the interests of the minor in the joint family properties would devolve on his heirs.
To decide which of these two views is the correct one, we shall have to examine the nature of the right which a minor coparcener has, to call for partition and of the power which the court has, to decide whether the partition in question is beneficial to the minor or not.
Under the Mitakshara law, the right, of a coparcener to share in the joint family properties arises on his birth, and that right carries with it the right to be maintained out of those properties suitably to the status of the family so long as the family is joint and to have a partition and separate possession of his share, should he make a demand for it.
The view was at one time held that there could be no partition, unless all the coparceners agreed to it or until a decree was passed in a suit for partition.
But the question was finally settled by the decision of the Privy Council in Girja Bai vs Sadashiv Dhundiraj (4), wherein it was held, on a review of the original texts and adopting the observation to that effect in Suraj Narain vs lqbal Narain (5), that every coparcener has got a right to become divided at his own will and option whether the other coparceners agree to it or not, that a division in status takes place when he expresses his intention to become separate unequivocally avid unambiguously, that the filing of a suit for partition is a clear expression of such an intention, and that, in consequence, (1) Mad.
(2) Mad.
(3) I.L.R. (4) (1916) L.R. 43 I.A. 151.
(5) (1912) L.R. 40 I.A. 40,45.
1256 there is a severance in status when the action for partition is filed.
Following this view to its logical conclusion, it was held by the Privy Council in Kawal Nain vs Prabhu Lal (1), that even if such a suit were to be dismissed, that would not affect the division in status which must be held to have taken place, when the action was instituted.
Viscount Haldane observed: "A decree may be necessary for working out the result of the severance and for allotting definite shares, but the status of the plaintiff as separate in estate is brought about by his assertion of his right to separate, whether he obtains consequential judgment or not." The law being thus settled as regards coparceners who are sui juris, the question is whether it operates differently when the coparcener who institutes the suit for partition is a minor acting through his next friend.
Now, the Hindu law makes no distinction between a major coparcener and a minor coparcener, so far as their rights to joint properties are concerned.
A minor is, equally with a major, entitled to be suitably maintained out of the family properties, and at partition, his rights are precisely those of a major.
Consistently with this position, it has long been settled that a suit for partition on behalf of a minor coparcener is maintainable in the same manner as one filed by an adult coparcener, with this difference that when the plaintiff is a minor the court has to be satisfied that the action has been instituted for his benefit.
Vide the authorities cited in Rangasayi vs Nagarathnamma (2 ) at p. 137.
The course of the law may be said, thus far, to have had smooth run.
But then came the decision in Girja Bai vs Sadashiv Dhundiraj (3) which finally established that a division in status takes place when there is an unambiguous declaration by a coparcener of his intention to separate, and that the very institution of a suit for partition constituted the expression of such an intention.
The question then arose how far this principle could be applied, when the suit for partition was instituted not by a major but by a minor acting through his next friend.
The view was expressed that (1) (1917) L.R. 44 I.A. 159.
(2) Mad.
(3) (1916) L.R. 43 I.A. 151.
1257 as the minor had, under the law, no volition of his own ' the rule in question had no application to him it was not, however, suggested that for that reason no .suit for partition could be maintained on behalf of a minor, for such a stand would be contrary to the law as laid down in a series of decisions and must, if accepted, expose the estate of the minor to the perils of waste and spoliation by coparceners acting adversely to him.
But what was said was that when a court decides that a partition is for the benefit of a minor, there is a division brought about by such decision and not otherwise.
It would follow from this that if a minor died before the court decided the question of benefit lie would have died an undivided coparcener of his family and his heirs could not continue the action.
In Chelimi Chetty vs Subbamma (1), the point directly arose for decision whether on the death of a minor plaintiff the suit for partition instituted on his behalf could be continued by his legal representatives.
It was held that the rule that the institution of a suit for partition effected a severance of joint status was not applicable to a suit instituted on behalf of a minor, and that when he died during the pendency of the suit" his legal representative was not entitled to continue it.
The ground of this decision was thus stated: " It was strongly argued by the learned pleader for the respondent that as the plaint states facts and circumstances which, if proved, would be good justification for the court decreeing partition, therefore at this stage we must proceed on the basis that there was a good cause of action and there was thus a severance of status effected by the institution of the suit.
This clearly does not amount to anything more than this, that it is open to a person who chooses to act on behalf of a minor member of a Hindu family to exercise the discretion on his behalf to effect a severance.
What causes the severance of a joint Hindu family is not the existence of certain facts which would justify any member to ask for partition, but it is the exercise of the option which the law lodges in a member of the joint family to say whether he shall continue to remain (1) Mad.
1258 joint or whether he shall ask for a division.
In the case of an adult he has not got to give any reasons why lie asks for partition but has simply to say that he wants partition, and the court is bound to give him a decree.
In the case of a minor the law gives the court, the power to say whether there should be a division or not, and we think that it will lead to considerable complications and difficulties if we are to say that other persons also have got the discretion to create a division in the family, purporting to act on behalf of a minor.
" This decision was cited with approval in Lalta Prasad vs
Sri Mahadeoji Birajman Temple (1), wherein it was observed: " The effect, therefore, we think, of an action brought by a minor through his next friend is not to create any alteration of status of the family, because a minor cannot demand as of right a separation; it is only granted in the discretion of the court when, in the circumstances, the action appears to be for the benefit of the minor.
See Chelimi Chetty vs Subbamma (2).
" In Hari Singh vs Pritam Singh (3), a suit for partition instituted on behalf of a minor was decreed, the court finding that it was for the benefit of the minor.
The question then arose as to the period for which the karta could be made liable to account.
It was held, following the decisions in Chelimi Chetty vs Subbamma (2 ) and Lalla Prasad vs Sri Mahadeoji Birajman Temple (1), that as the severance in status took place only on the date of the decision and not when the suit was instituted, the liability to account arose only from the date of the decree and not from the date of the suit.
It may be mentioned that in Chhotabhai vs Dadabhai (4) Divatia J. quoted the decision in Chelimi Chetty vs Subbamma (2) with approval, but as pointed out in Ramsing vs Fakira (5) and by the learned judge himself in Bammangouda vs Shankargouda (6), the point now under consideration did not really arise for decision in that case, and the (1) All. 461.
(2) Mad.
(3) A.I.R. 1936 Lah.
(4) A.I.R. 1935 Bom.
(5) I.L.R. (6) A.I.R. 1944 Bom.
1259 observations were merely obiter.
It is on the strength of the above authorities that the appellants contend that when the minor plaintiff died in January 1943, the suit for partition had abated, and that his mother had no right to continue the suit as his heir.
Now, the ratio of the decision in Chelimi Chetty vs Subbamma (1) and it is this decision that was followed in Lalta Prasad 's Case (2 ), Hari Singh vs Pritam Singh (3) and Chhotabhai vs Dadabhai (4) is that the power to bring about a division between a minor and his coparceners rests only with the court and not with any other person, and that, in our judgment, is clearly erroneous.
When a court decides that a suit for partition is beneficial to the minor, it does not itself bring about a division in status.
The court is not in the position of a super guardian of a minor expressing on his behalf all intention to become divided.
That intention is, in fact, expressed by some other person, and the function which the court exercises is merely to decide whether that other person has acted in the best interests of the minor in expressing on his behalf ail intention to become divided.
The position will be clear when regard is had to what takes place when there is a partition outside court.
In such a partition, when a branch consisting of a father and his minor son becomes divided from the others, the father acts on behalf of the minor son as well; and the result of the partition is to effect a severance in status between the father and his minor son, oil the one hand and the other coparceners, on the other.
In that case, the intention of the minor to become separated from the coparceners other than his father is really expressed on his behalf by his father.
But it may happen that there is a division between the father and his own minor son, and in that case, the minor would normally be represented by his mother or some other relation, and a partition so entered into has been recognised to be valid and effective to bring about a severance in status.
The minor has no doubt the right to have the partition set aside if it is shown to have been prejudicial to him but if that is not established, the partition (1) Mad.
(3) A.I.R. 1936 Lah.
(2) All.
(4) A.I.R. 1935 BOM.
160 1260 is binding on him.
Vide Balkishen Das vs Ram Narain Sahu (1).
And even when the partition is set aside on the ground that it is unfair, the result will be not to annul the division in status created by the partition but to entitle the minor to a re allotment of the properties.
It is immaterial that the minor was represented in the transaction not by a legal guardian but by a relation.
It is true, as held in Gharib Ul Lah vs Khalak Singh (2) that no guardian can be appointed with reference to the coparcenary properties of a minor member in a joint family, because it is the karta that has under the law the right of management in respect of them and the right to represent the minor in transactions relating to them.
But that is only when the family is joint, and so where there is disruption of the joint status, there can be no question of the right of a karta of a joint family as such to act on behalf of the minor, and on the authorities, a partition entered into on his behalf by a person other than his father or mother will be valid, provided that person acts in the interests of and for the benefit of the minor.
If, under the law, it is competent to a person other than the father or mother of a minor to act on his behalf, and enter into a partition out of court so as to bind him, is there any reason why that person should not be competent when he finds that the interests of the minor would best be served by a division and that the adult coparceners are not willing to effect a partition, to file a suit for that purpose on behalf of the minor, and why if the court finds that the action is beneficial to the minor, the institution of the, suit should not be held to be a proper declaration on behalf of the minor to become divided so as to cause a severance in status? In our judgment, when the law permits a person interested in a minor to act on his behalf, any declaration to become divided made by him on behalf of the minor must be held to result in severance in status, subject only to the court deciding whether it is beneficial to the minor; and a suit instituted on his behalf if found to be beneficial, must be held to bring about a division in status.
That (1) (1903) L.R. 30 I.A. 139.
: (2) (1903) L.R. 30 I.A. 165.
1261 was the view taken in a Full Bench decision of the Madras High Court in Rangasayi.
vs Nagarathnamma (1), wherein Ramesam J. stated the position thus: " These instances show that the object of the issue whether the suit was for the benefit of the minor is really to remove the obstacle to the passing of the decree.
It is no objection to the maintainability of the suit.
In my opinion therefore in all such cases the severance is effected from the date of the suit conditional on the court being able to find that the suit when filed was for the benefit of the minor.
" The same view has been taken in Ramsing vs Fakira (2) and Mandliprasad vs Ramcharanlal (3), and we agree with these decisions.
On the conclusion reached above that it is the action of the person acting on behalf of a minor that brings about a division in status, it is necessary to examine what the nature of the jurisdiction is which the courts exercise when they decide whether a suit is for the benefit of a minor or not.
Now, the theory is that the Sovereign as parens patriae has the power, and is indeed under a duty to protect the interests of minors, and that function has devolved on the courts.
In the discharge of that function, therefore, they have the power to control all proceedings before them wherein minors are concerned.
They can appoint their own officers to protect their interests, and stay proceedings if they consider that they are vexatious.
In Halsbury 's Laws of England, 3rd Edn., Vol.
XXI, p. 216, para.
478, it is stated as follows: " Infants have always been treated as specially under the protection of the Sovereign, who, as parens patriae, had the charge of the persons not capable of looking after themselves.
This jurisdiction over infants was formerly delegated to and exercised by the Lord Chancellor; through him it passed to the Court of Chancery, and is now vested in the Chancery Division of the High Court of Justice.
It is independent of the question whether the infant has any property or not.
" (1) Mad.
(2) I.L.R. (3) I.L.R. 1262 It is in the exercise of this jurisdiction that courts require to be, satisfied that the next friend of a minor has in instituting a suit for partition acted in his interest.
When, therefore, the court decides that the suit has been instituted for the benefit of the minor and decrees partition, it does so not by virtue of any rule, special or peculiar to Hindu law but in the exercise of a jurisdiction which is inherent in it and which extends over all minors.
The true effect of a, decision of a court that the action is beneficial to the minor is not to create in the minor proprio vigore a right which he did not possess before but to recognise the right which had accrued to him when the person acting on his behalf instituted the action.
Thus, what brings about the severance in status is the action of the next friend in instituting the suit, the decree of the court merely rendering it effective by deciding that what the next friend has done is for the benefit of the minor.
It remains to consider one other argument advanced on behalf of the appellants.
It was urged that the cause of action for a suit for partition by a minor was one personal to him, and that on his death before hearing, the suit must abate on the principle of the maxim, actio personalis moritur cum persona.
But that maxim has application only when the action is one for damages for a personal wrong, and as a suit for partition is a suit for property, the rule in question has no application to it.
That was the view taken in Rangasayi vs Nagarathnamma (1) at pp.
137 138 and in Mandliprasad vs Ramcharanlal (2) at p. 871, and we are in agreement with it.
All the contentions urged in support of the appeal have failed, and the appeal is accordingly dismissed with costs.
The amounts paid by the appellants to the respondents in pursuance of the order of this Court dated March 7, 1958, will be taken into account in adjusting the rights of the parties under this decree.
(1) Mad.
Appeal dismissed.
[/INST]In a suit instituted on behalf of a Hindu minor for partition of the joint family properties, the minor plaintiff died during the pendency of the suit and his mother as the legal representative was allowed to continue the suit as the second plaintiff, and the suit was decreed as it was found that the defendants had been acting against the interests of the minor and that the suit for partition was therefore beneficial to him.
It was contended for the appellants that the suit had abated by reason of the death of the minor before the suit was heard and before the Court could decide whether the institution of the suit was for his benefit.
Held, that when a suit is instituted by a person acting on behalf of a minor for the partition of the joint family properties, a declaration made by him on behalf of the minor to become divided brings about a severance in status, subject only to the decision of the Court that the action is beneficial to the minor.
The true effect of the decision of the Court is not to create in the minor a right which he did not possess before but to recognise the right which had accrued to him when the action was instituted.
Rangasayi vs Nagarathnamma, Mad. 95, Ramsingh vs Fakira, I. L. R. and Mandilprasad vs Ramcharanlal, I.L.R. , approved.
Case law reviewed.
Accordingly, the suit did not abate and the legal represen tative was entitled to continue the suit and obtain a decree on showing that when the suit was instituted it was for the benefit of the minor.
Held, further, that the suit did not abate on the ground either that the cause of action for a suit for partition by a minor was one personal to him, because such a suit is one relating to property.
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<s>[INST] Summarize the judgementtition Nos. 833 835 of 1979.
(Under article 32 of the Constitution) P. Parmeswara Rao, G. D. Gupta and Ashwani Kumar for the Petitioners.
U. R. Lalit and Miss A. Subshashini for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
In these three petitions under Article 32 of the Constitution, the petitioners separately pray for a restoration of the quota originally granted to them in their respective licences for the manufacture of fire arms.
Writ Petition No. 833 of 1979 has been filed by Ranjit Singh who alleges that his father Pritam Singh commenced the business of manufacturing guns in 1950 under a licence issued by the Government of Jammu and Kashmir.
The licence permitted him to manufacture 849 30 guns per month.
The guns were manufactured by hand and were not proof tested.
The licence was renewed annually and the quota was maintained throughout.
Later, with the enactment of the , the licence was issued under that statute.
The Government insisted that the guns manufactured by Pritam Singh should undergo proof testing, and for that purpose it became necessary for the manufacturer to purchase and install the necessary machinery and plant.
The machinery was installed shortly after 1960 on a substantial investment of funds raised with great difficulty and, it is said, in the result the factory is now capable of manufacturing 50 guns per month.
Until the year 1963, the licence in favour of Pritam Singh was renewed by the Government of Jammu & Kashmir for the full quota of 30 guns.
But with effect from the year 1964 the Government of India began to issue the licences.
The quota was reduced from 30 guns to 10 guns per month, and it is alleged that this has resulted in considerable hardship in view of the financial liability and the establishment expenses suffered pursuant to the installation of the machinery.
On the death of Pritam Singh in 1969, the business was carried on by the petitioner and his mother, and the licence now stands in their names.
Several representations were made to the authorities for the restoration of the original quota but there was no satisfactory response.
The petitioner claims that his plea for the restoration of his original quota has been supported by the State Government.
The petitioner cites a number of cases where the quota reduced in the case of other manufacturers has been restored and relies on other material to show that the determination of his quota has been arbitrary.
Writ Petition No. 834 of 1979 has been filed by Bachan Singh.
The facts incorporated in the petition run a materially similar course, except that the original quota granted to the petitioner consisted of 50 guns per month and has now been reduced to 5 guns per month.
The petitioner in the third Writ Petition, No. 835 of 1979, is Uttam Singh.
In his case, the original quota of 50 guns a month has been reduced to 15 guns a month.
Here again, the pattern of facts is substantially similar to that traced in the other two writ petitions.
In opposition to the writ petitions, the Union of India which is the sole respondent, relies on an Industrial Policy Resolution of 1956 which envisions an exclusive monopoly in the Central Government in the matter of manufacturing arms and ammunition while permitting existing manufacturers in the private sector to continue to carry on their business on a limited scale.
It is asserted that in fixing a quota the manufacturing capacity of a concern is not a determining factor, 850 and it is denied that the Government has acted arbitrarily.
It is also urged that the petitioners should be denied relief on the ground of laches.
The Union of India rests its case on the Industrial Policy Resolution of 1956.
Under that Resolution, however, it was decided that no objection would be taken to the continuance of the manufacture of arms and ammunition by existing units in the private sector already licensed for such manufacture provided the operation of those units was strictly restricted to the items already manufactured by them and that no expansion of their production or increasing the capacity of the items already produced was undertaken without the prior sanction of the Government of India.
Plainly, what was envisaged was a prohibition against an increase in the quota, not its curtailment.
Purporting to implement the Industrial Policy Resolution, the Government issued instructions that the quota fixed should be such that the market was not flooded with arms and ammunition.
No objection can be raised to that.
It is as it should be, but with that primary consideration defining the outer limits, there are other factors which govern the fixation of the actual quota.
There is the production capacity of the factory, the quality of guns produced and the economic viability of the unit.
The Government is bound to keep these in mind while deciding on the manufacturing quota.
There is need to remember that the manufacture of arms has been the business of some of these units for several years and the Industrial Policy Resolution contains a specific commitment to permit the continuance of those factories.
On the other side, the Government is entitled to take into consideration the requirements of current administrative policy pertinent to the maintenance of law and order and internal security.
Any curtailment of the quota must necessarily proceed on the basis of reason and relevance.
If all relevant factors are not considered, or irrelevant considerations allowed to find place, the decision is vitiated by arbitrary judgment.
On the material placed before us, we are not satisfied that the Government of India has taken into careful consideration the several elements necessary for forming a decision on the quota permissible to each of these petitioners.
We are of opinion that it should do so now.
And, for that purpose, the petitioners should be entitled to place before the Government a fresh and complete statement of their case, with supporting written material, to enable the Government to reach a just decision in each case.
We need not, in the circumstances, consider the other grounds on which the petitioners claim relief.
851 On behalf of the Government it is urged that there is no fundamental right under Article 19(1)(g) of the Constitution to carry on the manufacture of arms.
That contention is disposed of shortly.
The , expressly contemplates the grant of licences for manufacturing arms.
An applicant for a licence is entitled to have it considered in accordance with the terms of the statute and to have for its grant on the basis of the criteria set forth in it.
The other contention on behalf of the Government is that the petitioners are guilty of laches.
We are not impressed by the contention for the reason that the licences are granted for specific periods with a right to apply for renewal on the expiry of each period.
Each renewal constitutes a further grant of rights and it is open to the applicant to show on each occasion that the quota governing the preceding period should now be revised in the light of present circumstances.
Besides, the petitioners have been continuously agitating for the restoration of their quota.
Having regard to the peculiar circumstances of these cases, we are not inclined to deny them relief.
Accordingly, we allow the writ petitions and direct the respondent Union of India to reconsider the manufacturing quota fixed in the case of each petitioner after allowing a reasonable period to the respective petitioners to set forth their case on the merits, with such supporting written material as they may choose to place before it.
N.V.K. Petitions allowed.
[/INST]Prize Chits are one type of saving schemes.
In Prize Chits the organiser collects subscription in one lump sum or by monthly instalments spread over a specified period from the subscribers to the schemes.
Periodically, the numbers allotted to the members holding the tickets or units are put to a draw and the member holding the lucky ticket gets the prize either in cash or in the form of an article of utility, such as a motor car, scooter etc.
Once a person gets the prize, he is very often not required to pay further instalments and his name is deleted from further draws.
In case members do not get any prize, the schemes usually provide for the return of subscription paid by the members with or without an additional sum by way of bonus or premium at the end of the stipulated period.
As the flood of funds flowing through these prize chits benefited only the organisers of such schemes, and the total number of people victimised by these projects were considerable and injury to the community substantial, the Central Government set up a Study Group which went into the operation of these schemes.
The Report of the Study Group demonstrated the many sinister effects and also exposed the anti social impact upon the community by the operation of such schemes, and recommended to the State to intervene and interdict.
The Central Government thereupon undertook legislation for curbing the effect of the operation of these schemes by enacting the .
The petitioners in their writ petitions under Article 32 of the Constitution assailed the aforesaid statute: (1) contending that a package of proper safeguards would adequately protect the community, a total ban being recklessly excessive, unintelligently over broad and, therefore, unconstitutional, under Article 19(1)(g), (2) conventional chits and prize chits are substantially similar and, therefore, permission to continue 'conventional chits ' and prohibition of prize chits was discriminatory under Article 14, (3) there is a discriminatory exemp 802 tion from the operation of the prohibition in regard to those categories of prize chits which fall within section 11, and (4) the legislation being aimed at prize chits and intended to ban lotteries, would fall within the State List, Entry 34 List II and Parliament cannot enact such a law under Entry 7 of List III.
Dismissing the writ petitions, ^ HELD: (1) (i) There is a sufficient justification for undertaking legislation restricting the freedom to fleece through prize chits.
[810E].
(ii) The legislation cannot be struck down on the score of article 19(1)(g) of the Constitution.
[811F] (iii) The requirements of article 19(6) are, the reasonableness of the restriction upon the fundamental right to trade, the measure of reasonableness being the compelling need to promote the interest of the general public.
[810H] 2.
Conventional chits and prize chits are different categories with different financial features and different damaging effects.
There is, therefore, no force in the plea of violation of Article 14.
[812A] 3.
A bare reading of section 11 makes it clear that the exempted categories do not possess the vices of private prize chits.
What are exempted are prize chits and money circulation schemes promoted by or controlled by the State Governments, the Central Government, or the State Bank of India or the Reserve Bank.
Even Rural Banks and Cooperatives covered by section 11, are subject to public control.
Charitable and educational institutions are exempted only if they are notified by the State Government in consultation with the Reserve Bank.
There is, therefore, sufficient justification to justify the different classification of these items and their exemption cannot be called in question on the ground of violation of article 14.
[812G H; 813A] 4.
In pith and substance the present legislation is not one against lotteries.
It deals with a special species of contracts with sinister features, although one such feature is the award of prizes to subscribers.
While motives cannot validate or invalidate a legislation the core of the subject matter must govern competency.
[813 C D] 5.
In matters of economics, sociology and other specialised subjects, courts should not embark upon views of half lit infallibility and reject what economists or social scientists have, after detailed studies, commanded as the correct course of action.
The final word is with the Court in constitutional matters but judges hesitate to 'rush in ' where even specialists 'fear to tread '.
If experts fall out, court, perforce, must guide itself and pronounce upon the matter from the constitutional angle, since the final verdict, where constitutional contraventions are complained of, belongs to the judicial arm.
[811B C] 6.
When a general evil is sought to be suppressed some martyrs may have to suffer for the legislature cannot easily make meticulous exceptions and has to proceed on broad categorisations, not singular individualisations.
[811G] 7.
Judicial validation of a social legislation only keeps the path clear for enforcement.
Spraying legislative socio moral pesticides cannot serve any purpose unless the target area is relentlessly hit.
This legislation enacted in 803 response to expert recommendation and popular clamour is to be implemented by dynamic State Action.
[813E F] 8.
The possible hardship that bona fide prize chit promoters may suffer on account of the total prohibition clamped down by this legislation can be relieved against by the Central Government acting under Section 12.
[813F] 9.
Under Article 32 the Court 's function is not to give advisory opinion but to pronounce upon transgression of fundamental rights by State action.
[813H 814A]
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<s>[INST] Summarize the judgementAppeal No. 212/55.
Appeal from the Judgment and Decree dated July 7, 1953, of the Calcutta High Court in Appeal from Original Order No. 157 of 1952, arising out of the Judgment and Decree dated March 28, 1952, of the said High Court in Civil Rule No. 1409 of 1951.
B. Sen and P. K. Bose for the appellants.
P. K. Ghosh for the respondent.
section C. Mazumdar for the Intervener (Gopalpur Land Development Society, Ltd.).
August 29.
The Judgment of the Court was delivered by SINHA C. J.
The only substantial question that arises for determination in this appeal, on a certificate granted by the Calcutta High Court under article 133 (1)(c) of the Constitution, is whether the Government of West Bengal was bound to frame a development scheme under the provisions of the West Bengal Land Development and Planning Act, 21 of 1948, which hereinafter will be referred to as the Act, when it exercised its power of emergency under section 7 of the Act.
The facts of this case lie within a very narrow compass and are as follows: The respondent was the owner of about 18 bighas of land in a certain village in the district of 24 Parganas.
By a notification dated January 6, 1950, and published in the Calcutta Gazette dated January 12, 1950, under section 4 of the Act, the Government declared that the cadastral survey 370 plots, particulars whereof were given in the notification, were likely to be needed for the settlement of immigrants and for creation of better living conditions in the locality.
Thereafter a notification was ' issued under section 6 read with section 7 of the Act and published in the Calcutta Gazette dated April 27, 1950, declaring that the plots covered by the notification under section 4 aforesaid were needed for the very same purposes as stated in the notification under section 4.
On or about December 16, 1950, possession of those plots, except three, was taken by the Government.
When the Government started to erect certain structures on the land thus acquired and stored building materials near about, the respondent moved the High Court under article 226 of the Constitution challenging the vires of the Act and impugning the legality of the proceedings taken under the Act.
The matter was heard by H. K. Bose, J., sitting singly.
Before him the grounds urged in support of the petition were that the release of the three plots from the acquisition proceedings rendered the entire proceedings bad in law; that there was no urgency for the Government to take steps under section 7 of the Act, and for issuing the notifi cation under section 6 ; and that the provisions of the Act infringed the fundamental rights of the respondent, petitioner in the High Court, enshrined in article 19(1)(f) of the Constitution.
The learned Judge, by his judgment dated March 28, 1952, negatived all those contentions and discharged the rule issued by the High Court on the Government of West Bengal and others under article 226 of the Constitution.
The respondent preferred an appeal under the Letters Patent.
The appeal was heard by a Division Bench consisting of G. N. Das and Debabrata Mookerjee, JJ.
By their judgment dated July 7, 1953, it was held that the Act did not infringe the provisions of article 31 (2) of the Constitution and that therefore it became unnecessary to express any opinion with respect to the provisions of article 19(1)(f).
But the Bench also examined the provisions of the Act in the light of article 19(1)(f) of the Constitution and came to the conclusion that there was no infirmity in the Act, 371 even on that score, Having decided all the points raised on behalf of the appellant before it, the High Court allowed the appellant to raise another controversy, which had not been raised before the learned single Judge, namely, whether it was incumbent on the Government to frame a development scheme, after A possession had been taken by it, of the land in question.
Ordinarily, such a controversy should not have been allowed to be raised for the first time in the court of appeal.
Be that as it may, it came to the conclusion that even though the Government was entitled to deal with the land on an emergency basis under section 7 of the Act, it was incumbent on the State Government to frame a development scheme after possession had been taken.
The main reason for this conclusion as given by the High Court is that though section 7 had armed the Government with the power to take possession of the property before framing a scheme of development, the section does not, in terms, dispense with the necessity of framing a development scheme, after the emergency had been declared and possession taken.
In that view of the matter, the court of appeal allowed the appeal in part and directed a writ of mandamus to issue to the respondents before it, requiring them to proceed to frame a development scheme in terms of the Act.
The State of West Bengal and other officials who had been impleaded as respondents in the High Court applied for leave to appeal to this Court from the said judgment of the appeal court.
The High Court granted the leave prayed for, on condition that the appellants paid for the representation of the respondent before this Court by a junior Advocate of this Court.
That is how the matter comes before this Court.
It was argued on behalf of the appellants that the appeal court had misapprehended the scope and effect of sections 4, 5, 6 and 7 of the Act; that the Act contemplated two categories of acquisition proceedings, namely, (1) acquisition under section 6, after compliance with the provisions of section 5 and (2) acquisition in case of an emergency under section 7 read with section 6 of the Act; that the condition precedent laid down in section 5 necessitating 48 372 the framing of a scheme before a declaration under section 6 of the Act was made, is specifically excluded in cases of emergency once a declaration of emergency under section 7 is made.
The High Court was, therefore, in error in insisting upon the framing of a development scheme under section 5 of the Act, when that section had not been made applicable to the case of an emergency acquisition.
Once the property has been acquired it vests in the Government and thereafter the original holder of the property has no say in the matter, except on the question of amount of compensation.
Mr. Sen, for the appellants, finally contended that if the High Court was right in insisting upon a scheme of development being framed, the whole purpose of declaring an emergency would be defeated.
The learned counsel for the respondent has not made any serious attempt to meet the contentions raised on behalf of the appellants, but has attempted to show that the provisions of the Act, in so far as they give special powers to Government to declare an emergency and then to proceed with the acquisition without the necessity of framing a scheme of development, were unconstitutional, both in view of the provisions of article 31(2) and article 19(1)(f).
He also made a very feeble attempt to rely upon the provisions of article 14 of the Constitution and to suggest that the respondent was being discriminated against in the application of the emergency provisions of the Act to his case.
In our opinion, the contentions raised on behalf of the appellants are manifestly well founded and the High Court was clearly in error in issuing the mandamus against the appellants.
Before dealing with the contentions raised on behalf of the parties, it is convenient, at this stage, to set out the relevant provisions of the Act.
The Act replaced the West Bengal Land Development and Planning Ordinance, 11 of 1948, which was in similar terms.
The Act and the Ordinance, which it replaced, were enacted apparently as a result of the emergency created by the continual exodus of Hindus from East Pakistan on a mass scale and the consequent immigration of a very large population into West Bengal ' as a result of the 373 partition.
The Act was enacted " to provide for the acquisition and development of land for public purposes ".
It adopts the definitions of " land ", " Collector " and " company " as in the Land Acquisition Act, 1 of 1894, to which it is, in its terms, supplementary.
In the definition section 2, " development scheme " means, a scheme for the development of land for any public purpose; and a " notified area " has been defined as an area declared as such under sub section
(1) of section 4.
" Public purpose " has been defined in cl.
(d) of section 2 as including (i) the settlement of immigrants who have migrated into the State of West Bengal on account of circumstances beyond their control, (ii) the establishment of towns, model villages and agricultural colonies, (iii) the creation of better living conditions in urban and rural areas, and (iv) the improvement and development of agriculture, forestry, fisheries and industries ; but does not include a purpose of the Union.
Section 3 authorises the State Government to appoint the " prescribed authority " for carrying out the purposes of the Act.
Section 4 is, in terms, analogous to section 4 of the Land Acquisition Act and authorises the State Government by notification in the Official Gazette to declare any area to be a notified area on being satisfied that that specified area is needed or is likely to be needed for any public purpose.
The Act was amended in 1955 by the West Bengal Act, XXIII of 1955, and one of the amendments made by that Act was to add section 4A making provision for objections to be taken by any person interested in any land within the notified area, for an opportunity of being heard and for an enquiry being made on the merits of such objections, and finally for submission to the State Government of a report on the objections raised.
We are not concerned in this case with section 4A, because it was inserted into the Act after the decision of the case by the High Court.
Section 5, with which we are mainly concerned in this case is in these terms: "5(1).
The State Government may direct the prescribed authority, or, if it so thinks fit in any case, authorise any Company ' or local authority, to prepare, in accordance with the rules, a development scheme 374 in respect of any notified area and thereupon such scheme shall be prepared accordingly and submitted, together with such particulars as may be prescribed by the rules, to the State Government for its sanction : Provided that no scheme shall be necessary for acquisition of land for the public purpose specified in sub clause (i) of clause (d) of section 2.
A development scheme submitted to the State Government under subsection (1) may, after taking into consideration any report submitted under sub.
section (2) of section 4A, be sanctioned by it either without any modification or subject to such modifications as it may deem fit.
" The proviso to a. 5 was added by the same amending Act (West Bengal Act XXIII of 1955) and is likewise inapplicable to this case.
Section 6 again is, in terms, analogous to section 6 of the Land Acquisition Act, which provides for the declaration to be published in the Official Gazette to the effect that the State Government was satisfied that any land in a notified area, for which a development scheme has been sanctioned under section 5(2) of the Act, is needed for the purpose of executing such a scheme, unless there already has been a declaration made under section 7 of the Act.
Section 7, which is another section, the construction of which is involved in this case, is in these terms: " In cases of urgency, if in respect of any notified area the State Government is satisfied that the preparation of a development scheme is likely to be delayed, the State Government may, at any time, make a declaration under section 6, in respect of such notified area or any part thereof though no development scheme has either been prepared or sanctioned under section 5." Section 8 makes the provisions of the Land Acquisition Act applicable to acquisition proceedings taken in pursuance of the declaration made, either under section 6 or section 7 of the Act, subject to certain reservations made in pursuance of the provisos to section 8, relating to taking possession, determination of the amount of compensation, and of market value.
The other sections of the Act are not relevant to the point in controversy in this case and, therefore, need not be adverted to.
375 It will be noticed that section 7 is in the nature of a proviso to section 6.
Section 7 provides that in cases of urgency, if the State Government is satisfied that the preparation of a development scheme is likely to be delayed, it may make a declaration tinder section 6 that the land was needed for a public purpose, even though no development scheme has either been prepared or sanctioned under section 5.
The section, therefore, in clear terms, authorises the State Government to issue the necessary declaration under section 6, which puts the machinery of land acquisition proceedings into motion, if it is satisfied that the public purpose necessitating the acquisition of the land in question would be subserved without the preparation of a development scheme.
The Act itself came into existence in circumstances of great urgency.
Naturally, therefore, in suitable cases, where the preparation of a development scheme would cause delay, the Government was authorised to proceed with the acquisition of land after making the necessary declaration under section 6.
As already indicated after that declaration has been made by Government in the Official Gazette and the necessary enquiry made about compensation and the making of the award, the property becomes vested in tile Government.
The question naturally arises whether there is anything in the Act which makes it obligatory on the State Government to prepare a scheme of development thereafter.
The High Court has recognised the need for taking speedy action to meet the emergency created by the heavy influx of immigrants.
The High Court has observed that section 7 does not, in terms, dispense with the framing of a development scheme and that it merely says that the Government may issue a declaration under section 6, even though no development scheme has been framed.
But the High Court has further observed that even after taking possession of the property under r. 8, framed under the Act, within three days, there is no reason why the normal process envisaged in the Act should not be gone through.
The argument proceeds further that the Act itself contemplated land planning and development and therefore the framing of a development scheme was an essential part of the 376 process.
Hence, in the view of the High Court the framing of a development scheme was necessary in the normal course before the declaration under section 6 is made by the Government, and in the case of urgency under section 7, after taking possession of the land in question.
In our opinion, such a construction of the provisions of the Act is not warranted by the terms of the Act.
The addition of the proviso to section 5, quoted above, makes it clear that the Legislature has recognised the necessity in special circumstances of not framing a scheme in the case of the public purpose contemplated in cl.
(d)(i) of section 2, namely, for the purpose of settlement of immigrants.
On a fair reading of the relevant provisions of the Statute, it becomes clear that the Act contemplated acquisitions of two distinct classes, namely, (1) where the Government bad first considered and sanctioned a development scheme under the provisions of section 5 and then made a declaration that the land in a notified area was needed for the purpose of executing the particular development scheme and (2) where the notification under section 6 is made without any development scheme being prepared and sanctioned under section 5.
Once the declaration is made under section 6, the machinery of the Land Acquisition Act, 1 of 1894, comes into operation, of course subject to the reservations contained in the provios to section 8, as aforesaid.
The Land Acquisition Act itself does not contemplate the preparation of any such scheme of development.
In other words, section 7 completely dispenses with the statutory necessity of pre paring a scheme of development as envisaged in section 5 of the Act in cases where the Government has taken the decision that it is necessary to proceed further with the acquisition proceedings without waiting for the preparation of a scheme.
To insist upon the preparation of a development scheme would amount to rendering the provisions of section 7 otiose.
There is no justification for the observation made by the High Court that the Legislature did not intend that the State Government should proceed with the land acquisition proceedings under the Act without framing a scheme of development.
377 The High Court has recognised the legal position that it is open to the Government to take possession of the land under acquisition within three days after the making of the declaration of urgency under section 7, but has insisted that, even after taking possession as a measure of urgency, the Government was bound to,, prepare a scheme of development.
If that were so, the question naturally arises: to what use the land so taken possession of was to be put.
The taking of possession in cases of urgency would itself predicate the use of the land thus taken possession of by the Government.
But if the Government were to wait for the preparation and sanction of the scheme before putting the land acquired to any use, the very purpose of declaring the urgency and the taking of possession would be defeated.
It is clear, therefore, that the Legislature did not mean to insist upon the preparation of a scheme of development in cases of land acquisition brought within the purview of section 7 of the Act.
That disposes of the appeal.
But the learned counsel for the respondent appealed to the provisions of articles 14, 19(1)(f) and 31(2) of the Constitution in aid of his contention that section 7 of the Act was ultra vires.
Apparently, there is no discrimination.
As already indicated, there are two classes of cases into which the land acquisition proceedings envisaged by the Act fall.
The two classes can be easily identified and the purpose of the classification is based on a rational consideration, having due regard to the purpose and policy underlying the Act, namely, to acquire land for the public purpose, inter alia, of resettling immigrants who had to leave their hearth and home on account of circumstances beyond their control.
Such cases of urgency, as come under section 7, are clearly meant to serve the main purpose of the Act.
In our opinion, therefore, there is no substance in the contention that discrimination is implicit in the provisions of section 7.
The attack on the Act based on articles 19(1)(f) and 31(2) of the Constitution is futile in view of the provisions of article 31B, which is in these terms: 378 " Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amended it, continue in force.
" The Act in question is the last entry (serial number 20) in the Ninth Schedule.
Article 31B, quoted above, which renders the Act immune from all attacks based on the provisions of Part III of the Constitution relating to fundamental rights, makes it unnecessary to discuss with reference to the provisions of the statute that, even if the question were open, the Act does not stiffer from any such infirmity, as is attributed to it.
In view of the considerations set out above, we allow this appeal, set aside the judgment under appeal with costs here and in the High Court.
The respondent 's petition questioning the vires of the Act is dismissed.
Appeal allowed.
[/INST]By a notification under section 4 of the West Bengal Land Deve lopment and Planning Act, 1948, the Government declared that certain plots of land belonging to the respondent were needed for the settlement of immigrants from East Pakistan and for improving living conditions in the locality.
Thereafter a second notification was issued by the Government under section 6 read with section 7 of the Act declaring that the plots covered by the previous notification were needed for the same purpose as stated therein.
When the Government started to erect structures on the land thus acquired the respondent moved the High Court under article 226 of the Constitution challenging the vires of the Act and impugning the legality of the proceedings taken under tile Act.
The petition was heard by a judge of the High Court sitting singly who negatived all the contentions of the petitioner and discharged the rule.
On appeal by the respondent under the Letters Patent, a Division Bench of the High Court held that the Act did not infringe the provisions of articles 19(i)(f) and 31(2) of the Constitution.
The High Court further held that it was incumbent on the State Government to frame a development scheme after possession of the land had been taken even though the Government was entitled to deal with the land on an emergency basis under section 7 of the Act, which runs thus: " In cases of urgency, if in respect of any notified area the State Government is satisfied that the preparation of a development scheme is likely to be delayed, the State Government may, at any time, make a declaration under section 6, in respect of such notified area or any part thereof though no development scheme has either been prepared or sanctioned under section 5 ".
The High Court allowed the respondent 's appeal and directed a writ of mandamus to issue to the Government requiring them to proceed to frame a development scheme in terms of the Act.
On appeal by the State of West Bengal on a certificate granted by the High Court, 369 Held, that the High Court was in error in issuing the mandamus against the appellants.
Section 7 of the Act com pletely dispensed with the statutory necessity of preparing a scheme of development as envisaged in section 5 of the Act in cases where the Government had taken the decision that it was necessary to proceed further with the acquisition proceedings without waiting for a development scheme.
No discrimination was implicit in the provisions of section 7 of the Act and no fundamental right of the appellant was infringed either under article 14 or articles 19(1)(f) and 31(2) of the Constitution.
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<s>[INST] Summarize the judgement: Criminal Appeal No. 43 of 1972.
From the Judgment and Order dated 11 5 71 of the Rajasthan High Court in D.B. Criminal Appeal No. 478/67.
Nemo: for the Appellant.
S.M. Jain for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal under section 2(a) of the (Act 28 of 1970) raises a short question as to the nature of the offence made out against the appellant on the basis of the evidence adduced in Sessions Case No. 64 of 1966.
The Sessions Judge, Udaipur, who tried the appellant found on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki (P.W. 3) and Mst.
Modan (P.W. 8) that the appellant attacked his wife, Mst.
Gajri with dagger (Exh. 1) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature.
Despite this finding, the Sessions Judge convicted the appellant under section 304 of the Indian Penal Code and acquitted him of the charge under section 302 of the Penal Code in view of the fact that Dr. Laxmi Narain (P.W. 1) who conducted the post mortem examination of the body of Mst.
Gajri had said in the course of his examination that if immediate expert treatment had been available and emergency operation had been performed, there were chances of her survival.
The Sessions Judge agreeing with the contention raised on behalf of the defence also found that according to the case of the prosecution itself, the accused had gone to the village of his in laws to fetch Mst.
Gajri and it was only on her refusal to accompany him that the incident took place; that he had no intention to kill Mst.
Gajri and that at best what could be attributed to the appellant was the knowledge that the injury he was inflicting on the deceased was likely to cause her death.
746 On the matter being taken in appeal by the State, the High Court found that the Sessions Judge was in error in acquitting the appellant of the offence under section 302 of the Indian Penal Code ignoring the evidence to the effect that a penetrating wound 11/2" X1/2" was caused by the appellant with a dagger on the posterior axillary line 10" from the top of the shoulder and 5" from the spine which had caused injury to the liver and perforation of the large colon and was sufficient to cause death in the ordinary course of nature.
Accordingly, the High Court altered the conviction of the appellant from the one under section 304 Part II of the Indian Penal Code to that under section 302 of the Penal Code and sentenced him to imprisonment for life.
Mr. K.K. Luthra who was appointed as amicus curiae in the case not having cared to appear despite long and anxious waiting, we have gone through the entire record with the assistance of counsel for the respondent.
The grounds of appeal submitted by the appellant which are very inartistically drafted can at best be interpreted to urge only one thing viz. that the High Court went wrong in upsetting the judgment and order of the Sessions Judge and convicting the appellant under section 302 of the Indian Penal Code instead of under section 304 Part II of the Penal Code as ordered by the Sessions Judge.
This contention, in our judgment, is entirely misconceived.
It completely overlooks the circumstances attending the commission of the offence viz. that the appellant went armed with a dagger and despite the willingness expressed by Mst.
Gajri to accompany him next morning, he inflicted without the slightest provocation two injuries on her person (1) which landed on her right palm 3/4" above the second metacarpo phalangeal joint in the process of warding off the blow and (2) a penetrating wound, as stated above.
The whole affair appears to be pre planned and pre meditated and as such the case squarely falls within the purview of clause thirdly of section 300 of the Indian Penal Code.
We are fortified in this view by two decisions of this Court viz. Virsa Singh vs The State of Punjab and State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
In Virsa Singh vs The State of Punjab (supra) where the accused thrust a spear into the abdomen of the deceased which resulted in his death and in the opinion of the doctor, the injury was sufficient to cause death in the ordinary course of nature, it was held that even if the intention of the 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 747 of causing death, the offence would be murder.
The following observations made by this Court in that case are worth quoting: "If there is an intention to inflict an injury that is sufficient to cause death in the ordinary course of nature, then the intention is to kill and in that event, clause 'thirdly ' would be unnecessary because the act would fall under the first part of the section, namely "If the act by which the death is caused is done with the intention of causing death.
" In our opinion, the two clauses are disjunctive and separate.
The first is subjective to the offender: "If it is done with the intention of causing bodily injury to any person.
" It must, of course, first be found that bodily injury was caused and the nature of the injury must be established, that is to say, whether the injury is on the leg or the arm or the stomach, how deep it penetrated, whether any vital organs were cut and so forth.
These are purely objective facts and leave no room for interference or deduction: to that extent the enquiry is objective; but when it comes to the question of intention, that is subjective to the offender and it must be proved that he had an intention to cause the bodily injury that is found to be present.
Once that is found, the enquiry shifts to the next clause "and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death.
" The first part of this is descriptive of the earlier part of the section, namely, the infliction of bodily injury with the intention to inflict it, that is to say, if the circumstances justify an inference that a man 's intention was only to inflict a blow on the lower part of the leg, or some lesser blow, and it can be shown that the blow landed in the region of the heart by accident, then, though an injury to the heart is shown to be present, the intention to inflict an injury in that region, or of that nature, is not proved.
In that case, the first part of the clause does not come into play.
But once it is proved that there was an intention to inflict the injury that is found to be present, then the earlier part of the clause we are now examining 748 "and the bodily injury intended to be inflicted" is merely descriptive.
All it means is that it is not enough to prove that the injury found to be present is sufficient to cause death in the ordinary course of nature; it must in addition be shown that the injury is of the kind that falls within the earlier clause, namely, that the injury found to be present was the injury that was intended to be inflicted.
Whether it was sufficient to cause death in the ordinary course of nature is a matter of inference or deduction from the proved facts about the nature of the injury and has nothing to do with the question of intention.
In considering whether the intention was to inflict the injury found to have been inflicted, the enquiry necessarily proceeds on broad lines as, for example, whether there was an intention to strike at a vital or a dangerous spot, and whether with sufficient force to cause the kind of injury found to have been inflicted.
It is, of course, not necessary to enquire into every last detail as, for instance, whether the prisoner intended to have the bowels fall out, or whether he intended to penetrate the liver or the kidneys or the heart.
Otherwise, a man who has no knowledge of anatomy could never be convicted, for if he does not know that there is a heart or a kidney or bowels, he cannot be said to have intended to injure them.
Of course, that is not the kind of enquiry.
It is broad based and simple and based on commonsense: the kind of enquiry that "twelve good men are true" could readily appreciate and understand.
To put it shortly, the prosecution must prove the following facts before it can bring a case under section 300, "thirdly"; First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; These are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily 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, 749 Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
Once these four elements are established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under section 300, thirdly.
It does not matter that there was no intention to cause death.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" Similar view was expressed by this Court in State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
(Supra).
In the present case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause the death of the deceased, the case squarely fell within the ambit of clause thirdly of section 300 of the Indian Penal Code as held by this Court in the decisions referred to above.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
750 Explanation 2 to section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury, the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
For the foregoing reasons, we are of the view that the Sessions Judge was wholly wrong in convicting the appellant under section 304 Part II of the Indian Penal Code and acquitting him of the charge under section 302 of the Penal Code and the High Court was wholly right in convicting the appellant under section 302 of the Penal Code instead of under section 304 Part II of the Penal Code.
In the result, we do not find any merit in this appeal which is dismissed.
S.R. Appeal dismissed.
[/INST]The appellants in the above appeal were tried and convicted in respect of the offences inter alia under section 408, 465, 477 and 477A of the Indian Penal Code, 1860 read with section 5 of the Prevention of Corruption Act, 1947 by a special judge.
Both the appellants were members of a registered cooperative society.
The conviction of the appellants, was confirmed by the High Court.
21 of the Indian Penal Code defines a public servant "Members of the Executive Committee or servants of a cooperative society are not embraced by the categories mentioned in sec.
21" Chapter 9 of the Penal Code deals with offences by or relating to public servant.
Sec. 2 of the Prevention of Corruption Act, 1947 adopts definition of public servant from Sec.
21 of the Penal Code.
By the 1952 amendment of the Criminal Procedure Code the provisions of appointment of a Special Judge to try the offences have been provided.
The said 1955 amendment adds certain more offences which are to be tried by a special judge.
The Kerala Criminal Law Amendment Act, 1962 amended Sec.
161 of the Penal Code by adding an explanation thereto.
It provides that for the purpose of the said section and certain other sections a public servant shall denote, besides those who are public servants within the meaning of that section, members of the Board of Directors or the Executive or Managing Committee and other officer or servant of a Co operative Society registered or deemed to be registered under the law relating to co operative societies for the time being in force.
Sec. 3 of the Kerala.
Act provides that for the purpose of the Preventive of Corruption Act, 1947, public servant shall have the meaning assigned to it under the explanation to sec.
161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962.
(1) The appellants contended that sec.
2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purpose of Sections 161 to 165A of the Penal Code and for no other purpose.
Therefore, the use of the enlarged definition cannot be made for the purpose of 1947 Act.
(2) If the intention of the legislature was to enlarge the definition for all purposes, whatever, it would have amended section 21 of the Indian Penal Code itself.
Dismissing the appeals the Court, ^ HELD: (1) The terms of sec.
2 of the 1947 Act as substituted by sec.
3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that expression public servant shall have a particular meaning for the 798 purpose of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purpose of the Act" surely means for the purpose of all and not only some of the provisions of the Act.
[803E] (2) The Kerala Act carried out amendment of the 1947 Act insofar as the State of Kerala was concerned.
The 1947 Act deals not only with offences under sec.
161 to 165A of the Penal Code but also and mainly with those falling under various clauses of sub section 1 to 5 of the 1947 Act.
No reasonable line of distinction between the offences under sec.
161 to 165A of the Code on the one hand and those punishable under sec.
5 of the 1947 Act on the other appears feasible for the purpose of conferment of exclusive jurisdiction on special judges to try them.
From this point of view also interpretation canvassed on behalf of the appellants is untenable.
[804C E] (3) The arguments that the legislature would have incorporated the additional definition under sec.
21 if it desired to extend the scope for all purposes is without substance.
If the definition had been enlarged by amendment of sec.
21 it would have made the new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for Offences under sec.
161 to 165A of the Code but also for numerous other offences specified in the code relating to public servants as also to offences so related and created by other Acts wherein the definition of public servant occurring in sec.
21 of the Code has been adopted.
[804F H]
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<s>[INST] Summarize the judgementAppeal No. 464 of 1964.
Appeal by special leave from the Award dated the September 29, 1962 of the Third Industrial Tribunal in Case No. VIII 197 of 1960.
A. V. Viswanatha Sastri, Anand Prakash and D. N. Gupta, for the appellant.
N. C. Chatterjee, D. L. Sen Gupta and Janardan Sharma, for the respondent.
140 The Judgment of the Court was delivered by Hidayatullah, J.
The Dunlop Rubber Co. Ltd. was granted on January 21, 1963 special leave to appeal against the award of the Third Industrial Tribunal, West Bengal dated September 29, 1962.
By that award the Tribunal set aside the dismissal from service of twelve workmen of the Company and ordered their reinstatement with continuity of service but awarded only 25 per cent of the back wages etc.
during the period they were out of employment treating the period as leave.
This dispute was referred by the Government of West Bengal on July 20, 1960 under section 10 of the .
The workmen were dismissed after a domestic enquiry commenced on February 4, 1960 which was carried on exparte because these workmen did not choose to be present.
The Tribunal held that the enquiry was not proper and some of the witnesses were re examined before the Tribunal whose verdict was against the Company and hence this appeal.
Eleven of these workmen belonged to what is known as the Dual Auto Mill and the twelfth was working on what is described as the Baby Mill.
These workmen and several others stopped work from January 21, 1960 and they were placed under suspension on 25/27th January.
Ten other workmen were also dismissed but they were taken back on the intercession of the Government of Bengal.
The incident arose in the following circumstances : In the processing of rubber which is used in the manufacture of rubber goods by the Company, a number of departments have to work in sequence.
The Banbury Section prepares a mixture of rubber and chemicals and it is passed on to the Dual Auto Mill which, after further processing, turns out blocks of rubber called "batches".
Each batch is of about 1250 lbs.
There were at the material time two Dual Auto Mills and they were working in three shifts and as each auto mill required the attendance of two workmen, twelve such workmen were employed to look after the two mills.
Each shift was of 8 hours with half an hour 's rest for meals and an extra 20 minutes for emergencies.
It was expected to produce and was, in fact, producing 17 batches till January 12, 1960.
There was another mill called the Baby Mill but what it was used for is not quite clear on the record of the case.
One of the dismissed workmen (section R. Sen Gupta Check No. 252 was working on the Baby Mill and he was a protected worker.
The workmen in this Company are grouped under three Unions : the most numerous is Union No. 4145 which goes under the name of Dunlop Workers ' Union.
This Union was registered 141 but it was not recognised by the Company.
Another Union which bears No. 729 and goes under the, name of Dunlop Rubber Factory Labour Union was recognised by the Company.
We need not refer to the third Union which does not figure in these proceedings.
It appears that Union No. 4145, which came into existence in 1957, managed to capture all the elective seats open to the workmen by defeating the candidates set up by Union No. 729.
There was great rivalry between the two Unions and the dismissed workmen belonged to Union No. 4145.
It appears that Union No. 4145 had raised a demand for revision of wages etc.
which was being resisted by the Company.
The Baby Mill, the Banbury Mill and the Dual Auto Mills were manned by the workmen belonging to Union No. 4145, except one Raghunandan Das, Check No. 100, who belonged to Union No. 729 and was teamed with Chandramma Chaube one of the dismissed workmen.
Raghunandan Das was absent on leave from January 12 to January 19, 1960.
From January 12, there was a fall in the output of the Dual Auto Mills at all the three shifts.
The number of batches fell from 17 to 15 and later still further.
On January 15, 1960 warnings were issued to these workmen that they were going slow and that "go slow" action was misconduct under cl.
10(XVI) of the Company 's Standing Orders for operators and under cl.
18(C) of the Labour Union Agreement for operators.
They were told that if they did not immediately return to their normal output the Company would be forced to take disciplinary action against them.
All the workmen were served with such letters.
On January 19, Raghunandan Das joined his duties and was teamed again with Chandramma Chaube.
It seems that Raghu nandan Das found that Chandramma Chaube was not giving the full output and was taking more than the required time over the mixing operations.
Chandramma Chaube 's case, on the other hand, was that Raghunandan Das was not allowing sufficient technical time for the mixtures and he (Chandramma Chaube) was objecting to it.
It may be pointed out that the workmen were.
paid extra if they turned out more than the expected quota of batches and Raghunandan Das was anxious to earn more, if possible.
Be that as it may, it seems that these two workmen quarreled on January 21 and Raghunandan Das abused Chandramma Chaube and also Union No. 4145.
Immediately the members of 4145 Union threatened to stop work unless Raghunandan Das was removed from the Dual Auto Mill and transferred to another Department.
The officers of the Company promised an enquiry 142 but asked the workmen to go back to work.
The workmen belonging to the 4145 Union refused to do this.
As a result the Dual Auto Mills either remained closed or worked much below their capacity.
The workmen were again and again requested and ultimately on 25/27th January they were called to the office so that they could be served with charge sheets.
They declined to accepted the charge sheets and were there and then placed under suspension.
The suspended workmen included these twelve workmen and ten others as already stated.
One Mr. P. K. Maitra commenced enquiry into the charges in the presence of Mr. R. M. Bhandari, an observer.
At the commencement of the enquiry each of the workmen asked for a representative of Union No. 4145 who was "conversant with the art of cross examination" to be present.
Under the Standing Orders of this Company representation could only be by a member of a recognised Union but as Union No. 729 was anathema to the members of Union No. 4145 they would not avail of the services of any member of that Union.
They elected to remain absent except section R. Sen Gupta who, though their leader, appeared at the enquiry against himself and made a statement clearing himself but took no further part in the enquiry.
As a result of the enquiry, which was ex parte, Mr. Maitra held that these workmen were going slow and that they were guilty of the charge brought against them.
He recommended the punishment of dismissal.
The Company accordingly ordered their dismissal seeking at the same time the permission of the Tribunal under section 33 of the and tendering one month 's wages to each workman.
Later, the Government of West Bengal took interest in the matter and at the intercession of the Government the Company agreed to take back 10 of the workmen leaving it to Union No. 4145 to select the persons who should be taken back.
All the workmen of the Banbury Mill were taken back and the 1 1 workmen of the Dual Auto Mill and Sen Gupta of the Baby Mill remained dismissed.
The Tribunal in reaching the conclusion that the dismissal was improper and that the workmen should be reinstated held that the Company had not really charged the workmen with "go slow" action but had found them guilty of that charge.
It held that the Company was showing favours to Union No. 729 and was trying to put down the Union of the dismissed workmen.
The Tribunal, however, held that the stoppage of work by the workmen amounted to strike as there were proceedings pending before the Tribunal, but since the strike was peaceful and non 143 vident it was only technically illegal.
The Tribunal blamed the Company for contributing to the strike by its refusal to shift Raghunandan Das from his place of work.
In view of these findings the Tribunal held that the punishment of dismissal was not justified and the order now impugned was accordingly passed.
The Tribunal was wrong in almost all its conclusions.
It was wrong in holding that the workmen were not charged with "go slow" action and therefore could not be dismissed on the finding that they were guilty of "go slow".
Under the Standing Orders of the Company "go slow" is a major misconduct.
Clauses (VIII) and (XVI) of Standing Order 10 deal with insubordination or disobedience or failure whether alone or in combination with others, to carry out any lawful and reasonable or proper order of a Superior (cl. VIII) and engaging or inciting others to engage in irregular or unjustified or illegal strikes; malingering or slowing down of work (cl. XVI).
The charge sheet stated as follows : "You are hereby asked to show cause why disciplinary action should not be taken against you for the following misconduct under Operators Standing orders Clauses 10(VIII) and (XVI).
The two clauses of Standing Order 10, as pointed out above, deal with insubordination and inter alia with going slow.
It was contended before us that the words "go slow" did not figure in this charge as they did in the charges against workmen in the Banbury AM.
It is to be remembered that on January 15, 1960 these workmen had been expressly warned that they were going slow and that "go slow" action was misconduct under cl.
10(XVI) of the Company 's Standing Orders for Operators.
No doubt Mr. Lobo, who drew up the charge, had not mentioned go slow in these charges as he had done in the charges framed against the workmen of the Banbury Mill, but it is nevertheless clear that these charges refer to go slow and indeed the workmen in their replies to the charge denied that they were going slow.
It may be pointed out that Mr. Lobo had stated before the Enquiry Officer that the charge was "go slow".
The log books also showed that from January 12, 1960 against the Dual Auto Mills the remark was "slow work".
It is clearly established by the records produced that instead of 17 batches 15 batches or less were turned out at each shift.
This proves that there was a deliberate "go 144 slow" no sooner Raghunandan Das left on leave and the Dual Auto Mills came into the exclusive hands of Union No. 4145.
This Union thought that the opportunity was too good to be wasted to force their demand for increase of wages by the tactics of "go slow".
The explanation of the workmen that the mixture received from the Banbury Mill was too cold and had to be reheated before it could be processed in the Dual Auto Mills was false.
They attributed the cooling of the mixture to the working of a new machine called the festooner from the 12th of January.
It is clear that this machine was tried for three months before it was put into operation and had worked for three months prior to January 12, 1960 and so such complaint had been made by the workmen.
It is possible that the Banbury Mill operators, who were also suspended and dismissed, were cooling the mixture unduly by means of their blower to delay operation.
But whether the Banbury Mill cooled it and the Dual Auto Mills were required to reheat it or the Dual Auto Mills delayed the operations, it is clear that the motivating force behind it was the action of Union No. 4145 to force the hands of the Company in support of their demands.
It is sufficient to say that after the new workmen had got trained in the working of the Dual Auto Mills the production again reached the same number of batches and after the figure was even better though the festooner continued in operation.
We are satisfied that the workmen were going slow from January 12, 1960, that the charge of "go slow" was incorporated in the charge sheet read with the warning letter and that it was fully substantiated.
This amounted to misconduct under Standing Order No. 10 and was not a minor offence as contended before us by their learned counsel.
The minor offences deal with conduct of a very different kind.
The Tribunal was also wrong in thinking that there was a denial of natural justice because the workmen were refused the assistance of a representative of their own Union.
Under the Standing Orders it is clearly provided that at such enquiries only a re presentative of a Union which is registered under the Indian Trade Union Act and recognised by the Company can assist.
Technically, therefore, the demand of the workmen that they should be represented by their own Union could not be accepted.
It has been ruled by this Court in Kalindi & Ors.
vs Tata Locomotive & Engineering Co. Ltd.(1) and Brook Bond India (P) Ltd. vs Subba Raman(2) that there is no right to representation as such unless the Company by its Standing Orders recognises such a right.
(1)[1960] 3 S.C.R. 407.
(2) 145 Refusal to allow representation by any Union unless the Standing Orders confer that right does not vitiate the proceedings.
It is true that only the rival Union was recognised and there was hostility between the two Unions.
The quarrel itself which sparked off the strike was also between two representatives of the rival Unions.
In such circumstances it is idle to expect that these workmen would have chosen to be represented by a member of the rival Union and the Company might well have considered their demand to be represented by any other workman of their choice.
The workmen, however, insisted that the representation should be in the capacity of a representative of their own unrecognised Union.
In other words, they were desiring recognition of their Union in an indirect way.
The dispute, therefore, was carried on by these workmen with the twin object of achieving their demand for increased wages and also for the recognition of their Union.
The implication of their demand that they should be represented by a member of their own Union was not lost upon the Company and the refusal to allow representation on these terms cannot be characterised as a denial of natural justice or amounting to unfair play.
If the Company had been asked that the workmen wished to be represented by a workman of their own choice without the additional qualification about Union No. 4145 it is possible that the Company might have acceded to the request.
We think, the Company might have asked the workmen to delete all reference to Union No. 4145 and allowed them to have a representative of their own choice in the special circumstances of this dispute.
But we cannot say that the action of the Enquiry Officer was for that reason illegal or amounted to a denial of natural justice.
In this connection, we have repeatedly emphasised that in holding domestic enquiries, reasonable opportunity should be given to the delinquent employees to meet the charge framed against them and it is desirable that at such an enquiry the employ should be given liberty to represent their case by persons of their choice, if there is no standing order against such a course being adopted and if there is nothing otherwise objectionable in the said request.
But as we have just indicated, in the circumstances of this case, we have no doubt that the failure of the Enquiry Officer to accede to the request made by the employees does not introduce any serious defect in the enquiry itself, and so, we have no hesitation in holding that the result of the said enquiry cannot be successfully challenged in the present proceedings.
146 It follows that the two main reasons for interfering with the order of dismissal do not really exist.
The charge was under cls.
(VIII) and (XVI) of Standing Order No. 10.
It said so and its meaning was quite clear to the workmen who, according to plan, were definitely going slow from January 12, 1960 when the Dual Auto Mills passed into the control of workmen belonging to Union No. 4145.
The demand of the workmen, couched as it was, could not be granted by the Enquiry Officer, because the Standing Orders did not permit representation by a member of any but a recognised Union.
The additional reasons given by the Tribunal that later the demands of this Union were accepted in respect of wages can hardly justify the action of these workmen in going on an illegal strike and in declining to resume work unless what they demanded was done.
There was thus justification for the order passed by the Company.
It is on record that the Dual Auto Mills perform a key operation and no rubber goods can be produced without the batches being available.
By their action these workmen slowed down production of every category and by their refusal to work when asked to g0 back to work cause enormous loss to the Company.
The motive underlying the action is more deep seated than a mere quarrel between Chandramma Chaube and Raghunandan Das or the abuses which Raghunandan Das is alleged to have showered on Chandramma Chaube and his Union.
It is contended that there was discrimination between the Banbury Mill and the Dual Auto Mills because workmen of the Banbury Mill were reinstated but not the workmen of the Dual Auto Mills.
The discrimination, if any, was made by Union No. 4145 which nominated those who should be taken back in service.
There must be some reason why the Banbury Mill workmen were treated differently and if we are to hazard a guess, it seems that those workmen were not sending out a cold mixture as alleged but that the Dual Auto Mill workmen were taking more time on their own operation.
The production was slowed down not by the Banbury Mill operators but by the Dual Auto Mill operators.
In other words, the Banbury Mill workmen, though they joined in the strike, did not probably join in the "go slow", but the Dual Auto Mill workmen not only started "go slow" but also led the strike affecting a large number of workmen.
In any event the workmen chosen for reinstatement '.
were chosen by their own Union and it cannot be said that the Company made any discrimination.
We are satisfied that in this case the Tribunal was not justified in interfering.
It has acted as a court of appeal in scrutinizing the evidence and in reaching conclusions of its own.
We are also 147 satisfied that the conclusions reached by it were not justified on the evidence in the case.
In these circumstances, we think that the order passed by the Tribunal should be vacated and the order passed by the Company ought to be accepted.
It is a pity that these workmen, who, on their own admission were better paid than in any other Organisation should lose their job in an attempt to get an indirect recognition of their Union.
But it cannot be helped because the Company must have a free hand in the internal management of its own affairs.
No outside agency should impose its will unless the action of the Company is lacking in bona fides or is manifestly perverse or unfair.
There is nothing to indicate this.
At the same time we must say that existence of Union No. 4145 which has a larger membership than Union No. 729 which is the only recognised Union, has in a great measure contributed to this dispute.
We have often noticed that Companies favour one Union out of several and thus create rivalry which disturbs industrial peace.
It often turns out that this has adverse effect on Company itself.
Since Union No. 729 was formed in 1950 and Union No. 4145 in 1957 we cannot say that the non recognition of Union No. 4145 was deliberate.
But as that Union seems to be the stronger of the two Unions the Company should seriously consider whether Union No. 4145 should not also be recognised.
The appeal must succeed.
It will be allowed but we make no order about costs.
Appeal allowed.
[/INST]The members of the Bombay Bullion Association, respondent herein, were permitted under the Forward Contracts Control Act (Bom.
Act 64 of 1947) to carry on forward dealings in bullion subject to the bye laws framed by the Association.
The appellant who was a member of the Association and was carrying on business as bullion merchant, defaulted in performing his obligation to tender silver of which he was the forward seller, on the settlement day, and so the Association, purporting to act under its bye laws, purchased a quantity of silver at the risk of the appellant and claimed from him the difference in price.
The appellant paid the amount and challenging the legality of his being treated as in default filed a suit for its refund.
The suit was dismissed by the High Court.
In appeal to the Supreme Court it was contended that the Association should not have made the purchase because the purchasers had not fulfilled the terms of their obligations under the bye laws in making their payments to the Association.
The contentions were that : (i) certain of the purchasers who had made payments into the Clearing House of the Association by cheques, drawn on their account in the Clearing House, had not had the cheques certified as good for payment as required by bye law 137 B, and (ii) one payment was made by a purchaser, by a cheque drawn, not on the Clearing House but on a branch of the Clearing House in the city, and which besides was not certified good for payment as required by the bye law.
HELD : (i) Where a payment was made by a cheque drawn on in account with the Clearing House and the amount represented by that cheque was transferred to the Clearing House Account of the Association, it is virtually a payment in cash, though in form a payment by cheque.
Since payment in cash is one of the modes of payment recognised by the byelaw it satisfied the requirement of a valid payment.
[255 E F; 262 G H] Arsene A. Larocque vs Hyacinthia Beauckemin, (1897) A.C. 358, referred? to.
(ii)Where the Clearing House had accepted the cheque and credited it to the Association after ascertaining from the branch on which it was drawn, that the drawer of the cheque had enough funds at that branch for meeting of the cheque, the cheque need not be certified as good for payment.
The position with respect to such a cheque is the same as when the cheque is drawn on an account in the same branch, because the certificate of the banker that is referred to in the bye law is the certificate of a bank different from that into which the cheque is being paid.
In any event, when the staff of the Clearing 1 louse ascertained from the branch that the cheque was backed by sufficient funds to the credit of the customer in the branch on which it was drawn, it satisfied the requirements of a cheque certified as good for payment within the bye law.
[260 B; 262 A C; 263 G H] up./ 65 17 250
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<s>[INST] Summarize the judgementSpecial Leave Petition (Civil) No. 8001 of 1986 From the Judgment and order dated 8.7.1986 of the Allahabad High Court in W.P. No. 9664 of 1986.
U.R. Lalit and T. Sridharan for the Petitioner.
The Judgment of the Court was delivered by MISRA, J.
The short question which arises for consideration in this case is whether a suit is maintainable in a civil court for an injunction restraining the Hearing Authority appointed under section 68 D of the (hereinafter referred to as 'the Act ') from proceedings with the hearing of matters under that provision and from approving a scheme published under section 68 C of the Act either with or without any modification.
The petitioner is the holder of a permit issued under Chapter IV of the Act to ply a stage carriage on Bulandshahr Siana Garh Bugrasi Brijghat Bhasians Shambhaoli Babugarh Jadol Jahangirabad route in the State of Uttar Pradesh.
The State Transport Undertaking of the State of Uttar Pradesh published a scheme dated March 7, 1975 in the U.P. Gazette dated April 5, 1975 under section 68 C of the Act pro posing to operate its stage carriages to the exclusion of all private operators on the route referred to above.
The petitioner filed his objections to the said scheme along with several others.
After a number of adjournments the Hearing Authority empowered under section 68 of the Act was able to conclude the proceedings by April 26, 1979 and it is alleged that the Authority in the course of the hearing ob served that it would finalise and approve the scheme by 21.5.1979.
Before the Hearing Authority could give its approval to the scheme under section 68 D of Act, the petitioner filed original Suit No. 145 of 1979 on the file of the Civil Judge, Bulandshahr for a declaration that the above scheme published under section 68 C of the Act was illegal, void and ultra vires and for an injunction restraining the defendants in the suit from finalising and approving the scheme and acting upon it after it was published.
The State Transport Undertaking, i.e., the Uttar Pradesh State Road Transport Corporation, the State of Uttar Pradesh and the Regional Transport Authority, Meerut were impleaded as the defendents in the suit.
The defendants contested the suit.
L one of the pleas raised in their written statement was that the suit was 543 not maintainable in a civil court for the reliefs prayed for by the petitioner.
During the pendency of the suit the petitioner filed an application before the Civil Court for staying the hearing of the suit till the disposal of a special leave petition before this Court since the question relating to the maintainability of suits of similar nature was involved in the said special leave petition.
The learned Civil Judge declined to grant the request of the petitioner and fixed the suit for arguments on November 8, 1985.
Aggrieved by the order of the Civil Judge, the petitioner filed a revision petition before the Additional District Judge, Bulandshahr.
That revision petition was dismissed.
Against the order of Additional District Judge, the petitioner filed a writ petition.
On the file of the High Court of Allahabad.
That petition was also dismissed.
This special leave petition is filed against the order of the High Court of Allahabad.
We have heard the learned counsel for the petitioner in this case on the question of maintainability of the suit out of which this petition arises.
The question for consideration in this case is, as mentioned above, whether a suit is maintainable in a civil court for an injunction restraining the Hearing Authority under section 68 L) of the Act from proceeding with the hearing and approving the scheme either with or without modification.
The contention of the respondents before the trial court was that the suit was not maintainable for the reliefs prayed for by the petitioner since the jurisdiction of the civil courts in such matters was impliedly barred.
Chapter IVA of the Act was introduced into the Act by Act 100 of 1956.
Section 68 D of the Act provides that the provisions of the Chapter IVA and the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of the Act or any other law for the time being in force or in any instrument having effect by virtue of any such law.
Chapter IVA contains certain special provisions relating to the State Transport Undertakings.
A 'State Transport Undertaking ' is defined by section 68 A(b) of the Act as any Undertaking providing road transport J service where such undertaking is carried on by (i) the Central Government or a State Government; (ii) any Road Transport Corporation, established under section 3 of the ; and (iii) any municipality or any corporation or company owned or controlled by the Central Government or one or more State 544 Governments, or by the Central Government and one or more State Governments.
Chapter IVA of the Act provides for the preparation and approval of a scheme enabling the State Transport Undertaking to operate road transport services to the exclusion complete or partial of other persons.
The procedure laid down for the preparation of the scheme is contained in sections 68 C and 68 D of the Act.
Section 68 C of the Act provides that where any State Transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co ordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons or other vise, the State Transport Undertaking may prepare a scheme giving particulars of the nature of the service proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the official Gazettee and also in such manner as the State Government may direct.
Section 68 D of the Act provides that on the publication of any scheme in the official Gazette any person already providing transport facilities by any means along or near the area or route proposed to be covered by the scheme, any association representing persons interested in the provision of road transport facilities recognised in this behalf by the State Government and any local authority or police authority within whose jurisdiction any part of the area or route proposed to be covered by the scheme lies, may within thirty days from the date of its publication in the official Gazette file objections to it before the State Government.
The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter if they so desire, approve or modify the scheme.
The scheme as approved or modified as stated above shall then be published in the official Gazette by the State Government and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route.
Under section 68 I of the Act the State Government is authorised to make rules for the purpose of carrying into effect the provisions of this Chapter.
The rules which are promulgated provide for the details relating to the manner in which objections or representations can be filed under section 68 D(i) and the procedure to be followed at the hearing of persons who have filed such objections 545 and/or representations and the representatives of the State Transport Undertaking.
The rules also provide for the particulars to be incorporated in the scheme published under section 68 C of the Act.
From the above provisions it is clear that on the publication of the scheme under section 68 C of the Act any person who is aggrieved by the proposed introduction of the scheme is entitled to file his representations and objections and to appear before the Hearing Authority under section 68 D of the Act and make his submissions in support of his objections or representations.
Sub section (ii) of section 68 D of the Act authorises the Hearing Authority to approve the scheme either with or without modification.
By necessary implication it can also reject a scheme if it feels that it is not necessary to introduce the scheme.
When the scheme is approved or modified under section 68 D of the Act, such approved or modified scheme is required to be published in the official Gazette and on such publication it becomes final.
It is thus seen that Parliament has created a special machinery by the provisions contained in Chapter IVA of the Act for bringing jnto force an approved or modified scheme which would have the effect of excluding completely or partially other persons from operating motor service vehicles on any route or in any area.
After the scheme become final, as provided in sub section (iii) of section 68 D of Act, the transport authorities concerned can issue permits only in accordance with the scheme and the other provisions contained in Chapter IVA of the Act .
This Court in H. C. Narayanappa and Ors.
vs The State of Mysore and Ors., ; at page 753 has observed that the scheme approved or modified and published under section 68 D of the Act may properly be regarded as 'law ', within the meaning of Article 19(6) of the Constitution, made by the State excluding private operators from notified routes or notified areas, and immune from the attack that it infringes the fundamental right guaranteed by Article 19(1)(g) of the Constitution.
Section 9 of the Code of Civil Procedure, 1908 provides that the courts (subject to the provisions contained therein) have jurisdiction to try all suits of civil nature excepting suits of which their cognizance is either expressly or impliedly barred.
It is no doubt true that there is no express provision in the Act taking away the jurisdiction of the civil courts to try a suit in which the validity of the proceedings under Chapter IVA of the Act is called in question.
But we are of opinion that the jurisdiction of the civil courts is impliedly barred from entertaining suits of the present nature.
The jurisdiction of the State Government (the Hearing Authority under section 68 D of the Act) is exclusive in character and it is not open to a civil court to issue an order of injunction restraining the Hearing Authority from proceeding 546 with the hearing of the case and exercising its statutory functions.
Whenever statute uses the expression that a decision of an authority shall be final, the jurisdiction of a civil court to go into the correctness or otherwise of the decision is taken away.
We have gone through the plaint presented in this case.
It is not disputed that the scheme had been duly published under section 68 C of the Act by an authority which had the power to publish it and that the authority which was hearing the case under section 68 D of the Act had the power to do so.
All the contentions urged in the plaint relate to the merits of the scheme and the desirability of bringing the scheme into force.
All such objections relating to the merits of a scheme or the desirability of bringing such scheme can be raised by an aggrieved person before the Hearing Authority under section 68 D of the Act and it is for the Hearing Authority to consider such objections and representations and to pass appropriate orders thereon.
Where the Statute gives finality to the orders of a special tribunal the civil courts jurisdiction must be held to be excluded insofar as the merits to the case is concerned.
If jurisdiction is so excluded, the civil courts have jurisdiction only to examine whether the provisions of the Statute have not been complied with or the tribunal had or had not acted in conformity with the fundamental principles of judicial procedure.
In cases of the present nature where invariably reliance is placed by the private operators on Article 19(1)(g) of the Constitution, a writ petition lies before the High Court.
In such cases a suit is hardly the remedy which can be availed by them.
If suits of this nature are allowed to be entertained, the very object of the several provisions of Chapter IVA of the Act can be frustrated by interested parties by resorting to a civil court with the sole object of delaying the implementation of a scheme.
Such attempts should be curbed at the earliest opportunity.
The learned Civil Judge was right in declining to stay the further proceedings in the suit.
This is a suit which should have been rejected at the threshold under order 7 rule 11 of the Code of Civil Procedure on the ground that it did not disclose a cause of action.
We, therefore, do not find any ground to interfere with the orders of the High Court, the District Judge and the Civil Judge.
The Civil Judge is directed to dispose of the suit in the light of the observa tions made in this order.
The petition fails and is dismissed.
P.S.S Petition dismissed.
[/INST]The appeals raise the question whether in a case where the Land Acquisition officer takes temporary occupation, the person interested in the land was entitled to solatium on the compensation decreed in a proceeding under s.35 of the land Acquisition Act.
The High Court refused to allow it.
Dismissing the appeals, the Court ^ HELD: 1.
The provisions of section 23(2) of the Land Acquisition Act providing for payment of statutory solatium are not attracted to a case of compensation under section 35 of that Act.
[470H] 2.
Temporary occupation of land, provided in Part Vl of the Act, is distinct from, and is not included in, acquisition of land under Part II of the Act because in acquisition in exercise of the right of eminent domain title of the owner is extinguished and the property vests in the State, whereas when temporary occupation is taken the title of the owner remains untouched.
[470C D] Tan Bug Taim vs Collector of Bombay, AIR 1946 Bom.
216 referred to.
Clause "secondly" in section 23(1) of the Act is not applicable to temporary occupation covered by section 35 of the Act.
Statutory solatium as provided in section 23(2) of the Act does not apply to a case of damage covered by clause "secondly" in section 23(1) itself.
"Market value" occurs in the first clause of section 23(l) of the Act and sub section
(2) of section 23 refers to market value.
Solatium has reference to market value and the 469 mandate to pay solatium is only in respect of market value.
compensation under section 35 of the Act has no reference to market value and the actual loss sustained by the persons interested in the land only is intended to be compensated.[470F H]
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