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<s>[INST] Summarize the judgementTransfer Petition No. 96 of 1978.
Madan Bhatia and D. Gobardhan for the Petitioner.
V. M. Tarkunde and Mrs. K. Hingorani for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Mrs. Maneka Gandhi figures as an accused a prosecution launched against her and others by Miss. Rani Jethmalani for an offence of defamation in the Court of the Metropolitan Magistrate, Bombay.
The former is the editor of a monthly called "Surya" and is the wife of Shri Sanjay Gandhi and daughter in law of Smt.
Indira Gandhi, former Prime Minister.
The latter is a young advocate and is the daughter of a leading advocate and currently an important Member of Parliament.
The present petition has been made for a transfer of the criminal case from Bombay to Delhi, and a string of grounds has been set out to validate the prayer.
We decline the transfer and proceed to give our reasons without making the least reflection on the merits of the case.
Assurance of a fair trial is the first imperative of the dispensation of justice and the central criterion for the court to consider when a motion for transfer is made is not the hypersensitivity or relative convenience of a party or easy availability of legal services or like minigrievances.
Something more substantial, more compelling, more imperilling, from the point of view of public justice and its attendant environment, is necessitous if the Court is to exercise its power of transfer.
This is the cardinal principle although the circumstances may.
be myriad and vary from case to case.
We have to test the petitioner 's grounds on this touch stone bearing in mind the rule that normally the complainant has the right to choose any court having jurisdiction and the accused cannot dictate where the case against him should be tried.
Even so, the process of justice should not harass the parties and from that angle the court may weigh the circumstances.
381 One of the common circumstances alleged in applications for transfer is the avoidance of substantial prejudice to a party or witnesses on account of logistics or like factors, especially when an alternative venue will not seriously handicap the complaint and will mitigate the serious difficulties of the accused.
In the present case the petitioner claims that both the parties reside in Delhi and some formal witnesses belong to Delhi; but the meat of the matter, in a case of defamation, is something different.
The main witnesses are those who speak to having read the offending matter and other relevant circumstances flowing therefrom.
They belong to Bombay in this case and the suggestion of the petitioner 's counsel that Delhi readers may be substitute witness and the complainant may content herself with examining such persons is too presumptuous for serious consideration.
Now to the next ground.
The sophisticated processes of a criminal trial certainly require competent legal service to present a party 's case.
If an accused person, for any particular reason, is virtually deprived of this facility, an essential aid to fair trial fails.
If in a certain court the whole Bar, for reasons of hostility or otherwise, refuses to defend an accused person an extra ordinary situation difficult to imagine, having regard to the ethics of the profession it may well be put forward as a ground which merits this Court 's attention.
Popular frenzy or official wrath shall not deter a member of the Bar from offering his services to those who wear unpopular names or unpalatable causes and the Indian advocate may not fail this standard.
Counsel has narrated some equivocal episodes which seem to suggest that the services of an efficient advocate may not be easy to procure to defend Mrs. Maneka Gandhi.
Such glib allegations which involve a reflection on the members of the Bar in Bombay may not be easily accepted without incontestible testimony in that behalf, apart from the ipse dixit of the party.
That is absent here.
It is difficult to believe that a person of` the position of the petitioner who is the daughter in law of the former Prime.
Minister, wife of a consequential person and, in her own right, an editor of a popular magazine, is unable to engage a lawyer to defend her, while, as a fact, she is apparently represented in many legal proceedings quite competently.
A more serious ground which disturbs us in more ways than one is the alleged absence of congenial atmosphere for a fair and impartial trial.
It is becoming a frequent phenomenon in our country that court proceedings are being disturbed by rude hoodlums and unruly crowds, jostling, jeering or cheering and disrupting the judicial hearing with menaces, noises and worse.
This tendency of toughs and street roughs to violate the serenity of court is obstructive of the course of justice 382 and must surely be stamped out.
Likewise, the safety of the person of an accused or complainant is an essential condition for participation in a trial and where that is put in peril by commotion, tumult or threat on account of pathological conditions prevalent in a particular venue, the request for a transfer may not be dismissed summarily.
It causes disquiet and concern to a court of justice if a person seeking justice is unable to appear, present one 's case, bring one 's witnesses or adduce evidence.
Indeed, it is the duty of the court to assure propitious conditions which conduce to comparative tranquillity at the trial. 'Turbulent conditions putting the accused 's life in danger or creating chaos inside the court hall may jettison public justice.
If this vice is peculiar to a particular place and is persistent the transfer of the case from that place may become necessary.
Likewise, if there is general consternation or atmosphere of tension or raging masses of people in the entire region taking sides and polluting the climate, vitiating the necessary neutrality to hold a detached judicial trial, the situation may be said to have deteriorated to such an extent as to warrant transfer.
In a decision cited by the counsel for the petitioner, Bose, J. Observed: ".
But we do feel that good grounds for transfer from Jashpurnagar are made out because of the bitterness of local communal feeling and the tenseness of the atmosphere there.
Public confidence in the fairness of a trial held in such an atmosphere would be seriously undermined, particularly among reasonable Christians all over India not because the Judge was unfair or biassed but because the machinery of justice is not geared to work in the midst of such conditions.
The calm detached atmosphere of a fair and impartial judicial trial would be wanting, and even if justice were done it would not be "seen to be done".(1) Accepting this perspective we must approach the facts of the pre sent case without excitement, exaggeration or eclipse of a sense of pro portion.
It may be true that the petitioner attracts a crowd in Bombay.
Indeed, it is true of many controversial figures in public life that their presence in a public place gathers partisans for and against, leading to cries and catcalls or 'Jais ' or 'zindabads '.
Nor is it unnatural that some persons may have acquired, for a time a certain quality of reputation, sometimes notoriety, sometimes glory, which may make them the cynosure of popular attention when they appear in cities even in a court.
And when unkempt crowds press into a court hall it is possible that some pushing, some nudging, some brash ogling or angry starting may occur in the rough and rumble resulting in ruffled feelings (1) G.X. Francis vs Banke Bihari Singh, A.I.R. 1958 S.C. 809 at 810.
383 for the victim.
This is a far cry from saying that the peace inside the court has broken down, that calm inside the court is beyond restoration, that a tranquil atmosphere for holding the trial is beyond accomplishment or that operational freedom for the Judge parties, advocates and witnesses has ceased to exist.
None of the allegations made by the petitioner, read in the pragmatic light of the counter averments of the respondent and understood realistically, makes the contention of the counsel credible that a fair trial is impossible.
Perhaps, there was some rough weather but it subsided, and it was a storm in the tea cup or transcient tension to exaggerate which is unwarranted.
The petitioner 's case of great insecurity or molestation to the point of threat to life is, so far as the record bears out, difficult to accept.
The mere word of an interested party is insufficient to convince us that she is in jeopardy or the court may not be able to conduct the case under conditions of detachment, neutrality or uninterrupted progress.
We are disinclined to stampede ourselves into conceding a transfer of the case on this score, as things stand now.
Nevertheless, we cannot view with unconcern the potentiality of a flare up and the challenge to a fair trial, in the sense of a satisfactory participation by the accused in the proceedings against her.
Mob action may throw out of gear the wheels of the judicial process.
Engineered fury may paralyse a party 's ability to present his case or participate in the trial.
If the justice system grinds to a halt through physical manoeuvres or sound and fury of the senseless populace the rule of E law runs aground.
Even the most hated human anathema has a right to be heard without the rage of ruffians or huff or toughs being turned against him to unnerve him as party or witness or advocate.
Physical violence to a party, actual or imminent, is reprehensible when he seeks justice before a tribual.
Manageable solutions must not sweep this Court off its feet into granting an easy transfer but uncontrollable or perilous deterioration will surely persuade us to shift the venue.
It depends.
The frequency of mobbing manouvres in court precincts is a bad omen for social justice in its wider connotation.
We, therefore, think it necessary to make a few cautionary observations which will be sufficient, as we see at present, to protect the petitioner and ensure for her a fair trial.
The trial court should readily consider the liberal exercise of its power to grant for the accused exemption from personal appearance save on crucial occasions.
Shri Tarkunde, for the respondent fairly agreed that it was the right thing to do and explained the special reason for its first rejection.
If the application is again made, the magistrate will deal with it as we have indicated.
This will remove much of the unsavoury sensationalism which the hearing may suffer from 384 The magistrate is the master of the orderly conduct of court proceedings and his authority shall not hang limp if his business is stalled by brow beating.
It is his duty to clear the court of confusion, yelling and nerve racking gestures which mar the serious tone of judicial hearing.
The officials whose duty is to keep the public peace shall, on requisition, be at the command of the court to help it run its process smoothly.
When the situation gets out of hand the remedy of transfer surgery may be prescribed.
Every fleeting rumpus should not lead.
to a removal of the case as it may prove to be a frequent surrender of justice to commotion.
The magistrate shall take measures to enforce conditions where the court function free and fair and agitational or muscle tactics yield no dividends.
If that fails, the parties have freedom to renew their motion under section 406 of the Criminal Procedure Code.
For, where tranquil court justice is a casualty the collapse of our constitutional order is an inevitability.
We dismiss, for the nonce, this transfer petition.
S.R. Petition dismissed.
[/INST]The plaintiff (appellant), his father and step brother were owners of lands in a village in the former State of Hyderabad.
Coming to know that the two brothers and father were contemplating to migrate to Pakistan, defendant No. 1 suggested to the plaintiff that he would manage their properties but that since he was not in good health, a nominal power of attorney might be granted in favour of defendant No. 34.
The power of attorney (Ext.
Pl) was granted tc defendant 34 by all of them.
It was later supplemented by another deed (Ext. P2).
The plaintiff alleged that sometime thereafter he realised that the two defendants in collusion with each other transferred his lands to others for no consideration or inadequate consideration and that thereby a fraud was perpetrated upon him by the defendants.
Thereupon, it was further alleged, the plaintiff and his brother published in the newspapers and the official gazette a notice cancelling the power of attorney granted to defendant No. 34.
The plaintiff sued the defendants for recovery of possession of lands and certain other benefits.
The defendants on the other hand claimed that the two documents being valid the plaintiff could not resile from them.
They also alleged that the plaintiff was not the full and absolute owner of the lands but was a benamidar.
The trial court dismissed the plaintiff 's suit holding that the documents were valid The High Court upheld the trial court 's order.
It however held that the plaintiff was the absolute owner of the suit properties Dismissing the appeals. ^ HELD 1(a) There is no force in the contention that it is impermissible for three persons to jointly grant a power of attorney in favour of defendant No. 34.
Co principals may jointly appoint an agent to act for them and in such a case they become jointly liable to him and may jointly sue him.
[430C,F] (b) The relation of agency arises when one person, called the agent, has authority to act on behalf of another called the principal and consents so to act.
The relationship has its genesis in contract.
In order to show that it is imper 425 missible for three principals to jointly constitute an agent by a common power of attorney it should be shown that the provisions of Contract Act or the general law of contract have been violated by such a contract.
[430E] In the instant case there is no such violation.
Halsbury 's Laws of England Vol.
1 4th Edn.
para 726 referred to. 2.
There is no force in the contention that since the two documents confer a joint power of attorney in respect of properties of the three co principals, the agent could look after the joint properties of the donors alone and not their individual affairs.
What a power of attorney authorises depends on its terms and the purposes for which it was executed.
Where someone other than the person Who has the right to act in respect of certain things, has under a contract of agency, the right to act on behalf of the principal, the authority conferred by the written instrument has to be strictly construed.
Ordinarily the power of attorney is construed strictly by courts.
It is equally well established that in considering a contract it is legitimate to take into account the surrounding circumstances for ascertaining the intention of the parties.
[430H, 431A, 431H 432A, F] Bryant, Powis and Bryant Ltd vs La Banque du Peuple, at 177, Modi & Co. vs Union of India, referred to.
In the instant case in Ext.
P1 at three places the expressions used are" our power of attorney to act on our behalf and we empower the said person` '. 'on our behalf in all departments", and lastly, "acts done and effected by the agent shall be deemed to be acts done and effected by the principals.
" The power of attorney having keen granted by three co principals in favour of one agent the expression "on our behalf" would hardly be decisive of the scope of authority conferred by the deed.
The surrounding circumstances clearly established that each of the co principals had his land, each of them could not have access to this land and therefore could not manage them, and with a view to migrating to Pakistan each of them apparently wanted to dispose of his lands and collect cash and therefore for this purpose each of them wanted to constitute defendant No. 34 to be his agent in respect of his individual property.
1432C. G, 433F] 3.
A general power of attorney is not a compulsorily registrable document.
When those who executed a deed admit having executed it, the tact that the Sub Registrar failed to endorse that the executants were known to him would not render the deed invalid.
Nor is there a legal obligation on the part of the Sub Registrar to make an endorsement that the persons executing a deed were either personally known to him or were identified by someone known to him.
[434C, B] 4.
There is no force in the submission that the authority given under exhibit P1 was only to manage the property and not to sell it.
P1 clearly shows that apart from the power to manage the property a further power to purchase and sell lands was conferred on the agent.
The general power of attorney conferred wide authority on defendant No. 34 to file suits, defend actions.
engage lawyers.
purchase and sell land and execute sale deeds and so on.
[434D E, 435A] 5.
A document will be considered as a whole for interpretation of particular words or directions.
An ordinary authority given in one part of the instrument will not be cut down because there are ambiguous and uncertain expressions elsewhere.
A power of wide amplitude conferring wide authority cannot by 9 978 SCI/78 426 construction be narrowed down to deny an authority which the donor expressly wanted to confer.
[436B] Halsbury 's Laws of England 4th Edn.
1 para 733; referred to.
(a) By a catena of decisions of this Court it is well established that Order 41 Rule 27 C.P.C. does not confer a right on a party to produce additional evidence before an appellate court.
But if the court hearing the action requires any document to enable it to pronounce judgment, it has the jurisdiction to permit additional evidence to be produced.
If the High Court considered production of registered sale deeds essential to enable it to pronounce judgment, there is no reason why this Court should interfere with the discretionary power properly exercised by the High Court in the interest of justice.
[439E F] 7.
(a) The contention that defendant No. 34 who was the constitute attorney acted as a mere rubber stamp in certain transactions has no force.
Section 41 of the Transfer of Property Act provides that where, with the consent, express or implied of the person interested in immovable` property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it.
[436D, 437F] (b) Even if the father of the plaintiff could be said to be the ostensible owner of the land and he purported to sell the land, the plaintiff had acquiesced in the sale and accepted the consideration.
He would therefore be estopped from challenging the tile which was transferred pursuant to the sale.
[437E] Ramcoomar vs Macqueen, 1872 I.A. 11 Bengal LR 46; referred to.
(a) The contention that the plaintiff was a benamidar cannot be accepted.
The genesis of the concept of benami is that consideration for a transfer must flow from one person and the transfer is taken in the name of the other person and the consideration so flowing for the transfer was not intended to be a "gift in favour of the person in whose name the transfer is taken.
All these ingredients of benami ale absent in the instant case.
[440H] (b) Section 82 of the provides that where property is transferred to one person for a consideration paid or provided by another person, and it appears that such person did not intend to pay or provide such consider for the benefit of the transferee, the transferee must hold the property for the benefit OF the person paying or providing, the consideration.
[440F] (c) The plaintiff 's father held a high office in the Nizam 's Government.
He might have influenced the Nizam to grant the land to his son.
There is no evidence to show that the patta was for consideration.
Even if the Nizam in appreciation of the service rendered by the plaintiff 's father granted the land to the plaintiff it could not be said that any consideration flowed from the father of the plaintiff so as to make him a benamidar.
[440E, G]
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<s>[INST] Summarize the judgement(Civil) No. 8227 of 1982.
Under Article 32 of the Constitution of India.
Dr. Abishek Singhvi, A. Subba Rao and A.S. Gauraya for the Petitioners.
Girish Chandra and section Suri for the Respondents.
855 The Judgment of the Court was delivered by PATHAK, CJ.
This petition under Article 32 of the Con stitution has been filed by two petitioners, the Assam Rifles Multi purpose Co operative Society Limited and Major General A.S. Guraya, AVSM (Retd.), Vice Chairman of the said Co operative Society.
It is stated in this petition that on the north eastern extremity of India, between latitudes 27deg.
N. and 28deg.
N. and on both sides of longitude 97xE., within the former Tirup District in the NEFA area (now in Arunachal Pradesh) lies substantial territory which is a part of India.
It is claimed that Major General Guraya as Inspector General Assam Rifles prepared a programme for settling retired defence personnel, specially of the Assam Rifles, in that region and took preparator steps for effect ing such settlement.
It is asserted that about two hundred retired personnel with their families journeyed to the region and settled there on the basis of a scheme approved by the Government of India.
It is alleged that the scheme assured allotment of land, grant of title deeds in respect of the allotted land, facilities for movement by air to and from Mohanbari, freedom to develop the allotted areas, grant of advance by way of loans, provision of marketing facili ties for disposal of surplus produce, guaranteed supply of essential commodities and provision of the basic require ments of life for the purpose of encouraging the all round economic development of the area.
The Co operative Society was formed with the object of ameliorating the conditions of the settlers and for improving their economic lot.
The petitioners relied on correspondence exchanged between them and the authorities of the State Government and of the Central Government and prayed for directions from this Court to the respondents for grant of the reliefs indicated in the writ petition.
Counter Affidavits have been filed by the Government of India.
Most of the allegations made by the petitioners have been denied.
It is asserted that funds have been set apart and basic facilities have been provided.
It is alleged that land was not allotted to Major Gen. Guraya as he did not belong to the Assam Rifles and the scheme for rehabilitation of retired personnel from that unit did not cover him.
It is alleged that he has engineered this writ petition.
We may mention at the very outset that Major General Guraya, who appears in person before us, has categorically stated that he is not interested any more in any personal allotment.
The case was taken up by us on 20 February, 1987 and after 856 hearing the parties we were satisfied that settlement and habitation in that region should be encouraged.
The region constitutes part of Indian territory and is located on the Indian border with China and Burma.
It is in the public interest and for the benefit of the public that settlement of Indian citizens should be encouraged in this area and the area should be suitably developed.
In that view, on 20 February, 1987 we made an order directing the Central Gov ernment to nominate a competent authority of suitable status to examine the problem and to look into the scheme and, after hearing the petitioners, to report to the Central Government to enable it to make an appropriate order for redress of the grievances of the petitioners.
Pursuant to the order of this Court, a report was submitted by the present Director General, Assam Rifles in which he noted the features of the original scheme set forth in NEFA Adm. letter No. PC 42/63 of 16/17 August, 1963 and the approval with modifications of the Government of India in the Minis try of External Affairs thereto, as well as the points raised by the Assam Rifles Ex servicemen before this Court and before the Director General, Assam Rifles when he visit ed Vijayanagar for the purpose, and in that report, he has made a number of recommendations in support of the scheme to settle Assam Rifles Ex servicemen and to ensure that the various facilities and concessions originally promised to them are provided.
We had directed in our order of 20 Febru ary, 1987 that the final order should be made by the Govern ment of India after consideration of the report.
It seems that the Government considered the recommendations at an inter Ministerial meeting held in the Home Ministry on 6 July, 1987 and thereafter took the decision contained in Annexure III to the affidavit of Shri R.K. Tandon, Deputy Secretary (NE), Ministry of Home Affairs, New Delhi.
It appears that the Government has decided that the Assam Rifles Ex servicemen who have been allotted 10 11 acres of prime land per family in a valley should be provided with agricultural input facilities including animal husbandry, fertilizers, insecticides as well as horticultural support under the normal schemes run by the State Government, that the State Government should be requested to issue specific letters in respect of each family to enable it to obtain loans from banks and other financial institutions, that while free air lifts were not possible, the State Government should be asked to find out whether the subsidised rate of Rs.89 per flight per head could be further reduced and that in any event no charges be levied for abortive flights, that while a full time doctor is already posted in Vijaynagar, the State Government should be requested to post a mid wife to the Vijayanagar hospital and to arrange for periodical visits of a Gynaecologist, that the State PWD be requested to undertake the repair of the suspension bridges forthwith, 857 that the Multi purpose Co operative Society should apply to the State Government for recognition, and that a meeting be called to sort out the difficulties in the disbursal of pension by the Department of Posts and that on issues such as grant of citizenship, loans etc.
the position indicated in the minutes of the inter Ministerial meeting held on 6 July, 1987 should be maintained.
The report of the present Director General Assam Rifles and the decisions taken by the Central Government thereupon have been considered by us in the light of the submissions made by the parties.
The decisions of the Central Government placed before us refer to requests to be made to the State Government to provide some of the facilities required by the settlers.
Reference has already been made to those matters earlier.
More than sufficient time has passed, and it is desirable to ascertain what action has been taken by the State Government pursuant to those requests of the Central Government.
Certain supplementary directions are necessary from this Court, and we make them now: 1.
The Central Government and the State Government should decide between them as to which of them will give loans to the settlers and to what extent.
The Central Government should direct that the exist ing Post Office establishment be enlarged to handle dis bursement of pensions.
The State Government should upgrade the existing middle school to the status of a high school and make ade quate provision for additional seats in the student hostel to absorb the corresponding increase in the number of stu dents resulting from such upgradation.
The grant of domicile certificates should be consid ered in relation to the settlers, at least in respect of the members of the petitioner society.
The case will now be listed on 1 August, 1989 before which date the respondent No. 1, the Union of India, and the respondent No. 2, the State of Arunachal Pradesh, will file affidavits indicating the action adopted by them pursuant to the decisions taken at the inter Ministerial meeting men tioned earlier and pursuant to the directions made by this Court in this Order.
[/INST]The appellants were operating launch services for joy rides, film shooting, etc.
from Appollo Pier or Gateway of India to Elephanta Island in Bombay.
Respondent 7 was a cooperative association of launch owners also engaged in the same activities.
The members belonging to the associations were operating launch services turn by turn on voluntary roster system to avoid unhealthy competition.
When efforts were made by the police and the Port Trust Authorities to resolve the difference in the operation of launch services between the association and the appellants failed, a roster system was chalked out on the direction of the Deputy Conservator of Bombay Port Trust which was sought to be enforced by the police.
When some employees working in the launches were arrested for failure to act according to the roster system, the appellants filed writ petitions claiming that the police and the Port Trust Authorities had no authority to compel them to follow the roster system.
The High Court dismissed the writ petitions holding that the Bombay Port Trust Rules conferred powers upon the Deputy Conservator to give directions for berthing and for mooring and unmooring the vessels in the Port, and that apart the police and the Port Trust Authority had adequate powers under the Port of Bombay Passenger Boat Rules, 1962 and section 67 of the Bombay Police Act to regulate the manner in which the launches carried Passengers.
In the appeals to this Court, it was contended On behalf of the appellants that: (1) the Deputy Conservator of Bombay Port Trust, respondent No. 3 was not empowered in law to devise an order of the 826 imposition of a roster, and that this action was beyond the powers conferred by the , the Bombay Port Rules and the Port of Bombay Passengers Rules 1962.
(2) Respondent No. 3 had purported to act under Rules 4 and 19 of the Bombay Port Rules, Rule 4 of the Port of Bombay Passenger Boat Rules, and section 7 of the Bombay Police Act in having the roster system enforced by the Inspector of Police.
(3) The roster has tendency to prohibit trade and the power to regulate Is being misused as a power to prohib it.
(4) The imposition of the roster is too severe a measure to deal with the simple problem of overcrowding and chaos and touting for passengers, (5) The provocation for devising and imposing a roster was the complaint made by the appel lant 's trade rivals.
and (6) The roster has been prepared and is being enforced without recourse to any statutory provision enabling respondent No. 3 to devise it and impose it.
Dismissing the appeals, the Court, HELD: 1.
The roster system provides for the regulation of traffic, so that each launch obtains an opportunity of access to the landing place.
This is not a distribution of business, but a distribution of the time for which the landing place can be used, and therefore, a regulation of the use of the landing place.
The roster is intended to give effect to Rule 4 of the Port of Bombay Passenger Boats Rules, 1962.
There is no reason why recourse to a roster system should be considered as unreasonable.
[830C.F] 2.
The dominant purpose of the regulation of the use of the landing place by the launches is to prevent congestion and a possible breach of peace.
The real purpose that the roster is intended to serve, is to ensure the even flow of traffic at landing places.
[830H; 831A] Smt.
S.R. Venkataraman vs Union of India & Anr.
, ; ; Brownelis Limited vs The Ironmongers ' Wages Board Brownells Limited vs The Drapers ' Wages Board, ; and Hanson vs Radcliffe Urban District Coun cil, inapplicable.
All the launches owners have equitable access to the landing place and if the other conditions for plying the launches, such as holding of a proper licence, are satis fied, there is no reason why the launches, turn by turn, cannot avail of the facility of an equitable opportunity to use the landing place.
[831C D] 827 4(a) There is no excessive invasion of the appellants Fundamental Right to carry on business.
[831E] 4(b) What should be the duration for which the appel lants may be allowed to use the landing place, and what should be the turn in which such user may be permitted is essentially a matter for the judgment of the authorities concerned.
It is not possible for the Court to adjudicate on this point.
[831E F] 5.
The disputes between the parties in relation to the application of the roster is not a matter on which this Court will readily enter.
[831G] 6.
The imposition of a roster is reasonable and the power to impose a roster can be spelt out from the powers conferred on the authorities under the relevant statutory provisions.
The roster is only one method of regulation.
[831H; 832A]
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<s>[INST] Summarize the judgementCivil Appeal No. 984 of 1975.
Appeal by Special Leave from the judgment and Order dated the 10th February 1975 of the Andhra Pradesh High Court in W.A. No. 752 of 1974.
P. Ramachandra Reddy, Advocate General, A.P., P. P. Rao and V. Seetharaman, for the appellant.
R. C. Raghavan, G. Vedanta Rao and B. Kanta Rao, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for determination, in this appeal is whether a person whose parents belonged to a Scheduled Caste before their conversion to Christianity can on conversion or reconversion to Hinduism, be regarded as a member of the Scheduled Caste so as to be eligible for the benefit of reservation of seats for Scheduled Castes in the matter of a admission to a medical college.
The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is admittedly a caste deemed to be a Scheduled Caste in the State of Andhra Pradesh as specified in Part I of the Schedule to the Constitution (Scheduled Castes) Order, 1950.
They were both converted to Christianity at some point of time 1048 which does not appear clearly from the record, but it was the case of the respondent in his Writ Petition that he was born after their conversion.
This was also the assumption on which the arguments proceeded before the High Court and before us, too.
The counsel or the respondent expressed his readiness to argue the case on the same assumption, namely, that the respondent was born after the conversion of his parents, or, in other words, he was born of Christian parents.
It appears that in the State of Andhra Pradesh, for the purpose inter alia of admission to medical college, converts to Christianity are treated as belonging to backward class and, therefore, when the respondent applied for admission to Gandhi Medical College in 1973, he described himself as a member of a backward class.
But he did not succeed in getting admission.
Thereupon he got himself converted to Hinduism on 20th September, 1973 from Andhra Pradesh Arunchatiya Sangham stating that he had renounced Christianity and embraced Hinduism after going through Suddhi ceremony and he was thereafter "received back into Madiga caste of Hindu fold".
On the strength of this certificate, claiming to be a` member of Madiga caste, the respondent applied for admission to Guntur Medical College and on the basis that he was a member of a Scheduled Caste, he was provisionally selected for admission.
But subsequently he was informed by the Principal of the Medical College that his selection was cancelled as he was not a Hindu by birth.
The Principal apparently relied on Note (b) to clause (C) of rule 2 of the Rules issued by the Government of Andhra Pradesh under GO Rt.
No. 1315 dated 4th December, 1973 for admission to the M.B.B.S. Course in Government Medical Colleges for the Academic year 1973 74.
This Note was in the following terms: "No candidate other than Hindu including a Sikh can claim to belong to Schedule Castes.
No candidates can claim to belong to the Scheduled Caste except by birth.
" The respondent thereupon preferred a writ petition in the High Court of Andhra Pradesh challenging the validity of cancellation of his admission on the ground that Note (b), which required that a candidate, in order to be eligible or a seat reserved for Scheduled Caste, should belong to a Scheduled Caste by birth, went beyond the scope of the Constitution (Scheduled Castes) order, 1950 and was, therefore, void and the Principal was not entitled to cancel his admission on the ground that he was not a Hindu or a member of a Scheduled Caste by birth.
This ground of challenge was accepted by a Single Judge of the High Court and on appeal, a Division Bench of the High Court also took the same view.
In fact, it was conceded before the Division Bench by the learned Government Pleader appearing on behalf of the State that Note (b) was repugnant to the provisions of cl.
(3) of the Constitution (Scheduled Castes) order, 1950, since the only requirement of that clause was that in order to be a member of a Scheduled Caste, person should be professing Hindu or Sikh religion and it did not prescribe that he should be a Hindu by birth.
The State did not succeed in obtaining leave to appeal from the High Court and hence it preferred a special leave petition to this Court.
When the special leave petition came up for hearing, there was no decision of 1049 this Court dealing with the question as to whether a convert or reconvert to Hinduism can become a member of a Scheduled Caste and of so, in what circumstances and hence we granted special leave to the State, on the State agreeing that whatever be the result of the appeal, the admission of the respondent will not be disturbed and that the State will, in any event, pay the costs of the respondent.
It may be pointed out that since then a decision on this question has been rendered by a Bench of three judges of this Court to which we shall refer later.
It is clear on a plain reading of clause (4) of article 15 that the State has power to make special provision for scheduled Castes and in exercise of this power, the State can reserve seats in a medical college for members of Scheduled Castes without violating article 1 S or cl.
(2) of article 29.
The expression 'Scheduled Castes ' has a technical meaning given to it by cl.
(24) of article 366 and it means "such castes, races or tribes or parts or groups within such castes, races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of this Constitution.
" The President in exercise of the power conferred upon him under article 341 has issued the Constitution (Scheduled Castes) order, 1950.
paragraphs (2) and (3) of this; order are material and they read as follows: "2.
Subject to the provisions of this order, the castes, races or tribes or parts of or groups within caste or tribes specified in Part I to XIII of the Schedule to this order shall, in relation to the States to which these parts respectively relate, be deemed to be scheduled castes so far as regards members thereof resident in the localities specified in relation to them in those Parts of that Schedule.
Notwithstanding anything contained in Paragraph 2, No. person who professes a religion different from the Hindu or the Sikh religion shall be deemed to be a member of a Scheduled Caste.
" F The Schedule to this Order in part I sets out the castes, races or tribes or parts of or groups within castes or tribes which shall in the different areas of the State of Andhra Pradesh be deemed to be Scheduled Castes.
One of the castes specified there is Madiga caste and that caste must, therefore, be deemed to be a Scheduled Caste.
But by reason of c].
(3), a person belonging to Madiga caste would not be deemed to be a member of a Scheduled Caste unless he professes Hindu or Sikh religion at the relevant time.
It is not necessary that he should have been born a Hindu or a Sikh.
The only thing required is that he should at the material time be professing Hindu or Sikh religion.
Now, Note (b) was interpreted by the Principal of the Medical College to require that a candidate, in order to be eligible for a seat reserved for Scheduled Castes, should be a Hindu by birth.
This interpretation was plainly erroneous because what Note (b) required was not that a candidate should be a Hindu by birth but that 1050 he should belong to a Scheduled Caste by birth.
But even this requirement that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the provision in cl.
(3) of the Constitution (Scheduled Castes order.
1950 and was rightly condemned as void and no reliance was placed upon it on behalf of the State.
The principal argument advanced on behalf of the State was that when the respondent was converted to Hinduism, he did not automatically become a member of the Madiga caste, out it was open to the members of the Madiga caste to accept him within their fold and it was only if he was so accepted, that he could claim to have become a member of the Madiga caste.
There was no evidence in the present case, contended the State, showing that the respondent, on his conversion to Hinduism, was accepted as a member of the Madiga caste by the other members of that caste and, therefore, he was not at the time of his application for admission a member of a Scheduled caste Now, before we proceed to consider this contention, it is necessary to point out that there is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity, he loses his membership of the caste.
This question has been considered by this Court in C. M. Arumugam vs section Rajgopal and it has been pointed out there that ordinarily it is true that on conversion to Christianity, a person would cease to be a member of the caste to which he belongs, but that is not an invariable rule.
It would depend on the structure of the caste and its rules and regulations.
There are some castes, particularly in South India, where this consequence does not follow on conversion, since such castes comprise both Hindus and Christians.
Whether Madiga is a caste which falls within this category is a debatable question.
The contention of the respondent in his writ petition was that mere are both Hindus and Christians in Madiga caste and even after conversion to Christianity, his parents continued to belong to Madiga caste and he was, therefore, a member of Madiga caste right from the time of his birth.
It is not necessary for the purpose of the present appeal to decide this question.
We may assume that, on conversion to Christianity, the parents of the respondent lost their membership of Madiga caste and that the respondent was, therefore, not a Madiga by birth.
The question is: could the respondent become a member of Madiga caste on conversion to Hindusim ? That is a question on which considerable light is thrown by the decision of this Court in C. M. Arumugam vs section Rajgopal (supra).
The main question which arose for decision in C. M. Arumugamr vs section RaJgopal (supra) was whether section Raigopal, who belonged to Adi Dravida caste before his conversion to Christianity, could, on reconversion to Hinduism once again become a member of the Adi Dravida caste.
This Court, after examining the question on principle and referring to the decided cases, pointed out that the consistent view taken in this country since 1886 was that on reconversion to 1051 Hinduism, a person can once again become a member of the caste in which he was born and to which he belonged before conversion to another religion, if the members of the caste accept him as a member.
This Court observed that there was no reason, either on principle or on authority, which should compel it to disregard this view which has prevailed for almost a century and lay down a different rule on the subject and concluded that on reconversion to Hinduism, section Rajgopal could once again revert to his Adi Dravida caste, for he was accepted by the other members of the caste.
The reasoning on which this decision proceeded is equally applicable in a case where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequently embracing Hinduism, the members of the caste to which the parents belonged prior to their conversion accept him as a member within the fold.
It is for the members of the caste to decide whether or not to admit a person within the caste.
Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member.
The only requirement for admission of a person as a member of the caste is the acceptance of the person by the other members of the caste, for, as pointed out by Krishnaswami Ayyangar, J., in Durgaprasada Rao vs Sudarsanaswami,"in matters affecting the well being or composition of a caste, the caste itself is the supreme judge".
(emphasis supplied).
It will, therefore, be seen that on conversion to Hinduism, a person born of Christian converts would not become a member of the caste to which his parents belonged prior to their conversion to Christianity, automatically or as a matter of course, but he would become such member, if the other members of the caste accept him as a member and admit him within the fold.
This view would have ordinarily required us to find whether, on the material on record, it could be said to have been established by the respondent that, on conversion to Hinduism, he was accepted as a member of Madiga caste by the other members of that caste, for it is only if he was so accepted that he could claim to be a member of a Scheduled Caste.
But it is not necessary for us to undertake this inquiry because, as already pointed out, it has been agreed by the State that, whatever be the result of this appeal, the admission of the respondent will not be disturbed.
We accordingly dismiss the appeal with costs in favour of the respondent.
P.H.P. Appeal dismissed.
[/INST]The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is a scheduled caste, in the Andhra Pradesh as specified in the schedule to the Constitution (Scheduled Castes) order, 1950.
Respondent 's parents were converted to Christianity and thereafter the respondent was born.
The respondent got himself converted to Hinduism renouncing Christianity.
Thereafter, he applied for admission to Guntur Medical College on the basis that he was a member of a Scheduled Caste.
He was provisionally selected for admission but subsequently was informed by the principal the College that his selection was cancelled as he was not a Hindu by birth.
The Principal relied on Note (b) to Clause of rule 2 of the Rules issued by the Government of Andhra Pradesh for admission to the M.B.B.S. course in Government Medical College.
The said note provides that no candidate other than Hindu can claim to belong to Scheduled Caste.
It further provides that no candidate can belong to Scheduled Caste except by birth.
The respondent filed a Writ Petition in the High Court challenging the validity of Note (b) as going beyond the scope of the Constitution (Scheduled Castes) order, 1950.
The respondent succeeded before the learned single Judge as well as the Division Bench of the High Court.
In fact, it was conceded by the appellant before the High Court that note (b) was repugnant to the said order.
Dismissing the appeal by Special Leave, ^ HELD: 1.
It is clear on a plain reading of clause 4 of Article 15 that the State has power to make special provision for scheduled castes and in exercise of its power the State can reserve seats in a Medical College for members of Scheduled Castes without violating Article 15 or Article 29(2).
Article 366(24) defines Scheduled Castes to mean such castes, races or tribes as are deemed under Article 341 to be scheduled castes.
The President in exercise of the powers conferred upon him under Article 341 has issued Constitution (Scheduled Castes) order 1950.
Madiga caste is included in the schedule to the said order.
The said order itself, however, provides that no person who.
professes a religion other than Hindu or Sikh shall be deemed to be a member of a scheduled caste.
It, however, does not require that the should have been born a Hindu or a Sikh.
The only thing required is that at the material time he should profess Hindu or Sikh religion.
The requirement of the note that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the said order and was rightly condemned as void.
[1049B H, 1050A] 2.
There is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity he loses his membership of the caste.
It would depend upon r the structure of the caste and its rules and regulations.
There are some castes, 1047 particularly ill South India, where this consequence does not follow on conversion since such castes comprise both Hindus and Christians.
Whether Madiga caste falls in this category is a debatable question.
For the purposes of the present appeal it is not necessary to decide the contention of the respondent that there are both Hindus and Christians in Madiga caste and even after conversion to Christianity his parents continued to belong to Madiga caste.
[1050 C F] 3.
A similar question about the effect of re conversion was decided by this Court in the case of C. R. Arumugam vs section Rajagopal.
In that case this Court laid down that there is no reason to hold that a person on reconversion to Hinduism cannot once again become a member of the caste in which he was born and to which he belonged before conversion to another religion.
The reasoning on which this decision proceeded is equally applicable will a cause where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequent embraching Hinduism, the members of the caste to which the parents belong prior to their conversion accept him as a member within the fold.
It is for the members of the caste to decide whether or not to admit a person within the caste.
Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member.
The only requirement for admission of a person as a member of the caste is the acceptance of the reason by the other members of the caste.
On conversion to Hinduism a person would not become a member of the caste to which his parents belonged prior to their conversion, automatically or as a matter of course but he would become such member if the other members of the caste accept him as a members and admit him within the fold.
[1050G, 1051B E] There is nothing on record to show whether the respondent was accepted by Madiga caste.
However, it is not necessary to undertake this enquiry because it has been agreed by the appellants that whatever be the result of the appeal, the admission of the respondent would not be disturbed.
[1051 FG]
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<s>[INST] Summarize the judgementCivil Appeal No. 366 of 1979.
Appeal by Special Leave from the Judgment and Order dated 28 2 1978 of the Madhya Pradesh High Court (Indore Bench) in Civil Revision No. 93 of 1976.
Shanker Ghosh and section K. Gambhir for the Appellant.
R. K. Garg and A. K. Sanghi for Respondent No. 1.
The Judgment of the Court was delivered by UNTWALIA, J.
This appeal by special leave is from the judgment of the Madhya Pradesh High Court reversing the decision of the Second Additional District Judge, Indore in Miscellaneous Judicial Case No. 23 of 1975.
The appellant company had filed that case under Order 9 Rule 13 of the Code of Civil Procedure, hereinafter called the Code, for setting aside an ex parte decree for Rs. 28,479/ passed in favour of the respondent firm on 22 4 1975 against the appellant.
The learned Additional District Judge held that summons in the suit was not duly served on the company and it came to know about the decree on 29 7 1975.
Hence he set aside the ex parte decree.
The respondent firm filed a revision in the High Court under section 115 of the Code.
The High Court allowed the revision, set aside the judgment of the Trial Court and upheld the passing of the ex parte decree.
Hence this appeal.
The respondent filed the suit at Indore on 24 2 1975 against the appellant claiming damages to the tune of Rs. 26,000/ on account of the alleged non delivery of certain goods.
Summons in the suit was sent to the registered office of the company in Calcutta and is said to have been served on one Shri Navlakha on 17 3 1975 asking the company to appear at Indore on 25 3 1975 for settlement of issues.
Since the company did not appear in the Court on that date, eventually, 1030 the ex parte decree was passed on 22 4 1975.
According to the case of the appellant the company came to know about the ex parte decree for the first time when its constituted attorney Shri section K. Jhunjhunwala received a notice from the respondent by registered post demanding the decretal dues.
Thereupon Shri N. section Pareek, the Works Secretary of the company who is in charge of the legal matters was sent to Indore to ascertain as to how the ex parte decree came to be passed.
Pareek learnt that the summons purported to have been served on Navlakha on 17 3 1975.
Navlakha was mere Office Assistant in the Sales Department of the company.
He was neither a Secretary nor a Director nor any other Principal Officer of the company authorised to receive summons in the suit.
He did not bring the fact of the receipt of summons by him to the knowledge of any responsible officer of the company.
The company remained in dark and, as stated above, learnt for the first time on 29 7 1975 about the passing of the ex parte decree.
N. section Pareek was the only witness examined on behalf of the appellant in the Miscellaneous case tried by the learned Additional District Judge.
No witness was examined on behalf of the respondent.
The Trial Court held: "I hold that handing over of summons to Navlakha who was only an Office Assistant working in the company and who was not an officer duly authorised to accept summons on behalf of the company did not amount to valid service of summons on the applicant company.
" It also accepted the appellant 's case about the knowledge of the ex parte decree for the first time on 29 7 1975 and hence the application filed is about a week 's time thereafter was held to be within time.
The High Court in its impugned judgment has held: "It is not in dispute that the person who received the summons in the office of the Company is not a person who is entitled to be served on behalf of the company in accordance with sub clause (a) of Rule 2 of Order 29 of C.P.C." The High Court, however, took the view that since Navlakha was an employee of the company sitting in its registered office in Calcutta the summons will be deemed to have been duly served on the company within the meaning of the first part of clause (b) of Order 29, Rule 2 of the Code.
In the opinion of the High Court since the learned Additional District Judge did not apply his mind to the provision of law contained in clause (b), it committed a material irregularity and illegality in exercise of its jurisdiction in setting aside the ex parte decree.
1031 In our opinion the High Court was clearly wrong in upsetting the judgment of the Trial Court.
There was no error in that judgment much less any error of jurisdiction entitling the High Court to interfere with it.
Order 29 of the Code is headed "Suits by or against Corporations".
There are only three Rules in it.
We are concerned with Rule 2 which reads as follows: "Subject to any statutory provision of process, where the suit is against a corporation, the summons may be served (a) on the secretary, or on any director, or other principal officer of the corporation, or (b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business." Rule 2 is not an exhaustive provision providing for all modes of service on the company in the sense as to what is meant by service of summons on the Secretary, Director or Principal Officer in Jute and Gunny Brokers Ltd. and another vs The Union of India and others it was held that the words "Principal Officer" in clause (a) of Rule 2 would include managing agents and it can, under this rule, be on a juristic person.
Accordingly service on managing agents who are a corporation is valid under clause (a).
The meaning of clause (b) has got to be understood in the background of the provisions of the Code in Order 5 which is meant for issue and service of summons on natural persons.
Sending a summons by post to the registered office of the company, unless the contrary is shown, will be presumed to be service on the company itself.
But the first part of clause (b) has got to be understood with reference to the other provisions of the Code.
In Rule 17 of Order 5 it has been provided: "Where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgement, or where the serving officer, after using all due and reasonable diligence, cannot find the defendant, and there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain, 1032 and shall then return the original to the Court from which it was issued, with a report endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed.
" Sending summons to a corporation by post addressed to it at its registered office may be a good mode of service either by itself, or preferably, by way of an additional mode of service.
But leaving the summons at the registered office of the corporation if it is literally interpreted to say that the summons can be left anywhere uncared for in the registered office of the company, then it will lead to anomalous and absurd results.
It has to be read in the background of the provision contained in Order 5 Rule 17 of the Code.
In other words, if the serving peon or bailiff is not able to serve the summons on the Secretary or any Director or any other Principal Officer of the Corporation because either he refuses to sign the summons or is not to be found by the serving person even after due diligence then he can leave the summons at the registered office of the company and make a report to that effect.
In the instant case nothing of the kind was done.
It was not the case of the respondent in its rejoinder filed in the Miscellaneous case that the service of the summons as effected in accordance with the first part of clause (b) of Rule 2 of Order 29 of the Code.
Annexure A to the counter affidavit filed by the respondent is the petition filed by the appellant under Order 9 Rule 13 of the Code.
In paragraph 9 of the said petition it was stated: "Inspection of record of this Hon 'ble Court relating to the service of the summons reveals that the bailiff of the Small Cause Court at Calcutta seems to have delivered a copy of the summons to a gentleman who is described as an office assistant, on 17 3 1975 at about 12.40 P.M.
No office assistant of the defendant No. 1 Company is empowered or authorised to receive summons.
The original summons which has been returned by the bailiff to this Hon 'ble Court, has been signed by one Shri Nawlakha.
Shri Nawlakha was concerned merely with sales and had nothing to do with legal matters generally or with receiving summons in particular.
Service of the summons on Shri Nawlakha cannot be regarded as due service on the defendant No. 1 for the purpose of Order 9 Rule 13 C.P.C." The rejoinder of the respondent is Annexure B to the counter affidavit.
Para 9 of the rejoinder which is in reply to para 9 of the petition reads as follows: 1033 "In reply to para 9 it is stated that the summons was duly served as stated in this para.
But it is denied that Shri Nawlakha was concerned merely with sales and has nothing to do with legal matters, generally or with receiving summons in particular.
It is denied that service on Shri Nawlakha cannot be regarded as due service on the Company Defendant No. 1 for the purpose of Order 9 Rule 13 C.P.C. Shri Nawlakha was a responsible officer who could have intimated the receipt of the summons to his so called bosses.
Without prejudice it is submitted that the Madhya Pradesh amendment in Order 9 Rule 13 C.P.C. may kindly be perused.
" No where in the rejoinder a stand was taken that the summons was duly served on the company because it was left at the registered office of the company.
Reference to the Madhya Pradesh amendment of Order 9 Rule 13 is immaterial as the Trial Court has pointed out that the company had no knowledge of the ex parte decree, even otherwise, before 29 7 1975.
No contrary finding has been recorded by the High Court.
We, therefore, hold that the judgment by the Trial Court setting aside the decree was correct.
In any event no error of jurisdiction was committed by it.
The High Court went wrong in interfering with it.
We accordingly allow the appeal, set aside the judgment of the High Court and restore that of the Trial Court.
The suit shall now proceed to disposal in accordance with the law.
We may, however, make it clear that the appellant under the orders of the Court had furnished bank guarantee for the decretal amount.
It has agreed to continue the same till the disposal of the suit.
We shall make no order as to costs.
S.R. Appeal allowed.
[/INST]The appellant Ram Chander and Mange were tried by the learned Additional Sessions Judge, Jind, for the murder of Dunni.
Both were convicted under section 302 read with section 34 Indian Penal Code and sentenced to imprisonment for life.
On appeal the High Court acquitted Mange but confirmed the conviction and sentence of Ram Chander.
In appeal by special leave it was contended that the conviction and sentence were vitiated as the principle of fair trial was abandoned by the Sessions Judge who rebuked the witnesses and threatened them with prosecution for perjury and based his conviction on such extorted evidence.
Allowing the appeal, the Court ^ HELD: 1: 1.
If a Criminal Court is to be an effective instrument in dispensing justice, the presiding judge must cease to be a spectator and a mere recording machine.
He must become a participant in the trial by evincing intelligent active interest by putting questions to witnesses in order to ascertain the truth.
The Court has wide powers and must actively participate in the trial to elicit the truth and to protect the weak and the innocent.
It is the duty of a judge to discover the truth and for that purpose he may "ask any question, in any form, at any time, of any witness, or of the parties, about any fact, relevant or irrelevant".
But this he must do, without unduly trespassing upon the functions of the public prosecutor and the defence counsel, without any hint of partisanship and without appearing to frighten, coerce, confuse, intimidate or bully witnesses.
He must take the prosecution and the defence with him.
The Court.
the prosecution and the defence must work as a team whose goal is justice, a team whose captain is the judge.
The judge, "like the conductor of a choir, must, by force of personality, induce his team to work in harmony; subdue the raucous, encourage the timid, conspire with the young, flatter and old.
" F] Sessions Judge, Nellore vs Intna Ramana Reddy and Anr.
, I.L.R. , approved.
Jones vs National Coal Board, ; , quoted with approval.
In the instant case, the questions put by the learned Sessions Judge, particularly the threats held out to the witnesses that if they changed their statements they would involve themselves in prosecution for perjury were certainly intimidating, coming as they did from the presiding judge.
In an effort to compel 13 the witnesses to speak what he thought must be truth, the learned Sessions Judge, very wrongly, firmly rebuked them and virtually threatened them with prosecutions for perjury.
He left his seat and entered the ring.
The principle of "fair trial" was abandoned.
[19 F H] 2.
The Evidence Act contains detailed provisions dealing with statements of persons who cannot be called as witnesses and former statements of persons who are called as witnesses.
These provisions would appear to become redundant if the evidence of a witness is to be tested and accepted or rejected with reference to the former statement of another witness on the ground that such former statement renders the evidence highly probable or improbable.
Even assuming that under certain circumstances it is permissible to use the first information report under the first part of section 11 there is in the present case no question of invoking the first part of section 11, which is inapplicable since the first information report is now not sought to be used as being inconsistent with the prosecution case.
Nor can first information report be used by resort to the second part of section 11.
[20 H 21 A; 20 F G] Ram Kumar Pande vs The State of Madhya Pradesh, ; @ 522, discussed.
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<s>[INST] Summarize the judgementivil Appeal No. 2705 of 1977.
From the Judgment and Order dated 28.10.1975 of the Madras High Court in Tax Case No. 492 of 1975.
AND Civil Appeal No. 512(NT) of 1989.
From the Judgment and Order dated 13.2.1978 of the Madras High Court in Tax Case No. 332 of 1975.
R. Mohan and R.A. Perumal for the Appellant.
A.T.M. Sampath for the Respondent in C.A. No. 2705 of 1977.
Mrs. Janaki Ramachandran for the Respondent in C.A. No. 5 12 (NT) of 1989.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
The question involved in these two matters is the same.
So we ant leave in SLP 2440 of 1979 and proceed to dispose of both the appeals together.
The respondent assessee in each of these cases acquired a reserve forest.
It is common ground that the acquisition was effected with a view to raise a coffee and cardamom plantation thereon.
For doing this, the assessee had to clear a portion of the forest and in the process fell the unwanted trees standing thereon as natural growth.
The cut trees were sold by the assessee in the form of firewood as well as in the form of cut sizes of timber as well as sleep ers.
Some of the growth was also converted into charcoal and the resultant charcoal sold.
On these facts, the question arose in each of these cases whether the price 411 realised by the assessee on the sale of firewood, timber, sleepers and charcoal was assessable to sales tax.
We are concerned with the assessment year 1969 70.
The assessee 's turnover, in respect of these items in the case of Shanmugha Estate was Rs.3,00,396.16 which included a turnover in charcoal of Rs.86,829.24.
In the case of Shakti Estate, the disclosed turnover was as follows: Firewood 1,98,687.08 Sized timber 83,490.89 Sleepers 28.
164,00 _____________ 3,10,47.97 _____________ The Deputy Commercial Tax Officer added 5% towards omissions and assessed a turnover of Rs.3,25,859.07.
The further facts disclosed in the case of Shakti Estate are these.
The assessee is a firm of 10 individuals.
It had not purchased the forest but had got a lease which entitled them to enjoy the usufruct of the forest by its exploita tion.
Clause (4) of the partnership deed recites that "the firm will carry on the development and exploitation of the lands".
The firm had been functioning for the past 7 years and had been paying sales tax on its sales of firewood, timber and sleepers.
But for the first time in assessment year 1968 69, it put forward a claim that the above turnover was not assessable in its hands.
The full facts in the case of Shanmugha Estate are not on record but, except for the fact that this was a case of a purchase of a forest by the assessee, and that the plantation does not seem to have started yielding crops, the facts are broadly similar to those in the case of Shakti Estate.
The assessing officers and the first appellate authorities held the turnover in question to be taxable.
But the Tribunal reversed this and held that the turnover was not liable for assessment to sales tax.
The High Court had dismissed the revision filed by the State in the case of Shakti Estate in respect of assessment year 1968 69 by a short order which read: "We are of the view that the Tribunal was right in its order.
This was a case of a lease.
It did not involve any sale of trees.
Merely because the trees cut were sawn to sizes, that would not by itself make out a sale.
" 412 In respect of assessment year 1969 70 also, the States revision was dismissed following the above order.
In the case of Shanmugha Estate the department challenged the Tribunals finding only in respect of sales of sized timber.
The suggestion that the sizing of trees into timber or their conversion into sleepers would make a difference was not accepted by High Court, which, following the decision of the Kerala High Court in Kuttirayin & Co. vs State, [1976] 38 STC 282, affirmed the Tribunals order by its judgment re ported in (1979) 43 STC 226.
The State appeals from the judgments in both the cases.
The answer to the question posed depends on the inter pretation of the expressions "dealer" and "business", as defined under the Tamil Nadu General Sales Tax Act.
These definitions read thus: "Business includes: (i) any trade, or commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, com merce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental to ancillary to such trade, com merce, manufacture, adventure Or COnCern.
" "Dealer means: any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes (i) a local authority, company or Hindu undi vided family, firm or other association of persons which carries on such business; (ii) a casual trader . . " It is seen that, in the case of Shakti Estate, the planta tion has 413 started functioning and there is turnover in coffee and cardamora to the extent of Rs.58,000 while it is stated that the Shanmugha Estate has not yet started deriving income from its plantation.
The principal contention of the asses sees is that they are, or may, no doubt, become, dealers in coffee or cadamore or other crops grown, or to be grown, on the estates but that they are by no means dealers in fire wood, timber, sleepers or charcoal.
They say that their intention in acquiring the forest or rights therein was not to deal in the forest produce whether as firewood, timber, charcoal or otherwise but to start a plantation thereon.
That business could not be started or carried on without clearing the forest trees and so the activity of clearing the jungle was one that was not only unconnected with the assessees business as such but was something the assessees were constrained to indulge in.
This amounted to nothing more than a mere realisation by an owner of a part of his property to the best advantage and cannot be described as a trading activity or as partaking of the character of an adventure or concern in the nature of trade.
We do not, however, think that the above contention of the assessees can be accepted.
The facts show that each of the assessees has acquired a huge forest area which contains a large number of trees.
When the asseessee purchased the forest or got it on lease for starting a plantation thereon, it was aware of the existence of trees (some of them quite valuable) on the land and the price paid must inevitably have included some value for these trees as well.
The asses sees also knew full well that before they could start the plantation, as well as during the running of it, they would have to clear the forest in stages by cutting off the trees standing thereon and disposing of the same from time to time.
Each of these assessees is a firm the purpose of which is to carry on business.
It will be quite proper and natural to infer that the intention of the assessees at the time of purchase included not only an intention to grow and sell coffee and cardamom and other crops but also an intention to dispose of the trees standing on the land to the best advan tage in the circumstances.
Indeed the lease deed in the case of Shakti Estate clearly talks of an intention of "develop ment and exploitation of the lands", words which cannot be merely confined to the cultivation of commercial crops thereon.
In the face of such a declared purpose, it is of no relevance whether the exploitation and development was under the terms of a lease deed or a purchase deed and the dis tinction made by the High Court between the two would appear immaterial.
The extent of the lands acquired or leased out is so vast that the clearance has to be done in stages and the sale of forest trees extends over several years.
Indeed, it is bound to be a 414 recurring feature even after the plantation starts working as there will always be a certain number of trees retained in the plantation as shade trees and the like.
The nature of the task undertaken by the assessee is really one in the nature of a venture to carry out sustained, systematic and organised activities in the nature of business.
These activ ities do not merely cover the running of a plantation.
They commence right from the beginning when the assessee went in for the land with a view to developing it.
They fully in tended, as a first stage in the business which they intended to start, to exploit the trees standing on the land to the maximum advantage.
Moreover, they did not merely sell the forest trees haphazardly.
They took steps to exploit them in a commercial manner.
When the trees yielded timber, the assessee not only had them sawn and cut to sizes but even converted them into sleepers and sold them.
They reduced a part of the jungle growth to charcoal and sold the same.
Taken all together, one is left in no doubt that when the assessees went in for a purchase or lease of the forest for starting a plantation they also knowingly let themselves in for engaging in a trade in the forest produce.
The fact that the assessees are business entities, the size of the tract developed, the extent and value of the trees standing on the land, the inevitability of the jungles having to be cleared and the standing trees disposed of before commercial crops could be grown, the manner in which the forest trees were disposed of are all, we think, insignia that mark out the entire set of activities as a concern in the nature of trade.
It is true that, in the area of income tax law, it has been held that no adventure in the nature of trade can be spelt out where all that a person does amounts to a mere realisation of his capital assets.
It has been held thus that an owner of a huge estate who does not want to retain it any longer cannot be taxed on the surplus accruing to him on the sale of his capital assets even though he might carry out the realisation to best advantage in a commercial manner such as by forming a company, developing the lands, plotting them out, advertising them for sale, waiting for a favour able market and selling them over a period of several years.
But this line of cases is of no help in the context of the facts of the present case and in the view we have taken above of the assessees transactions.
Here the assessees did not merely realise the value of a capital asset belonging to them.
They went in for the acquisition of an asset fully realising its potentialities for exploitation not merely as a plantation but also, incidentally, by disposing of the existing growth on the land.
It seems impossible to say that they did not intend to do this also while going in for the acquisition.
If one purchases an asset with a view to turn it to account in such manner, we 415 think, one is certainly carrying out an adventure in the nature of trade.
Moreover, we have also to give full effect to the defi nitions in the statute we are concerned with.
The definition of a "business" also includes "any transaction in connection with or incidental to or ancillary" to a trade and thus, even on the assessees own arguments, these activities were incidental and ancillary to the business which the assessee was carrying on or definitely intended to carry on.
It is also immaterial, on this definition, that the assessees may not have had a "motive of making a profit or gain" on these sales though on the facts, it is clear that such motive must have existed and, in any event could not be ruled out.
The reference to a "casual" dealer in the second definition also renders it immaterial that the assessees may not have in tended to be regular dealers in sleepers, timber, firewood or charcoal but that this was something casual or incidental to the acquisition and exploitation of a forest for running a plantation.
Before concluding, we may refer to the decisions cited before us.
The decisions of the High Court in the present cases and in Kuttirayin 's case (supra) support the assesses contention but, for reasons given above, we are unable to accept them as correct.
The decision of the Madras High Court in L.N. Plantation Co. vs State, [1981] 47 STC 210 supports the department 's contention and we approve of the same.
In Tamil Nadu Trading Co. vs State, [1981] 52 STC 7 the Madras High Court was dealing with a case where the assessee was found to be a dealer in timber.
But, in the course of their judgment, the Court made the following observations which support the case of the department: "Even if it were to be assumed, without ac cepting, for the sake of argument, that the assessee purchased the land for the purpose of coffee plantation, the sale of timber and firewood fall under "any transaction" in connection with or incidental or ancillary to the business of coffee plantation and would therefore, fail within the definition of "business" under section 2(d) of the Act.
" We agree.
There decisions of this Court were also referred to by counsel.
State vs Burmah Shell, [1973] 31 STC 426 and Dis trict Controller of Stores vs Assistant Commercial Tax Officer, [1976] 37 STC 423 were cases where an assessee, carrying on a business, had to dispose of unserviceable or useless material and such disposals were held taxable 416 as "business" sales, the transactions being incidental or ancillary to the principal business carried on by the asses see.
The disposals effected by the Shakti Estate whose plantation business had started in full swing will certainly fall squarely within the principle of these decisions.
But, as we have discussed above, in our view, even the sales effected before the plantation started yielding results would be covered by the definitions as the venture undertak en by the assessee has to be considered as an integral whole and there can be no doubt that the sale of the forest pro duce was part of the activities in the contemplation of the assessees right from the beginning.
As against the above decisions, reliance was placed, on behalf of the assessees, on Deputy Commissioner vs Palampa dam Plantation, [1969] 24 STC 231 where, it is said, it was held that an assessee could not be held taxable as a dealer on the sale of trees of spontaneous growth in a plantation.
But that decision clearly turned on the specific language of the definition of "dealer" contained in section 2(viii)(e) of the Kerala General Sales Tax Act, 1963, and does not lay down any general proposition as contended for on behalf of the assessees.
For the reasons discussed above, we allow the appeals and set aside the order of the High Court and Tribunal in these cases.
In the result, the turnovers in dispute in the two cases before the High Court will stand included in the assessees turnover and the assessments modified accordingly.
We, however, make no order regarding costs.
N.V.K. Appeals allowed.
[/INST]The respondent had entered into contracts with Universi ties and other educational institutions for printing of question papers for them.
In the demand notes prepared the respondent gave the charges for printing, blocks, packing handling, delivery, postal and also value of paper and value of packing materials separately in the relevant assessment years.
On re examination the Assessing Officer noticed that printing charges and block making charges escaped assessment and brought them to tax.
In respect of subsequent assessment also claims for exemption towards printing charges and block making charges were disallowed.
The appeals preferred by the Respondents were dismissed by the Appellate Assistant Commissioner, who reached a finding that the contracts were only for supply of printed question paper as a finished product and that there was no scope to disintegrate cost of paper with separate charges for printing and block making though the bills were made out in a different way.
The respondent preferred appeals to Sales Tax Appellate Tribunal.
The Tribunal held that the respondent was assessa ble only on the sale value of paper and that printing and block making charges were not to be included in the assess ment.
Against the Tribunal 's Orders, the appellant preferred tax cases before the High Court.
The High Court dismissed the cases and held that the contract between the assessee and the Universities is of highly confidential nature and that the printing of question papers could be entrusted only to those in whom the institutions got the highest confi dence, and that the price paid for such confidentiality and trust is not 302 the price for the sale of goods.
The present appeals by Special Leave are against the High Court 's Orders.
In this appeal, it was argued on behalf of the appellant that printing charges and block making charges are includi ble in the assessable turnover of the Respondent.
On behalf of the Respondent it was argued that the contract entered into between her and the educational institutions was a contract of work and labour and in the performance of the contract, indicentally she had to sell paper to them and hence except to the extent of the cost of paper she was not liable to pay sales tax in respect of the other amounts receive by her.
Dismissing the appeals, HELD: 1.1 Contract for work in the execution of which goods are used may take one of three forms.
The contract may be for work to be done for remuneration and for supply of material used in the execution of works in which the use of materials is accessory or incidental to the execution of the work; or it may be a contract for work and use or supply of materials, though not accessory to the execution of the contract, is voluntary or gratuitous.
In the last class there is no sale because though property passed it did not pass for a price.
Whether a contract is of the first or the second class must depend upon the circumstances; if it is of the first, it is a composite contract for work and sale of goods; where it is of the second category, it is a contract for execution of work not involving sale of goods.
[307H; 308A B] 1.2 In each case the nature of the contract and the transaction must be found out.
And this is possible only when the intention of the parties is found out.
The fact that in the execution of a contract for work some materials are used and the property/goods so used, passes to the other party, the contractor undertaking to do the work will not necessarily be deemed, on that account, to sell the materi als.
Whether or not and which part of the job work relates to that depends on the nature of the transaction.
[316G H] 1.3 Normally, it may be that the goods prepared by the assessee which could not be exhibited for sale, would not be decisive of the matter and could in certain circumstances be sales liable to sales tax, but in all circumstances it depends upon the nature of the sale and the nature of the transaction involved.
Printing of question papers at the 303 behest of University or educational institutions is rather a delicate and confidential type of work and the price paid for supplying such printed question papers or printed mat ters entails primarily the confidence, and secondly the skill and to a very small measure the material.
If that is the position, it cannot be categorised as entailing sale of goods but it is rather a contract for works done.
[309G H; 310A] Government of A.P. vs Guntur Tobaccos Ltd., XVISTC 240 relied on.
Hindustan Aeronautics Ltd. vs State of Kerala, [1984] ISCC 706 and P.T. Varghese vs State of Kerala, 37 STC 1171 approved.
Saraswati Printing Press vs CST, Eastern Division Nag put, X STC 286 and State of A.P. vs Sri Krishna Power Press, Vizianagaram, XI STC 498.
P.M. Venkatachalam Pillai vs State of Madras, XXIII STC 72; State of Orissa vs Ramnath Panda, XXVII STC 98; S.R.P. Works and Ruby Press vs State of A.P., XXX STC 195 and STO, Special Circle 11, Palghat vs I. V. Somasundaram, 33 STC 68.
A.S. Hameed Bharath Press vs State of Tamil Nadu, 54 STC 379; CST vs Uma Art Press, 56 STC 300; Chandra Bhan Gosain vs State of Orissa, XIV STC 766; CST vs M/s Sabarmati Reti Udvog Sanakari Mandali Ltd., 38 STC 203 and Marcel (Furri ers) Ltd. vs Tapper, referred to.
2.1 The primary difference between a contract for work or service and a contract for sale is that in the former there is in the person performing or rendering service no property in the thing produced as a whole, notwithstanding that a part or even the whole of the material used by him may have been his property.
Where the finished product supplied to a particular customer is not a commercial com modity in the sense that it cannot be sold in the market to any other person, the transaction is only a works contract.
[316E] 2.2 When the questions are set on a piece of paper and sent for printing, the University remains the owner until it divulges these to the intending candidates or the students.
But that is a matter which is relevant in the method of communication of the question to the candidates appearing in the examination.
The means employees for such communication entail use of mind, confidence, trust for the material, 304 paper and the technical skill of printing.
It is a combina tion of these various factors that results in printing the question papers and the payment made in the process entails a composite payment for all these.
Question papers as such, after being printed are neither available commercially nor available to any community commercial or otherwise save under specific circumstances for the candidates appearing at a particular time in an examination.
[308D E; 309C] Court Press Job Branch, Salem vs State of Tamil Nadu, 54 STC 382 and CST vs M.P.V. Ratna Fine Arts Printing Press, 56 STC 77 approved.
State of Madras vs Gannan Dunkerlay & Co. (Madras) Ltd., IX STC 353; Patnaik & Co. vs State of Orissa, XVI STC 364 and T.V. Sundaram lyengar & Sons vs State of Madras, 35 STC 24 referred to.
The contract in the present case is one, having regard to the nature of the job to be done and the confi dence reposed, for work to be done for remuneration and supply for paper was just incidental.
Hence, the entire price for the printed question papers would have been enti tled to be excluded from the taxable turnover, but since the demand notes prepared by the assessee showed the costs of paper separately, it appears that it has treated the supply of paper separately.
Except the materials supplied on the basis of such contract, the contract will continue to be a contract for work and labour and no liability to sales tax would arise in respect thereof.
[317A C]
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<s>[INST] Summarize the judgementAppeal No. 855 of 1968.
Appeal by Special Leave from the Award dated October 26, 1967 of the National Industrial Tribunal, Calcutta in Reference No. NIT 3 of 1967.
D. N. Mukherjee, for the appellant.
P. section Khera and section K. Nandy, for respondents Nos. 1 and 3.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the Award dated October 26, 1967 of the National In dustrial Tribunal, Calcutta in Reference No. NIT 3 of 1967, holding that for the accounting year 1965 66, the quantum of bonus payable by the appellant to its workmen is 20% of the effective salaries or wages with a further direction to set on a sum of Rs. 1,46,252.
The appellant, Indian Cable Company Ltd. (hereinafter to be referred as the Company) occupies a very prominent position in the Cable Industry of India having its Head Office at Calcutta and its factory at Jamshedpur.
It has, branches in Bombay, Madras, New Delhi, Kanpur, Ahmedabad, and Bangalore.
(In addition to insulated cables, the Company manufactures Aluminium Rods, Radio Aerials, Fuse Wires and other products.).
Its paid up capital is Rs. 2,48,65,450.
It employed workmen numberingover 5000.
The gross effective salaries and wages of its employees for the relevant accounting year amounts to Rs. 1,05,32,880.
Its accounting year is from 1st April to 31st March of the succeeding year.
For the accounting year 1964 65, the Company declared and paid bonus at 20% to all employes in accordance with the provisions of the (hereinafter to be referred as the Act).
For the year in question 1965 66, it calculated a sum of Rs. 23,68,785 as available surplus.
This amount was arrived at by the Company after calculating direct tax without deducting the provision for payment of bonus payable to its workmen.
A sum of Rs. 14,21,271 being 60% of the said available surplus was declared as bonus for the year 1965 66.
This amount represented 13 51% of the wage bill.
The workmen were dissatisfied with this offer of bonus at 13.51% and demanded payment of bonus at the maximum rate of 20% as provided in the Act.
In consequence they raised a dispute with the Company.
In view of the agreement dated November 24, 1966 between the parties to refer the claim for additional bonus for adjudication to a Tribunal, the workmen received the bonus at 108 the rate of 13.51% offered by the Company.
The Central Government by order dated June 23 1967 referred for adjudication to the National Industrial Tribunal, Calcutta, the following dispute "What should be the quantum of bonus payable to the Workmen of the Indian Cable Company Limited Calcutta for the accounting year 1965 66" The Unions contended before the Tribunal that the computa tion of allocable surplus by the Company has not been properly made in accordance with the Act and that several items shown in the profit and loss account as expenditure have to be added back to arrive at the actual gross profits.
The Unions further alleged that the Company has spent large amounts for payment of liability for future years with a view to reduce the available and allocable surplus, which in consequence has resulted in, the reduction of percentage of bonus.
The Company on the other hand maintained that it has kept proper accounts which have been audited by a reputed firm of auditors Messrs Lovelock & Lewes and that the computation of allocable surplus has been properly arrived at having due regard to the provisions of the Act.
The Com pany denied the allegations of the Unions that enormous expenditure has been shown with a view to reduce the quantum of bonus.
On the other hand, the Company pleaded that all items of expenditure were justified and those items are deductable in considering, the claim for bonus.
At this stage it may be mentioned that the Unions served interrogatories requiring information on various matters and there is no controversy that the Company furnished all the informations that were 'Called for.
Before the Tribunal the Company required various deductions to be made from the net profits shown in its profit and loss account.
On the other hand, the Unions required various items to be added back.
The Tribunal accepted the contentions of both the parties with regard to certain items.
We will in due course refer to the items which are in dispute before us at the instance of both the Company and the Unions.
The Tribunal computed the, available surplus at Rs. 37,54,713, 60% of this amount being Rs. 22,52,828 was fixed as allocable surplus.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252 to be set on.
As the bonus at the rate of 13.51% had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within the period mentioned 109 in the Award.
One aspect which has to be acted is that (in calculating the available surplus, the Tribunal before calculating the notional direct tax, deducted the bonus payable for the accounting year in question.
The grievance of the Company, as placed before us by its learned counsel Mr. D. N. Mukherjee, relates to three items (1) the method of computation of notional direct tax; (2) disallowance of the deduction from gross profits of the sum of Rs. 2.65 lakhs made as ex gratia payment for the accounting year 1964 65 to employees drawing emoluments exceeding Rs. 750 per mensem; and (3) disallowance of the claim for re 'turn on provision for doubtful debts.
The first contention relates to the principle to be adopted for calculating direct tax when computing the available and allocable surplus for payment of bonus under the Act.
According to the Tribunal, under sections 6 and 7 of the Act, the bonus payable for ,the relevant accounting year has to be deducted from the grossprofits for calculation of direct tax or alternatively rebate for bonus found payable has to be calculated and 60% of the rebate has to be added back as allocable surplus.
The Tribunal took notice of the fact that the Income tax Authorities did not object to deduction of the provision made by the Company for payment of bonus for the accounting year 1965 66.
On this reasoning the Tribunal added back to the gross profits as per the profit and loss account the provision made for payment of bonus.
For coming to this view the Tribunal followed its previous decision in Indian Oxygen Ltd. vs Their Workmen (N.I.T. 1 of 1966).
The Tribunal has also noted that its Award in the Indian Oxygen Ltd. was pending appeal in this Court.
According to Mr. D. N. Mukherjee, this method of calculation of direct tax under the Act, adopted by the Tribunal is contrary to the decisions of this Court.
We are in entire agreement with this contention of Mr. Mukherjee.
In view of the decisions of this Court, to which we will immediately refer, Mr. P. section Khera, learned counsel for the Unions was unable to support the reasoning of the Tribunal on this aspect.
The question of calculation of direct tax under the Act was considered for the first time by this Court in Metal Box Co. of India Ltd. vs Their Workmen.(1) It was held therein that the nationalc tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
Therefore, it is clear from this decision that an employer is entitled to deduct (1) ; 110 his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 and 6 of the Act.
The same principle, has been reiterated in The Workmen of William Jacks and Company Ltd. Madras vs Management of William Jacks and Co., Madras,(1) Delhi Cloth and General Mills Co. Ltd. vs Workmen(2) and Indian Oxygen Ltd. etc.
vs Their Workmen.
(3) In fact the last decision overruled the decision of the National Industrial Tribunal in Reference No. NIT 1 of 1966, which has been followed by the present Tribunal.
We may also state that after the first decision of this Court, referred to above, the Act was amended in 1969.
The last three decisions of this Court considered the question whether the amendments effected to the Act had made ' any change in the principle laid down by this Court in the first decision.
It was uniformly held in all the three decisions that the amendment has not effected any change in the principle laid down in the earliest decision that the tax liability under the Act is to be worked out first by working out the gross profits and deducting therefrom bonus payable to the employees.
Therefore, it follows that the Tribunal committed an error in law in corrupting, direct tax after deducting bonus.
Therefore, this point will have to be held in favour of the appellant.
The second item relates to the disallowance of Rs. 2.65 lakhs which represented the ex gratia payment made by the Company to certain employees drawing, emoluments exceeding Rs. 750 per mensem for the year 1964 65.
The Company claimed that this amount should be deducted from the gross profits whereas the Unions contended that the same has to be added back to the gross profits shown in the profit and loss account.
The factual position relating to this claim is as follows: From the letter dated February 4, 1966, Ext. 1, written by the Company to one of its officers Mr. section N. Banerjee, it is seen that the Company in appreciation of the officer 's services during the year 1964 65 made an ex gratia payment of Rs. 90.
Mr. Banerjee has given evidence on behalf of the Unions.
He has deposed to the fact that he was drawing about Rs. 1,000 per mensem and that he received the letter Ext.
I as well as the sum of Rs. 90 mentioned therein.
He has further stated that over and above this sum of Rs. 90 he has also, received the bonus payable to him under the Act for the year 1964 65.
He has also deposed to the effect that the ex gratia payment of Rs.( 90 was paid to him in lieu of bonus calculated on the difference in emoluments drawn by him and the ceiling of Rs. 750 per mensem fixed by the Act.
It was (1) ; (2) ; (3) ; 111 the practice of the Company to pay bonus to all the members of its staff without application of any ceiling.
In view of the fact that a ceiling had been fixed under the Act, to make up for the lesser amount that the employees like Mr. Banerjee will get under the Act, this amount of Rs. 2.65 lakhs was paid to all such officers.
The Tribunal accepted the evidence of Mr. Banerjee that the ex gratia amount was paid to keep up the old practice of the Company of paying all the members of the staff without the application of any ceiling.
The Tribunal held that such a payment was not an item which could be deducted from the gross profits under the Act as claimed by the management.
Accordingly, it added back the sum of Rs. 2.65 lakhs to the gross profits shown in the profit and loss account.
Mr. Mukherjee urged that the Company was justified in claiming the above amount by way of deduction.
He referred us to the definition of "employee" in section 2(13) of the Act as also to the employees declared eligible for bonus under section 8.
He also relied on sections 10 and 11 which make it obligatory on an employer to pay the minimum bonus and also the maximum bonus upto 20% respectively.
We are not inclined to agree with the contention of Mr. Mukherjee that the Tribunal committed an error when it added back the sum of Rs. 2.65 lakhs.
From the evidence of Mr. Banerjee, which has been accepted by the Tribunal, read along with the letter Ext.
1, it is clear that Mr. Banerjee received not only bonus due to him under the Act, but also the extra amount of Rs. 90.
Mr. Banerjee was admittedly drawing a salary of Rs. 1000 per mensem.
For a person to be an "employee" under section 2(13), among other things, he is a person drawing a salary or wage not exceeding Rs. 1600 per mensem.
Under section 8, it is provided that every employee is entitled to be paid in an accounting year bonus as per the Act provided he has worked in the establishment for not less than thirty working days in that year.
Section 10, provides for payment of minimum bonus to every employee.
Similarly section 11 provides for payment of bonus to every employee subject to a maximum of 20% of his salary or wage.
According to Mr. Mukherjee there is no prohibition in the Act from paying bonus to officers like Mr. Banerjee, upto a maximum of 20%.
Therefore, when the payment as in Ext.
1, has been made to officers like Mr. Banerjee and others, such amounts have to be computed as an item of expenditure, under the Second Schedule of the Act.
It is no doubt true that an officer drawing a salary not exceeding, Rs. 1600 per mensem is an employee under section 2(13) and he will also be eligible for payment of bonus under section 8 read with sections 10 and 11 of the Act.
But ,the point that is missed by the learned counsel is the limitation 112 contained in section 12.
Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2 (13) and eligible for bonus, still for purposes of calculation of bonus payable under sections 10 and 11, such officers, whose salary exceeds Rs. 750 per mensem, for calculating bonus, the, salary or wages per month will be taken at the maximum of Rs. 750 per mensem.
That is, if an officer is getting, Rs. 1500, per mensem.
he will be eligible for onus; nevertheless for calculating bonus payable to him he will be treated as drawing a salary of only Rs. 750 per mensem.
Therefore, Mr. Banerjee, in the case before.
, us, has admittedly to be paid bonus, which is due to him under the Act for the year 1964 65 on the, basis that his salary is only Rs. 750 per mensem.
What the Company has done was to pay him not only the bonus as calculated under the Act, but also an additional amount.
Such additional amount paid to all such officers totalling Rs. 2.65 lakhs cannot be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
The third item relates to return on provision for doubtful debts.
The Company had calculated return of Share capital and Reserves.
It further claimed a return at 6% on Rs. 2.5 lakhs, which according to it was a revision for doubtful debts.
The amount claimed as return under this head was Rs. 15,000 and the Company claimed to deduct this amount from the gross profits as an item of expenditure.
The Tribunal has rejected this claim of the Company.
It is not necessary for us to dwell on this point at any great length in view of the decision of this Court in Indian Oxygen Ltd. etc.
vs Their Workmen(1), where the decision of the Tribunal directing such an amount to be added back in computing the gross profits has been approved.
The legal position has been dealt with in the said _judgment.
Accordingly, we hold that the Tribunal was justified in adding back the said amount to gross profits.
Mr. P. section Khera, learned counsel for the Unions has contended that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
The Unions no doubt have not filed any appeal.
In fact in the particular circumstances of this case the could not have filed an appeal because they have been awarded the maximum 20% allowable under the Act.
But, according to Mr. Khera, if the items on which he has relied on had been added back, the Award of the Tribunal can be maintained even on the basis that the principle adopted by the Tribunal in respect of direct tax is found to be erroneous by this Court.
(1) ; 113 The right of parties like the respondents before us even in labour adjudication to support the decision of the Tribunal on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken note of by the Tribunal, has been recognised by this Court in Management of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan etc.
(" ') In fact this decision had to deal with an appeal filed a Co operative Society against the Award of the Tribunal setting aside the order passed by the Society removing from its service an employee.
This Court permitted the Union concerned, which was respondent in the appeal, to support the Award of the Tribunal, directing reinstatement of the employee on grounds which had not been accepted by the Tribunal and also on ground which had not been taken notice of by the Tribunal.
Similarly, in J. K. Synthetics Limited vs J. K. Synthetics Mazdoor Union(1), this Court permitted the Union, which was the respondent in the appeal, to support the decision of the Industrial Tribunal on a method of computation regarding bonus which was not adopted by the Tribunal.
Though 'the management appellant therein challenged the right of the Union to support the award on other grounds without filing an appeal, that contention was rejected by this Court as follows : "On behalf of the management the right of the union to challenge the multiplier and divisor, in the absence of an appeal by it, is strenuously contested but in our view there is little force in this objection.
The appeal by the employer is against the grant of bonus to, the employees which implies that the method of computation of the gross profits, as well as of the available surplus and the rate at which the bonus is granted can subjected to scrutiny.
It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added, before arriving at the available surplus.
In an appeal, the sevetat steps which have to be taken for computation of the available surplus, either in respect of the actual amounts or the method adopted, can be challenged.
If so, the union, even where it has not appealed against ,the award, can support it on a method of computation, which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so longing in the final result the amount awarded is not exceeded.
We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan, (1) ; (2) 114 Jaipur and another(1), where it was held that the respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken notice of by the Tribunal while they were patent on the face of the record.
" In the said decision this Court also found support for the above view in the decision of Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others(1), though the latter decision related to an election appeal.
We will now deal with the items, which, according to ( 'the Unions should not have been allowed to be deducted from the gross profits.
The first item relates to a sum of Rs. 18,24,047 paid by the Company to retired workmen at Jamshedpur Workshop under a Voluntary Retirement Scheme.
This Scheme is exhibit G. and it was framed on August 9, 1965.
The Scheme states that the Company has been suffering, from an acute shortage of imported raw materials in view of the difficulty in getting foreign exchange and as such production could not be maintained for some, considerable time.
In view of these difficulties it is stated that the Company has found it necessary substantially to reduce the number of workers in the Workshop.
The Scheme offered substantial benefits to workmen who choose to retire voluntarily, namely, ex gratia payment equal to retrenchment compensation under section 25 of the Industrial Disputes Act, and gratuity admissible to the workmen.
There is evidence on the side of the Company that about 450 workmen availed themselves of the Voluntary Retirement Scheme and a sum of Rs. 18,24,047 was paid.
This item has been included in the profit and loss account under the heading "Salary, Wages, Bonus and Retirement gratuities.
" The Company gave a break ,up of these items in answer to the interrogatories furnished to it by the workmen.
The contention on behalf of the Unions is that under the Re tirement Gratuity Scheme, which is in force, a workman retires at the age of 60 and normally during the year 1965 66, the payment of gratuity to persons so retired would have come to Rs. 1.21 lakhs.
Therefore, it was argued that the payment of Rs. 18.24 lakhs and odd paid as lumpsum under the Voluntary Retirement Scheme during the year 1965 66 was not proper as that amount would have in the ordinary course been spread over eight or ten years.
The Tribunal has rejected this claim of the Unions, and in ,,our opinion, quite rightly.
If there had been a retrenchment and compensation had been paid to all these workmen, ;the Unions cannot raise any objection in law to the payment of such amount.
(1) ; (2) [1965]1 S.C.R. 712.
115 If retrenchment had been restored, the junior most men under the principle "last come first go" would have been sent out of service.
On the other hand, the Voluntary Retirement Scheme enabled the younger workmen to continue in service while it offered a temptation for the older employees to retire from service.
The Voluntary Retirement Scheme has not been challenged, as mala fides by the Unions.
We are in agreement with the view of the Tribunal that the payment of compensation to induce the workmen to retire prematurely was an item of expenditure incurred by the Company on the ground of commercial expense in order to facilitate carrying on of the business and it was an expenditure allowable under section 37(1) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
The second item, which according to the Unions should have been added back is the sum of Rs. 65,764 which was claimed as extra shift allowance of plants and machinery added during the year.
The consideration of this claim was postponed by the Income tax Officer on the ground that the Company had not furnished the requisite particulars.
The Company claimed a sum of Rs. 36,10,594 as depreciation allowable under section 32(1) of the Income tax Act.
According to the Unions, as the sum of Rs. 65,764 has not been accepted by the Income tax Officer, the Company can claim depreciation only in the sum of Rs. 35,44,830.
The Tribunal did not accept this contention of the Unions on the ground that the amount of Rs. 65,764 has not been disallowed by the Income tax Officer.
It is now stated in an affidavit filed in this Court on March 23, 1972 by the Chief Financial Accountant of the Company that the Company has filed an appeal against the order of the Income tax Officer refusing to allow Rs. 65,764 as extra shift allowance for the year 1965 66.
In our opinion, the rejection of the Unions ' contention in this regard by the Tribunal is justified.
It is seen that the Company has produced figures for depreciation and that has not been subjected to any serious challenge by the Unions.
Hence the objection regarding extra shift allowance has also to be rejected in view of the decision of this Court, in Jabalpur Bijlighar Karamchari Panchayat vs The Jabalpur Electric Supply Co. Ltd. and another.
(1) The third item objected to by the Unions related to the ex penditure shown by the Company for repairs and renewals.
According to the Unions the expenses shown are very heavy and large and that the Company was not justified in incurring 'the same.
In our opinion, this contention also has been properly rejected by the Tribunal.
Apart from the fact that the Unions (1) A.I.R. 1972 S.C.70 116 are not technically entitled to raise this objection, as they have not pleaded the same in their statement of case filed before this Court, this contention can be rejected even on merits.
The Unions had furnished interrogatories requiring the Company to furnish certain particulars.
Mr. R. N. Gupta, the Chief Financial Accountant of the Company filed an affidavit before the Tribunal giving answers to the interrogatories.
He had categorically given details as to how the amount of Rs. 12.94 lakhs has been incurred as expenses for repairs and renewal.
Mr. Gupta had also given evidence about this matter.
In cross examination he had stated that all the vouchers for repairs and renewal were scrutinised by the auditors and this evidence has been accepted by the Tribunal.
Therefore, the Tribunal was justified in rejecting this claim of the Unions.
The last item relates to the claim made by the Unions that after distribution of bonus at 20% for the year 1964 65, there must have been a surplus and it.
should have been set on for the next year, namely, 1965 66.
This amount so set on should be taken into account for computing bonus for the year 1965 66.
This assertion made on behalf of the Unions was controverted by the Company on the ground that there was no surplus left after paying, the maximum 20% bonus for the accounting year 1964 65.
In fact the evidence of Mr. Gupta shows that apart from there not having been any surplus, the Company Raid 20% bonus merely because they had already announced that they will pay the same.
It is clear from his evidence that bon us at 20% could not have been declared for the year 1964 65 and in order to honour the declaration made by the Company, bonus was paid at that percentage.
This evidence of Mr. Gupta has been, in our opinion, rightly accepted by the Tribunal.
No evidence contra has been adduced by the Unions.
Once the evidence of Mr. Gupta is accepted, it is: clear that there was no surplus after paying bonus for 1964 65.
Therefore, the question of set on does not arise.
This plea of the Unions also has to be rejected.
From what is stated above, it is seen that the only aspect in respect of which the Award of the Tribunal requires modification is in respect of the principle to, be adopted for calculating direct tax.
As we have accepted the contention of the Company in that regard, it follows that recomputation of the available and allocable surplus will have to be made after making a calculation of direct tax without deducting bonus payable for the year 1965 66.
In the original calculation filed by the Company, it calculated tax only in the sum of Rs. 98,10,893.
It has later on corrected this figure by adding a sum of Rs. 1,34, 921 being surtax.
Therefore, the total direct tax will be Rs. 99,45,814.
Here again Mr. 117 Gupta in his affidavit dated March 23, 1972 has given the correct figures.
Therefore the recomputation of the available surplus, allocable surplus and the percentage of bonus for The accounting year 1965 66 on the basis of our judgment will be as follows Rs. Rs. Gross Profit as pier Award 216,16,195 of National Tribunal Less (1) Depreciation admissible under section 32 (1) of I.T. Act. 36,10,594 (2) Development Rebate admissible 6,76,22442,86,818 1,73,29,377 Less: Direct Tax as Per cl. 6 (c) including Di vidend Tax 99,45,814 73,83,563 Less Statutory Deductions Share Capital Rs. 248,65,45021,13,56349,22,387 @ 8 .5%.
Reserves Rs. 46,81,37,73928,08,824 @ 6% (without tak ing into account 6 % of Rs. 250,000/ be ing provision for Doubtful debts) Available Surplus. 24,61,176 Allocable Surplus60% of above 14,76,706 Effective Gross salary 105,32,880 Bonus paid @ 13.51% 14,22,992 Balance .51% 53,714 14.02% 14,76,706 From the above, it will be seen that the workmen will be entitled to bonus at 14.02% of their total salary or wages and the amount will be Rs. 14,76,706 and not Rs. 20% as awarded by the Tribunal.
From this it follows that the further direction in the Award of the Tribunal regarding set on cannot be accepted.
Admittedly, the Company has already declared and paid Rs. 14,22,922 representing 13.51% of the total wages or salary.
Therefore, the balance additional amount that the Company will have to pay by way of bonus to make up the 14.02%, as stated above, is Rs. 53,714.
This amount will be paid by the Company within a period not exceeding two months from today.
The Award of the Industrial Tribunal is accordingly modified and the appeal allowed in part.
Parties will bear their own costs.
G.C Appeal allowed in part.
[/INST]The appellant company declared bonus for the year 1955 56 at 13.51% The workmen demanded bonus at the rate of 20%, the maximum provided in the Payment.of Bonus Act, 1965.
The dispute about the rate of bonus and calculation of the available surplus was referred to the Industrial Tribunal.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252/ to be set on As the bonus at the rate of 13.51 % had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within a prescribed period.
In appeal to this Court against the Tribunal 's award the appellant company contended : (i) that the Tribunal erred in holding that under sections 6 and 7 of the the bonus payable for the relevant accounting year has to be deducted from the gross profits for the calculation of direct tax, (ii) that the Tribunal erred in refusing to deduct from the gross profits the ex gratia payment made to employees in respect of salary above the ceiling of Rs. 750 fixed by the Act.
(iii) that the Tribunal wrongly refused to deduct the reserve for doubtful debts from the gross profits.
On behalf of the respondent workmen it was urged that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
HELD : (i) In the case of Metal Box Co., it was held by this Court that the notional tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
It is clear from the above decision that an employer is entitled to deduct his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 & 6 of the Act.
This principle has been upheld by the Court in later cases.
This Court has also held that the amendment of the Act in 1969 has not effected any change in the earlier decision that the tax liability under the Act is to be workedout firstby working out the gross profits and deducting therefrom bonuspayableto the employees.
It followed that the Tribunal committed anerror inlaw in computing direct tax after deducting bonus.
[109H 110D] Metal Box Co. of India Ltd. vs Their Workmen, [1969]1 S.C.R. 750, The Workmen of William Jacks, and Company Ltd. Madras vs Management of William Jacks and Co. Ltd., Madras, A.I.R. 1971 S.C. 08SupCI/72 106 1821, Delhi Cloth and General Mills Co. Ltd. vs Workmen ; and Indian Oxygen Ltd. etc.
vs Their Workmen; , applied.
(ii) Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2(13) of the Act and eligible for bonus, the salary or wages per month will be taken at the maximum of Rs. 750/ permensem.
What the company had done was to pay such men not only the bonus as calculated under the Act, but also in additional amount representing bonus on the emoluments above the ceiling of Rs. 750/ .
Such additional amount paid to all such officers totalling Rs. 2.5 lakhs could not be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
[12A C] (iii) In view of the decision of this Court in Indian Oxygen Ltd. the Tribunal 's decision adding back the deduction claimed by the appellant on account of return on the provision for doubtful debts must be upheld.
[112E F] (iv) The respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have taken notice of by the Tribunal while they were patent on the face of the record.
[113A, 114A B] Management, of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan et. ; ; J. K. Synthetics Limited vs J.K. Synthetics Mazdoor Union, and Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others; , , followed.
(v) The Voluntary Retirement Scheme had not been challenged as mala fide by the Unions.
The payment of Compensation.
to induce the workmen to retire prematurely was an item of expenditure incurred by the company on the ground of commercial expense in order to facilitate carying on of the business and it was an expenditure allowable under section 37(i) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
[115B C] (vi) The Company had filed an appeal against the order of the Income tax officer postponing consideration of the company 's claim for extra shift allowance.
The Company had produced figures of depreciation and that had not been subjected to any serious challenge by the Unions.
In the circumstances the Tribunal rightly refused to add back the amount claimed by the Company as extra shift allowance.
[1 15F G] Jabalpur Bijlighar Karamchari Panchayat vs
The Jabalpur Electric Supply Co. Ltd. and another, A.I.R. 1972 S.C.70 applied.
(vii) The amount claimed by the Companyin respect of repairs and renewals was supported by evidence and had been accepted by the auditors.
The contention of the Unions that the Company was not justified in incurring the said expenditure had been rightly rejected by the Tribunal.
[1 15A] (viii) Since from the evidence produced on behalf of the company it was clear that there was no surplus after paying bonus for 1964 65 the question of set on for the next year did not arise.
The plea of the Unions in this regard had to be rejected.
[116F] [After working out the available and allocable surplus on the basis of the above findings the Court fixed the bonus payable at 14.02%].
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<s>[INST] Summarize the judgementvil Appeals Nos.
4885 91 of 1989.
From the Judgment and Order dated 21.9.
1989 & 6.10.1989 of the Punjab & Haryana High Court in C.W.P. No. 11218/89 and 12519, 12520, 12521, 12593, 12868 & 12463 of 1989.
P.H. Parekh, Manoj Swarup and J.P. Pathak for the Appellant.
Krishan Kumar and Mehta Dave & Co. for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
These appeals are directed against two Orders of the Punjab & Haryana High Court by which the High Court has directed the appellant Institute to admit respondent students 1 to 8B to its B .E. course irrespective of their merits.
The relevant admitted facts are that on May 24 and 25, 1989, respondent No. 9 Punjab University held a Com bined Entrance Test (C.E.T.) for admission to B.E. course (Session 1989 90) conducted by 4 different institutes in cluding the appellant Institute.
On June 26, 1989, the University declared the merit list of students who appeared in C.E.T. June 30, 1989 was the last date fixed for submit ting applications by students to individual institutes.
The students were given choice of the institutions and they were required to state their choice in order of preference.
The representatives from the 4 institutes met together at Chand igarh from 24th to 27th July 1989 to finalise the admissions tO the 4 institutes.
The meeting of the representatives of the 4 institutes was necessary to ensure that the students were given the institutes of their choice in the order of merit, subject, of course, to the students applying to the particular institutes and that the student did not get admission at more than one institute at a time.
The Commit tee of representatives interviewed the students and awarded them the institutes of their choice in the order of their respective merits.
Accordingly, the appellant Institute drew up its merit list of candidates.
Interviews were held in the respective institutes including the appellant Institute for filling up the reserved seats other than those 397 reserved for Scheduled Castes and Scheduled Tribes and also for filling up seats in general category which fell vacant subsequentIy as a result of the students leaving the appel lant Institute.
On August 14, 1989, a second round of inter views was held in all the institutes including the appel lant Institute for filling seats which fell vacant as a result of the students leaving the appellant Institute subsequently.
Incidentally, this was also the last date of admission to B.E. course as was notified in the prospectus of the appellant Institute.
However, the last date was extended to 25th August, 1989 by an advertisement in the newspaper, namely, Tribune published on August 19, 1989 wherein it was clearly mentioned that the admission to the course will be closed on August 25, 1989.
The advertisement was repeated in another newspaper, namely, the Times of India on August 20, 1989.
The appellantInstitute closed the admissions at 5.00 p.m. on August 25, 1989.
On this day, the position of the appellant Institute was that the last stu dent who was admitted to the B .E.
Course was at serial number 1127 in the merit list prepared by the University as per the results of the C.E.T 3.
On August 30, 1989, respondents 1 to 4 filed a Writ Petition No. 112 18/89 before the Punjab & Haryana High Court for a direction to the appellant Institute to extend its last date of admission and to admit them to the B.E. course in the appellant Institute alleging that six seats were lying vacant in the Institute.
In the meanwhile, as usual, the first test of the B.E. course was held by the appellant Institute after six weeks of the commencement of the course.
On September 19, 1989, the appellant Institute filed its written statement to the writ petition objecting to the maintainability of the petition against the appellant Institute as it was not a State within the meaning of Article 12 of the Constitution of India.
It was also pointed out in the written statement that since the past experience showed that some students left the Institute as soon as they got admission in the other institutes, the appellant Institute had admitted 10 additional students to the B.E. course.
The total seats available in the B.E. course in the appellant Institute were 180 and students at numbers 181 190 were admitted to meet this contingency.
It was also pointed out in the written statement that the last date of admission to the course was fixed by the appellant Institute taking into account the said past experience as well as to put a seal of finality on the process of admission which would otherwise continue indefinitely.
On September 20, 1989, the appellant Institute also filed a short affidavit in the writ petition stating therein that the admissions to the B.E. course had closed on 25th August, 1989 and no student had been 398 admitted thereafter.
It was also pointed out that regular classes had begun, and the first terminal examination had been held from 4th September, 1989 to 9th September, 1989 which carried weightage of about 30% marks.
Hence, the students admitted at the belated stage would not be able to cover up lecture attendance and no seat in excess of the total seats could be filled up.
On September 21, 1989, the High Court allowed the writ petition by proceeding on the assumption that more than half a dozen seats were lying vacant with the appellant Institute.
The High Court held that belated admissions were something that the students seeking such admissions would worry about rather than the appellant Institute.
The appel lant Institute was also directed to grant admissions to respondents 1 to 4 in the B.E. course forthwith.
As pointed out by the appellant Institute, on that day the factual position with regard to seats in the course was that out of 190 students who were granted admission, 12 students had left leaving a total strength of 178 students.
Since the last date for admission was August 25, 1989, 178 students had continued in the course with regular instructions and tests one of which was already held as stated earlier be tween 4th and 9th September, 1989, six weeks after the commencement of the course.
A further batch of Writ Petitions, namely, Writ Petitions Nos.
125 19, 12520, 1252 1, 12593, 12868, 12463 all of 1989 filed by respondents 5 to 8B respectively were allowed by the High Court on October 6, 1989 directing the appellant Institute to admit the respective respondents to the said course.
It also further appears that three other similar writ petitions filed by other students seeking admission to the course in the appellant Institute are pending before the High Court for preliminary hearing.
The appellant Institute further points out that the second test of the said course was scheduled to be held from 23rd to 28th October, 1989.
It is not disputed before us that whereas the last student admitted on merit in the appellant Institute was at serial number 1127 in the merit list prepared by the Univer sity as per the Combined Entrance Test, the respondent students were at the serial numbers in the said merit list, as follows: respondent No. 1 (1145), No. 2 (1147), No. 3 (116 1), No. 4 (1277), No. 5 (1259), No. 6 (1112), No. 7 (1266), No. 8 (1218), No. 8A (1189) and No. 8B (1245).
Thus it will be seen that except for respondent No. 6 who had not earlier applied for being admitted to the appellant Insti tute and had opted for some other Institute, all the re spondents had secured lower numbers in the merit list.
399 What is further, the students who were at a higher serial number of merit list were still waiting for admission to the appellant Institute, when the High Court directed the appel lant Institute to admit the respondent students.
What is more, even in their writ petitions before the High Court the respondent students had claimed no further relief than that they should be directed to be admitted to the appellantIn stitute according to their merit.
The relief claimed in Writ Petition No. 112 18/89 may be reproduced here by way of illustration: "this Hon 'ble Court may please to issue a Writ of Mandamus directing the respondents to extend the date of admission and to admit the petitioners in the B.E. course as per their merits;".
(emphasis supplied) The High Court further not only ignored the fact which was specifically pointed out in the appellant Institute 's affi davit in reply before it, that there were no seats available in the appellant Institute whose capacity was only 180 seats but also the fact that there were more meritorious students than the respondents as per the C.E.T. who could not secure admission and who were waiting to be admitted to the appel lant Institute.
The respondent students could get admission to the appellant Institute only if their comparative merits ordained it and not otherwise.
They could claim no merit over other meritorious students merely because they had approached the Court for securing admission.
There was further nothing wrong in the appellant Institute admitting 10 more students in the circumstances pointed out above.
The Institute has a capacity of only 180 students.
To meet the contingency of the students leaving it soon after admission they had admitted, as they do every year, 10 more students.
As it turned out, 12 of the students left leaving 178 students on the roll, with only 2 vacan cies.
The High Court could have directed only two students to be admitted and that too on merit.
Admittedly, there were more meritorious students than the respondents, waiting in queue.
The High Court thus travelled beyond its jurisdiction and not only directed more students than the Institute could absorb but also students who were less meritorious, to be admitted.
No reasons whatsoever have been given by the High Court for exercising its extraordinary writ jurisdiction so peremptorily which has resulted in injustice both to the appellantInstitute as well as to the students who stood higher in merit than almost all the respondent students except respondent No. 6.
We refrain from making any further comments on the impugned order.
400 8.
Since the respondent students stand already admitted, and the more meritorious students cannot now avail of the seats given to the respondents due to lapse of time, we do not propose to interfere with their pursuit of the course.
It is for this reason that we are dismissing the appeals.
In the circumstances, the appeals stand dismissed, but with no order as to costs.
G.N. Appeals dismissed.
[/INST]The State of Bihar published an advertisement inviting applications for appointments to the junior teaching posts in medical colleges in the State of Bihar.
For the post of Assistant Professor.
only such officers who had worked as Resident or Registrar in Medical Hospitals recognised for imparting M.B.B.S. studies by the Medical Council of India and having three years experience of such post were consid ered eligible.
The last date for receipt of applications was fixed as 31st January 1988.
Pursuant to the said advertise ment.
applications from eligible candidates were received and a select list or panel was prepared for appointments to the respective posts.
The respondents and some other inter venors who were working then in the Medical colleges as junior teachers challenged the State action in fixing the 3 1st of January 1988 as the cut off date for receipt of applications for the advertised posts.
as they had by then not completed three years which was prescribed as the requi site experience.
It was contended by them that the cut off date was arbitrarily fixed and was therefore violative of Article 14 of the Constitution.
The High Court took the view that the State Government in fixing the 31st January 1988 as the cut off date.
had deviated from its usual practice of fixing the cut off date as 30th of June of the relevant year.
Hence this appeal by the State of Bihar by special leave.
It is contended by the State that the decision of the High Court was based on an erroneous premise that the cut off date for eligibility purposes was 'always ' fixed as 30th of June of the relevant year in the past.
Allowing the appeal, this Court.
HELD: The past practice was to fix the last date for receipt of applications a month or one and a half months after the date of actual publication of the advertisement.
Following the past practice the State 469 Government fixed the last date for receipt of applications as 31st January 1988.
These who had completed the required experience of three years by that date were.
therefore.
eligible to apply for the posts in question.
[474G H] The choice of date cannot be dubbed as arbitrary even if no particular reason is forth coming for the same unless it is shown to be capricious or whimsical or wide off the reasonable mark.
The choice of 'the date for advertising the post had to depend on several factors, e.g. the number of vacancies in different disciplines.
the need to fill up the posts.
the availability of candidates etc., [475C D] Merely because the respondents and some others would qualify for appointment if the last date for receipt of applications is shifted from 31st January 1988 to 30th June 1988.
is no reason for dubbing the earlier date as arbitrary or irrational.
[475D] The High Court was clearly in error in striking down the Government 's action of fixing the last date for receipt of application as 31st January 1988 as arbitrary.
[475E] Municipal Board, Pratabgarh & Anr.
vs Mahendra Singh Chawla & Ors., ; Union of India & Anr.
vs M/s. Parameswaran Match Works & Ors., ; and Uttar Pradesh Mahavidyalaya Tadarth Shikshak Niyamitika ran Abhiyan Samiti, Varanasi vs State of Uttar Pradesh & Ors., , referred to.
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<s>[INST] Summarize the judgement: Special Leave Petition (Criminal) No. 432 of 1981.
From the Judgment and order dated the 25th September, 1980 of the High Court of Andhra Pradesh at Hyderabad in Criminal Revision Case No. 461 of 1980.
P. Ram Reddy and G.N. Rao for the Petitioner.
The order of the Court was delivered by CHINNAPPA REDDY.
The respondent was charged with an offence under Section 34 (a) of the Andhra Pradesh Excise Act on the allegation that he was found in possession of a quantity of eight litres of illicitly distilled arrack, an intoxicant, in contravention of the provisions of the Act and the Rules made under the Act.
The learned Judicial First Class Magistrate convicted him and sentenced .
him to suffer rigorous imprisonment for a period of two years, which was the minimum sentence that could be awarded for an offence under Section 34 (a) of the A.P. Excise Act.
On an appeal preferred by the respondent, the Sessions Judge, Anantapur con firmed the conviction and sentence.
The respondent preferred a revision petition before the High Court.
The learned Single Judge who heard the revision confirmed the conviction.
But, on the question of sentence, he observed: 497 "Mr. T. Ramulu, appearing for the petitioner who has A filed this revision through jail, has submitted that the petitioner is aged 30 years and is a first offender and he has already served a sentence of about IN months and that the sentence may be appropriately modified.
It is true that under the A.P. Excise Act, a statutory minimum sentence is prescribed.
But having regard to the submissions made above, I feel the interest of justice will be satisfied if the sentence of imprisonment imposed against the petitioner is reduced to the period already undergone and if the fine of Rs. 5O/ , imposed is set aside.
The revision is dismissed subject to the modification as stated above.
" We are unable to understand why the High Court reduced the sentence.
The statute prescribes a minimum sentence.
It does not provide for any exceptions and does not vest the Court with any discretion to award a sentence below the prescribed minimum under any special circumstances.
The learned judge has himself noticed that the sentence imposed is the statutory minimum.
Having noticed that the statute prescribes a minimum sentence for the offence, the High Court has ununderstably reduced the sentence of imprisonment to less than the minimum permissible.
The High Court was clearly in error in doing so.
We think we have said enough to correct the error.
It is unnecessary to pursue the matter further by granting special leave.
The petition is dismissed with the above observations.
P.B.R. Petition dismissed.
[/INST]Where the statute prescribes minimum sentence and does not provide for any exceptions or vest the Court with any discretion to award a sentence below the prescribed minimum under any special circumstances, a Court cannot reduce the sentence to less than the minimum permissible.
[497 D E]
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<s>[INST] Summarize the judgement: Criminal Appeal No. 92 of 1981.
From the judgment and order dated the 16th January, 1980 of the High Court of Gujarat at Ahmedabad in Special Criminal Application No. 186 of 1979.
J.L. Nain and R.N. Poddar for the Appellant.
O.P. Rana (amicus curiae) for the respondent.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave is by the State of Gujarat and is directed against the judgment and order of the Gujarat High Court quashing the order of detention passed by the appellant against the respondent.
The facts material for the purpose of disposal of this appeal and not disputed before us may be stated in a narrow compass.
In exercise of powers conferred on it by sub section (1) of Section 3 of the (hereinafter called 'the Act '), the appellant passed the order of detention dated 7th May 1979 against the respondent on the grounds that the respondent and three others, namely, Hasan Haji Ismail Subhania, Gulam Hussain Hasan Subhania and Salemamad Allarakha Jasraya were found in a trawler containing eight packages with 4,645 contraband wrist watches valued at Rs. 10,48,700.00.
The petitioner and Salemamad were members of the crew.
Hasan Haji was the owner of the trawler and his son, Gulam Hussein, was the tindal of the, vessel.
They were interpreted by the Customs Authorities who seized the contraband goods and the trawler.
The petitioner made a statement on 21st January, 1979 before the Customs officer, admitting that he was a member of the crew but denied any knowledge of the contraband goods.
He stated that he was engaged as a member of the crew by the owner on the daily wage basis at the rate of Rs. 10.00 per day.
It was also stated in the grounds that in the statement dated 21st January, 1979, the respondent admitted that he was the tindal of the vessel 'Shahe Nagina ' which had been seized by the Customs officer in 1977 for smuggling wrist watches and that a penalty of Rs. 5,000.00 was levied against him.
The respondent moved the High Court of Gujarat.
A Division Bench of the High Court by the impugned order quashed 742 the order of detention on the ground that the respondent at the time of joining the vessel as a member of the crew had no "full knowledge that the vessel was to be used for smuggling activity".
The High Court held, "the above material on the record, therefore, was not sufficient for reaching a genuine satisfaction that the petitioner was engaged in smuggling activity and it was necessary to detain him with a view to preventing him from indulging in that activity in future" (emphasis added).
According to the High Court, "the satisfaction reached by the detaining authority cannot be said to be genuine on the material which was placed before the detaining authority".
At the outset Mr. Rana, appearing for the respondent as amicus curiae, raises a preliminary objection The objection is that in view of the fact that the maximum period of detention mentioned in Section 10 of the Act has expired, and as such the appeal has become infructuous.
It may be mentioned, to appreciate the preliminary objection, that the order of detention against the respondent was made on 7th May, 1979 and this appeal was being heard on 15th September, 1981, which was beyond two years.
Section 10 of the Act is in the following terms: "The maximum period for which any person may be detained in pursuance of any detention order to which the provisions of section 9 do not apply and which has been confirmed under clause (f) of section 8 shall be a period of one year from the date of detention or the specified period, whichever period expires later, and the maximum period for which any person may be detained in pursuance of any detention order to which the provisions of section 9 apply and which has been confirmed under clause (f ) of section 8 read with sub section (2) of section 9 shall be a period of two years from the date of detention or the specified period, whichever period expires later.
" We have not been told by Mr. Rana whether the first part or the second part of Section 10 applies to the facts of the case.
He has made the submission on the assumption that the second part of Section 10 applies and the period of two years prescribed by the second part already expired.
In our opinion, the submission has no force.
In Section 10, both in the first and the second part of the section, it has been expressly mentioned that the 743 detention will be for a period of one year or two years, as the case may be, from the date of detention, and not from The date of the order of detention.
If the submission of learned counsel be accepted, two unitended results follow: (1) if a person against whom an order of detention is made under Section 3 of the Act, he can successfully abscond till the expiry of the period and altogether avoid detention; and (2) even if the period of detention is interrupted by the wrong judgment of a High Court, he gets the benefit of the invalid order which he should not.
The period of one or two years, as the case may be, as mentioned in Section 10 will run from the date of his actual detention, and not from the date of the order of detention.
If he has served a part of the period of detention, he will have to serve out the balance.
The preliminary objection is overruled.
Now to turn to the merit.
The order of High Court is clearly erroneous.
The High Court has misdirected itself to its jurisdiction to inquire into the order of detention by an authority.
The High Court, accepting the contention of the counsel of the detenu, before it has held that there was no material on record to prove knowledge of the detenu with the contraband goods in the vehicle.
By implication, the High Court has erroneously imported the rule of criminal jurisprudence that the guilt of an accused must be proved beyond reasonable doubt to the law of detention.
The High Court in its writ jurisdiction under Article 226 of the Constitution is to see whether the order of detention has been passed on any materials before it.
If it is found that the order has been based by the detaining authority on materials on record, then the Court cannot go further and examine whether the material was adequate or not, which is the function of an appellate authority or Court.
It can examine the material on record only for the purpose of seeing whether the order of detention has been based on no material.
The satisfaction mentioned in Section 3 of the Act is the satisfaction of the detaining authority and not of the Court.
The judgment of the High Court, therefore, is liable to be set aside.
We set aside the order of the High Court and allow the appeal.
G S.R. Appeal allowed.
[/INST]Under section 72 Of the 9th Sch.
of the Government of India Act, 1935: " The Governor General may, in cases of emergency, make and promulgate ordinances . and any ordinance so made shall, for the space of not more than six months from its promulgation, have the like force of law as an Act passed by the Indian Legislature . " ; section I (3) of the India and Burma (Emergency Provisions) Act, 1940, provided that section 72 Of the Government of India Act, 1935, shall as respects Ordinances made during the period beginning with June 27, 1940, the date of the passing of that Act, and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency, have effect as if 635 the words " for the space of not more than six months from its promulgation " were omitted.
The appellant was prosecuted for having on July 11, 1953, contravened the provisions of section 4 of the High Denomination Bank Notes (Demonetisation) Ordinance, 1946.
The Ordinance was promulgated by the Governor General of India on January 12, 1946, but on April 1, 1946, an Order in Council was published in the Gazette of India Extraordinary whereby the period of emergency referred to in the India and Burma (Emergency Provisions) Act, 1940, was declared to have ended on April 1, 1946.
It was contended for the appellant that the Ordinance in question was not in operation on the date when the offence was alleged to have been committed and that therefore the prosecution was not maintainable, because (1) the Ordinance had been promulgated in exercise of the emergency powers and that it lapsed ipso facto on April 1, 1946, when the declaration was made that the emergency was at an end; and (2) section 72 of the 9th Sch.
of the Government of India Act, 1935, having been restored with effect from April 1, 1946, one must look to its terms as they originally stood, to justify the continuance of the Ordinance after April I, 1946.
Held, that the deletion of the words " for the space of not more than six months from its promulgation " from section 72 of the 9th Sch.
of the Government of India Act, 1935, by section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, had the effect of equating Ordinances which were promulgated between June 27, 1940, and April I, 1946, with Acts passed by the Indian Legislature without any limitation of time as regards their duration, and therefore continuing in force until they were repealed.
Though after April I, 1946, section 72 Of the 9th Sch.
of the Government of India Act, 1935, was restored in its original form, the continuance of the Ordinance in question after that date had to be determined having regard to the terms of the section as they stood on the date of such promulgation, as there was nothing to justify retrospective operation of the section so restored.
J. K. Gas Plant Manufacturing Co. (Rampur) Ltd. and others vs King Emperor, , relied on.
</s>
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<s>[INST] Summarize the judgementAppeals Nos.
1186 1188 of 1972.
Appeals by special leave from the Judgment and Order (fated 12/ 13/15th October, 1971 of the Bombay High Court in Special Civil Application Nos. 555, 556 of 1967 and 72 of 1968.
K. section Cooper, M. K. Shah, P. H. Parekh and Sunanda Bhandare, for the appellants.
B. N. Lokur, Rameshwar Nath, for respondent No. 1.
Subodh Markendeya, for Respondent No. 2.
The Judgment of the Court was delivered by SARKARIA, J.
Whether the principle of apportionment is applicable to the fixation of standard rent of a premises under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, the Act); if so whether on the facts of the case, the principle has been rightly invoked is the two fold question that falls for decision in these three appeals by special leave directed against the judgment of the High Court of Judicature at Bombay.
The material facts are as under A big compound, measuring 11,150 sq.
yards, at 156 Tardeo Road, Bombay, belonged to Raja Bahadur Moti Lal Mills, Ltd., Bombay, appellant No.1.
The Mills were shifted from these premises in the year 1930.
In 1932, the whole of this estate including the structures standing on.
a part of it, was let out to Sound Studios Ltd. Between the years 1932 and 1940, some part of it was sub let by Sound Studios to Sheraj Ali, who was the proprietor of M/s. Famous 579 Cine Laboratory and another part to Neon Signs (India) Ltd., and the rest of the estate continued to be with Sound Studios.
Thereafter, Sound Studios went out of the picture and the whole estate was let out to National Studios Ltd. on October 23, 1940 at a monthly rent of Rs. 1700/ for a period of two years.
In July 1941, National Studios surrendered their lease and Sheraj Ali became a direct tenant under appellant 1 in respect of the premises in his possession, called for the sake of identification, 983/1 (whole) and 983/2 (Ground floor).
On December 1, 1941 and again in November 1942, Sheraj Ali took on rent additional portions of this estate so that his original rent, which was Rs. 400/ , was first increased to Rs. 600/and then to Rs. 700/ and thereafter in November 1942 to Rs. 875/ .
By November 1947, Sheraj Ali was paying Rs. 1200/ per month as rent for the premises demised to him including some new structures which had been built.
Sheraj Ali had taken a loan from M/s. Govind Ram Bros. Ltd., Respondent 1 on the security of his Film Studio Equipments.
He failed to repay the loan.
Thereupon, Respondent 1 instituted a suit for recovery of the amount and obtained a decree from the High Court,.
on February 27,1948.
As a result of the High Court 's decree, the right, title and interest of Sheraj Ali in the mortgaged property were assigned to Respondent 1.
Respondent 1, in consequence, took a fresh lease on March 19,1948 from appellant No. 1 of the, properties (called for identification) 983/1 to 983/12, which were in the tenancy of Sheraj Ali ', at a contractual rent of Rs. 1228/ p.m.
On the same date, Respondent 1 executed another lease in respect of three rooms in the same premises (marked for identification as) 984, in favour of appellant 1, on a monthly rent of Rs. 750/ Respondent 1 failed to pay the contractual rent, regularly, which fell into arrears which were not cleared despite the pressing demands made by the Receiver.
On March 13, 1954 the Receiver wrote to Respondent 1 threatening to take legal proceedings for the recovery of the rent.
This Receiver, who is now appellant No. 2, had been appointed by the High Court in Suit No. 454 of 1949 instituted by appellant 1 against the Insurance Company On April 14, 1954, two applications were filed in the Court of Small Causes by Respondent 1 for fixation of standard rent in respect of the premises comprised in the said two leases one application, R.A.N. 983/54, relates to properties 983/1 to 983/12, and the other (R.A.N. 984) to premises 984.
It was alleged in the applications that since on September, 1, 1940, the entire estate, including the properties in question.
had been let out on a monthly rent of Rs. 1700/ , standard rent of the premises it question should be fixed on the basis of apportionment In particular, it was pleaded that fair rent of Rs. 983/1 to 983/12 should be 1/8th of Rs. 1200/ which was later corrected as 1700/ .
On the same basis it was alleged in the second application, that fair rent of premises 984 should be Rs. 75/ p. m. 580 The appellants resisted these applications and averred in R. A. N. 983/54, that several entirely new structures had been built and substantial alterations made in most of these structures between the years 1940 and 1948, as a result whereof the property had lost its identity, and consequently, fair rent could not be fixed on apportionment basis.
On June 11, 1958, Respondent 1 made an application for amendment of the Standard Rent Application (R.A. N. 983154) for adding an alternative ground based on the value of the land and cost of construction so that in the event of the court holding on the preliminary issue in favour of the appellants, the standard rent could be fixed on the basis of the valuation of the land and the construction.
This application was disallowed.
On July 30,1958 Respondent 1 made an application for amendment of his R. A. N. 984 of 1954 on lines similar to that in R. A. N. 983/54.
It was also dismissed by an order, dated July 31, 1958.
At the stage of arguments on December 4, 1958, Respondent 1 moved another application for amendment and addition of the plea that they were the owners of the structures in premises 983/10, 983/1] and 983/12.
The second amendment was not sought to be made in the other application R. A. N. 98411954 relating to property 984.
This prayer was also declined.
The trial court (Samson J.) by its judgment dated April 2, 1959, found that the premises in question on account of structural alterations had undergone such a change that they could no longer be identified with the property that existed in September 1940 and that the mode of ,determining rent by apportionment was not available to the tenants.
In the result he dismissed the applications, adding "there is no sufficient ,material to ascertain the standard rent in any other way '.
Against those orders, Respondent 1 filed a revision petition under section 129 (3) of the Act before the Revisional Court of Small Causes, Bombay, which accepted, the same set aside the order of the trial judge, allowed the amendment and remanded both the applications for fixation of fair rent to the trial court.
Against this remand order, dated August 8, 1960, of the Revisional Court, the appellants preferred two Civil Revisions to the High Court of Bombay.
During the pendency of those Revisions, the trial court allowed the amendment and proceeded to decide the entire matter afresh.
These facts were brought to the notice of the High Court, which, however, ,dismissed the revision petitions by a judgment dated February 3, 1961 holding that the first Revisional Court had, in fact, remanded the entire matter for trial de novo, after rightly allowing both the amendments.
After the remand, the trial court by its judgment, dated April 25, 1961 held that except 983/10, 983/11 and 983/12, which were new structures there was no change of identity in the rest of the properties 581 i. e. 983/1 to 983/9; that new structures 983/10, 983/11 and 983/12 belonged to Respondent 1 who was consequently, liable to pay rent only for the land underneath; that the cost of repairs of the properties, 983/8 and 983/9 after they had been destroyed by fire, was mainly borne by Respondent 1, the landlord 's contribution being Rs. 8,500/ only.
Applying the principle of apportionment, it fixed the standard rent of the properties 983/1 to 983/12 at Rs. 400/ p.m. subject to permitted increases after 1954.
Regarding the premises 984(in R.A.N.984/54), the trial court gave are turn on the investment of Rs.40,000/ made by the landlord inclusive of the cost of structure and the value of land underneath at Rs. 30/ per sq. yard (as that of 1940) and fixed the standard rent at Rs. 386/ p. m. subject to permitted increases after 1946.
Aggrieved by these orders of the trial court, appellants and Respondent 2 filed two revision applications under section 129 (3) to the Revisional Court of Small Causes which by its judgment, dated September 30, 1964, substantially upheld the findings of the trial court, inter alia with the exceptions : (i) that the ownership of the new structures 983/10, 983/11 and 983/12 vested in Appellant 1, who was entitled to get a fair return on that investment; (ii) that the value of the land "married" to the new structures 983/10, 983/11 and 983/12, and 984/54, should be taken at Rs. 50/ per sq.
yd., i. e. as of 1948 and not as of 1940 as had been done by the trial court on remand.
In the result, the standard rent in R.A.N. 983 was raised to Rs. 981 / and in R.A.N. 984 to Rs.411/ p.m.
To impugn the decision, dated September, 30, 1964, of the Revisional Court, the parties preferred six Special Civil Applications under article 226/227 of the Constitution to the High Court.
By a common order, a learned single Judge of the High Court dismissed these applications except that he corrected some arithmetical errors and, in consequence, fixed the standard rent of properties 983/1 to 983/12 at Rs. 841.07 and that of premises 984/54 at Rs. 462/11 p. m.
It is against this decision dated 12/13th October 1971 of the High Court that these appeals have been filed by special leave.
The first contention of Mr. Cooper, learned Counsel for the appellants is that there is no provision in the Act which requires standard rent to be fixed on apportionment basis; rather, the definition of "premises" in section 5(8) (b) which speaks of "part of a building let separately," read with clause (i) of section 5(10) and clause (c) of section 11 (1) with due emphasis on the article 'the ' immediately preceding the, word 'premises ' in the said clauses, indicates that the standard rent would be the rent for which the suit premises were first let separately on or, after the basic date i.e. September 1, 1940.
If on the basic date proceeds the argument the premises in question did not form the subject of a separate, single ,demise but had been let out together with other portions of larger premises, its standard rent could not be determined on the footing of the rent payable for those different portions.
Reliance 582 has been placed on Dhanrajgirji Naraingirji vs W. G. Ward;(1) and Bata Shoe Co ' Ltd. vs Narayan Das Mullick and Ors.(2) Counsel had further tried to distinguish Capital and Provincial Property Trust Ltd. vs Rice(3) and Bhikaji Ramchandra Paranjpe vs Vishnu Ramchandra Paranjpe(4), referred to in the judgment of the High Court.
On the other hand, Mr. Lokur, learned Counsel for Respondent maintains that the principle of apportionment has always been accepted by the Bombay High Court as an appropriate guide in fixing standard rent under the Act of premises which on the basic date had been let out as part of a larger entity.
It is pointed out that in Narayanlal Bansilal vs Venkatrao Anant Rai(5); a Bench of the High Court while considering the question of standard rent in respect of another portion of the very property of the appellant Mills, had invoked this principle.
Before we deal with the contentions canvassed, it will be proper to make a brief survey of the relevant provisions of the Act: The material part of the definition of "premises" in s.5(8) reads: "Premises" means: (a) any land not being used for agricultural purposes; (b) any building or part of a building let separately.
" (emphasis supplied) Sub section (10) of the same Section defines "standard rent", in relation to any premises, to mean (a) where the standard rent fixed by the court and the Controller respectively under the Bombay ]tent Restrictions Act, 1939 or the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, such standard rent; or (b) Where the standard rent is not so fixed/subject to the provisions of section 11, (i) the rent at which the premises were let on the first day of September 1940, or (ii) where they were not let on the first day of September 1940, the rent at which they were last let before that day, or (iii) where they were first let after the first day of September 1940, the rent at which they were first let, or (iv) in any of the cases specified in section 11, the rent fixed by the Court; (1) (2) A.I.R. 1953 Cal.
(3) [1952] Appeal Cases 142.
(4) (5) 583 Section 1 1 empowers the Rent Court to fix the standard rent at such amount, as having regard to the provisions of this Act and the circumstances of the case, the court deems just (a) where any premises are first let after the first day of September 1940, and the rent at which they are so let is in the opinion of the Court excessive; or (b) where the Court is satisfied that there is no sufficient evidence to ascertain the rent at which the premises were let in anyone of the cases mentioned in sub clause (i) to (iii) of clause (4) of sub section (10) of section 5; or (c) Where by reason of the premises having been let at one time as a whole or in part and another time in parts or a whole, or for any other reasons, any difficulty arises in giving effect to this part; or (d) Where any premises have been or are let rent free or at a nominal rent or for some consideration in addition to rent; or (e) Where there is any dispute between the land lord and the tenant regarding the amount of standard rent.
" Clause (c) read with the opening part of section 11(1) is crucial for our purpose.
One of the primary objects of the Act is to curb exaction of extortionate rents and to stabilise the same at prewar level.
In achieving that object, however, it avoids a Procrustean or mechanical approach.
While pegging the basic line to September 1, 1940, it significantly subordinates "standard rent" by its very definition in section 5 (10) (b) to the benignant jurisdiction of the Court under s.11.
And the key words of the latter provision, into which the conscience of this anti rack renting statute is compressed, are "the circumstances of the case, the Court deems just".
These words inhibit a rigid and ossified determination of "standard rent".
They leave sufficient "play at the joints", investing the court with a wide discretion in the matter.
According to the scheme of the Act, while "rent" recoverable by the landlord, may owing to permitted increases, fluctuate, the 'standard rent ' always remains fixed or stationary.
If on the basic date, the suit premises were not let out separately but were a part of the subject matter of a larger demise as in the instant case difficulty arises in giving effect to the statute.
Clause (c) of section II (1) then comes into operation.
To resolve the difficulty this clause and the related provisions are not to be construed in a narrow technical sense which would stultify or defeat their object.
It is to be interpreted liberally in a manner which would 'advance the remedy ', 'suppress the 584 mischief, and foil 'subtle inventions and evasions ' of the Act.
Construed in accordance with this socially relevant rule in Hayden 's case the meaning of 'the premises ' having been let at one time as a whole, spoken of in this clause, can legitimately be deemed to cover ' the larger premises which, on the basic date, had been let as a: whole and of which the suit premises was a part let out subsequently.
In any event, the amplitude of the phrase "or any other reason" in the latter part of the clause, is wide enough to embrace cases of this kind and confers a plenary curative power on the Court.
True, that unlike the English Rent Control Act of 1920 or the later English Acts, the (Bombay) Act does not expressly speak of apportionment.
But the language of its relevant provisions construed consistently with the scheme and in built policy of the Act, is elastic enough to permit the fixation of standard rent on apportionment basis.
As noticed already, section II (1) gives a discretion to the Court to fix such amount as standard rent as it "deems just".
However, in exercising this discretion the Court has to pay due regard to (i) the provisions of the.
Act and (ii) the circumstances of the case.
Apportionment or equal distribution of the burden of rent on every portion is a rule of justice and good sense.
If the standard rent of a whole was a specific amount, it stands to reason that the standard rent of a part or sub division of that whole should not ordinarily exceed that amount.
Therefore, if in the circumstances of a given case the Court feels that for securing the ends of justice and giving effect to the provisions and policy of the Act, it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so.
This principle, however, is applicable where on the basic date, that portion of which the standard rent is to be determined, had not been let separately as on unit, but the whole, of which it is a part, had been let on that date.
Apportionment postulates that on account of its having been let on the basic date, the whole had acquired a standard rent which has to be allocated to smaller units subsequently carved out of it.
It is thus clear that the principle of apportionment is not alien to the spirit of the Act, and has indeed been often invoked by the courts in fixing standard rent under this Act.
In Narayanlal Bansilal 's case (supra), a Division Bench of the Bombay High Court determined standard rent of another part of this very estate of the Mills in accordance with that principle.
However, while conceding that apportionment is not foreign to the scheme, purpose and policy of the Act, we will like to emphasise the need for caution and circumspection in invoking it.
It is not to be rigidly and indiscriminately applied as a cast iron rule of law regardless of time and circumstances or the equities of the case.
A doctrinaire approach, not consistent with a just and fair determination, stultifies the whole salutary purpose of justice to both, the landlord and the tenant.
If necessary, it can be adjusted, adapted and attuned in the light of the particular circumstances of the case, to satisfy the statutory requirement of 585 fixing the standard rent as at a "just amount.
Thus if after the material date, the landlord has made investments and improvements in the promises, it will be just and reasonable to take that factor also into account and to give him a fair return on such investments.
Further, in appor tioning the rant, the Court must consider other relevant circumstances, such as "size, accessibility, aspect, and other 'Physical advantage enjoyed by the tenant of the premises of which the standard rent is in question, as compared with those of the rent of the property in which it is comprised [see Bainbridge vs Contdon(1)].
Where after the basic date, the premises completely change their identity, apportionment as a method of determining just standard rent, loses its efficacy and may be abandoned altogether.
We have only illustrated, not exhaustively enumerated the relevant circumstances and their implications.
At this stage, we may notice the decisions in Danrajgirji vs W.C. Ward (supra) and Bata Shoe and Co. vs Narayan Dass (supra) relied upon by Mr. Cooper.
In the first, a learned single Judge of the Bombay High Court was considering sections 2(1)(a) and 13(1)(a) of the Bombay Rent (War Restriction Act II of 1918), which were, to an extent, similar to sections 5(8)(b) and (10) and 11(1)(c) of the 1947 Act.
There, the Port Trust had in March 24,1915, leased the building known as Watson 's Annexe to one Dr. Billimoria at a rental of Rs. 2,850, besides ground rent and taxes.
Dr. Billimoria sublet the premises in different flats to different tenants.
The premises in the occupation of the defendant were sublet to him at a rental of Rs. 75/ in September, 1915, i.e. before September 1, 1916 which was the basic date under the 1918 Act.
The tenancy of Dr. Billimoria was terminated by a consent decree on July 31, 1923 and thereafter, the defendant held directly under the plaintiff.
The question arose as to whether standard rental of the flat should be calculated on the basis of the actual rent of Rs. 75/ , on the basis of the subletting or whether it should be determined by apportionment of the rent which Dr. Billimoria was paying to the Port Trust on the basis of the first letting.
Pratt J answered this question thus: "The Rent Act itself in the definition of the premises refers to a part of the building separately let as premises of which the standard rent has to be determined and such standard rent must be determined with reference to those premises in the manner spe cified by s 2(1)(a) of the Act.
The standard rent, therefore, must be ascertained on the admitted basic rent of Rs. 75./. .
Again, if the head lease instead of being as here the lease of one building consisting of flats had been a lease of a large number of buildings constituting a large estate, it would be almost impossible to make a correct apportionment of the rent.
I do not think it was the intention of the Rent Act that landlords and tenants should be driven to do a difficult and expensive process of valuation.
and calculation before their rent could be ascertained.
" (1) M45Sup.
CI/75 586 We see force in the argument as also textual and pragmatic support.
But these considerations do not preclude the Court from importing the flexible factors of fairness suggested by the circumstances of the case.
Indeed, section 11, as explained earlier, obliges the Court to do it.
Moreover, the interpretation of "premises" adopted by the learned judge was a little too literal, narrow and divorced from the purpose and content of the provisions relating to fixation of standard rent.
Nor was it in accord with the scheme and object of the 1918 Act.
The court 's jurisdiction to consider, as a strong circumstance, proper apportionment of rent is not taken away, in our view.
It may be noted that just like the opening clause of section 5 of the 1947Act, which defines "premises" "standard rent" etc., the corresponding section 2(1) of the 1918 Act, also, started with the qualifying words "In this Act, unless there is anything repugnant in the subject or context".
While applying these definitions to particular cases and provisions of the Acts, these words should not be lost sight of.
The argument in favour of adopting the restricted interpretation, ignores this rider to the definitions, provided by the Legislature in these statutes.
We do not intend to over burden this judgment with a discussion the decision in Bata Shoe & Co 's case (supra).
Suffice it to say that is a decision under the West Bengal Premises Rent Control Act (17 of 1950) which stands on its own facts.
It cannot be accepted as laying down a rule of universal application.
It is vulnerable, more or less on the same grounds, on which the decision in Dhanrajgirji 's case can be assailed.
We reject the narrow interpretation of the relevant provisions of Ss. 2 and II, canvassed for by the appellants, for two reasons: Firstly, it will leave the door wide open for evasion of this statute by what Abbot C. J. in Fox vs Bishop of Chester(1) called "shift or contrivance" All that a greedy landlord, need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents.
Such an evasion may amount to a fraud upon the statute.
Secondly, such a construction so manifestly subversive of one of the primary objects of the Act would be wholly beyond the intendment of the Legislature.
For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated.
it takes us to the second part of that question namely whether the principle of apportionment was correctly applied to the fact, of the case ? Mr. Cooper contends that the first trial court (Samson J.) had rightly found that the premises in question on account of extensive alterations and constructions undergone a complete change after the basic date, and therefore standard rent could not be determined by apporoining the rent of the whole among the parts.
It is maintained that (1) (824) ; at 655.
587 this finding of Samson J. was wrongly set aside by the High Court and must be deemed to be still holding the field.
Objection is also taken to the amendments allowed by the trial court on remand.
In the alternative, it is argued that even the courts below found that properties 983/10, 983/11, 983/12 and 984/54 were admittedly new structures and extensive repairs and replacements had been made in the remaining suit premises which had been destroyed or severely damaged by fire in 1948 49.
On account of these substantial alterations and reconstructions the premises in question had lost their identity and consequently, the principle of appointment was not applicable.
The first part of the contention based on the judgment of Samson J. is groundless.
The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which thereafter, decided the case afresh after allowing the applicant to amend his R.A. N.S.
It is too late in the day any way to argue on the assumption that the findings still survive.
The question whether a certain property has changed its identity after the basic date is largely one of fact.
The courts below have found that excepting properties 983/10, 983/11,983/12 and 984/54 which were admittedly new structures contracted near about 1948, the rest of the properties, namely 983/1 to 983/9 had not lost their identity.
The courts therefore, worked out the economic rent of these new structures by capitalising their value and gave the landlord a fair return on Ms investments and fixed their standard rent mainly on that basis.
It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of appointment.
Even so, it allowed the landlord fair return over Rs. 14,448/ being the cost of flooring, ceiling and other fixtures fixed to property 983/6.
Now it is not disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs. 1700/ .
The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case.
We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in the exercise of its special jurisdiction under article 136 of the Constitution.
Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other considerations dictated by a sense of justice and fairplay, cannot be condemned by this Court as, illegal.
We therefore, overrule this contention, also.
Lastly, it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs. 30/ per sq.
on the basis of an instance (exhibit R 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948.
it is added that some photostat co pies of sale deeds pertaining to the rele vant year were produced by Mr. Deweja, architect examined by the Landlord, and the Revisional Court wrongly rejected them As unproved.
it is maintained that in 1948, the market value of the site underneath the 288 structures was Rs. 120/ per sq.
in support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account, Counsel has cited Bukmanibai Khunji Cooverji vs Shivnarayan Ram Ashre.
We are unable to accept this contention also.
The courts below in capitalising the structures, 983/10 to 983/12 and 984/54 did take into account the value of the land married to those properties at the rate of Rs. 50/ per sq.
yd; which, according to their estimate, after adding Rs. 30/ per sq.
yd for escalation, would be the market value of that land in the year 1948.
Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent.
Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs. 120/ per sq.
We, therefore, do not think it necessary to examine Cooverji 's case cited by the Counsel.
We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re investigate factual conclusions not shown to be perverse or manifestly unjust.
Such is not the case here.
For all the foregoing reasons, we would answer the question posed for decision.in the affirmative and dismiss these appeals with one set of costs.
V.P.S. Appeals dismissed (1)(1966)67 Bom.
L.R. 692.
[/INST]On September 1, 1940, the basic date under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the properties in dispute were parts of a larger entity comprised in a single lease.
In March 1948, the respondent took a fresh lease of the properties in dispute, Thereafter, the respondent filed applications in the court of Small Causes for fixation of standard rent on the basis of apportionment.
The trial court dismissed the applications holding that the premises, on account of structural alterations, had undergone such a change that they could no longer be identified with the property that existed in September 1940; that the mode of determining the rent by apportionment was not available to the tenant; and that there was no sufficient material for ascertaining the standard ' rent in any other way.
This order was set aside in revision and the case was remanded to the trial court.
After remand, the trial court held that except with respect to three items of the premises in dispute, which were new Structures, there was no change of identity in the rest of the properties; that the new structures belonged to the respondent who was consequently liable to pay rent only for the land underneath; and on that basis, applying the principle of apportionment, fixed the standard rent.
With respect to one item the trial court took into consideration the investment made by the landlord inclusive of the, cost of structures, estimated the value of the land underneath as in 1940, and fixed the standard rent on that basis.
In revision it was held that the ownership of the three new structures also vested in the appellant, that he was entitled to get a fair return on that investment also and that the value of the land should be taken as in 1948 and not in 1940, and the standard rent was fixed on that basis.
Further revisions to the High Court were dismissed with some arithmetical corrections.
In appeal to this Court, HELD : The principle of apportionment is applicable to the fixation of standard rent of the premises in dispute and the principle had been rightly invoked and applied.
[584 F G] (a) One of the primary objects of the Act is to curb exaction of extortionate rent.
Section II (1) empowers the Court to fix the standard rent at such amount, as having regard to the provisions of the Act and the circumstances of the case, the Court deems just, If on the basic date the premises were not let out separately but were a part of the subject matter of a larger demise then section 11(1)(c) comes into operation.
If the standard rent of a whole was a specific amount it stands to reason that the standard rent of a part or sub division of the whole should not ordinarily exceed that amount.
Therefore, if in the circumstances of a given case the court feels that for securing the ends of justice and giving effect to the provisions and policy of the Act it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so.
The language of the Act consistently with its scheme and in built policy is elastic enough to permit the fixation of standard rent on apportionment basis.
At the same time, caution and circumspection are necessary in applying the principle to the particular circumstances of a case.
For example, if after the material date, the landlord has made investments and improvements in the premises it will be just and reasonable to take that factor also into account and give him a fair return on such investment.
Similarly, in apportioning the rent, the Court must also consider other relevant circumstances and advantages enjoyed by the tenant of the premises of which the standard rent is in question as compared with the rest 578 of the Property in which it is comprised.
Further,where after the basic date the premises completely changed their identity, apportionment as a method of determining just standard rent loses its efficacy and may be abandoned altogether.[583E 585C] Narayanlal Bansilal vs Venkatrao Anant Rai 67 Bom.
L.R. 352, Bainbridge vs Congdon and Fox vs Bishop of Chester ; at 655 referred to.
Dhanrajgirji Naraingirji vs W. G. Ward (1925) 27, Bom.
L.R. 877 and Bata Shoe & Co. Ltd. vs Narayan Das Mullick and Ors.
not approved.
(b)(1) The findings of the trial court before remand had been set aside in the order of remand, and there is nothing wrong or unfair or untenable in the method adopted by the lower courts after remand which would warrant interference by this Court in exercise of special jurisdiction under article 136 of the Constitution.
[587D G] (ii) The question whether certain property has changed its identity after the basic date is largely one of fact.
The factual conclusions arrived at by the revisional court and High Court are not shown to be perverse or manifestly unjust" It was with regard to the unchanged old properties that the High Court and the Revisional Court mainly adopted the method of apportionment.
Even so, they allowed the landlord a fair return over the amount invested by him towards the cost of flooring, ceiling and other fixtures.
since the rent of the old unchanged premises was fixed mainly on apportionment basis, the courts rightly did not think it necessary to take the value of their sites separately into computation in fixing the standard rent.
[588 B D] (iii) As regards the new structures the courts below, in capitalising their value did take into account the value of the land and took the market value of the land as in the year 1948.
[588B]
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<s>[INST] Summarize the judgementN: Writ Petition (Crl.) No. 247 of 1990.
(Under Article 32 of the Constitution of India).
S.S. Ray, Vijay Bahuguna, S.K. Gambhir, Sunil Kr.
Jain and Vijay Hansaria for the Petitioner.
Ashok Desai, Solicitor General, P parmeshwaran and A. Subba Rao for the Respondents.
The order of detention was issued by Nisha Sahai Achuthan, Joint Secretary to the Government of India who was specially empowered under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs & Psychotropic Substances Act and it recited that with a view to preventing the peti tioner from engaging in abetting and transportation of narcotic drugs, the said Sayyed Farook Mohd. @ Farooq @ Sayyed Farooq Isamuddin @ Anand be detained and kept in custody in the Yervada Central Prison, Pune.
The grounds of detention were also served on the same day i.e. February 15, 1990 immediately after his arrest by the Customs Authori ties.
On July 19, 1989 the staff of the Preventive Collector ate Customs, Bombay impounded two fiat cars bearing Nos.
GJV 5440 and MHY 2625.
The drivers of the said cars namely Aslam Mohammad Nazir and Mohammad Yakub Sheikh were apprehended.
On search of the two cars, 100 packets of brown coloured powder purporting to be narcotic drug of Pakistan origin was found out of the dickies of the cars.
The narcotic drug recovered from the dickies of the said cars weighed 100 kgs.
and its value in the market is about 2.34 crores.
Car No. GJV 5440 belonged to the petitioner detenu, Syed Farooq Mohammad and the other car No. MHY 2625 belonged to one C.P. Reddy, an Officer of international airport who was also apprehended and his statement u/s 108 of the was recorded.
It was revealed from his statement that this car was also used for transporting heroin along with petition er 's car.
The statements of Aslam Mohammad Nazir and Moham mad Yakub Sheikh who were apprehended as well as the state ment of other person i.e. Mohd. Azam Khan @ Wali Mohd. Khan @ Hameed Khan were also recorded u/s 108 of the by the Customs Officials.
From these statements it appeared that these persons were known to the detenu and they used to visit often the hotel 'Fisherman ' at Worli for disco.
The detenu i.e. Farooq Mohammad also used to go for disco in the said hotel 'Fisherman ' at Worli.
It has been stated by Aslam Mohammad Nazir that on July 19, 1989 he was sitting in room No. 106, 2nd Floor, Kali Building near Burtan apartment, Bombay Central (residence of the detenu) along with his friend, Mohd. Yakub Sheikh, driver of the other car.
Hameed also came there to meet Farooq Mohammad.
Hameed asked him and Mohd. Yakub Sheikh to go along with him to Kalina.
He told them that a truck had come to Kalina with some packets of contraband goods and that they were to take those packets near Jaslok hospital Thereafter, he took two fiat cars beating registration Nos.
GJV 5440 and MHY 2625 from Farooq.
He gave the keys of car No. GJV 5440 to him and car No. MID/2625 to Mohd. Yakub.
245 Thereafter, they drove those two cars to Kalina as per Hameed 's instructions and Hameed led them in a red maruti car bearing No. BLB 7445 where Hameed showed them one truck wherefrom four gunny bags were unloaded and kept in the dickies of the above said two cars.
It further appears from his statement that as per Hameed 's instructions after the cars were parked near Jaslok Hospital, they handed over the keys of both the cars to Hameed and he told them to contact him again in the evening on telephone No. 367373 of R.K. Hotel From Farooq 's place they contacted him over the telephone.
Hameed told them to wait there and he was coming there.
Thereafter Hameed took them in the Maruti Car to a place near Tejpal Road, Gowalia Tank.
There he showed them the same two fiat cars bearing Nos.
GJV 5440 and MHY 2625.
Hameed gave the keys of the car No. GJV 5440 to him and car No. MHY 2625 to Mohd. Yakub Sheikh and asked them to drive the said two cars following his car.
Similar statement was made by Mohd Yakub Sheikh which was recorded by the Customs Officials.
It has also been stated by them that they were told by Hameed that each of them will get Rs.5,000 as monetary consideration.
Yakub also stated that similar jobs have been done by him on 4 5 occa sions and he received Rs.5,000 each time from Hameed.
From the statement of Hameed recorded by the Customs Officials, it appears that on July 19, 1989 afternoon he collected two drivers namely Aslam Mohd Nazir and Mohd. Yakub Sheikh and two fiat cars from Farooq of Bombay Central.
This Farooq was introduced to him by Mohd. Nasir, a narcotic drug dealer who is now detained m ' Rajasthan in connection with a drug case.
The detaining authority searched the residence of the detenu on July 20, 1989 but nothing incriminating could be found therefrom.
After recording the statements of these persons and examining and considering the test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 which mentioned that the brown powder contained in those 100 packets is narcotic drug coming within the Narcotic Drugs and Psychotropic Substances Act, the impugned order of detention was made on December 20, 1989 and the petitioner was arrested and detained on service of the order of deten tion on February 15, 1990.
The challenge to the detention order had been made in the instant writ petition principally on four grounds which are as under: ( 1 ) The impugned order of detention has been passed rely ing on 246 the incident which is absolutely stale as the incident is dated July 19, 1989 whereas the impugned order has been passed on December 20, 1989.
(2) The statements of the three persons as recorded in the form of statement under section 108 of the came to the respondents on July 20, 1989.
The order should have been passed immediately on 20th July, 1989 but the order has been passed on December 20, 1989 i.e. after five months.
The impugned order, it is therefore contended, is illegal and has been passed on stale ground.
(3) Since no order of preventive detention has been passed against C.P. Reddy on the same evidence, no order should have been passed against the petitioner as his involvement is of the same nature and to the same extent as that of C.P. Reddy.
(4) Assuming that the order rejecting bail application has been considered though not evident from the grounds of detention supplied, yet the same has not been supplied to the petitioner.
This indicates that a relevant document has not been supplied to the petitioner which affected his right of effective representation guaranteed under Article 22(5) of the Constitution.
The petitioner after grant of bail by an order of this Court appeared before the respondents and applied for making statement u/s 108 of the .
He was arrested and the order of detention was served on him.
This material aspect should have been considered before serving the impugned order.
As regards the first ground, the counsel for the peti tioner has vehemently urged before this Court that the statements of the two persons i.e. Aslam Mohd. Nazir and Mohd. Yakub Sheikh the drivers of the said two cars handed over by the petitioner for carrying narcotic drugs and also the statement of Hameed, did not implicate the petitioner in the transportation and smuggling of the drugs and as such there was non application of mind on the part of the detain ing authority in clamping the order of detention on the petitioner.
The impugned order of detention is, therefore, vitiated by non application of mind.
The learned counsel referred to certain portions of the statements recorded by the Customs Officials u/s 108 of the and con tended with great emphasis that there was nothing to say that the petitioner was implicated in the smuggling or transportation of the heroin which has been seized from the dickies of the two cars.
247 This contention of the learned counsel is totally devoid of merit in as much as the statements of these three persons as recorded by the Customs Officials u/s 108 of the clearly implicate the petitioner who knowing fully that these two cars will be used for the purpose of transporta tion of prohibited drugs i.e. heroin and for selling of the same, handed over the keys of the two cars to the said two drivers who were sitting at his residence with Hameed on the asking of Hameed for carrying the contraband goods.
In these circumstances, it is meaningless to argue that the state ments of these three persons did not implicate the petition er.
All the aforesaid three persons were well known to the petitioner and were sitting at the petitioner 's residence, they were given the keys of the petitioner 's car as well as the keys of the car of C.P. Reddy which was brought to his garrage for repairs by one Ravi Poojari through whom C.P. Reddy sent his car for repairs.
The petitioner knowing fully well that these two cars will be used for the purpose of transporting contraband goods i.e. heroin from the truck stationed at Kalina from which four gunny bags containing the said heroin were unloaded and placed in the dickies of these two cars, handed over the keys of the cars.
It is also evident from these statements recorded by the Customs Offi cials that the petitioner along with those three persons used to visit hotel 'Fisherman ' for disco regularly and they were well known to the petitioner In these circumstances, it is beyond pale of any doubt that the petitioner knowing fully well that these two cars will be used for transporting contraband goods, i.e. heroin, handed over the keys of the cars for the said purpose.
Therefore, this challenge is wholly without any basis.
The next ground of challenge is that the cars were impounded and the contraband goods were seized on July 19, 1989 and the statements of these three persons were recorded by the Customs Officials on July 20, 1989 and the residen tial premises of the detenu were searched on July 20, 1989 but no incriminatory articles ' were found.
The detaining authority made inordinate delay in passing the impugned.order of detention against the detenu as late as on December 20, 1989 under section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988 to be hereinafter referred to as the 'said Act '.
It has been submitted that if there was any urgent necessity to prevent the petitioner, the order should have been passed immediately on 20th July, 1989 but it has been passed on December 20, 1989 i.e. after five months.
The impugned order is, therefore, illegal being passed on stale ground.
This contention is, in our considered opinion, devoid of any 248 substance as we have stated hereinbefore that the two cars were impounded on July 19, 1989 and brown sugar weighing 100 kgs.
was recovered from the dickies of these two cars on that day.
The said three persons i.e. Aslam Mohd. Nazir, Mohammad Yakub Sheikh and Hameed were examined and their statements were recorded by the Customs Officials on the next day i.e. July 20, 1989.
It is also evident that samples of the said contraband drugs were taken from each of the 100 packets and the same were sent for chemical examination.
The test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 were received by the Customs Department and the Customs Officials screened all these things and the detaining authority after considering all these, passed the order of detention on December 20, 1989.
In these circum stances, it cannot be said that the delay of five months in making the impugned order of detention rendered the deten tion illegal and bad as it was made on stale ground.
The detention order has been made with promptitude considering the relevant and vital facts proximate to the passing of the impugned order of detention.
This ground of challenge is, therefore, totally unsustainable.
The third ground of challenge is that the relevant document i.e. bail application of the petitioner and order made there on which might have been considered by the de taining authority were not supplied to the petitioner and as such his right of making effective representation guaranteed under Article 22(5) of the Constitution of India has been seriously prejudiced.
This ground is without any substance because firstly there is nothing to show from the grounds of detention that the rejection of this bail application by the Sessions Judge, Greater Bombay on January 5, 1990 was con sidered by the detaining authority before passing the im pugned order of detention and as such this being not re ferred to in the grounds of detention, the documents had not been supplied to the petitioner, and it, therefore, cannot be urged that non supply of this document prejudiced the petitioner in making effective representation against the order of detention.
Article 22(5) of the Constitution, undoubtedly, mandates that all the relevant documents re ferred to in the grounds of detention and which are consid ered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu.
The said document was not considered by the detaining authority in coming to his subjective satisfaction and in making the impugned order of detention.
The non furnishing to the detenu of the said document i.e. the bail application and the order passed thereon, does not affect in any manner whatsoever the detenu 's right to make an effective representation in compliance with the provi sions of Article 22(5) of 249 the Constitution of India.
This ground, therefore, is wholly untenable.
It has been contented in this connection by referring to the order made by this Court on January 22, 1990 in the Special Leave Petition filed by the petitioner before this Court against the rejection of his application of anticipa tory bail whereon this Court made an interim order while issuing show cause notice on the Special Leave Petition and directing that in the meantime the petitioner shall not be arrested, that the impugned order of detention is illegal.
This order was made in the Special Leave Petition which did not challenge the impugned order of detention but questioned the rejection of the application for anticipatory bail.
The order of detention was made on December 20, 1989 i.e. prior to the passing of the said order dated January 22, 1990.
The said order of this Court has, therefore, nothing to do with the subjective satisfaction arrived at by the detaining authority in passing the order of detention in question.
It has been urged in this connection that the facts in between the passing of the detention order and implementing the detention order have to be taken into account for consider ing whether the detention order should be served on the detenu even after passing of the order by this Court dated January 22, 1990 stating that the petitioner shall not be arrested in the meantime.
The counsel for the petitioner referred the case of Binod Singh vs District Magistrate, Dhanbad, Bihar and Ors., Wherein the detenu was served with the order of detention u/s 3(2) of the National Scurity Act while he was in jail custody in connection with the criminal charge u/s 302 I.P.C.
The question arose whether in such cases where the detention order which was passed before the detenu surrendered before the Court and was taken into custody in a criminal case, should be served on the detenu after he has surrendered in the criminal case and was in jail as an under trial prison er.
It has been held by this Court that: " . . the power of directing preventive detention given to the appropriate ,authorities must be exercised in excep tional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised . . " 250 This ruling as well as the ruling in Suraj Pal Sahu vs State of Maharashtra and Ors., ; relied upon by the counsel for the petitioner have no application to the instant case in as much as in the instant case the detenu was not arrested and imprisoned in jail till February 15, 1990 when the order of detention was served on him and he was arrested by the Customs Authorities.
Considering all these, this ground of challenge is also wholly untenable.
The next ground of challenge is that the detenu appeared before the respondents and applied to them to record his statement u/s 108 of the .
He was then arrested and the order of detention was served on him.
It is relevant to mention in this connection the averments made in para 10 of the counter affidavit filed on behalf of the respondents which is to the effect that in fact, when the petitioner presented himself, his statement was recorded on February 15, 1990 and it was only after the recording of the state ment that the petitioner was detained in pursuance of the detention order.
It has also been stated in para 11 of the said affidavit that there existed sufficient grounds which impelled the detaining authority to pass the detention order against the petitioner.
It has also been stated in para 12 of the said affidavit that a detention order under the Prevention of Illicit Traffic in Narcotic Drugs and Psycho tropic Substances Act, 1988 can be legally issued even if there is a single and solitary case against a person.
It has also been stated that the detaining authority carefully scrutinised all the relevant documents and facts of the case and arrived at his subjective satisfaction that preventive order of detention of the petitioner is necessary to prevent him from smuggling and transporting contraband goods and as such the impugned order of detention is not at all illegal or bad and the same is not vitiated by non application of mind or non consideration of relevant materials.
This ground, therefore, is not sustainable.
The last ground of challenge is that there has been inordinate delay in arresting the detenu and in serving the detention order i.e. on February 15, 1990 after a lapse of 1 month and 25 days and no serious attempt was made to arrest the petitioner and to serve the order of detention on him in accordance with the provisions of Section 8 of the said Act which specially provides for enforcing the provisions of Section 82, 83, 84 and 85 of the Code of Criminal Procedure.
It has been urged in this connection that this unusual delay in arresting the petitioner shows that there was no real and genuine apprehension in the mind of the detaining authority regarding the necessity of detention of the petitioner and as such continued detention of the petitioner is 251 illegal and contrary to law.
It is apropos to refer in this connection to the averments made on behalf of the respond ents in para 7 of the counter affidavit.
It has been stated therein that the Department served two notices, one of which was accepted by his mother and the second by his brother, Nizamuddin for handing over the same to the petitioner, as the petitioner was not available in the house.
It has been submitted that the petitioner deliberately avoided making himself available to the Department and thus delayed comple tion of investigation of the case.
Instead of appearing before the Department, the petitioner applied to the Ses sions Judge for anticipatory bail which was rejected on 5.1.1990.
Thereafter, the petitioner approached this Court for anticipatory bail, which was granted on 22.1.1990.
It is, therefore, evident that the petitioner absconded and tried to evade arrest pursuant to the order of detention even though he knew the passing of such an order by the detaining authority.
It is relevant to mention here the observations of this Court in Shafiq Ahmad vs District Magistrate, Meerut and Ors., [1989] 4 SCC 556 to the follow ing effect: " . .
We are, however, unable to accept this contention.
If in a situation the person concerned is not available or cannot be served then the mere fact that the action under Section 7 of the Act has not been taken, would not be a ground to say that the detention order was bad." In Bhawarlal Ganeshmalji vs State of Tamil Nadu & Anr., ; an order of detention was made against the appellant u/s 3(1) of COFEPOSA Act in December, 1974.
It could not be executed because the detenu was absconding and could not be apprehended despite a proclamation made under Section 7 of the Act.
More than three years after the order was passed, the appellant surrendered in February, 1978.
It was held that there must be a 'live and proximate link ' between the grounds of detention and the avowed purpose of detention.
But in appropriate cases the Court can assume that the link is 'snapped ' if there is a long and unex plained delay between the date of the order of detention and the arrest of the detenu.
Where the delay is not only ade quately explained but is found to be the result of the detenu 's recalcitrant or retractory conduct in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened.
It was, therefore, held that the delay in serving the order of detention on the detenu does not viti ate the order.
In the instant case, it has been clearly averred in the affidavit that two notices were served, one on the petition er 's mother and another 252 on the petitioner 's brother directing the petitioner to appear before the detaining authority.
The petitioner, it has been stated, has intentionally absconded and thereby evaded arrest.
These averments have not been denied by the petitioner.
In these circumstances it cannot be said that the delay was not explained and the rink between the grounds of detention and the avowed purpose of detention has been snapped.
Reference may also be made in this connection to the decision in T.A. Abdul Rahman vs State of Kerala and Ors., ; This ground of challenge is, there fore, devoid of any merit.
It has also been submitted on behalf of the petitioner that the representation made by the detenu on February 28, 1990 both to the Chairman, Advisory Board as well as to the Central Government were not disposed of till March 29, 1990 when the said representation was rejected by the Central Government.
It has been submitted that this long delay of one month made the continued detention of the petitioner invalid and illegal.
The counsel for the respondents has produced before this Court the relevant papers from which it is evident that after receipt of the representation of the petitioner, it was sent to the detaining authority for his comments and immediately after the comments of the detaining authority were received the same were processed and put up before the Minister concerned who rejected the representa tion after considering the comments of the detaining author ity and the State Government.
It has been urged on behalf of the petitioner that the comments were not duly considered.
This submission is not at all tenable in as much as it is evident from the relevant papers produced before this court that the Central Government passed the order after consider ing the comments of the detaining authority.
So this submis sion is without any substance and the same is rejected.
It has been further submitted that the counter affidavit was sworn not by the detaining authority but by one Shri A.K. Roy, Under Secretary in the Ministry of Finance, De partment of Revenue, New Delhi and as such this affidavit cannot be taken into consideration and the averments made therein are not relevant to explain the unusual delay in serving the order of detention as well as in rejecting the representation.
In this connection some rulings of this Court have been cited at the bar.
In Madan LaI Anand vs Union of India and Ors.
, ; the counter affidavit filed on behalf of the respondents had been af firmed by Kuldip Singh, Under Secretary to the Government and not by the detaining authority himself.
It was urged that the counter affidavit being not sworn by the detaining authority, the averments made therein should not be taken notice of.
It was held 253 that there being no personal allegation of mala fide or bias made by the detenu against the detaining authority in per son, the omission to file affidavit in reply by itself is no ground to sustain the allegation of mala fides or non appli cation of mind.
Similar observation has been made by this Court in Mohinuddin vs District Magistrate, Beed and Ors.
, ; which is to the following effect: " . .
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 Government under Article 166 of the Constitution to pass orders on behalf of the govern ment in such matters.
" Reference has also been made therein to the cases of Niran jan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar, ; and Mohd. Alam vs State of West Bengal, ; In the instant case, the counter affidavit has been filed by Shri A.K. Roy, Under Secretary to the Government, Ministry of Finance, Department of Revenue, New Delhi al though the order of detention was made by Nisha Sahai Achu than, Joint Secretary to the Government of India, Ministry of Finance.
It is evident that the said Under Secretary was dealing with the papers relating to the particular order of detention and he placed those papers before the Minister concerned.
In these circumstances, the counter affidavit filed on behalf of the respondents cannot but be considered and there is no allegation of mala fide or malice or extra neous consideration personally against the detaining author ity in making the impugned order of detention.
This conten tion is, therefore, not tenable.
254 In the premises aforesaid we dismiss the writ petition and hold that the impugned order of detention is quite in accordance with law and the same is valid.
The observations made herein are confined to this application.
T.N.A. Petition dismissed.
[/INST]Consequent to the acquisition of the appellant 's land for meeting the requirements of the respondent Corporation, a reference was made to the Civil Court, under section 18 of the Land Acquisition Act, 1894, when was determined without notice to the respondent Corporation.
and by allowing higher compensation to the appellants.
The State preferred an appeal against the decision of the Civil Court which was dismissed and the respondent Corporation 's intervention in the appeal was not allowed.
Thereafter the respondent Corporation filed a writ petition challenging the validity of the Civil Court 's judgment.
The High Court set aside the award of compensation and directed the Civil Court to re open the proceedings.
Dismissing the appellant 's appeal, this Court, HELD: 1.
In view of the clear language used in clause (c) of section 20 of the Land Acquisition Act, 1894 there cannot be any doubt that the respondent Corporation was entitled to be heard before the reference could be deter mined.
[22H] Himalayan Tiles and Marbles (P) Ltd. vs Francis Victor Coutinho, ; , referred to.
The land was acquired for the purpose of the respondent Corporation, and the burden of payment of compensation is on the Corporation.
Therefore, the High Court 's view that it was mandatory for the Court of reference to have caused a notice to be served on the respondent Corporation is correct.
Non service of notice deprived the 21 Corporation of an opportunity to place its case before the Court, and the judgment so rendered in the reference case was illegal and not binding on the respondent Corporation.
[22D E] 3.
The High Court 's direction to the Civil Judge to re open the proceedings and decide the matter afresh after giving the Corporation a chance to lead its evidence on the question of valuation is confirmed.
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<s>[INST] Summarize the judgementivil Appeal No. 3561 of 1986.
From the Judgment and Order dated 28.2.1986 of the Gujarat High Court in SCA No. 1176 of 1974.
Mehta, Shishir Sharma and P.H. Parekh for the Appel lants.
Respondent in person.
(N.P.) The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Gujarat dated 28.2.1986 allowing the respondent 's writ petition and quashing order of discharge from service and directing his reinstatement in service.
The respondent joined service as technical assistant with the Gujarat State Electricity Board (hereinafter re fened to as the Board).
He was promoted to the post of Deputy Engineer.
While he was posted at Surat as Deputy Engineer he was transferred to Ukai subdivision under the order of the Superintending Engineer dated 29th March, 1974.
Pursuant to the order of transfer he was relieved from his duties at Surat on 30th March, 1974 to enable him to join at Ukai.
He made representation to the Additional Chief Engi neer for cancelling his transfer order on the ground that his mother aged 70 years was ailing and it would cause great inconvenience to him if he was required to join at Ukai.
His representation was rejected and he was directed to 361 join at Ukai but he did not do so instead he filed a civil suit at Baroda challenging validity of the order of trans fer.
Meanwhile, the Chief Engineer by his order dated 27th May, 1974 discharged the respondent from service with effect from 31st March, 1974 in accordance with service Regulation No. 113.
The respondent challenged the validity of the order of his discharge from service by means of a writ petition under Article 226 of the Constitution before the High Court of Gujarat.
A learned Single Judge of the High Court quashed the order of termination on the findings that the order of discharge was issued m violation of the basic principles of natural justice as no opportunity was afforded to the re spondent before discharging him from services under Regula tion No. 113.
The learned Single Judge granted a declaration in respondent 's favour holding the order void and illegal but having regard to recalcitrant attitude of the appellant and his continued conduct of disobedience of the orders of his superior authorities, he refused to grant consequential reliefs regarding reinstatement or payment of back wages.
The respondent as well as the appellant board, both pre ferred Letters Patent appeals against the order of learned Single Judge.
A Division Bench of the High Court dismissed the appeal preferred by the Appellants but it allowed the respondent 's appeal.
The Division Bench upheld the order of the learned Single Judge holding the order of discharge illegal and void but it set aside the order of the learned Single Judge refusing to grant consequential relief instead it directed the appellants to reinstate the respondent, and to treat him in service without any break in service and to grant him benefits of increments, seniority, and promotion to which he may be entitled under the rules.
The Bench, however, did not grant full back wages to the respondent instead it directed the Board to pay him 50 per cent of back wages.
Aggrieved, the appellant has preferred the instant appeal after obtaining special leave of this Court.
This appeal came up for hearing before us on 28th Janu ary, 1988 and on that day Sh.
B.K. Mehta, Advocate appearing for the appellants and Sh.
Vimal Dave, Advocate, appearing for the respondent were fully heard.
After hearing learned counsel for the parties we were satisfied that the learned Single Judge as well as the Division Bench both had commit ted error in allowing the writ petition and granting relief to the respondent.
We expressed our view in the Court and suggested to Mr. Vimal Dave, counsel for the respondent, that if he agreed the original writ petition of the respond ent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the High Court and of this Court as during the pendency of the appeal, the appellants 362 were directed by means of interim order of this Court to continue to pay salary to the respondent which was being paid to him regularly.
The hearing was adjourned to enable Sh.
Vimal Dave, to obtain instructions from the respondent.
The appeal came up for hearing before us on 16.2.1988 when another counsel appeared to argue the appeal on behalf of the respondent on merits.
We refused to hear the counsel as we had already completed hearing.
Thereupon, the respondent himself appeared in person and sought permission to make his submissions personally.
We refused to accede to his request as oral heating had already been completed and the matter had been adjourned only to enable the respondent 's counsel to obtain instructions.
However, in the interest of justice we permitted the respondent to file written submissions.
if any, in support of his case.
Thereafter, the case was listed several times but no written submissions were filed instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in us with a prayer to transfer the case to some other Bench.
Since this was unusual, uncalled for and unjustified request we ignored the same and reserved the order.
We are constrained to note that instead of utilising the opportunity granted to him for filing written submissions the respondent has mis used adjournments for the purposes of raising frivolous objections for getting the case transferred to some other Bench.
No party is entitled to get a case transferred from one Bench to the other, unless the Bench is biased or there are some reasonable grounds for the same, but no right to get a case transferred to any other Bench, can legitimately be claimed merely because the judges express opinion on the merits of the case on the conclusion of hearing.
In the instant case on the conclusion of the oral hearing we had expressed our opinion on 28.1.1988 in the open court, that we were inclined to allow the appeal and set aside the order of the High Court and dismiss the writ petition but taking a sympathetic view we requested Sh.
Vimal Dave, learned coun sel appearing for the respondent to obtain instructions as aforesaid.
The opportunity granted to the respondent has, however, been misused by raising mischievous and frivolous objections instead of filing written submissions.
The re spondent 's prayer is accordingly rejected and since oral hearing has already been completed, and in spite of several adjournments respondent failed to appear before the Court or to file the written submissions we proceed to decide the case on merits.
Transfer of a Government servant appointed to a particu lar cadre of transferable posts from one place to the other is an incident of service.
No Government servant or employee of Public Undertaking has legal tight for being posted at any particular place.
Transfer from 363 one place to other is generally a condition of service and the employee has no choice in the matter.
Transfer from one place to other is necessary in public interest and efficien cy in the Public administration.
Whenever, a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representation to the competent authority for stay, modification or cancellation of the transfer order.
If the order of transfer is not stayed, modified or cancelled the concerned public servant must carry out the order of transfer.
In the absence of any stay of the transfer order a public servant has no justification to avoid or evade the transfer order merely on the ground of having made a repre sentation, or on the ground of his difficulty in moving from one place to the other.
If he fails to proceed on transfer in compliance to the transfer order, he would expose himself to disciplinary action under the relevant Rules, as has happened in the instant case.
The respondent lost his serv ice as he refused to comply with the order of his transfer from one place to the other.
There is no dispute that the respondent was holding a transferable post and under the conditions of service ap plicable to him he was liable to be transferred and posted at any place within the State of Gujarat.
The respondent had no legal or statutory right to insist for being posted at one particular place.
In fact, during the tenure of his service in the Board the respondent had been transferred from one place to an other place several times.
In March, 1974 he was transferred .
from Surat to Ukai.
The distance between the two places as was stated before us during the hearing of the case is less than 50 kms.
He was relieved from his duties at Surat on 30th March, 1974 but he did not join at Ukai till the impugned order of discharge was issued on May 27, 1974.
The Chief Engineer who discharged the respondent 's services exercised his power under Service Regulation No. 113, which runs as under: "113.
The continued absence from duty or overstay, m spite of warning, to return to duty shall render the employee liable to summarily discharge from service without the necessity of proceedings under the Gujarat Electricity Board, Conduct, Discipline and Appeal Procedure.
" The above Rule provides that if an employee of the Gujarat Electricity Board continues to remain absent from duty or overstays the period of sanctioned leave and in spite of warning, he fails to return to duty, he renders himself liable to be discharged summarily from service without 364 complying with the procedure prescribed for taking discipli nary action, under the Gujarat Electricity Board, Conduct, Discipline and Appeal Procedure.
Regulation 113 confers wide powers on the authorities to summarily discharge an employee from service, if he continues to be absent from duty in an unauthorised manner and refuses to join his duty even after warning.
Under the disciplinary rules detailed procedure is required to be followed for removing an employee from serv ice but Regulation 113 provides for summary discharge from service.
Before this power is exercised, two conditions must be satisfied; Firstly, the employee must be found to be absent from duty without leave or overstaying the period of sanctioned leave, and secondly, he failed to join his duty even after a warning.
The object and purpose of giving warning is to remind the delinquent employee that if he continues to be absent from duty he would be liable to action under Regulation 113 and to afford him an opportunity to make amends by joining his duty.
If even thereafter he fails to join duty, his services are liable to be terminated by an order of discharge.
It is noteworthy that the validity of Regulation 113 was not challenged before the High Court and the parties proceeded on the assumption that Regulation 113 was valid and applicable to the respondent 's service.
The Chief Engineer discharged the respondent from service as he had continued to remain absent from duty w.e.f. March 30, 1974 to May 27, 1974.
The Division Bench of the High Court held that no warning as contemplated by service Regulation No. 113 had been issued to the respondent nor he had been afforded any opportunity of showing cause before the im pugned order of discharge was passed and consequently, the order of discharge was null and void being contrary to service Regulation No. 113 itself.
On perusal of the materi al on record we are of the opinion that the view taken by the High Court is not sustainable as there is sufficient material on record which shows that warning had been issued to the respondent before the order of discharge was issued.
In determining the question whether any warning was given to the respondent it is necessary to refer to the sequence of events and the correspondence which ensued between the appellants and the respondent.
On March 29, 1974 the Superintending Engineer of the Board issued the order, transferring the respondent from Surat to Ukai, on 30.3.1974 the respondent was relieved from Surat and directed to join his duty at Ukai, but the respondent did not join his duty at the new place of posting.
Instead he made a representa tion to the Additional Chief Engineer on 8.4.1974 after the transfer order.
The Transfer order was not stayed and as the respondent did not join 365 his duties, he continued to be absent without sanction of any leave.
In this situation the Superintending Engineer by his letter dated 18th April, 1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unautho rised absence from duty in breach of service Regulation No. 113.
The letter is as under: "GUJARAT ELECTRICITY BOARD O & M DIVISION Nana Varchha Road Surat.
Dated 18th April, 1974 To Shri A.S. Pohani Junior Engineer, Ukai 37, Gurunagar Society Near Jakat Naka, Surat 3.
Sub: Transfer from Surat to Ukai.
You have been relieved on 30.3.1974 A.N. on account of your transfer from Surat to Ukai, but you have not reported to Ukai till today and remained on unauthorised absence on re lief, which is breach of S.R. No. 112 and 113.
Please submit your explanation as to why action should not be taken against you for disobeying order of superior and breach of S.R. No. 112 and 113 within 7 days from re ceipt of this letter.
Sd/ Execut ive Engineer (O & M) Surat Copy f.w.c.s.
to Superintending Engineer, GEB, Utran.
" There is no dispute that the respondent received the afore said letter as he sent a reply to the Superintending Engi neer on April 20, 1974, a copy of which was annexed as Annexure 'J ' by the petitioner, to his 366 petition before the High Court.
By that letter respondent stated that he was waiting for the decision of his represen tation made for reconsideration of his transfer from Surat to Ukai and therefore, the question of his remaining on unauthorised leave was misconceived.
Since the respondent had not obtained any sanctioned leave for his absence his absence from duty was unauthorised.
No Government servant or employee of any public undertaking has a right to be absent from duty without sanction of leave, merely on account of pendency of representation against the order of transfer.
Since the respondent continued to be absent from duty the Superintending Engineer by a registered post acknowledgment due letter dated April 24, 1974 informed the respondent that his request to postpone his transfer was rejected and he was directed to join his duty at Ukai and on his failure to do so disciplinary action would be taken against him.
The Establishment Officer (P) of the Board, also informed the respondent by his letter dated May 6, 1974 that his repre sentation against the order of transfer was not accepted and he was directed to obey the order of transfer.
A copy of the letter filed by the petitioner himself as Annexure 'K ' to the writ petition in the High Court.
But even thereafter, the respondent did not join his duties.
Ultimately, the Chief Engineer of the Board took action against the respond ent and discharged him from service with effect from 31.3.1974 by his letter dated May 27, 1974.
The sequence of events and the correspondence which ensued between the officers of the Board and the respondent clearly show that the respondent disobeyed the order of transfer and he re mained absent from duty in an unauthorised manner without obtaining sanction of leave.
The aforesaid documents leave no room for any doubt that the respondent was reminded of his failure to join his duties at Ukai and he was further reminded that his unauthorised absence had exposed him to disciplinary action.
In fact, the Superintending Engineer had by his letter dated 18th April, 1974 clearly reminded the respondent that his unauthorised absence was in breach of Service Regulation No. 113 and called upon to show cause why action should not be taken against him but in spite of these letters the respondent failed to join his duties.
The Division Bench of the High Court has held that since no warning was issued to the respondent action taken under Service Regulation No. 113 was not in accordance with law.
This finding is wholly misconceived.
A warning need not be in any particular form.
The object and purpose of the warn ing as contemplated by the Regulation,.
is to remind the delinquent employee that his continued unauthorised absence from duties was liable to result in discharge of his serv ice.
The substance of the Superintending Engineer 's letter dated 18th April, 1974 which was admittedly served on the respondent, contained 367 warning to the respondent, which fully met the requirement of Regulation No. 113.
Before the High Court a controversy was raised as to whether the registered letter dated 24.4.1974 addressed by the Superintending Engineer to the respondent was received by him or not.
The registered cover, containing the letter dated 24.4.1974 was returned back by the postal authorities with an endorsement that the addressee refused to accept the same.
The respondent 's case was that no such registered letter was tendered to him by the postman nor he ever re fused to accept the same.
The Division Bench held that letter dated 24.4.1974 which contained a warning had not been served on the respondent and since the Board had failed to raise the question before the learned Single Judge it could not do so in the letters patent appeal.
The Division Bench further held that since the letter dated 24.4.1974 was not served on the respondent, there was no material to show that any warning had been issued to the respondent before he was discharged from service.
We do not agree with the view taken by the Division Bench.
Firstly, even if the letter dated 24.4.1974 was not served on the respondent there is no dispute that the Superintending Engineer 's letter dated 18th April, 1974 had been served on him.
By that letter warning as contemplated by Regulation No. 113 had been issued to the respondent.
Therefore even if the letter dated 24.4.1974 was not served on the respondent the order of discharge as contemplated by Regulation No. 113 is sustainable in law.
But even otherwise, the Division Bench committed error in holding that the Board had raised the question of service of the letter dated 24.4.1974 for the first time before the Division Bench in the letters patent appeal.
Perusal of the averments made in paragraphs 17, 18, 23 and 25 (2)(ii) of the counter affidavit filed in reply to the petitioner 's writ petition before the learned Single Judge shows that the Board had categorically pleaded that the respondent was informed by letter dated 24.4.1974 that his representation to postpone his transfer was rejected and he should obey the order of transfer.
It was further pleaded that the respond ent had refused to accept the registered letter and the same had been returned back by the postal authorities with an endorsement that the addressee refused to accept the same.
In his rejoinder affidavit the respondent denied the afore said allegations and asserted that the letter was not ten dered to him and he never refused to accept the registered cover and the postal endorsement was wrong and incorrect.
Apart from denying the postal endorsement, the respondent placed no material before the Court in support of his plead ing.
In this view, we are of the opinion that the Division Bench was totally wrong in holding that 368 no opportunity was afforded to the respondent to meet the case set up by the Board that the letter dated 24.4.1974 was served on the respondent.
No new plea had been raised by the Board before the Division Bench instead the plea relating to service of the aforesaid letter had already been before the learned Single Judge.
There is presumption of service of a letter sent under registered cover, if the same is returned back with a postal endorsement that the addressee refused to accept the same.
No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same.
The burden to rebut the presumption lies on the party, challenging the factum of service.
In the instant case the respondent failed to dis charge this burden as he failed to place material before the Court to show that the endorsement made by the postal au thorities was wrong and incorrect.
Mere denial made by ,the respondent in the circumstances of the case was not suffi cient to rebut the presumption relating to service of the registered cover.
We are, therefore, of the opinion that the letter dated 24.4.1974 was served on the respondent and he refused to accept the same.
Consequently,the service was complete and the view taken by the High Court is incorrect.
In view of the above discussion, we therefore hold that the respondent 's failure to join his duties at Ukai resulted in unauthorised absence and his failure to join his duties in spite of the repeated reminders and letters issued to him constituted sufficient valid ground for taking action under Regulation No. 113.
We further hold that before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disci plinary action should not be taken against him.
The respond ent acted in an irresponsible manner in not complying with the order of transfer which led to his discharge from serv ice in accordance with the Service Regulation No. 113.
The learned Single Judge as well as the Division Bench both erred in law in setting aside the order of discharge.
We, accordingly, allow the appeal, set aside the order of the Single Judge as well as Division Bench and dismiss the respondent 's petition.
There would be no order as to costs.
The respondent has been paid a sum of Rs. 1,04,170 towards salary under the interim orders of this Court.
Now, since the order of 369 discharge is held to be valid the amount paid to the re spondent is liable to be recovered from him, but having regard to the facts and circumstances of the case and the hardship which could be caused to the respondent, we direct the appellant not to recover the amount already paid to the respondent.
S.K.A. Appeal al lowed.
[/INST]The respondent joined service as technical assistant with the Gujarat State Electricity Board and was later promoted to the post of Deputy Engineer.
While he was posted at Surat he was transferred to Ukai Sub division under the order of the Superintending Engineer dated 29th March, 1974 and he was relieved from his duties at Surat on 30th March, 1974.
He made representation to the Addl.
Chief Engineer for cancelling his transfer order which was rejected and he was directed to join at Ukai but he did not do so and continued to be absent without sanction of any leave and instead he filed a civil suit challenging validity of the order of transfer.
The Superintending Engineer by his letter dated 18th April, 1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unauthorised absence from duty in breach of service Regulation No. 113.
The respondent failed to join his duty even after a warning.
Thereafter the Superintending Engineer sent a letter dated 24th April, 1974 by registered cover which contained a warning but the same was returned back by the postal authorities with an endorse ment that the addressee refused to accept the same.
Meanwhile, the Chief Engineer by his order dated 27th May, 358 1974 discharged the respondent from service in accordance with service Regulation No. 113 as he had continued to remain absent from duty since 30th March, 1974.
The respondent filed a writ petition before the High Court challenging the validity of the order of his discharge from service.
A learned Single Judge of the High Court quashed the order of discharge but looking to the attitude of the respondent and continued conduct of disobedience of the orders of his superior he was not granted consequential reliefs.
The respondent as well as the appellant Board preferred Letter Patent Appeals.
A Division Bench of the High Court dismissed the appeal of the appellant Board and allowed the respondent 's appeal upholding the order of discharge as illegal and void and directed the appellants to reinstate the respondent, to treat him in service, and to grant him benefits of incre ments, seniority, and promotion.
The Division Bench, howev er, did not grant full back wages but directed the Board to pay the respondent 50 per cent of back wages.
Against the order of the Division Bench of the High Court the appellants preferred an appeal to this Court by special leave.
The appeal came up for hearing and advocates for both the parties were fully heard.
Being satisfied that the Single Judge as well as Division Bench of the High Court committed error in allowing the writ petition of the re spondent, this Court suggested to the counsel for the re spondent that if he agreed the original writ petition of the respondent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the High Court and of this Court.
The bearing was adjourned to enable counsel to obtain instructions from the respondent.
On the next hearing another counsel appeared on behalf of the respondent to argue on merits.
The Court refused to hear fresh argu ments as the hearing had already been completed.
Thereupon, the respondent appeared in person to make his submissions which the Court refused as oral.
hearing has already been completed.
However, in the interest of justice the respond ent was permitted to file written submissions.
No written submissions were filed, instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in the Bench of this Court with a prayer to transfer the case to some other Bench.
The Court ignored the request of the respondent as it was unusual, uncalled for, and unjustified.
359 Allowing the appeal by special leave, this Court, HELD: No party is entitled to get a case transferred from one Bench to the other, unless the Bench is biased or there are some reasonable grounds for the same.
but no right to get a case transferred to any other Bench, can legiti mately be claimed merely because the Judges express opinion on the merits of the case on the conclusion of hearing.
[362E] Transfer of a Government servant appointed to a particu lar cadre of transferable posts from one place to other is an incident of service.
No Government servant or employee of public undertaking has legal right for being posted at any particular place.
Transfer from one place to other is gener ally a condition of service and the employee has no choice in the matter.
Transfer from one place to other is necessary in public interest and efficiency in the Public Administra tion.
[362H; 363A] Whenever, a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representa tion to the competent authority for stay, modification, or cancellation of the transfer order.
If the order of transfer is not stayed, modified, or cancelled the concerned public servant must carry out the order of transfer.
[363B] If he fails to proceed on transfer in compliance to the transfer order, he would expose himself to disciplinary action under the relevant Rules, as has happened in the instant case.
The respondent lost his service as he refused to comply with the order of his transfer from one place to the other.
[363C] No Government servant or employee of any public under taking has a right to be absent from duty without sanction of leave, merely on account of pendency of representation against the order of transfer.
[366B] There is presumption of service of a letter sent under registered cover, if the same is returned back with a postal endorsement that the addressee refused to accept the same.
No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same.
The burden to rebut the presumption lies on 360 the party, challenging the factum of service.
[368B C] In the instant case, the respondent 's failure to join his duties at Ukai resulted in unauthorised absence and his failure to join his duties in spite of repeated reminders and letters issued to him constituted sufficient valid ground for taking action under Regulation No 113.
Before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disciplinary action should not be taken against him.
The respondent acted in an irresponsible manner in.
not complying with the order of transfer which led to his dis charge from service in accordance with the Service Regula tion No. 113.
The Single Judge as well as the Division Bench both therefore erred.
in law in setting aside the order of discharge.
[368E G]
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<s>[INST] Summarize the judgementAppeal No. 108 of 1957.
Appeal by special leave from the judgment and order dated February 16, 1955, of the Bombay High Court in Income tax Reference No. 35/x of 1954.
A.V. Viswanatha Sastri, B. K. B. Naidu and I. N. Shroff, for the appellants.
C. K. Daphtary, Solicitor General of India K. N. Rajagopal Sastri and D. Gupta, for the respondents.
March 15.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal with the Hid special leave of this Court against the judgment and order dated February 16, 1955, of the High Court of Bombay in an Income tax Reference under section 66(2) of the Indian Income tax Act.
The appellants are two assessees, Charandas Haridas and Chinubhai Haridas, whose cases are identical, and, in fact, there was a consolidated reference by the Income tax Appellate Tribunal, which was answered by the High Court by its judgment.
The respondents are respectively the Commissioner of Income tax, Bombay North, Kutch and Saurashtra and the Commissioner of Income tax, Delhi, Ajmer, Rajasthan and Madhya Bharat.
The two appellants represented two units of Hindu undivided families.
Charandas Haridas represented his wife, three sons and himself, and Chinubhai Haridas represented his wife, son and himself.
In stating the facts relative to the two families, it will not be necessary to give them separately, because the question which was answered by the High Court in the judgment under appeal arose in identical circumstances in the two families.
The only difference is in the shares held respectively by the two Hindu undivided families in the managing 298 agencies to be hereafter mentioned.
We will, therefore, confine ourselves to a statement of the facts relating to Charandas Haridas only.
Charandas Haridas was the Karta of the Hindu undivided family consisting of his wife, three sons and himself.
He was a partner in six managing agency firms in six Mills.
In previous years, the income received by him as partner in these managing agencies was being assessed as the income of the Hindu undivided family.
On December 31, 1945, Charandas Haridas acting for his three minor sons and himself and Shantaben, his wife, entered into an oral agreement for a partial partition.
By that agreement Charandas Haridas gave an one pie share to his daughter, Pratima, in the managing agency commission from two of the six managing agencies held by the family.
The balance together with the shares in the other managing agencies was divided into five equal shares between Charandas Haridas, his wife and sons.
This agreement was to come into effect from January 1, 1946, which was the beginning of a fresh accounting year.
On September 11, 1946, Charandas Haridas acting for himself and his minor sons, and Shantaben executed a memorandum of partial partition in which the above facts were recited, the document purporting to be a record of what had taken place orally earlier.
In the assessment years 1947 48 and 1948 49, Charandas Haridas claimed that the income should no longer be treated as the income of the Hindu undivided family but as the separate income of the divided members.
The Income tax Officer declined to treat the income as any but of the Hindu undivided family, and assessed the income as before.
An appeal to the Appellate Assistant Commissioner was un.successful, and the matter was taken to the Income tax Appellate Tribunal.
The Appellate Tribunal held that by the document in question, the division, if any, was of the income and not of the assets from which the income was derived, inasmuch as " the agreements of the managing agency with the managed Companies did not undergo any change whatever as a result of the alleged partition The Appellate Tribunal, 299 therefore, held that the arrangement to share the receipts from this source of income was not binding on the Department, if the assets themselves continued to remain joint.
It further held that the document was " a farce ", and did not save the family from assessment as Hindu undivided family.
The Tribunal having declined to state a ease under section 66(1) of the Indian Income tax Act, Charandas Haridas moved the Bombay High Court, and obtained an order under section 66(2) of the Act.
The question on which the case was stated was: " Whether there were materials to justify the finding of the Tribunal that the income in the share of the commission agency of the Mills was the income of the Hindu undivided family ? " The High Court stated that though the reference was very elaborately argued, it raised a very simple question of fact and all that it was required to find out was whether there were materials before the Appellate Tribunal upon which the finding of fact could be rested.
The High Court held that though the finding given by the Appellate Tribunal could not be construed as a finding that the document was not genuine, the method adopted by the family to partition the assets was insufficient to bring about the result intended by it.
According to the High Court, the Appellate Tribunal war, right in holding that the document was ineffective, and though the income might have been purported to be divided and might, in fact, have been so divided, the source of income.
still remained united as belonging to the Hindu un divided family.
It accordingly answered the question in the affirmative, holding that there were materials before the Tribunal on which it could reach the conclusion that in so far as these income bearing assets were concerned, they still belonged to the Hindu undivided family.
Leave to appeal to this Court was refused by the High Court, but Charandas Haridas applied to this Court and obtained special leave, and the present appeal was filed.
Mr. Viswanatha Sastri appearing for Charandas Haridas, pointed out that a Hindu undivided family cannot be a partner of a firm Charandasa, Haridas, 300 therefore, though he represented the Hindu undivided family, in his capacity as a partner could not insist that the other members of the family be received as partners, or admitted to the benefits of partnership.
The only mode in which the partition could be made was to divide the income, and this bad the necessary effect, in law, of dividing the assets, if not for the purposes of the Partnership Act, at least for the purposes of assessing income tax.
lie, therefore, contended that the Hindu undivided family which had ceased to exist in so far as these assets were concern ed, could not be assessed as such after January 1, 1946, the date from which the partition was effective.
The learned Solicitor General for the Department contended that the argument itself involved the assumption that the assets were not, in fact, divided, and since income tax was payable at the moment of time when income accrued, this income must be taken to have accrued to the Hindu undivided family and its subsequent partition into five or six shares did not affect the position.
Before we deal with these arguments, it is necessary to quote the operative portion of the document, which is as follows: " Re: Partial partition of the Hindu Undivided Family of Charandas Haridas of Ahmedabad.
We the undersigned Sheth Charandas Haridas by himself and as the guardian of minors Rameshchandra Charandas, Anilkumar Charandas and Gautamkumar Charandas and Shantaben Charandas all residing in Shahibaug, Ahmedabad make this memorandum (Nondh) that, we have a Hindu undivided family and Sheth Charandas Haridas manages our family 's joint property as Karta or Manager and all of us as members of the joint undivided family are entitled to our joint undivided family as Malik.
Our family received a commission of Re. 0 1 11. 5112 from the Vijaya Mills Co., Ltd. and out of this commission Sheth Charandas Haridas as Karta or Manager of the family has given already a commission of one pie to Pratima, the daughter of the family.
So also out of the commission of Re. 0 2 1/2 received by the family from the Gopal 301 Mills Co., Ltd. Sheth Charandas Haridasas Karta and Manager has given already to Pratima one pie commission.
After deducting these Re. 0 1 10. 5/12 and Re. 0 1 11 commission remained.
These commissions and other commission received from various other mills have been partitioned orally by us on Samvat Year 2002 Magsar Vadi 12, dated 31st December, 1945.
By this partition we decided that whatever commission fell due till 31 12 45 and which is received after 31 12 45 should be kept joint and in respect of the commission which accrues from 1 1 46 and received after that date each of us become absolute owner of his one fifth share and therefore from the date,i.e., from 1 1 46 these commissions cease to be the joint property of our family.
But it is our desire that we should keep a memorandum for our memory of the oral partial partition effected on Samvat Year 2002 Magsar Vadi 12, dated 31 12 45 pursuant to which we have partitioned the commissions to be received by our family.
Because of this we keep this note.
" The document no doubt mentions "a commission" in respect of each of the six managing agencies, which commission was divided by the document.
The word "commission", however, has been used in two different senses; sometimes it refers to the amount of the managing agency commission to be received by Charandas Haridas and sometimes to the right to that commission which Charandas Haridas bad as a partner.
The sole question is whether the source was effectively divided for purposes of the Income tax law, so that the assessment could not be made upon a Hindu undivided family.
The law was stated by Mayne, and approved by the Privy Council in Pichappa vs Chokalingam in the following words: " Where a managing member of a joint family enters into a partnership with a stranger the other members of the family do not ipso facto become partners in the business so as to clothe them with all the rights and obligations of a partner as defined by the Indian Contract Act.
In such a, case the (1) A.I.R. 1934 P.C. 192.
39 302 family as a unit does not become a partner, but only such of its members as in fact enter into a contractual relation with the stranger: the partnership will be governed by the Act.
" Further, the Privy Council in Appovier vs Rama Subba Aiyan (1) observed: " Nothing can express more definitely a conversion of the tenancy, and with that conversion a change of the status of the family quad this property.
The produce is no longer to be brought to the common chest, as representing the income of an undivided property, but the proceeds are to be enjoyed in six distinct equal shares by the members of the family, who are thenceforth to become entitled to those definite shares.
" The Bombay High Court quoted this passage, and stated that there must be a division of the right as well as a division of the property; and unless the division effected a separation of the property into shares, it would remain only as a separation of the income after its accrual and would not affect the asset as such.
In this view of the matter, the Bombay High Court held that the asset continued to be joint in spite of the division of the income after its accrual.
In our opinion, here there are three different branches of law to notice.
There is the law of Partnership, which takes no account of a Hindu undivided family.
There is also the Hindu law, which permits a partition of the family and also a partial partition binding upon the family.
There is then the Income tax law, under which a particular income may be treated as the income of the Hindu undivided family or as the income of the separated members enjoying separate shares by partition.
The fact of a partition in the Hindu law may have no effect upon the position of the partner, in so far as the law of Partnership is concerned, but it has full effect upon the family in so far as the Hindu law is concerned.
Just as the fact of a Karta becoming a partner does not introduce the members of the undivided family into the partnership, the division of the family does not change the position of the partner Vis a vis the other partner or partners.
The Income (1) (1866) 11 M.I.A. 75.
303 tax law before the partition takes note, factually, of the position of the Karta, and assesses not him qua partner but as representing the Hindu undivided family.
In doing so, the Income tax law looks not to the provisions of the Partnership Act, but to the provisions of Hindu law.
When once the family has disrupted, the position under the partnership continues as before, but the position under the Hindu law changes.
There is then no Hindu undivided family as a unit of assessment in point of fact, and the income which accrues, cannot be said to be of a Hindu undivided family.
There is nothing in the Indian Income tax law or the law of Partnership which prevents the members of a Hindu joint family from dividing any asset.
Such division must, of course, be effective so as to bind the members; but Hindu law does not further require that the property must in every case be partitioned by metes and bounds, if separate enjoy ment can otherwise be secured according to the shares of the members.
For an asset of this kind, there was no other mode of partition open to the parties if they wished to retain the property and yet hold it not jointly but in severally, and the law does not contemplate that a person should do the impossible.
Indeed, the result would have been the same, even if the dividing members had said in so many words that they had partitioned the assets, because in so far as the firms were concerned, the step would have been wholly inconsequential.
The respondent suggested that the family could have partitioned the managing agencies 'among the members of the family by balloting them severally; but that would not have been possible without a dissolution of the managing agency firms and their reconstitution, which was not altogether in the hands of Charandas Haridas.
It was also suggested that the managing agencies could have been allotted to Charandas Haridas while the others took some other property, or a receiver could have been appointed.
No doubt, there were many modes of partition which might have been adopted; but the question remains that if the family desired to partition these assets only and no more, could they have acted in some other manner 304 to achieve the same result? No answer to this question was attempted.
It is, therefore, manifest that the family took the fullest measure possible for dividing the joint interest into separate interests.
There is no suggestion here that this division was a mere pretence; nor has the Appellate Tribunal given such a finding.
The document was fully effective between the members of the family, and there was factually no Hindu undivided family in respect of these particular assets.
The assets at all times stood in the name of Charandas Haridas, and looked at from the point of view of the law of Partnership, the family had no standing.
The assets still are in the name of Charandas Haridas, and looked again from the same viewpoint, the division has no different signification.
What has altered is the status of the family.
While it was joint, the Department could treat the income as that of the family; but after partition, the Department could not say that it was still the income of the Hindu undivided family, when there was none.
In the face of the finding that this was a genuine document and not a sham, and that it effectually divided the income and in the circumstances, the assets, the question answers itself in the negative, that is to say, that there were no materials to justify the finding that the income in the share of the commission agency of the Mills was the income of the Hindu undivided family.
The appeal will be allowed.
The respondents will pay the costs of the two assessees here and below.
There will be only one set of costs here.
Appeal allowed.
[/INST]The respondent workman was dismissed by his employer, the appellant, pending adjudication of an:industrial dispute, and without the permission of the Industrial Tribunal, relating to the discharge of 7 other employees working as apprentices under the appellant.
The respondent raised a dispute before the Industrial Tribunal under section 33A of the , and his case was that he was concerned in the dispute relating to the said 7 employees and gave evidence on their behalf and that his dismissal was solely due to the interest he took in their cause.
The Tribunal found in his favour and passed an award directing his reinstatement.
The appellant contended that the respondent was incompetent to raise the dispute under section 33A of the Act.
The question for decision, therefore, was one relating to the construction of section 33(1)(a) of the Act: 351 Held, that the expression " workmen concerned in such dis pute " occurring in section 33(1)(a) of the , as amended by Act 36 of 1956, includes not merely such workmen as are directly or immediately concerned with the dispute, but also those on whose behalf the dispute is raised as well as those who, when the award is made, will be bound by it.
Eastern Plywood Mfg. Co. Ltd. vs Eastern Plywood Mfg. Workers ' Union, and Newtone Studios Ltd. vs Ethirajula (T.R.), , approved.
The New jehangir Vakil Mills Ltd., Bhavnagar vs N. L. Vyas & Others, A.I.R. 1959 BOM.
248, disapproved.
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<s>[INST] Summarize the judgementtition (Criminal) No. 30 of 1987.
(Under Article 32 of the Constitution of India).
Harjinder Singh for the petitioner.
R.S. Sodhi for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
This is a petition under Article 32 of the Constitution of India for a writ of habeas corpus or any other appropriate writ or order quashing the order dated 3rd January, 1985 passed by the Special Secretary to the Government of Punjab for detention of the petitioner and praying for the release of the petitioner.
By our order dated 8th May, 1987, we had held that the writ petition succeeds for the reasons which we would give later.
We had also set aside the order of detention and directed the petitioner to be released.
We are now giving the reasons for the said order.
459 The facts necessary for disposal of the writ petition lie within a fairly narrow compass.
The petitioner was detained on 21st November, 1985 pursuant to an order of detention dated 3rd January, 1985 passed under Sub Sections 1 & 2 of section 3 of the National Security Act, 1985 signed by the Special Secretary to the Government of Punjab setting out that the President of India in exercise of the powers conferred by Sub Sections ( 1) & (2) of Section 3 of the National Security Act, 1985 was pleased to order that the petitioner should be detained.
The ground given in that order is that the petitioner is indulging in activities prejudicial to the defence of India and the security of the State.
On 17th April, 1985, the petitioner, when he was in jail, was served with an order passed under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Act (referred to hereinafter as COFEPOSA), dated 17th April, 1985, directing his detention.
The petitioner made a representation against his order of detention under COFEPOSA.
He was produced before the Advisory Board under that Act and pursuant to the recommendation of the Advisory Board, his detention Under COFEPOSA was revoked.
The petitioner was also produced before the same Board, being also the Advisory Board under the National Security Act.
The petitioner did not make any representation against his detention under that Act as, according to him, he was confused and believed that his detention was only under COFEPOSA.
It appears that the Advisory Board confirmed the order of his detention.
On 24th January, 1986, an order was passed by the Under Secretary to the Government of Punjab, Home Department setting out that the President of India in exercise of powers conferred on him under Sub Section ( 1) of Section 12 read with Section 14 A( 1) (2) (c) & (d) of the (No. 65 of 1980) as amended confirmed the aforesaid order of detention and was pleased to order that the petitioner would continue to be detained in the custody of the Inspector General of Prisons, Punjab for a period of two years from the date of his detention.
The petitioner made a representation dated 18th December, 1986 through his Advocate addressed to the President of India for revocation of his detention.
On 24th December, 1986 the petitioner made a representation to the Special Secretary to the Government of Punjab, Department of Home Affairs and Justice, against his detention.
In this representation the petitioner, inter alia, contended that his detention was invalid as vital facts and materials that should have influenced the minds of the declaring authority and the detaining authority had not been placed before them.
Both the representations made by the petitioner were rejected on 26th February, 1987.
According to the respondent, the representation made to the Special Secretary, Government of Punjab was 460 received on 14th January, 1987.
But, according to the petitioner, it was received by the Special Secretary on 30th December, 1986.
In support of this contention the detenu has produced an acknowledgement slip along with a copy of his representation.
We propose to proceed on the assumption that the representation was received by the Special Secretary on 14th January, 1987 because, even on that assumption, the petitioner, in our opinion, must succeed in the petition.
In the petition the petitioner has challenged the order of detention passed against him under the on various grounds including the ground that Section 14 A of the is void as violating the Constitution of India.
We propose to dispose of the petition only on one ground, namely, that there was inordinate delay in consideration of the representation made by the petitioner to the Government of Punjab through Special Secretary; and hence we do not propose to discuss the other grounds urged by the petitioner.
We may mention here that as far as representation made by the petitioner to the Central Government by his Advocate 's letter addressed to the President of India is concerned, we do not propose to enter into any controversy regarding that representation as the Union of India has not been joined as a party to the petition.
The contention of the petitioner, on the basis of which we propose to dispose of this petition, is that he made a representation to the Government of Punjab on 18th December, 1986.
That representation, as per admission of the Government of Punjab, was received on 14th January, 1987 and there was undue delay in disposing of that representation which was rejected on 26th February, 1987, as aforesaid.
According to the petitioner there is no justification for this delay and on account of this delay the rights of the petitioner under Article 22(5) of the Constitution of India have been violated and the continued detention of the petitioner is not valid in law.
Coming to the affidavit filed by Shri V.V. Chadha, Under Secretary to the Government of Punjab, in this connection, we may point out that, apart from saying that the representation made by the petitioner as aforesaid, was received on 14th January, 1987, no explanation whatever is given as to why it took over a monty and ten days to consider and dispose of that representation.
It has been repeatedly laid down that in a matter of detention, the representation made by the detenu should be disposed of with utmost expedition and failure to do so vitiates the order of detention, because it infringes the fundamental right given to every citizen under Article 22(5) of the Constitution of India.
In support of his arguments, learned counsel for the petitioner 461 drew our attention to the decision of this Court in Saleh Mohammed vs Union of India, where a delay of 22 days in considering the representation of the detenu was held to be inordinate and unreasonable.
It was held that this delay violated the rights of the petitioner under Article 22(5) of the Constitution of India and vitiated the detention order.
In that case the detention order was under COFEPOSA and the detenu was arrested on 21st January , 1980.
On 20th February, 1980 the detenu made a representation to the detaining authority through Superintendent of Jail.
On 25th February, 1980 he was produced before the Advisory Board.
On 10th March, 1980 his detention was confirmed by the State Government and on 26th March, 1980 his representation was rejected by the State Government.
In the affidavit filed by the respondent in that case it was contended that the representation of the detenu made on 20th February, 1980 was received in the Home Department on 14th March, 1980.
It has been pointed out by this Court in that case that: "Times out of number, this Court has emphasised that where the liberty of an individual is curtailed under a law of preventive detention, the representation, if any, made by him must be attended to, dealt with and considered with watchful care and reasonable promptitude lest the safeguards provided in Article 22(5) of the Constitution and the statute concerned should be stultified and rendered meaningless.
" It was held that the functionaries of the state were guilty of gross negligence in dealing with and disposing of the representation of the detenu.
The delay of about 22 days during which time the representation of the detenu remained unattended in the office of the Suprintendent of Jail or Inspector General of Prisons was to be held as inordinate.
In Harish Pahwa vs State of U.P. & ors.
, [19811 3 S.C.R. 276 it has been pointed out by this Court that it does not look with equanimity upon delays in considering the representations of detenus.
Where the liberty of a person is involved, it is the duty of the State to determine his representations with the utmost expedition and deal with it continuously until a final decision is taken and communicated to the detenu.
In that case the representation of the detenu was received by the State Government on 4th June, 1980.
The detention was under COFEPOSA.
Comments were called for from the Customs authorities on 6th June, 1980 and the comments were received on 13th June, 1980.
462 On 17th June.
1980, the State Government referred the representation A to its Law Department for is opinion which was furnished on 19th June, 1980.
The representation was rejected on 24th June, 1980.
The rejection was communicated to the jail authorities two days later.
The writ petition filed by the petitioner was dismissed by the High Court.
The aforesaid principles were reiterated by this Court on an appeal preferred by the detenu against the decision of the High Court.
It was held in that case that there was no explanation given by the Government as to why no action was taken on the representation of the detenu on 4th, 5th and 25th June, 1980 and what consideration was given by the Government to it from 13th June, 1980 to 16th June,1980.
On that ground it was held that there was inordinate delay in considering the representation of the detenu and the detention became bad in law.
In the light of these decisions in the present case it must be held that the delay in dealing with the representation of the petitioner, which was admittedly received by the Government on 14th January, 1987 and rejected as late as on 26th February, 1987, must be considered as inordinate delay in dealing with the representation.
No explanation is given in the counter affidavit as to why the representation could not have been dealt with and disposed of earlier, and hence it must be held that the order of detention of the petitioner is vitiated by reason of delay in dealing with his representation.
It was contended by the learned counsel for the respondent that the representation made by the detenu to the Special Secretary, Government of Punjab was invalid as the Advocate who sent the representation had no authority to make that representation.
It was submitted by him in the alternative that the delay in dealing with the representation was on account of the fact that it was made by a person claimed to be the Advocate of petitioner but whose authority was not checked.
In our view neither of these contentions can be upheld.
These contentions have not been taken up in the counter affidavit and cannot be urged merely at the hearing of the petition.
There is nothing in law which prevents a representation being made by an Advocate on behalf of the detenu.
If there was any difficulty on that ground, enquiries should have been made with the Advocate as to what was his authority to represent the detenu, and no such enquiry has been made in the present case.
Thus, in the present case, the fact that the representation was made by the Advocate does not explain the delay in dealing with that representation and cannot constitute any explanation for the delay in dealing with it.
463 lt was next sought to be contended by learned counsel for the respondent that the delay in dealing with the representation had caused no prejudice to the petitioner, because it admitted that he preferred a writ petition against his detention to the Punjab & Haryana High Court and that writ petition was dismissed by the High Court.
In our view this submission also cannot sustain order of detention.
It is true that the writ petition preferred by the petitioner to the Punjab and Haryana High Court was dismissed, but we are informed that a Special Leave Petition filed against that decision is pending in this Court.
Moreover at the time when the writ petition was dismissed, the petitioner had not made any representation to the State Government at all and hence the dismissal of his writ petition by the High Court cannot be regarded as any substitute for consideration of his representation by the State Government which, unlike the Court, might be entitled to go into the factual merits of the grounds forming the basis of detention order.
In support of his contention, learned counsel for the respondent sought to rely on the decision of this Court in Smt.
Asha Keshavrao Bhosale vs Union of India & Anr., ; in which case it was held that the delay of about two months in disposal of the representation made by the petitioner on behalf of the detenu to the Chief Minister against his order of detention did not vitiate the order of detention.
That case, however, is of no assistance to the respondent because it turns on its own facts.
A detailed representation was made in that case by the Secretary, Khed Taluka Maratha Seva Sangh which espoused the cause of the detenu and challenged the detention.
That representation was received on 29th November, 1984 in the Secretariat of the Chief Minister.
It was forwarded to the Home Department on 3rd December, 1984 and disposed of expeditiously, namely, on 12th December, 1984.
The rejection of that representation was communicated on 13th December, 1984.
The High Court, which dismissed the petition of the detenu had considered the contents of both the representations and held that the representation made by the petitioner was the second one and based yon the same grounds and delay in disposing of that representation did not prejudice the case of the detention.
That conclusion was confirmed by the Supreme Court.
The facts in this case are nowhere comparable to the facts of that case, and hence the principles laid down in that case have no application to the case before us.
It was for the aforesaid reasons that the order setting aside the order of detention was passed by us as stated earlier.
N.P.V. Petition allowed.
[/INST]The petitioner was detained by the Punjab Government pursuant to an order of detention passed under sub sections (1) and (2) of section 3 of the .
When in jail, he was served with an order passed under section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Act (COFEPOSA) directing his detention.
The petitioner made a representation against his order of detention under COFEPOSA.
He was produced before the Advisory Board.
Pursuant to Board 's recommendation, his detention was revoked.
He was also produced before the same Board, being also the Advisory Board under the .
He did not make any representation against his detention under the , believing that his detention was only under COFEPOSA.
The Board confirmed the detention order.
On January 24, 1986 an order passed under subsection (1) of section 12 read with section 14 A(1)(2)(c) and (d) of the , as amended, confirmed the aforesaid order of detention and the petitioner was directed to be continued to be detained for a period of 2 years from the date of his detention.
The petitioner made a representation dated December 18, 1986, through his Advocate, addressed to the President of India for the revocation of his detention.
On December 24, 1986, the petitioner made a representation to the Government of Punjab against his detention, con tending that his detention was invalid as vital facts and materials that should have influenced the minds of the declaring authority and the detaining authority had not been placed before them.
Both these 457 representations were rejected on 26.2.1987.
The petitioner challenged the order of detention on various grounds including the one that there was inordinate delay in dealing with his representation to the Punjab government.
It was contended that there was no justification for the undue delay in disposing of his representation, which had resulted in violation of his rights under Article 22(5) of the Constitution and that his continued detention was not valid in law.
It was contended on behalf of the respondent State that the representation was received on January 14, 1987, and it was invalid as the Advocate who sent it had no authority to make it and that the delay in dealing with it was on account of the fact that it was made by a person claiming to be an Advocate of the petitioner whose authority was not checked, and that the delay had caused no prejudice to the petitioner because he preferred a writ petition against his detention to the High Court which was dismissed.
This Court allowed the writ petition, set aside the order of detention, and directed release of the petitioner.
Giving reasons for its decision, this Court, ^ HELD: 1.1 Where the liberty of a person is involved, it is the duty of the State to determine his representation with utmost expedition and deal with it continuously until a final decision is taken and communicated to detenu.
Failure to do so vitiates the order of detention, because it infringes the fundamental right given to every citizen under Article 22(5) of the Constitution of India.
[461F G, 460H] In the instant case the delay in dealing with representation of the petitioner, which was admittedly received by the Government on January 14, 1987 and rejected as late as on February 26, 1987, must be considered as inordinate delay in dealing with the representation.
No explanation is given in the counter affidavit as to why the representation could not have been dealt with and disposed of earlier.
Hence, the order of detention is vitiated by reason of delay in dealing with his representation.
[462C E] Saleh Mohammad vs Union of India, and Harish Pahwa vs State of U.P. & Ors., ; , relied on.
458 1.2 There is nothing in law which prevents a representation being made by an Advocate on behalf of the detenu.
If there was any difficulty on that account, enquiry should have been made with the Advocate as to what was his authority to represent the detenu.
No such enquiry has been made in the present case.
Thus, the fact that the representation was made by the Advocate does not explain, and cannot constitute any explanation for the delay in dealing with that representation.
[462G H] 1.3 No doubt the writ petition preferred by the petitioner was dismissed but Special Leave Petition against that decision is pending in this Court.
Further, at that time, the petitioner had not made representation to the State Government at all.
Hence the dismissal of the writ petition by the High Court cannot be regarded as any substitute for consideration of his representation by the State Government which, unlike the Court, might be entitled to go into the factual merits of the grounds forming the basis of detention order.
[463B C] Smt.
Asha Keshavrao Bhosale vs Union of India & Anr., ; , distinguished.
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<s>[INST] Summarize the judgementAppeals Nos.
946 of 1963.
Appeals from the judgment dated February 22, 1961 of the Madras High Court in Case Referred No. 121 of 1956.
K. N. Rajagopal Sastri, R. H. Dhebar and R. N. Sachthey, for the appellant (in all the appeals).
A. V. Viswanatha Sastri, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Shah J.
The Andhra Chamber of Commerce hereinafter called the assessee 's a Company incorporated under the Indian Companies Act 7 of 1913.
The assessee was permitted under section 26 of the Act to omit the word "Limited" from its name by order of the Government of Madras.
The following are the principal objects of the Memorandum of Association of the assessee : (a) To promote and protect trade, commerce and industries of India, in the Province of Madras and in particular in the Andhra country.
(b) To aid, stimulate and promote the development of trade, commerce and industries in India, or 567 any part thereof with capital principally provided by Indians or under the management of Indians.
(c) To watch over and protect the general commercial interests of India or any part thereof and the interests of the Andhras in particular engaged in trade, commerce or manufacture in India and in particular the Andhra Desa.
(y) To do all such other things as may be conducive to the preservation and extension of trade, commerce, industries and manufactures or incidental to the attainment of the above objects or any of them.
Clauses (d) to (x) are incidental to the principal objects.
By cl. 4 of the Memorandum of Association it was provided that the income and property of the assessee shall be applied solely towards the promotion of its objects as set forth therein and no portion thereof shall be paid or transferred, directly or indirectly, by way of dividends, bonuses or otherwise howsoever by way of profit to its members.
On December 2, 1944 the assessee purchased a building and made substantial alterations, additions and improvements therein.
The assessee then moved its offices into that building on May 14, 1947 and let out to tenants the portion not required for its use.
The income of the assessee is obtained from subscriptions and donations collected from its members and rent received from the building.
The following table sets out in columns 3 & 4 the net annual value of the property less the statutory deductions permissible under section 9 of the Income tax Act, 1922 and the net excess of expenditure over the income of the assessee (other than the rental income) incurred in connection with all its activities for the assessment years relating to which dispute arises in this group of appeals Previous year Assessment Amount Net excess (calendar year) year Rs. Rs. (1) (2) (3) (4) 1947 1948 49 3,400 7,431 1948 1949 50 6,154 7,139 1949 1950 51 6,928 5,266 1950 1951 52 5,740 10,173 1952 1953 54 8,072 13,672 1953 1954 55 8,072 17,397 In proceedings for assessment before the Second Additional Income tax Officer, City Circle 1, Madras, it was contended that Sup./65 11 568 the annual value of the building was not assessable in its hands as the assessee was a charitable institution within the meaning of section 4(3) (i) of the Income tax Act, 1922.
In the alternative, it was contended that the excess of expenditure over income should be set off against such income if the annual value is held assess,able.
The Income tax Officer rejected the contentions of the assessee and assessed its income from property on the basis of net annual value in the six assessment years without debiting the expenditure in excess of income (other than rent) against the net annual value.
The assessee appealed to the Appellate Assistant Commis sioner against all the orders of assessments.
The Appellate Assistant Commissioner held that the assessee not being a charitable institution the income in question was not exempt under section 4(3) (i).
He also rejected the alternative contention, for in his view, there was no specific profit making activity of the assessee the loss from which could be set off against its other income.
Appeals were then taken to the Income tax Appellate Tribu nal.
The Tribunal held that the assessee was not exempt within the meaning of section 4(3) (i) from liability to pay income tax, because the activities of the assessee were intended for the benefit primarily of its members and "embraced only collective action on behalf of all its constituent members" which "could not be said to be the result of any trade or business or vocation carried on by it".
At the instance of the assessee the Tribunal referred the following questions to the High Court : "(1) Whether the aforesaid income from property owned by the assessee is exempt under section 4 (3) (i) for the aforesaid six years of assessment ? (2) If the answer to the above question is in the negative, whether the activities of the assessee amount to a trade or business, the profit or loss from which is assessable under section 10 ?" The High Court answered the first question in the affirmative and did not record a formal answer on the second question.
Against the order of the High Court, these appeals are preferred by the Commissioner of Income tax, with certificate granted by the High Court under section 66A (2) of the Indian Income tax Act.
We are concerned in this group of appeals with the assess ment of income of the assessee in the years 1948 49 to 1954 55 569 with the omission of the assessment year 1952 53.
Between the years 1948 49 to 1952 53 there has been some change in section 4(3) (i) which before it was amended by Act 25 of 1953 with effect from April 1, 1952 read as follows : "Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them : (i) Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such purposes, the income applied, or finally set apart for application thereto." By the last paragraph of sub section (3) "charitable purpose" was defined as including relief of the poor, education, medical relief, and the advancement of any other object of general public utility, but nothing contained in cl.
(i) or cl.
(i) or cl.(i.a)or cl.
(ii) shall operate to exempt from the provisions of the Act that part of the income of a private religious trust which does not enure for the benefit of the public.
By the amendment made by section 3 of the Indian Income tax (Amendment) Act 25 of 1953, cls.
(i) and (i a) as they originally stood were amalgamated.
It is common ground that by the amendment, no alteration which has a material bearing on the question to be decided in these appeals has been made.
Income from property qualifies for exemption under section 4(3) (i) if two conditions co exist (i) the property is held under trust or other legal obligation; and (ii) it is so held wholly or in part for religious or charitable purposes .
The building which the assessee owns is by virtue of cl. 4 of the Memorandum of Association held under a legal obligation to apply its income to purposes specified in the Memorandum of Association.
It is not the case of the assessee that the objects of incorporation are relief of the poor, education or medical relief, and the only question canvassed at the Bar is whether the purposes for which the assessee stands incorporated are objects of general public utility, within the meaning of the expression "charitable purpose" in section 4(3).
The principal objects of the assessee are to promote and protect trade, commerce and industries and to aid, stimulate and promote the development of trade, commerce and industries in India or any part thereof.
By the achievement of these objects, it is not intended to serve merely the interests of the members of 570 the assessee.
Advancement or promotion of trade, commerce and industry leading to economic prosperity enures for the benefit of the entire community.
That prosperity would be shared also by those who engage in trade, commerce and industry but on that account the purpose is not rendered any the less an object of general public utility.
It may be remembered that promotion and protection of trade, commerce and industry cannot be equated with promotion and protection of activities and interests merely of persons engaged in trade, commerce and industry.
In Commissioners of Inland Revenue vs Yorkshire Agricultural Society(1) an association called the Yorkshire Agricultural Society was formed with the object of holding annual meetings for the exhibition of farming stock, implements etc.
, and for the general promotion of agriculture.
All prizes were open to competition in the United Kingdom, but certain privileges were attached to membership of the Society.
The income of the Society was derived from entry fees and gate receipts, local subscriptions for prizes, interest on investments, and subscriptions of members.
It was held by the Court of Appeal that on the facts found by the Commissioners the Society was established for a charitable purpose and that purpose continued notwithstanding the incidental benefits enjoyed by members of the Society; and that those benefits did not prevent the.
Society from being established for a "charitable purpose only".
In Halsbury 's Laws of England, 3rd Edn., Vol. 4 at p. 236, Art 517, it is stated "An association or institution may benefit its members in the course of carrying out its main charitable purpose and this alone will not prevent it from being a charity.
It is a question of fact whether there is so much personal benefit, intellectual or professional, to the members of a society or body of persons as to be incapable of being disregarded." In The Institution of Civil Engineers vs The Commissioners of Inland Revenue (2) it was held that the Institution of Civil Engineers founded and incorporated by Royal Charter for the general advancement of mechanical science, and more particularly for promoting the acquisition of that species of knowledge which constitutes the profession of a civil engineer was a body of persons established for charitable purposes only.
The Special Commissioners having regard in particular to the provisions of the supplemental charter of 1922, by which the corporate members (1) (2) 571 of the Institution were authorised to use the title of member, or associate member, as the case might be, found that a substantial part of the objects of the Institution was to benefit the member & and rejected the claim of the Institution for exemption.
The Court of King 's Bench disagreeing with the Special Commisssioners held that the benefit of members was purely incidental to the main purpose of the Institution which was established for charitable purposes only.
The Court of Appeal found that the only purpose for which the Institution was established was the promotion of science and that purpose had never been added to or varied by any of the supplemental charters : it followed therefore that the Institution was established for charitable purposes only, notwithstanding that it is of advantage to a civil engineer in his profession to be a member of the Institution, this result not being a purpose for which the Institution was established, but being incidental to and consequent upon the way in which the Institution carries out the charitable purpose for which alone it was established.
In the promotion of trade, commerce and industries of India the public is vitally interested and if by the activities of the assessee that object is achieved, it would be within the meaning of section 4(3) (1) of the Act an advancement of an object of general public utility.
In enacting the last paragraph of section 4(3) the legislature has used language of great amplitude.
"Charitable purpose" includes not only relief of the poor, education and medical relief alone, but advancement of other objects of general public utility as well.
The clause is intended to serve as a special definition of the expression "charitable purpose" for the Act : it is again inclusive and not exhaustive or exclusive.
Even if the object or purpose may not be regarded as charitable in its popular signification as not tending to give relief to the poor or .for advancement of education or medical relief, it would still be included in the expression "charitable purpose" if it advances an object of general public utility.
The expression "object of general public utility" however is not restricted to objects beneficial to the whole mankind.
An object beneficial to a section of the public is an object of general public utility.
To serve a charitable purpose, it is not necessary that the object should be to benefit the whole of mankind or even all persons living in a particular country or Province.
It is sufficient if the intention be to benefit a section of the public as distinguished from specified individuals.
Observations to the contrary made by Beaumont C.J., in Commissioner of Income tax Bombay Presi 572 dency, Sind and Baluchistan vs The Grain Merchants ' Association of Bombay(1) that "an object of general public utility means an object of public utility which is available to the general public as distinct from any section of the public" and that objects of an association "to benefit works of public utility confined to a section of the public, i.e. those interested in commerce" are not objects of general public utility, do not correctly interpret the expression "objects of general public utility".
The section of the community sought to be benefited must undoubtedly be suffi ciently defined and identifiable by some common quality of a public or impersonal nature: where there is no common quality uniting the potential, beneficiaries into a class, it may not be regarded as valid.
It is true that in this case there is in fact no trust in respect of the income derived from the building owned by the assessee.
But the property and the income therefrom is held under a legal obligation, for by the terms of the permission granted by the Government to the assessee to exclude from its name the use of the word "limited", and by the express term,% of cl. 4 of the Memorandum of Association the property and its income are not liable to be utilised only for the purposes set out in the Memorandum of Association.
Counsel for the revenue submitted that the purposes of the assessee are vague and indefinite.
He submitted that if a competent Court were called upon, as it may be called upon to administer the obligation imposed by the Memorandum of Association, the Court would on account of vagueness of the objects decline to do so, and therefore the purposes cannot be regarded as charitable.
In the alternative, counsel contended that the benefit which is contemplated by the Memorandum of Association was not the benefit to the public generally, but the benefit to its members to carry on their business more profitably.
In the further alternative, relying upon cl. 3(g) of the Memorandum of Association, counsel contended that the objects of the assessee were political, it being open to the assessee to appropriate the entire income for political purposes.
But the primary objects of the assessee are to promote and protect trade, commerce and industries and to aid, stimulate and promote the development of trade, commerce and industries and to watch over and protect the general commercial interests of India or any part thereof.
These objects are not vague or inde (1) 573 finite as objects of general public utility.
An object of general public utility, such as promotion, protection, aiding and stimulation of trade, commerce and industries need not, to be valid specify the modus or the steps by which the objects may be achieved or secured.
It cannot be said that if called upon to administer an institution of which the objects are of the nature set out, the Court would decline to do so merely on the ground that the method by which trade, commerce or industry is to be promoted or protected, aided or stimulated or the general commercial interests of India are to be watched over or protected are not specified.
Analogy of cases like Runchordas Vandra wandas vs Parvati Bhai(1) in which the Privy Council declared a devise under a will in favour of "dharam" void, is misleading.
In that case the devise was declared void, because the expression "dharam" in the view of the Judicial Committee being law, virtue, legal or moral duty was too general and too indefinite for the courts to enforce.
Observations by Lord Simonds in Commissioners of Inland Revenue vs National Anti Vivisection Society(2) that "One of the tests, and a crucial test, whether a trust is charitable lies in the competence of the Court to control and reform it. . . that it is the King as parens patriae who is the guardian of charity, and that it is the right and duty of his Attorney General to intervenue and to inform "the Court if the trustees of a charitable trust fall short of their duty.
So too it is his duty to assist the Court, if need be, in the formulation of a scheme for the execution of a charitable trust.
But. . is it for a moment to be supposed that it is the function of the Attorney General on behalf of the Crown to intervene and demand that a trust shall be established and administered by the Court, the object of which is to alter the law in a manner highly prejudicial, as he and His Majesty 's Government may think, to the welfare of the State ?" do not assist the case of the revenue.
In the view of Lord Simonds the object of the trust was political and, therefore, void, and not because it was vague or indefinite.
In Baddeley and others (Trustees of the Newtown Trust) vs Commissioners of Inland Revenue(") certain properties were conveyed to trustees by two conveyances, in one case on trust, inter alia, for the promotion of the religious, social and physical well being of persons resident in the County Boroughs of West Ham and Leyton by the provision of facilities for religious (1) L.R. 26 I.A. 71.
(2) , 367.
(3) 574 services and instruction and for the social and physical training and recreation of such aforementioned persons who were members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided and by promoting and encouraging all forms of such activities, as were calculated to contribute to the health and well being of such persons, and in the other case on similar trusts omitting reference to religious services and instruction and otherwise substituting "moral" for "religious".
These trusts were, it was held, not for charitable purposes only.
The case arose under the Stamp Act of 1891, and it was contended that the trusts being charitable stamp duty at a lower rate was chargeable.
The House of Lords held that the trust was not charitable.
It was observed by Lord Simonds that "the moral, social, and physical well being of the community or any part of it is a laudable object of benevolence and philanthropy, but its ambit is far too wide to include purposes which the law regards as charitable".
These cases have, in our judgment, no bearing on the inter pretation of the language used in the Memorandum of Associa tion of the assessee.
The argument that it is only for the benefit of the members or the trading classes in Andhra Desa that the funds of the assessee could be utilised does not stand scrutiny.
It is clear from the diverse clauses in paragraph 3 of the Memorandum of Association that the objects were not merely to benefit the members of the assessee or even the trading community of Andhra Desa.
Reliance was placed upon the membership clause in the Articles of Association and it was submitted that only persons speaking Telugu language and residing in Andhra Desa [as defined in cl. 1 (s) of the Articles of Association] could be members.
But that argument is wholly unfounded.
By sub cl.
(iii) of cl. 5 a Chamber of Commerce or Trade Association protecting and promoting Indian trade, commerce and industry is eligible for election as a member of the Chamber and the representative of such a Chamber of Commerce or Trade Asso ciation need not necessarily be able to speak and write Telugu.
Similarly by sub cl.
(iv) a Company or Corporation having its principal office or registered office in Andhra Desa or a branch in Andhra Desa is eligible to become a member in its conventional or corporate name and the representative of such a Company or Corporation need not necessarily be able to speak or write Telugu.
Again under sub cl.
(v) a Partner of a Firm of a "Private Partnership Concern" or a Joint Family Business 575 concern, or a Sole Proprietory concern having its principal office or registered office in Andhra Desa or a branch in Andhra Desa is eligible for membership of the Chamber and the representative of such a member need not necessarily be able to speak or write Telugu.
Finally, by sub cl.
(vi) an individual residing anywhere in India and connected in any manner with trade, industry and commerce is eligible for membership of the Chamber provided his mother tongue is Telugu or he can both speak and write Telugu.
There is no geographical limitation upon the membership qualification, nor is there limitation about the capacity to speak or write Telugu.
We should not be taken as holding that if there were such restrictions, the character of the assessee as an institution for promotion of charitable objects would thereby be necessarily effected.
Clause 3(g) of the Memorandum of Association on which strong reliance was placed reads as follows : "To urge or oppose legislative and other measures affecting trade, commerce or manufactures and to procure change of law and practice affecting trade, commerce and manufactures and in particular those affecting trade, commerce and industries in which Andhras are concerned and obtain by all acknowledged means the removal, as far as possible, of all grievances affecting merchants as a body and mercantile interests in general.
" But cl. 3(g) is not the primary object of the assessee : it is merely incidental to the primary objects of promotion or protection of trade, commerce and industries, or to aid, stimulate and promote the development of trade, commerce and industries or to watch over and protect the general commercial interests.
The expression "object of general public utility" in section 4(3) would prima facie include all objects which promote the welfare of the general public.
It cannot be said that merely a purpose would cease to be charitable even if public welfare is intended to be served thereby if it includes the taking of steps to urge or oppose legislation affecting trade, commerce or manufacture.
If the primary purpose be advancement of objects of general public utility, it would remain charitable even if an incidental entry into the political domain for achieving that purpose e.g. promotion of or opposition to legislation concerning that purpose, is contemplated.
In In re The Trustees of the Tribune(1) the (1) 576 Judicial Committee of the Privy Council was called upon to consider whether a trust created under a will to maintain a printing press and newspaper in an efficient condition, and to keep up the liberal policy of the newspaper, devoting the surplus income of the press and newspaper after defraying all current expenses in improving the newspaper and placing it on a footing of permanency and further providing that in case the paper ceased to function or for any other reason the surplus of the income could not be applied to the object mentioned above, the same should be applied for the maintenance of a college which had been established out of the funds of another trust created by the same testator, was a charitable purpose within the meaning of section 4(3).
The Judicial Committee expressed the view that the object of the settler was to supply the province with an organ of educated public opinion and this was prima facie an object of general public utility, and observed "These English decisions are in point in so far only as they illustrate the manner in which political objects, in the wide sense which includes projects for legislation in the interests of particular causes, affect the question whether the Court can regard a trust as being one of general public utility.
In the original letter of reference it was not suggested by the Commissioner that the newspaper was intended by its founder to be a mere vehicle of political propaganda, and in the case of Sardar Dyal Singh it seems unrea sonable to doubt that his object was to benefit the people of Upper India by providing them with an English newspaper the dissemination of news and the ventilation of opinion upon all matters of public interest.
While not perhaps impossible it is difficult for a newspaper to avoid having or acquiring a particular political complexion unless indeed it avoids all reference to the activities of Governments or legislatures or treats of them in an eclectic or inconsistent manner.
The circumstances of Upper India in the last decade of the nineteenth century would doubtless make any paper published for Indian readers sympathetic to various movements for social and political reform.
But their Lordships having before them material which shows the character of the newspaper as it was in fact conducted in the testator 's lifetime, have arrived at the conclusion that questions of politics and legislation 577 were discussed only as many other matters were in this paper discussed and that it is not made out that a political purpose was the dominant purpose of the trust.
" In All India Spinners ' Association vs Commissioner of Incometax, Bombay(1) the assessee was formed as an unregistered association by a resolution of the All India Congress Committee for the development of village industry of hand spinning and hand weaving.
The Association was established as an integral part of the Congress Organisation, but it had independent existence and powers unaffected and uncontrolled by politics.
The objects of the Association, amongst others, were to give financial assistance to khaddar organisations by way of loans, gifts or bounties, to help or establish schools or institutions where handspinning is taught, to help and open khaddar stores, to establish a khaddar service, to act as agency on behalf of the Congress to receive self spun yarn as subscription to the Congress and to issue certificates and to do all the things that may be considered necessary for the furtherance of its objects, with power to make regulations for the conduct of affairs of the Association of the Council and to make such amendments in the present constitution, as may be considered from time to time.
The funds of the Association consisted mostly of donations and subscriptions, and out of the funds charkas and handlooms were purchased and supplied to the inhabitants free of charge.
Raw cotton was supplied to the poor people to be spun into yarn and the yam so spun along with the yam acquired by the Association were supplied to other poor people for hand weaving.
The income of the Association was treated by the Commissioner of Incometax as not exempt under section 4(3) (i) of the Indian Income tax Act inasmuch as (i) the dominant purpose of the Association was political, (ii) even assuming it was not political, the dominant purpose was not in any event a valid charitable purpose in law, and (iii) some of the objects were not clearly charitable objects.
The Judicial Committee held that the income of the Association was derived from property held under trust or other legal obligation wholly for charitable purposes and the English decisions on the law of charities not based upon any definite and precise statutory provisions were not helpful in construing the provisions of section 4(3) (i) of the Indian Income tax Act.
The words of section 4(3) were largely influenced by Lord Macnaghten 's definition of charity in Pemsel vs Commissioners for Special Purposes of Income Tax (2) , but that definition had no statutory (1) (2) 578 authority and was not precisely followed in the most material particulars; the words of the section being "for the advancement of any other object of general public utility" and not as Lord Macnaghten said "other purposes beneficial to the community".
The Judicial Committee observed that the primary object of the Association was relief of the poor and apart from that ground there was good ground for holding that the purposes of the Association included advancement of other purposes of general public utility.
The Judicial Committee then held : "These words, their Lordships think, would exclude the object of private gain, such as an undertaking for commercial profit though all the same it would sub , serve general public utility.
But private profit was eliminated in this case.
Though the connexion in one sense of the Association with Congress was relied on as not consistent with 'general public utility ' because it might be for the advancement primarily of a particular party, it is sufficiently clear in this case that the Association 's purposes were independent of and were not affected by the purposes or propaganda of Congress." The Indian legislature has evolved a definition of the ex pression "charitable purpose" which departs in its material clause from the definition judicially supplied in Pemsel 's case(1), and decisions of English Courts, which proceed upon interpretation of language different from the Indian statute have little value.
We, therefore, do not propose to deal with the large number of English cases cited at the Bar, except to mention three, which declared trusts for political purposes invalid.
In Rex vs The Special Commissioners of Income tax (ex parte The Headmasters ' Conference) and Rex vs The Special Com missioners of Income Tax (ex parte) The Incorporated Association of Preparatory School(1) it was held that a conference of Headmasters incorporated under the Companies Act as an Association limited by guarantee, of which under the Memorandum of Association income was to be applied towards the promotion of its expressed objects, one of which was the promotion of or opposition to, legislative or administrative educational measures, the holding of examinations, etc.
was not a body of persons established for charitable purposes only within the meaning of the Income Tax Acts.
Similarly an incorporated Association of Preparatory Schools incorporated under the Companies Act as an Association limited by guarantee, income (1) ; (2) 579 whereof was to be applied solely towards the promotion of its expressed objects which included the advancement and promotion of, or opposition to, legislative or administrative educational measures etc.
was not an association whose income was applicable to charitable purposes only.
The Court of King 's Bench held in the case of each of the two trusts that because the income could be utilised for promotion of, or opposition to, legislative or administrative educational measures, and those being the primary objects, the income was not liable to be applied solely to charitable purposes.
In The Commissioners of Inland Revenue vs The Temperance Council of the Christian Churches of England and Wales (1) a Council constituted by resolution at a meeting of representatives of the temperance Organisation of the Christian Churches of England and Wales, the purpose of which being united action to secure legislative and other temperance reform was held not to be a council established for charitable purposes only, nor was its income applicable to charitable purposes only, and that it was therefore not entitled to the exemption sought.
In Bowman vs Secular Society Ltd.(2) Lord Parker observed: "A trust for the attainment of political objects has always been held invalid, not because it is illegal but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit." This Court in a recent judgment, Laxman Balwant Bhopatkar by Dr. Dhananjaya Ramchandra Gadgil vs Charity Commissioner, Bombay (3) considered whether for the purposes of the Bombay Public Trust Act 29 of 1950 a trust to educate public opinion and to make people conscious of political rights was a trust for a charitable purpose.
The Court held (Subba Rao J., dissenting) that the object for which the trust was founded was political, and political purpose being not a charitable purpose did not come within the meaning of the expression "for the advancement of any other object of general public utility" in section 9(4) of the Bombay Public Trusts Act, 1950.
The definition of "Charitable purpose" in section 9 of the Bombay Public Trusts Act closely follows the language used in the definition given under the Income tax Act section 4(3).
But in Laxman Balwant Bhopatkar 's case(1), as in the cases of the Courts in England which we (1) (2) , 442.
(3) ; 580 have referred to, it was held that the primary or the principal object was political and therefore the trust was not charitable.
In the present case the primary purpose of the assessee was not to urge or oppose legislative and other measures affecting trade, commerce or manufactures.
The primary purpose of the assessee is, as we have already observed, to promote and protect trade, ,commerce and industries to aid, stimulate and promote the development of trade, commerce and industries and to watch over and protect the general commercial interests of India or any Part thereof.
It is only for the purpose of securing these primary aims that it was one of the objects mentioned in the Memorandum of Association that the assessee may take steps to urge or oppose legislative or other measures affecting trade, commerce or manufactures.
Such an object must be regarded as purely ancillary or subsidiary and not the primary object.
The appeals therefore fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.
[/INST]The assessee company Me Andhra Chamber of Commerce had as its main object the promotion, protection, and development of trade, commerce and industry in India.
It owned a building where it had its offices, and those parts of it not in the company 's own use were let out to tenants.
In income tax proceedings the company claimed exemption in respect of the rental income under s.4(3) (i) of the Indian Income tax Act, 1922.
The claim was negatived by the assessing and appellate authorities.
The High Court, however, held that the company was a charitable institution and its income from property was exempt under section 4(3) (i).
The Revenue appealed to the Supreme Court by special leave.
It was contended by the appellant that the property was not held by the company for a charitable purpose within the meaning of section 4(3) (i), that the objects of the company were vague, that the benefit contemplated by the Memorandum of Association was not to the public generally but to the members of the company only, and that the objects of the company were political it being open to it to appropriate the entire income for political purposes.
HELD: (i) The term charitable purpose as defined in the Act was inclusive and not exclusive.
It included objects of general public utility.
The object of the assessee company promotion of trade and commerce in the country was an object of general public utility, as not only the trading class but the whole country would benefit by it.
It is not necessary that the benefit must include all mankind.
It is sufficient if the intention be to benefit a section of the public as distinguished from specified individuals.
[571 F H].
Commissioners of Inland Revenue vs Yorkshire Agricultural Society, and The institution of Civil Engineers vs Commissioners of Inland Revenue, , relied on.
Commissioner of Income tax Bombay Presidency, Sind and Baluchistan vs The Grain Merchants ' Association of Bombay, , disapproved.
(ii) There was nothing vague about the company of general public utility such as promotion, protection, aiding and stimulation of trade, commerce need not to be valid, specify the modus or the steps by which the objects may be achieved or secured.
[573 A B].
Runchordas Vandrawandas vs Parvati Bai L.R. 26 I.A. 71, Commissioners of Inland Revenue vs National Anti Vivisection Society, and Baddeley and others (Trustees of the Newtown Trust) vs Commissioners of Inland Revenue, , distinguished.
(iii) The argument that it was only for the benefit of the trading classes ,in Andhra Desa that the funds of the company could be utilised did not stand scrutiny.
[574 D E].
566 (iv) It cannot be said that a purpose would cease to be charitable even if public welfare is intended to be secured thereby if it includes the taking of steps to urge or oppose legislation affecting commerce, trade or manufacture.
If the primary Purpose be advancement of objects of general public utility, it would remain charitable even if an incidental entry into the political domain for achieving that purpose e.g. promotion of or opposition to legislation concerning that purpose is contemplated.
The object mentioned in the Memorandum of Association was that the assessee may take steps to urge or oppose legislative or other measures affecting trade, commerce, or manufacture.
Such an object must be regarded as purely ancillary or subsidiary and not the primary object.
[575 G H; 580 B C].
In re the Trustees of the Tribune, and All India Spinnere Association vs Commissioners of Income tax, Bombay, , relied on.
Pemsel vs Commissioner for special Purposes of Income Tax; , and Bowman vs Secular Society Ltd., , referred to.
Rex vs The Special Commissioners of Income tax (ex parte The Incorporated .Association of preparatory schools) , The Commissioners of Inland Revenue vs
The temporance council of the Christian Churches of England and Wales, , and Laxman Balwant Bhopatkar by Dr. Dhananjaya Ramachndra Charity commissioner, Bombay; , ,
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1709 of 1969.
Appeal by Special Leave from the judgment and Decree dated April 10, 1969 of the Punjab & Haryana High Court in Letters Patent Appeal No. 70 of 1964.
J. C. Talwar and R. C. Kohil, for the appellant.
V. C. Mahajan, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the judgment and order dated April 10, 1969 of the Full Bench of the Punjab & Haryana High Court in Letters Patent Appeal No. 70 of 1964, dismissing Civil Writ Petition No. ' 22 of 1963 filed by the appellant to quash the order of the respondent dated September 1 1, 1962.
94 The circumstances that led to the filing of the Civil Writ Petition No. 22 of 1963 may be briefly stated : In the elections held in October, 1959, the appellant was elected as a Member of the Municipal Committee, Phagwara.
On June 20, 1960, a meeting was held for the election of the President and Vice President of the Committee.
The meeting was presided over by the Sub Divisional Officer (Civil).
According to the Appellant the Presiding Officer conducted the elections of the President and the Vice President in an irregular and illegal manner and was favouring the, party led by another committee member Bhag Ram.
When the appellant and another member Om Prakash Agnihotri protested against this conduct of the Sub Divisional Officer (Civil), the group led by Bhag Ram brought into the Town Hall some unruly elements from outside who created panic and confusion and manhandled Om Prakash Agnihotri, who was also a candidate for the presidential office.
It may be stated at this stage that according to the respondent, Om Prakash Agnihotri created a scene in the meeting and the appellant who was a staunch supporter of Om Prakash Agnihotri brought into the Town Hall, a number of outsiders with a view to cause chaos and confusion in the meeting and that the appellant did not maintain decorum and did_not care to obey the directions of the Chairman.
Ultimately, Bhag Ram was elected as the President.
The appellant and certain other members of the Committee filed Writ Petition No. 1095 of 1960 in the High Court challenging the election of Bhag Ram as the President.
But the said writ petition was dismissed on the ground that the disputed facts involved therein could not be gone into by the High Court in proceedings under article 226 of the Constitution.
While the writ petition No. 1095 of 1960 was pending in the High Court, the respondent State on December 5, 1960 served a notice on the appellant under the proviso to section 16(1) of the Punjab Municipal Act, 1911 (Punjab Act III of 1911) (hereinafter to be referred as the Act) calling upon,him to show cause within 21 days why he should not be removed from the membership of the Committee under section 16 (1 ) (e) of the Act.
The said notice charged the appellant of having brought outsiders into the Town Hall on June 20, 1960 to cause disturbance to the meeting that was being then held and, that he did not maintain decorum nor did he care to obey the rulings of the Chairman.
In consequence the appellant was charged of having flagrantly abused his position as a member of the Committee.
The appellant sent a reply on December 12, 1960 controvert ing the allegations made in the notice.
In turn he averred that the, 95 Sub Divisional Officer (Civil) who presided over the meeting, was actively helping the party led by Bhag Rain and it was the latter who brought in outsiders to create confusion and disorder.
He denied having brought any outsiders into the hall as alleged in the notice.
He further stated that the crowd that was ' brought into the hall by Bhag, Ram manhandled Om Prakash Agnihotri.
He .further denied the allegation that he did not maintain decorum and that he did not obey the Chair.
On the other hand, he stated that he was quite obedient to the Chair and that he was not responsible for the confusion that prevailed at the meeting.
Finally he stated that even if all the allegations made in the show cause notice were true, they will not bring the matter under section 16(1) (e) of the Act justifying action being taken against him by way of removing him from the Committee.
On September 11, 1962 the Governor of Punjab passed an order section 16 ( 1 ) (e) read with proviso to section 1 6 (1 ) of the Act removing the appellant from the membership of the Municipal Committee, Phagwara.
By the same order the appellant was also disqualified for a period of three years under sub section
(2) of section 16 of the Act.
The appellant challenged the above order of the State Government before the High Court in Civil Writ No. 22 of 1963.
The main plea that was taken in the writ petition appears to be that even if all the allegations contained in the show cause notice of December 5, 1960 are true, the appellant cannot be considered to have "flagrantly abused his position as a member of the Committee" so as to attract the penal consequences under section 16 ( 1 ) (e) of the Act.
According to the appellant the allegations made against him regarding his conduct at the meeting of the Committee held on June 20, 1960 have, no relevancy for invoking the powers conferred on the State Government under section 16(1) (e).
In consequence he alleged that the order dated September 11, 1962 removing him from the membership of the Committee and disqualifying him was null and void and was an abuse of the power vested in the Government under section 16 of the Act.
The State contested the writ petition on the ground that when it was found at the Committee meeting that Om Prakash Agnihotri could not secure support for being elected as the President, the appellant who was his ardent supporter went out and deliberately brought some hooligans into the Town Hall and created trouble at the meeting.
Further the appellant behaved in a very disorderly manner and did not obey the rulings given by the Sub Divisional Officer (Civil) who was then presiding over the meeting for the purpose of conducting the election of the President and the Vice President.
As the appellants conduct Was such as to attract the penal provisions of section 16 (1 ) (e) of the Act, the show cause notice 96 was issued under the proviso to the said section for which the appellant sent a very elaborate reply.
As the explanation sent by the appellant was not found to be acceptable the state went passed the order dated September 11, 1962 and it was well within its powers.
The learned Single Judge who dealt with the writ petition was of the view that the allegations made against the appellant in the show cause notice, even if true, will not attract section 16 (1) (e) of the Act.
According to the learned Judge it is only when a member of the Committee has shown favour or indulged in self aggrandisement by virtue of his position as a member that the said provision Will apply.
On this reasoning, the learned Judge held that the grounds which led to the making of the order dated September 11, 1962 were neither germane nor relevant for the purpose of attracting section 16(i) (e).
However, deplorable the conduct of the appellant as alleged may have been at the meeting held on June 20, 1960, that by itself will not enable the State Government to take action under section 16 (1) (e) of the Act.
Ultimately, by his judgment dated September 18, 1963, the learned Judge quashed the order of the Government dated September 11, 1962 as being illegal and void.
The State carried the matter in Letters Patent Appeal No. 70 of 1964.
The said appeal was heard, in the first instance, by a Division Bench.
The Division Bench was not inclined to agree with the views of the learned Single Judge regarding the interpretation placed on section 16 ( 1 ) (e) of the Act.
The view of the Division Bench is that the conduct of the appellant, as alleged in the show cause notice amount to his having "flagrantly abused his position as a member of the Committee ' so as to attract the penal provisions of section 16 (1) (e) of the Act.
Another point appears to have been taken before the Division Bench, namely, that the order dated September 11, 1962 suffers from the vice of not giving reasons for the action taken by the State Government and on that ground it has to be struck down.
The Division Bench felt that this aspect of the matter is a fairly important one and as such it required consideration by a larger bench.
In the end by order dated August 7, 1968 the Division Bench referred the appeal to a Full Bench for consideration of all aspects.
The appeal came up before the Full Bench of three Judges.
The Full Bench agreed with the view of the Division Bench regarding the applicability of section 16 (1) (e) of the Act and held that the conduct of the Appellant amounted to "flagrantly abusing, his position as, a member of the Committee".
Regarding the question whether the order dated September 11, 1962 has to be 97 struck down on the ground that it does not give any reasons, the Full Bench felt that the said question should be considered by a larger bench of five Judges.
Accordingly by its order dated February 20, 1969, the Full Bench directed the appeal to be heard before a Full Bench of five Judges.
The Letters Patent appeal in consequence was heard by a bench of five Judges.
Three questions were posed for consideration: (a) Whether the decision and order of the State removing the appellant herein from his membership of the Committee under section 16(1 ) (e) of the Act are quasi judicial; (b) If they are quasi judicial, whether the State was required by law to state reasons for its decision; and (c) if the State was bound to give reasons, whether as a fact reasons have been, given for its decision by the State in the order dated September 11, 1962.
After a fairly elaborate consideration of the matter the learned Judges held on points Nos.
(a) and (b) that the order of the State removing a Municipal.
Committee member under section 16 (1) (e) of the Act is a quasi judicial order and as such the State was bound to give its reasons for arriving at a decision.
Regarding point No. (c) the learned Judges, after a thorough examination of the note file produced before them by the State, ultimately held that the State had considered the explanation offered by the appellant and after applying its mind to, the materials: before, it was justified in passing the order removing the appellant from his membership of the Committee and also disqualifying him for a period of three years.
In the result, the Full Bench of five Judges by its order dated April 10, 1969 allowed Letters Patent appeal filed by the State and set aside the order of the learned Single Judge.
The result was that the writ petition filed by the appellant herein was dismissed.
Before we advert to the contentions urged before us by the learned counsel, it is necessary to refer to the relevant provisions of the Act as well as the show cause notice issued by the State as also the final order passed by it.
We will of course refer also to the substance of the reply sent by the appellant to the show cause notice.
98 The relevant provision is section 16 (1 ) (e), its proviso and sub section
(2) of section 16.
They are as follows: "16(1) The State Government may, by notifica tion, remove any member of committee.
(e) if, in the opinion of the State Government he has flagrantly abused his position as a member of the committee or has through negligence or misconduct been responsible for the loss, or misapplication of any money or property of the committee.
Provided that before the State Government notifies the removal of a member under this section, the reasons for his proposed removal shall be communicated to the member concerned, and he shall be given an opportunity of tendering an explanation in writing.
(2) A person removed under this section or whose election or appointment has been deemed to be invalid under the provisions of sub section (2) of section 24, or whose election has been declared void for corrupt practices or intimidation under the provisions of section 255, or whose election the State Government or the Deputy Commissioner has under section 24 refused to notify, shall be disqualified for election for a period not exceeding five years Provided that a person whose election or appointment has been deemed to be invalid under the provisions of sub section (2) of section 24, shall not be disqualified for election or appointment for a period exceeding two years from the date of, disqualification." No rules framed under the Act, having any bearing on the manner in which the Government has to deal with the matter have been brought to our notice.
The show cause notice issued by the State on December 5, 1960 was as follows : "It has been brought to the notice of the Government that on the 20th June, 1960 the Sub Divisional Officer (Civil) Phagwara, convened a meeting of the newly elected members of the Municipal 'Committee, Phagwara, after the election of the Committee, held on 17 10 1959 in order to administer oath of allegiance 99 and to conduct the election of the President of the Committee to enable the new Committee to take over the charge, you also attended that meeting at the time of election of the office of the President.
You were sup porter of the group headed by Shri Om Parkash Agnihotri, member of the Committee whose candidature was proposed for this office.
During the course of the meeting when Shri Om Parkash Agnihotri became unruly and began to tear his clothes, beat his chest and create a row you managed to bring some outsiders in the Town Hall to cause disturbance at the meeting.
More over you did not maintain decorum or care to obey the chair.
By your aforesaid action you have flagrantly abused your position as a member of the Committee within the meaning of section 16(1) (e) of the Punjab Municipal Act 1911.
I am directed to call upon you to show cause under proviso to section 16(1) ibid why you should not be removed from the membership of the Committee under section 16(1) (e) ibid.
You should tender your explanation to the Deputy Commissioner Kapurthala with an advance copy to, Government together with copy (copies) of documents, if any, so as to reach there within a period of twenty days from the date of despatch of this letter.
In case no explanation is submitted by you within the stipulated period, it will be considered that you have no explanation to offer and government may proceed ahead to notify your removal.
" The appellant sent a reply on December 16, 1960.
No copy of the reply sent by the appellant has been placed in the record available before us.
But the nature of the reply can be gathered in the summary given by the High Court.
In his reply the appellant had denied the allegations made against him in the show cause notice.
On the other hand, he averred that the Sub Divisional Officer (Civil) who was presiding over the meeting was taking sides with Bhag Ram and it was the latter who brought hooligans in the Town Hall and created chaos and confusion.
He also denied the allegation that he did not obey the rulings given by the Chair and that he behaved in a disorderly manner.
He further averred that the hooligans who were.
brought into the Town Hall by hag Ram manhandled Om Parkash Agnihotri and created confusion at the meeting.
He further averred that even assuming that all the allegations made against him in the show cause notice are true, section 16 (1 ) (e) of the Act was not attracted as he has not "flagrantly abused his position as a member of the Committee".
The order of the State dated September 11, 1962 was a , follows: 100 "Whereas the Governor of Punjab after giving an opportunity to Shri Bhagat Ram Patanga member Municipal Committee Phagwara of tendering an explanation under the proviso to section 16 of the Punjab Municipal Art 1911 is satisfied that the said Shri Bhagat Ram Patanga has flagrantly abused his position as a member of the aforesaid committee, now, therefore, in exercise of the powers vested in him under clause (e) of, sub section 1 of section 16 ibid, the Governor of Punjab is pleased to remove the said Shri Bhagat Ram Patanga from the membership of the Municipal Committee Phagwara from the date of Publication of this notification in the official Gazette and is further pleased.
to disqualify the said Shri Bhagat Ram Patanga for a period of three years from the aforementioned date under Sub section (2) of Section 16 ibid.
" It will be seen that section 16(1) of the Act gives power to the State Government to remove any member of a committee if he is guilty of one or other of the acts mentioned in cls.
(a) to (g).
In particular we are, concerned with cl.
To attract that provision the State Government must form an opinion that the appellant has "flagrantly abused his.
position as a member of the Committee".
We are not concerned with the other grounds mentioned in cl.
(e) for which also the removal of a member can be ,ordered.
But before notifying the removal of a member from the ,Committee, there is an obligation on the State Government by virtue of the proviso to section 16(1) to communicate to the member concerned the reasons for his proposed removal.
There is also a further obligation to give the concerned member an opportunity of tendering an explanation in writing.
Sub section (2) gives power to the authority concerned when removing a member to disqualify him for election for a period not exceeding five years.
In view of the proviso to section 16(1) the show cause notice was issued ' on December 5, 1960.
The grounds for the action proposed to, be taken were also indicated therein as coming within section 16(1) (e) of the Act.
The appellant was given an opportunity of tendering his explanation in writing.
As mentioned earlier, he also availed himself of the said opportunity.
But the point to be noted is that in order to attract section 16 (1) (e) of the Act, the appellant should be found to have flagrantly abused his position as a member of the committee.
In the case before us the State Government has coming to a finding that the conduct attributed to the appellant at, the meeting held on June 20 ' 1960 amounted to having "flagrantly abused his position as a member of the Committee" and it was on this basis that he was removed from the committee This conclusion arrived at by the Government, though ,not approved by the learned Single Judge, has been accepted as 101 correct by the Division Bench in its order dated August 7, 1968 in the Letters Patent appeal.
The view of the Division Bench has been approved by the Full Bench of three Judges as also of five Judges.
On behalf of the appellant Mr. J. C. Talwar, learned counsel, raised two contentions : (1) The allegations made against the appellant in the show cause notice dated December 5, 1960, even if true, are not such as to attract section 16 ( 1 ) (e) on the ground that the appellant has "flagrantly abused his position as a member of the committee"; and (2) The larger bench of five Judges having held that the proceedings, initiated by the State against the appellant are, quasi judicial and that the State was bound to give reasons, erred in holding that the files produced before it disclosed that there has been a consideration of the appellant 's explanation by the State.
This view of the High Court is erroneous.
Mr. V. C. Mahajan, learned counsel for the State, has not challenged the finding of the High Court in the Letters Patent appeal regarding the proceedings initiated against the appellant being of a quasi judicial nature and the State being bound to give reasons for the order.
But the counsel urged that the appellant has no where raised the contention that there has been no consideration by the State Government of the explanation offered by him before the order dated September 11, 1962 was passed.
He also pointed out that there has been district compliance of the provisions of the statute by the State Government before passing the order dated September 11, 1962.
The counsel further urged that the conduct of the appellant as disclosed by the. events 'that took place at the meeting of June 20, 1960 constitute a flagrant abuse by the appellant of his position as a member of the committee so as to, attract section 16 (1) (e) of the Act.
We are not inclined to accept the contention of Mr. Talwar that the allegations made against the appellant regarding his conduct at the meeting of June 20, 1960 do not amount to his having flagrantly abused his position as a member of the committee .Mr.
Talwar 's contention appears to be that it is only when a abuses his position as a member of the committee and shows favour to others or gains undue, advantage to him that he, can be considered to have flagrantly abused his position as a member of the committee.
No doubt, such a contention has found favour at the hands of the learned Single Judge.
But, in our opinion, the Division Bench was right when it differed from this view of the learned Single Judge.
The nature of the allegations made against the appellant is self evident from averments contained in the show cause notice, extracted above.
The allegations clearly show that the appellant had brought in outside elements in order 102 to create confusion and chaos at the meeting.
The expression "flagrantly" means glaringly, notoriously, scandalously.
A position is said to be abused when it is put to a bad use or for wrong purpose.
No doubt it may vary with the circumstances.
When a meeting of the members of the committee was being held, the appellant had no doubt a right to participate in the proceedings as a member of the committee.
But he had no business, as a member participating in the meeting of the committee, to go outside and bring in hooligans for the purpose of creating confusion and chaos.
This behaviour of the appellant was to, say the least scandulous.
If he had not been a member of the committee, he would not be entitled to be present inside the Town Hall.
at the time of the meeting.
The appellant did flagrantly abuse his position as a member of the Committee while participating in the meeting of the committee, when he brought in rowdies for creating disturbance so that the Committee meeting may not be held peacefully and properly.
Therefore, the State Government was perfectly Justified in coming to the conclusion that action has to be taken 'against the appellant under section 16(1) (e) of the Act.
Therefore the first contention of the learned counsel for the appellant will have to be rejected.
Coming to the second contention, it has to be noted that the appellant does not appear to have raised this contention before the learned Single Judge, nor even in his writ petition.
It was only when the State went up in appeal, that the appellant raised the 'Contention that the proceedings initiated against him are quasi judicial and as such the State was bound to give reasons in its order.
To this limited extent the Full Bench has agreed with the appellant.
The appellant raised in consequence the further contention that the order dated September 11, 1962 has to be struck, down inasmuch as it does not give any reasons.
far as this last aspect is concerned, we have already referred to the fact that the Fall Bench of five Judges went through the file produced before it by the State and has come to the conclusion that there is a clear indication that the representations of the appellant were taken into account and considered by the Government before the order dated September 11, 1962 was passed.
At this stage we may say that inasmuch as very severe penal consequences: result by removing a person from the membership of a committee, to which he: has, been duly elected and as no appeal is provided ' under the statute against an order so, removing him, it is not only desirable but also essential that the State Government should indicate its reasons for forming the opinion as required under section 16 (1 ) (e) of the Act.
When such an order is challenged, the State must place before the Court the necessary materials which were avail able before it and which were taken into consideration for forming ,an opinion to remove the person concerned as a member of the 103 committee.
In this case, it is not possible for us to, know whether the State referred in its counter affidavit in the writ petitioN to the various matters contained in the relevant file, as the, appellant has not Placed before us either a copy of his writ petition or the counter affidavit of the State.
Therefore it is not possible for us to know the actual avertments made by the appellant and the answers given by the State in the writ petition.
The facts given by us, in the earlier part of the judgment regarding the plea of the appellant and the defence raised by the State were all gathered by us from the judgments of the learned Single Judge and of the Letters Patent Bench.
When once the Letters Patent Bench has held that the order passed by the State Government is of a quasi judicial nature, it is obligatory on the part of the State Government to make available to the member concerned the materials available before it and on the basis of which the show cause notice is issued.
Even if those materials are not referred to in the show cause notice in any great detail, it is open to the member concerned to request the State Government to furnish him the materials on which the show cause notice has been issued so that he may give an effective answer not only to the averments, contained in the show cause notice but also to the materials, on the basis of which the show cause notice has been issued.
For instance, in the case before us, the High Court has referred to the information contained in the relevant file before it that there was the report of the Sub Divisional Officer, who presided over the meeting held on June 20, 1960, giving his version of the part played by the appellant.
In his answer to the show cause notice the appellant had denied that he ever brought any outsider into the Town Hall and that, on the other hand, it was Bhag Rain, who had brought outsiders in the Town Hall and created the confusion.
This raises a disputed question of fact on which the Government is not entitled to take view rejecting the plea of the appellant without having disclosed to him the actual allegations made in the report.
But it is unnecessary for us t pursue this aspect further because the appellant has not made a grievance either before the High Court or before us that the proceedings initiated against him suffer from the infirmity of not having made available to him the materials that were before the Government when it passed the order removing him from the membership of the committee.
As pointed out earlier, the only other contention in this regard raised by him and that too at the stage of Letters Patent Appeal was that the order of the Government does not show that his representations have been taken into account by the State.
Again there is also the possibility that the term of the office of the appellant, who was elected to the committee, as early as 1959 may have expired long ago.
If disputed questions of fact arise for consideration by the Government, there 104 is, no provision, so far as we could see, in the Act as to how the State is to deal with the matter.
Further no Rules also have been brought to our notice laying down the Procedure to be a by the, state under such circumstances.
These are all matters of considerable importance which should attract the attention of the State Government, so that suitable provisions may be made either in the Act or in the Rules made by virtue of the rule making power.
In the particular circumstances of this case, we are in agreement with the High Court that the, file produced by the, Government does disclose that the State has considered the appellants representations as also the other relevant materials before it when passing the order dated September 11, 1962.
The 'various reports that were before the State Government, notes made by the concerned department on the basis of the said reports and on the explanation furnished by the appellant as well as the jottings made from time to time by the Minister concerned, have all been very elaborately dealt with by the Full Bench of five Judges.
We do not think it necessary to cover the ground over again.
The learned Judges after a consideration of all those materials contained in the file, produced before them, have recorded a finding that the State Government was justified in rejecting the explanation offered by the appellant and passing the order under attack accepting the reports of the officers concerned. 'We are in entire agreement with the views expressed in this regard by the learned Judges in the Letters Patent Appeal.
From what is stated above, it is clear that there has been a proper consideration of the explanation furnished by the appellant and that there has been no violation of the principles of natural Justice.
The second contention of the learned counsel for the appellant also fails.
In the result, the judgment and order of the High Court in the Letters Patent Appeal are confirmed and the appeal dismissed.
However, there wilt be no order as to costs.
V.P.S. Appeal dismissed.
[/INST]The respondent State served a notice on the appellant, who was a member of the Municipal Committee, under the proviso to section 16(1) of the Punjab Municipal Act, 1911 calling upon him to show cause why he should not be removed from the membership of the committee under section 16(1)(e).
The notice charged the appellant with having brought outsiders into the ball where a meeting was being held for the election of the President and Vice President of the Committee and caused disturbance to the meeting that he did not maintain decorum, and t hat he did not obey the rulings of the Chairman of the meeting.
The appellant denied the allegations and averred that it was the Chairman who was actively helping the opposite party and that it was he who brought in outsiders to create confusion and disorder.
The Governor of Punjab passed an order under section 16(1) (e) read with the proviso, removing the appellant from the membership of the Committee and also disqualifying him for a period of three years under section 16(2).
The appellant challenged the order before the High Court and the trial judge held that the allegations against the appellant in the show cause notice, even if true, would not attract section 16(1)(e) of the Act, and, therefore, quashed the order.
The appellate Court, held, after examining the note file produced by the State that the State had considered the explanation offered by the appellant and the other materials before it, and that the State was justified in passing the order.
Dismissing the appeal to this Court, HELD : (1) Section 16(1) of the Act gives power to the State Government to remove any member of the Committee if he is guilty of one or other of the acts mentioned in clauses(a) to (g).
To attract clause (e), the State Government must form an opinion that the appellant had "flagrantly abused his position as a member of the Committee".
The evression 'flagrantly ' means glaringly, notoriously, scandalously; and a position is said to be abused when it is put to a bad use or for a wrong purpose depending upon the circumstances of the case.
When a meeting of the membership of the Committee was being held the appellant had a right to participate in the proceedings as a member of the Committee.
if he had not been a member of the committee he would not be entitled to be present at the time of the meeting.
But he had no business to go outside and bring in hooligans for the purpose of creating confusion and chaos.
The appellant thus flagrantly abused his position as a member of the Committee while participating in the meeting of the Committee, and therefore the State Government was, justified in passing the order.
[100D H] 93 (2) The High Court was justified in holdingthat the State Government had considered the appellant 's representations as also the other relevant materials before it passed the impugned Order.
since there had been a proper consideration of the explanation furnished by the appellant there was no violation of theprinciples of natural justice.
[1104C F] (3) In as much as very severe penal consequences result by removing a person from the membership of a committee and appeal is provided under the Act it is not only desirable but essential that the State Government should indicate its reasons for forming the opinion as required under section 16(1)(e) of the Act.
It is obligatory on the part of the ' State Government to make available to the member concerned the materials available before it and on the basis of which the show cause notice is issued, and it is open to the member concerned, to request the State Government to furish him the materials, so, that, be may love an effective answer to the averments contained in the show cause notice and to the materials on the basis of which it had, been issued.
When such an order is challenged the State must place before the Court the.
necessary materials which were available before it and which were taken info consideration for forming the opinion to, remove the person concerned from membership of 'the committee.
in the present case, however, the appellant had not made a grievance either before the High Court or before this Court that the proceedings initiated against him suffered from the infirmity of not having been made available to him the materials that were before the Government when it passed, the order removing him from the membership of the Committee.
[102F H; 103A E; 104,B C] The averments of the appellant and the Chairman of the meeting raised a disputed question of fact on which Government was not entitled to take a view rejecting the plea of the appellant without having disclosed to him the alleg ations made in the report.
If disputed questions ' of fact arise for the consideration of the Government there is no provision as to how the State has to deal with the matter.
Therefore, suitable provision may be made either in the Act or in the Rules for dealing with such disputed question of fact.
[1O4A B]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 180 of 1963.
Appeal by special leave from the judgment and decree dated February 19, 1958 of the Patna High Court in Appeal from Appellate Decree No. 919 of 1954.
Sarjoo Prasad and B. P. tha, for the appellants, 159 A. V. Viswanatha Sastri, B. K. P. Sinha and A. G. Ratna parkhi, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The plaintiffs appellants instituted Title Suit No. 91 of 1950, out of which this appeal arises, for redemption of two usufructuary mortgages created by plaintiff No. 1 and ancestors of plaintiffs Nos. 2 to 6 dated July 5, 1927 and April 15, 1928 in favour of the defendant for Rs. 1,000 and Rs. 1,300 respectively.
The mortgage dated July 5, 1927 was in respect of 7.20 acres of occupancy raiyati lands, consisting of four plots Nos.
149, 155, 955 and 957, in village Hichapur under the Tikari Raj.
The mortgaged lands were part of a larger holding of 23.69 acres under khata No. 59, and the annual rent of the entire holding was Rs. 153 3 0.
The mortgage deed provided that the mortgagee would pay Rs. 33 14 9 out of the total rent payable to the landlord and the mortgagors would pay the balance rent.
There was default in payment of rent for several years.
The landlord obtained a, decree for arrears of rent, and at the rent sale held on June 18, 1934, the mortgagee defendant purchased the Hichapur lands in the farzi name of Dwarkalal.
The mortgage dated April 15, 1928 was in respect of 7.20 acres of lands in village Utrain tinder kahas mahal.
The mortgaged lands were part of a larger holding of 1988 1/2 acres in khata No. 269.
The, rent of the entire holding was Rs. 155 4 0.
The mortgage deed provided that the mortgagee would pay Rs. 68 10 9 out of the total rent and the balance rent would be payable by the mortgagors.
There was default in payment of rent for several years.
Certificate proceedings were started for the recovery of the arrears of rent, and at a certificate sale held on January 22, 1934, the Utrain lands were purchased by the defendant in the farzi name of Deonarain.
It appears that out of the sum of Rs. 33 14 9 pay able by the mortgagee annually on account of the rent of the Hichapur lands, the mortgagee consistently paid Rs. 33 annually, but did not pay the balance sum of 14 annas 9 pies, whereas the mortgagors consistently defaulted in payment of the sum of Rs. 119 4 3 payable by them annually on account of the total rent.
It also appears that out of the sum of Rs. 68 10 9 payable by the mortgagee annually on account of the rent of the Utrain lands, the mortgagee consistently paid Rs. 68 annually but did not pay the balance sum of 10 annas 9 pies, whereas the mortgagors consistently defaulted 160 in payment of the sum of Rs. 86 9 3 payable by them annually on account of the total rent.
The trial Court decreed the suit.
The first appellate Court allowed the appeal in part, passed a decree for redemption of 3.93 acres of plot No. 955 only on the ground that this portion of the land was not sold at the rent sale and gave leave to the defendant to withdraw Rs. 1,000 deposited by the plaintiff in respect of the mortgage dated July 5, 1927.
The High Court dismissed a second appeal preferred by the plaintiffs.
The plaintiffs now appeal to this Court by special leave.
The plaintiffs contend that the purchases at the rent sale and the certificate sale were made by the mortgagee by availing himself of his position as such and having regard to section 90 of the and Illustration (c) to it, the purchases enured for the benefit of the plaintiffs and they are entitled to redeem the entire mortgaged lands.
The defendant mortgagee disputes this contention, and claims that the aforesaid sales extinguished the equity of redemption.
Section 90 of the and Illustration (c) to it are as follows : "Where a tenant for life, co owner mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage.
(c) A mortgages land to B, who enters into possession.
B allows the Government revenue to fall into arrears with a view to the land being put up for sale and his becoming himself the purchaser of it.
The land is accordingly sold to B. Subject to the repayment of the amount due on the mortgage and of his expenses properly incurred as mortgagee, B holds the land for the benefit of A." 161 In Basmat Devi vs Chamru Sao(1), a part of one entire hold ing was mortgaged, both the mortgagor and the mortgagee were liable to pay the rent of the holding, both of them defaulted in payment of the rent, the default of both contributed to the passing of a rent decree and the sale of the holding in execution of, the decree, the default of the mortgagee being substantial, and the mortgagee purchased the holding at the execution sale.
On these facts, this Court held that the mortgagee clearly gained an advantage by availing himself of his position as such, and having regard to section 90 of the his purchase must inure for the benefit of the mortgagor, and the mortgagor was entitled to redeem the mortcaged property.
In that case, Das Gupta, J. observed "Whether this would be true even where the portion which the mortgagee is liable to pay is so very small that the property is not ordinarily likely to be brought to sale for that amount, it is unnecessary for us to decide in the present case.
" The question left open by Das Gupta, J. arises for decision in the present case.
This is a case where the mortgaged property is part of a larger holding, the mortgagee agreed to pay a portion of the rent of the entire holding, and the mortgagors agreed to pay the balance rent payable in respect of it.
The mortgagors defaulted in payment of the rent payable by them.
The mortgagee paid almost the entire amount of the rent payable by him but defaulted in payment of a trifling sum.
The portion of the rent which the mortgagee failed to pay is so small that it is impossible to say that the property was brought to sale for it or that his default was in any real sense a contributory cause of the sale of the property.
it is not shown that non payment of the trifling sums by the mortgagee was made mala fide or with the ulterior object of the property being put up for sale and his becoming the purchaser of it.
The mortgagee did not gain any advantage by availing himself of his position as such or of a situation brought about by his own default.
The real effective cause of the sale was the default of the mortgagors alone.
In the circumstances, section 90 of the and Illustration (c) to it are not attracted, and the purchase by the mortgagee does not inure for the benefit of the mortgagors.
The rent sale and the certificate sale extinguished the right of redemption.
Consequently, the suit by the mortgagors for redemption of the mortgaged property is liable to be dismissed.
The first appellate Court, however, gave a decree for redemption of 3.93 acres of plot No. 955 in Hichapur village and gave (1) ; 162 liberty to the mortgagee to withdraw the entire sum of Rs. 1,000 deposited by the plaintiffs in respect of the mortgage of the Hichapur lands.
Before the High Court the plaintiffs contended, relying upon the last paragraph of section 60 of the , that they were entitled to redeem the aforesaid 3.93 acres of Utrain lands on payment of the proportionate amount of the mortgage money payable under the mortgage dated July 5, 1927.
The High Court negatived this contention.
The Courts below observed that 3.93 acres of plot No. 955 of the Hichapur lands were not sold at all at the sale held on June 18, 1934, but quite inconsistently, the Courts below also observed that the aforesaid sale held on June 18, 1934 was a rent sale and was made in execution of a rent decree.
Learned counsel on behalf of both parties conceded before us that there could be no rent sale in respect of a portion of the holding.
It may be that there was a rent sale, and by mistake, the sale certificate omitted to mention the 3.93 acres of plot No. 955.
The relevant documents are not printed in the paper book.
Having regard to the value of the subject matter in dispute, it is not worthwhile to call for a fresh finding on this point.
We, therefore, indicated to counsel on both sides in course of the argument that we shall decide this appeal on the footing that the sale held on June 18, 1934 was a rent sale and the entire Utrain lands were purchased by the defendant at the rent sale.
On this footing the last paragraph of section 60 of the can have no application.
The plaintiffs appellants do not now own the equity of redemption in any portion of the Hichapur lands.
The Courts below, therefore, should have dismissed the entire suit for redemption, and the question of redemption of a portion of the property on payment of a proportionate amount of the mortgage money does not properly arise in this case.
However, the first appellate Court gave a decree for redemption of the aforesaid 3.93 acres of land.
The High Court affirmed this decree, and there is no cross appeal by the defendant respondent.
In the circumstances, the decree passed by the Court below must be maintained.
In the result, the appeal is dismissed with costs.
Appeal dismissed.
[/INST]The ancestors of the appellants created usufructuary mortgages in favour of the respondent.
The mortgaged property was a part of a larger holding.
The mortgagee respondent had agreed to pay a portion of the rent of the entire holding and the mortgagors agreed to pay The balance rent payable in respect of it.
The mortgagors defaulted for several years in payment of the rent.
The mortgagee paid almost the entire amount of the rent but defaulted in the payment of a trifling sum.
The landlord obtained a decree for arrears of rent, and at rent sales the mortgagee pur chased the lands.
The appellant s mortgagors filed a suit for redemption of the mortgage, which was decreed by the trial court.
The mortgagee appealed, which was allowed in part passing a decree for redemption of a small plot only on the ground that this portion of land was not sold at the rent sale.
The mortgagors ' appeal to the High Court was dismissed.
In appeal by special leave, the mortgagors contended that the purchases at the rent sale and the certificate sale were made by the mortgagee by availing himself of his position as such as having regard to section 90 of the and Illustration (c) to it.
the purchases enured for the benefit of the mortgaors and they were entitled to redeem the entire mortgaged lands.
HELD : The portion of the rent which the mortgagee failed to pay was so small that it was impossible to say that the property was brought to sale for it or that his default was in any real sense a contributory cause of the site of the property.
It was not shown that non payment of the titling sum by the mortgagee was made mala fide or with the ulterior object of the property being put up for sale and his becoming the purchaser of it.
The mortgagee did not gain any advantage by availing himself of his position as such or of a situation brought about by his default.
The real effective cause of the sale was the default of the mortgagor& alone.
L161 E G] In the circumstances, section 90 of the and Illustration (c) to it were not attracted, and the purchase by the mortgagee did not enure for the benefit of the mortgagors.
The rent sale and the certificate sale extinguished the right of redemption.
[161 G H] Basmat Devi vs Chamru Sao, ; , referred to.
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<s>[INST] Summarize the judgementminal Appeal No. 189 of 1967.
Appeal by special leave from the judgment and order dated September 4, 1967 of the Madhya Pradesh High Court in Criminal Appeal No. 492 of 1964.
A.S.R. Chari, B.P. Maheshwari and Sobhag Mal Jain for the appellant.
I. N. Shroff, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
In this appeal by special leave the principal question which arises is whether a Sales Tax Inspector inspecting the accounts under the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) hereinafter referred to as the Act is entitled to remove obstruction to the inspection of account books; in other words, if he attempts to remove the obstruction is he acting in the execution of his duties as such.
The facts are not in dispute.
On October 24, 1959, Krishan Sahai, Sales Tax Inspector, P.W. 1, alongwith Shri N. J. Warudkar, P.W. 5, and Shri Harikishan Gupta, P.W. 2, went to the shop of the appellant Mangat Rai, run under the name and style "Mangat Rai Ram Kumar".
The officer visited the shop for a surprise check.
He informed the appellant that he wanted to inspect his account books.
At that time they were in the verandah which is common to the shop of the appellant and the neighbouring shop of Munshiram.
It is perhaps best to describe what happened in the words of the Inspector: "I entered the shop of the accused for inspection and Shri Warudkar entered the shop of Munshiram.
The accused, Harikishan and myself all three entered the shop of the accused.
I and Harikishan sat on the Gadi of the accused and the accused Mangat Ram sat near the iron safe.
I asked the accused person to show his account books for inspection.
Many account books were kept there.
He took out 3 note books of the size of exercise notebooks out of them.
I thought he was taking out them for showing the same to me for inspection.
In the meantime Dayakishan who is the son of the accused also came into the shop.
The accused kept one notebook as it was and he handed over the remaining two note books to his son and asked him to rule away for keeping the same at his house.
When the accused was turning the pages of the note book I noticed that it contained accounts therefore, suspicion came to my mind and I demanded these note books from that boy for inspection.
That boy had the exercise book in his right hand.
I tried to snatch away the exercise book by catching hold of 153 his left hand.
When I had caught hold of that boy with my left hand the accused caught hold of my right hand and pulled me to the back side by giving me a jerk as a result of which my shirt got torn and the boy ran away.
I tried to get separated from the grip of the accused so that I would be able to catch the boy but in the mean time the accused caught hold of my waist with his both the hands and said, "Do not touch the exercise books.
It would be dangerous.
" In cross examination it is stated: "When the accused was turning the pages of both the account books with which the boy was running away "I noticed that 'Business transaction ' was written therein.
" The Magistrate who, tried the: case convicted the appellant under section 353 and under section 506(1) of the Indian Penal Code.
The learned Sessions Judge held that the Sales Tax Inspector "had not required the accused to produce those copy books for checking and inspection and as he was not authorised to seize them, his attempt to hold the boy and relieve him of the copy books was not in the discharge of his public duty and therefore the accused cannot without doubt be held guilty of an offence under section 353 Indian Penal Code or even 352 Indian Penal Code.
" The State filed an appeal under section 417 of the Criminal Procedure Code.
The High Court came to the conclusion that the Sales Tax Inspector was certainly within his statutory authority to demand inspection of the copy books kept in the shop and if some of the books were sought to be removed in such clandestine manner, it would be idle to contend that the Sales Tax Inspector would have no power to prevent evasion of inspection and commission of an offence in his very presence.
In the result the High Court allowed the appeal and convicted Mangat Rai under section 353 and section 506(1) and sentenced him to rigorous imprisonment for four months on each count, the sentences to run concurrently.
The learned counsel for the appellant, Mr. Chari, contends that the Act contemplates voluntary submission to inspection and that there cannot be any forcible inspection of accounts.
He says that if there is any obstruction to inspection it may be punishable under section 46(h) of the: Act, but the Sales Tax Inspector cannot do anything to forcibly inspect the accounts.
He urges that what has happened in this case is an attempt on the part of the Sales Tax Inspector to exercise the powers under section 29 (3) of the Act, and it is common ground that the Sales Tax Inspector did not have power to act under section 29(3).
Sup CI 70 11 154 In order to appreciate the arguments of the learned counsel it is necessary to set out the relevant provisions of the Act and the Rules.
"Madhya Pradesh General Sales Tax Act section 29.
Production and inspection of accounts and documents and search of premises.
(1)The Commissioner may, subject to such conditions as may be prescribed, require any dealer to produce before him any accounts, registers or documents, relevant to the financial transactions of a dealer including accounts, registers or documents relating to profits derived from the business of any firm, or to.
furnish any information, relating to the stock of goods of the dealer, or purchases, sales or deliveries of goods made by him, as may be necessary for the purpose of this Act.
(2) All accounts, registers and documents relating to the stocks of goods of any dealer, or to purchases, sales or deliveries of goods made by him and all goods kept in any place of business or warehouse of any dealer shall, at all reasonable times, be open to inspection by the Commissioner.
(3) If the Commissioner has reason to suspect that any dealer is attempting to evade payment of any tax, he may, for reasons to be recorded in writing, seize such accounts, registers, or documents of the dealer as he may consider necessary and shall grant a receipt for the same, and shall retain the same only for so long as may be necessary for examination thereof or for a prosecution.
(4) For the purpose of sub section (2) or subsection(3), the Commissioner may enter and search any place of business or where house of any dealer." "Madhya Pradesh General Sales Tax Rules 54.
Notice of inspection.
Unless the inspecting officer in his discretion deems it necessary to make a surprise visit, he shall give reasonable notice in writing to the dealer of his intention to inspect the accounts, registers, documents or stocks of goods of such dealer and in fixing the date, time and place for the purpose 155 shall, as far as possible, have due regard to the convenience of the dealer.
Retention of seized books of accounts, registers and documents.
If the inspecting officer seizes any books of accounts, or documents under section 29, he shall give a written acknowledgement of the same specifying in brief the articles so seized.
He shall not without recording in writing the reasons retain them for more than twenty one days.
" A similar section was construed by this Court in Commissioner of Commercial Taxes vs Ramkishan Shrikishan Jhaver(1).
The section which came up for interpretation was section 41 (2) of the Madras General Sales Tax Act (1 of 1959), which reads as follows: "41(2).
All accounts, registers, records and other documents maintained by a dealer in the course of his business, the goods in his possession and his offices, shops, godowns, vessels or vehicles shall be open to inspection at all reasonable times by such officer: Provided that no residential accommodation (not being a place of business cure residence) shall be entered into and searched by such officer except on the authority of a search warrant issued by a Magistrate having jurisdiction over the area, and all searches under this sub section shall, so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure, 1898 (Central Act 5 of 1898).
" The contention of the respondent in that case was that the provisions did not authorise search of premises but merely provided for inspection thereof at all reasonable times by the empowered officer.
This Court observed: "Though, therefore, the word 'search ' has not been used in sub section (2) these two powers of entering the offices, etc., for inspection and of inspecting every kind of account maintained by a dealer with respect to his business together amount to giving the officer 'concerned the powers to enter and search the offices, etc., and if he finds any account in the offices, shops, etc., to inspect them.
Otherwise, we can see no sense in the legislature giving power to the empowered officer to enter the offices, etc., for the purpose of inspection as the officer concerned would only do so for the purpose (1) , 671.
156 of finding out all accounts, etc., maintained by the dealer and if necessary to inspect them for the purposes of the Act.
We cannot therefore agree with the High Court that there is no power of search whatsoever in sub section (2) because the sub section in terms does not provide for search.
Similarly, the officer has been given the power to inspect the goods in the possession of the dealer.
He has also the power to enter the dealer 's offices, etc., for the purpose of such inspection.
Combining these two powers together it follows on the same reasoning that the officer has the power to search for the goods also and to inspect them it found in the offices of the dealer.
We have therefore no hesitation in coming to the conclusion that the power of search is implicit in subsection (2) with reference both to the accounts, etc.
maintained by the dealer and the goods in the possession of the dealer.
" We have referred to the above case, which was not cited at the bar, in order to show that there is no rule that provisions like this should be construed very strictly.
In the present Act there is a special provision section 29(4) which enables the Commissioner to enter and search any place of business or wherehouse of any dealer for the purpose of sub section (2) of section 29.
If the powers under sub sections
(2) and (4) are read together it would mean that the Commissioner is entitled to search for the account books even if the assessee does not place the account books before him.
If the Commissioner searches and takes hold of account books for the purposes of inspection it is difficult to say that he is seizing the account books within the meaning of sub section
(3) of section 29.
Search for inspection implies taking possession of the account books for the purpose of inspection.
In the Act 'seizure ' means something different because here seizure means that the Commissioner would take into possession the account books and take them outside the possession of the assessee.
The learned counsel referred to us the decision of this Court in Hazari Lal vs State of Bihar(1), where this Court observed: "In our opinion merely holding books found lying in the premises for perusing them cannot properly be regarded as seizure because seizure implies doing something over and above holding an article in one 's hand.
According to Shorter Oxford Dictionary, seizure, among other things, means ' . confiscation or forcible taking possession (land or goods); a sudden and forcible taking hold. ' As already stated, Mr. Singh (1) [1963] Supp. 1 S.C.R. 419, 425. ? 157 merely picked up the books which were lying in the shop and did not snatch them away from anyone nor did he take them by force.
On the contrary they were taken away by force by the appellant.
If, indeed, he had retrieved them by force it may have been possible to urge that latter act of his amounts to seizure.
" In our opinion the last sentence quoted above is an abiter, and we must examine the question independently whether the attempt made by the Sales Tax Inspector in this case to take possession of the account books from the hands of the appellant 's son amounts to seizure or does it amount only to an attempt to enforce his right of inspection.
It seems to us that if we were to accept the contention of the learned counsel for the appellant we would be nullifying the power of inspection and search contained in section 29(2) and (4) of the Act.
Any assessee who does not want to show any particular book or if he finds that the Sales Tax Inspector has got hold of a book, which might prove damaging to his case, the assessee could snatch away or ask his clerk or son or relation to snatch away the book and run away leaving the Sales Tax Inspector helpless to do anything in the matter.
In our view the Sales Tax Inspector having seen the two books in the hands of the assessee was entitled to demand that they be shown to him and if he did forcibly try to take possession of them it cannot be said that he attempted to seize the account books within the meaning of section 29(3) for the object was not to dispossess the trader but to hold the books for a temporary period for the purpose of inspection.
If section 29(4) authorises him to search business premises for the purpose of inspection it implies that he can get hold of the books in respect of the business of the assessee.
As observed by this Court in M.P. Sharma vs Satish Chandra(1) these powers are given to the Sales Tax Inspector for the protection of social security.
This Court observed that "a power of search and seizure is in any system of jurisprudence an overriding power of the State for the protection of social security and that power is necessarily regulated by law." The learned counsel urges that the appellant was entitled to exercise his right of private defence of the person of his son.
We are unable to sustain this contention.
The son was clearly committing an offence under section 46(h) of the Act and in these circumstances we are unable to appreciate how any question of private defence arises.
(1) ; ; 1096.
158 In our view the Sales Tax Inspector was acting in execution of his duty as a Sales Tax Inspector and the appellant used criminal force against the Sales Tax Inspector.
Further he intended to deter the Sales Tax Inspector and prevent him from discharging his duty as a public servant.
In the result the appeal fails and is dismissed.
R.K.P.S. Appeal dismissed.
[/INST]Section 29 sub section (2) of the Madhya Pradesh General Sales Tax Act provides in part that all accounts relating to the stock in trade of any dealer shall be.
open to inspection by the Commissioner; and for this purpose sub section (4) empowers the Commissioner to search any place of business of the dealer.
The Sales Tax Inspector visited the shop of the appellant fox a surprise check and wanted to inspect his account books.
When the Inspector tried to prevent removal of the books in a clandestine manner by forcibly taking possession of them, the appellant used criminal force and was subsequently convicted under sections 353 and 506(1) I.P.C.
In appeal to this Court it was contended that the Act did not authorise forcible inspection of accounts and that the Inspector was exercising powers of seizure under section 29(3) of the Act which he did not have.
HELD: Dismissing the appeal, If the powers under sub section (2) 'and (4) are.
read together, it would mean that the Commissioner is entitled to search and take hold of the account books even if the assessee does not place the account books before him.
If the Commissioner does so, he cannot be said to seize the account books.
In the Act "seizure" means that the Commissioner should take into possession the account books and take, them outside the possession of the assessee.
[156 E G] In the present case the Sales Tax Inspector having seen the account books in the hands of the assessee was entitled to demand that the account books be shown to.
him and if he did forcibly try to take possession of them, he was only attempting to enforce his right of inspection.
He cannot be said to have attempted to seize the account books within the meaning of section 29(3), for, the object was not to dispossess the trader but to hold the books for a temporary period for the purpose of inspection.
[157 E F] The observation contra in Hazari Lal vs State of Bihar [1962] Supp. ?.
S.C.R. 419 at 425, held obiter, Commissioner of Commercial Taxes vs Ramkishan Shrikishan Jhovar , 671 and N.P. Sharma vs Satish Chandra ; ; 1096 referred ' to.
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<s>[INST] Summarize the judgementivil Appeal Nos.1685 and 1686(NT) of 1974 From the Judgment and Order dated 21st February, 1974 of the Karnataka High Court in Tax Reference Nos. 67 and 68 of 1972.
M.K. Banerjee, Additional Solicitor General, Ms A. Subhashini and B.B.Ahuja for the Appellant G. Sarangan and Mukul Mudgal for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
These appeals are directed against the judgment of the Karnataka High Court disposing of two Income tax References.
The question in each Reference, which was answered by the High Court in favour of the assessee and against the Revenue, is whether in computing the profits for the purpose of deduction under section 80E of the Income Tax Act, 1961, the loss incurred by the assessee in the manufacture of alloy steels could not be set off against the profits of the manufacture of automobile ancillaries.
The assessee is a public limited company engaged in the 169 manufacture of automobile spares.
The products manufactured by it are covered by the list in the Fifth Schedule to the Income Tax Act.
During the previous year relevant to the assessment year 1966 67, the assessee commenced another activity, the manufacture of alloy steels, which was also an industry included in the Fifth Schedule.
The assessee sustained a loss in the alloy steel industry during the previous years relevant to the assessment years 1966 67 and 1967 68.
It claimed a loss in the sum of Rs. 15,30,688 for the assessment year 1966 67.
For the assessment year 1966 67, the assessee disclosed profits from the industry of automobile ancillaries in the following detail: 1.
Manufacture of Springs at Mangalore Rs. 7,54,107 2.
Manufacture of Springs at Nagpur Rs. 9,61,808 3.
Manufacture of Hubs and Brake Drums Rs. 41,214 Rs 17,57,129 The assessee claimed relief under section 80E at 8 per cent of this amount in the sum of Rs.1,40,574.
In the same manner, the assessee claimed relief under section 80E in the sum of Rs.1,52,483 for the assessment year 1967 68.
The Income Tax Officer declined to grant the relief claimed by the assessee in the two assessment years.
He noticed that the assessee had not taken into account the losses incurred in the alloy steel industry, and he held that the assessee would be entitled to deduction under section 80E on the profits from the manufacture of automobile parts only after setting off the loss in alloy steel manufacture.
After making certain adjustments in the computation of the total income, the Income Tax Officer gave relief under section 80E in the sum of Rs.24,896 for the assessment year 1966 67 and Rs.1,20,986 for the assessment year 1967 68, computing the deduction at 8 per cent on the amount of profits from the manufacture of automobile parts as reduced by the losses from the alloy steel manufacture.
An appeal by the assessee was dismissed by the Appellate Assistant Commissioner of Income tax.
But on second appeal, the Income Tax Appellate Tribunal accepted the contention of the assessee that a deduction was permissible at 8 per cent on the entire profits of the automobile parts industry included in the total income without deducting therefrom the losses in the alloy steel manufacture.
It directed the Income Tax Officer to recompute the relief under section 80E.
At the instance of the Revenue, the Appellate Tribunal referred 170 the case for each of the two assessment years 1966 67 and 1967 68 to the Karnataka High Court for its opinion on the following question of law: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that in computing the profits for the purpose of deduction under section 80E of the Income Tax Act, 1961 the loss incurred in the manufacture of alloy steels should not be set off against the profits of the manufacture of automobile ancillaries?" The High Court answered the question in the affirmative.
To appreciate the merits of the controversy in these appeals it would be as well to set forth at this point the relevant provisions of section 80E of the Income Tax Act as they stood at the time: 80E. "Deduction in respect of profits and gains from specified industries in the case of certain companies (1) In the case of a company to which this section applies, where the total income (as computed in accordance with the other provisions of this Act) includes any profits and gains attributable to the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles and things specified in the list in the Fifth Schedule, there shall be allowed a deduction from such profits and gains of an amount equal to eight per cent thereof, in computing the total income of the company.
" It is not disputed that the assessee is a company to which section 80E applies.
The question is whether for the purpose of granting relief under s.80E the loss suffered by the assessee in the manufacture of alloy steels can be set off against the profits arising from the manufacture of automobile ancillaries.
It is apparent that section 80E provides for the grant of a rebate when computing the total income of a company carrying on the business of generating or distributing elect 171 ricity or other form of power or of constructing, manufacturing or producing any one or more of the articles and things specified in the list in the Fifth Schedule.
Popularly, the list is known as the list of Priority Industries.
A perusal of the entries in the list makes it clear that they are concerned with articles and things which are regarded of primary importance in the industrial and economic development of the country.
Some of them form part of the industrial and economic base of the country while others enter into the industrial and economic infrastructure considered necessary or desirable for its development.
A certain priority has been assigned to the construction, manufacture or production of those articles and things.
They find place in section 80E along with the business of generation or distribution of electricity or other form of power.
Nobody can dispute that electrical energy or other form of energy is crucial to industrial and economic development.
The nature of articles and things included in the list in the Fifth Schedule possesses the same character.
Alloy steels are undoubtedly covered by Entry (1) "Iron and steel (metal), ferro alloys and special steels", while automobile ancillaries appear clearly by that description in Entry 20 of the list.
Both represent separate priority industries.
It is obvious from the object underlying the enactment of section 80E and the terms in which it provides relief that the intention of Parliament in enacting the provision was to encourage the setting up of industries concerned with the generation or distribution of electrical and other energy and the construction, manufacture or production of articles or things specified in the list in the Fifth Schedule.
The intention goes further.
By making a provision for a rebate year after year on the industry making profits and gains during the year, the intention also was to provide an incentive for promoting efficiency in the industry.
It is clear that the benefit was directed to the setting up and also the efficient working of the priority industries.
How is the benefit to be worked out? First, it must be a company to which section 80E applies, that is to say a company which satisfies the requirements of sub section
(2) of section 80E.
Second, the total income, as computed in accordance with the Income tax Act 1961 without taking into regard the provisions of section 80E, should include profits and gains attributable to the business or the industry mentioned in the section.
Third, from the profits and gains attributable to such business or industry a deduction has to be allowed of an amount equal to eight per cent of such profits and gains and effect must be given to this deduction when computing the total income of the company.
172 The assessee in this case carries on two industries, both of which find place in the list in the Fifth Schedule and can, therefore, be described as priority industries.
It is urged by the learned Additional Soliciter General, appearing for the Revenue, that on a true application of section 80E the profit in the industry of automobile ancillaries must be reduced by the loss suffered in the manufacture of alloy steel, and reference has been made to a number of cases to which we shall presently refer.
After giving the matter careful consideration we do not find it possible to accept the contention.
It seems to us that the object in enacting section 80E is properly served only by confining the application of the provisions of that section to the profits and gains of a single industry.
The deduction of eight per cent is intended to be an index of recognition, that a priority industry has been set up and is functioning efficiently.
It was never intended that the merit earned by such industry should be lost or ' diminished because of a loss suffered by some other industry.
It makes no difference that the other industry is also a priority industry.
The coexistence of two industries in common ownership was not intended by Parliament to result in the misfortune of one being visited on the other.
The legislative intention was to give to the meritorious its full reward.
To construe section 80E to mean that you must determine the net result of all the priority industries and then apply the benefit of the deduction to the figure so obtained will be, in our opinion, to undermine the object of the section.
An example will illustrate this.
An industry entitled to the benefit of section 80E could have its profits wholly wiped out on adjustment against a heavy loss suffered by another industry, and thus be totally denied the relief which should have been its due by virtue of its profits.
In our opinion, each industry must be considered on its own working only when adjudging its title to the deduction under section 80E. It cannot be allowed to suffer because it keeps company with some other industry in the hands of the assessee.
To determine the benefit under section 80E on the basis of the net result of all the industries owned by the assessee would be, moreover, to shift the focus from the industry to the assessee.
We hold that in the application of section 80E the profits and gains earned by an industry mentioned in that section cannot be reduced by the loss suffered by any other industry or industries owned by the assessee.
We shall now turn to the cases cited before us.
In the view which has found favour with us it is apparent that the Madras High Court erred in holding in Commissioner of Income tax, Tamil Nadu III vs English Electric Company Ltd., , that in granting relief under section 80E the adjustment of certain losses in other trading 173 transactions was permissible in determining the quantum of profits and gains attributable to the priority industry claiming relief under that provision.
The High Court did not correctly appreciate the law laid down by this Court in Cambay Electric Supply Industrial Co. Ltd., vs Commissioner of Income tax, Gujarat II.
, That was a case where this Court held that, for the purpose of granting relief under section 80E to an industry, account must be taken when computing the profits and gains attributable to that industry of the balancing charge worked out under sub section
(2) of section 41 as well as items of unabsorbed depreciation and any depreciation development rebate carried forward from earlier years.
It appears from the facts of that case that the balancing charge as well as the unabsorbed depreciation and unabsorbed development rebate related to the particular industry itself.
The only business carried on by the assessee there was generation and distribution of electricity at Cambay.
The balancing charge arose because during the relevant accounting period the assessee had sold some of its machinery and buildings.
The unabsorbed depreciation and development rebate also appear to relate to the same business.
There is no indication that any of them related to a business or industry distinct from that whose profits and gains formed the subject of computation under section 80E. Our attention has been invited by the Revenue to Distributors (Baroda) P. Ltd.v.
Union of India and Others, ; That is a case in which the Constitution Bench of this Court was called upon to consider the scope of section 80M of the Income tax Act.
We do not see how that case is in any way relevant to the case before us.
The point before the Court appears to have been whether the income by way of dividends from a domestic company, which fell to be included in the gross total income of the assessee, should be the amount computed in accordance with the provisions of the Act or the full amount received from the paying company.
We may refer at this point to Commissioner of Income tax, West Bengal II vs Belliss and Morcon (I.) Ltd., a decision of the Calcutta High Court to which one of us (Sabyasachi Mukharji J.) was a party.
That decision supports the view taken by us in so far as it lays down that in applying section 80 I of the Income tax Act (which replaced section 80E) it is not permissible to compute the profits of the priority industry, respecting which the relief is claimed, by taking into account the depreciation loss from other industries.
No doubt the depreciation loss arose in that case from non priority industries, but in view of what we have said earlier that should make no difference whatever.
We think it unnecessary to refer to other cases on the point.
We think it sufficient to indicate that a distinction must be drawn between a case where the loss or un 174 absorbed depreciation pertain to the same industry whose profits and gains are the subject of relief under section 80E and a case where the loss or unabsorbed depreciation relate to industries other than the one whose profits and gains constitute the subject of relief.
While concluding we may point out that the Mysore High Court seems, in our opinion, to be perfectly right in holding in Commissioner of Income tax, Mysore vs Balanoor Tea and Rubber Co. Ltd., that the loss from the plastic business carried on by the assessee could not be deducted from the profits and gains attributable to the tea industry for the purpose of computing the quantum of the profits and gains attributable to the tea industry under section 80E.
In the result, we affirm the answer returned by the High Court to the question raised in the Income tax References.
The appeals are dismissed with costs.
A.P.J. Appeals dismissed.
[/INST]The assessee company is engaged in the manufacture of autombile spares.
During the previous year relevant to the assessment year 1966 67, the assessee also commenced the manufacturing of alloy steels.
Both the industries are included in the Fifth Schedule to the Income Tax Act, 1961.
The assessee sustained a loss in the alloys steel industry during the previous years relevant to the assessment years 1966 67 and 1967 68.
It claimed a loss in the sum of Rs.15,30,688 for the assessment year 1966 67.
For the assessment year 1966 67, the assessee disclosed profits to the tune of Rs.17,57,129 from the industry of automobile ancillaries.
The assessee claimed relief under section 80E at 8% of this amount in the sum of Rs.1,40,574.
Similarly the assessee claimed relief in the sum of Rs.1,52,483 for the assessment year 1967 68.
The Income Tax Officer declined to grant the relief claimed and held that the assessee would be entitled to deduction under section 80E on the profits from the manufacture of automobile parts only after setting off the loss in alloy steel manufacture.
The Appellate Assistant Commissioner dismissed the appeal of the assessee.
But on second appeal, the Tribunal accepted the contention of the assessee that a deduction was permissible at 8% on the entire profits of the automobile parts industry included in the total income without deducting therefrom the losses in the alloy steel manufacture and directed the Income tax Officer to recompute the relief under s.80E.
In the Reference, on the question whether in computing the profits for the purpose of deduction under section 80E of the Income tax Act, 1961, the loss incurred in the manufacture of alloy steels should not be set off against the profits of the manufacture of automobile ancillaries, the High Court answered in favour of the assessee and against the revenue.
167 In the Appeal to this Court, on behalf of the Revenue it was contended that on a true application of section 80E the profit in the industry of automobile ancillaries must be reduced by the loss suffered in the manufacture of alloy steels.
Dismissing the appeal, ^ HELD: 1.
In the application of section 80E of the Income tax Act, 1961 the profits and gains earned by an industry mentioned in that section cannot be reduced by the loss suffered by any other industry or industries owned by the assessee.
[172G] 2.
Each industry must be considered on its own working only when adjudging its title to the deduction under section 80E. It cannot be allowed to suffer because it keeps company with some other industry in the hands of the assessee.
To determine the benefit under section 80E on the basis of the net result of all the industries owned by the assessee would be, to shift the focus from the industry to the assessee.
[172E F] Commissioner of Income tax, Tamil Nadu III vs English Electric Company Ltd., [1981]131 ITR 277 overruled.
Cambay Electric Supply Industrial Co.Ltd.
vs Commisioner of Income tax, Gujrat II, followed.
Distributors (Baroda) P. Ltd. vs Union of India & Ors., ; inapplicable.
Commissioner of Income tax, West Bengal II vs Belliss and Morcon (1) Ltd., ; and Commissioner of Income tax, Mysore vs Balanoor Tea and Rubber Co. Ltd., approved.
The object underlying the enactment of section 80E was to encourage the setting up of industries concerned with the generation or distribution of electrical and other energy and the construction, manufacture or production of articles or things specified in the list in the Fifth Schedule.
By making a provision for a rebate year after year on the industry making profits and gains during the year, the intention also was to provide an incentive for promoting efficiency in the industry.
The benefit was directed to the setting up and also the efficient working of the priority industries.
[171E F] 168 4.
The object in enacting section 80E is properly served only by confining the application of the provisions of that section to the profits and gains of a single industry.
The deduction of 8% is intended to be an index of recognition that a priority industry has been set up and is functioning efficiently.
It was never intended that the merit earned by such industry should be lost or diminished because of a loss suffered by some other industry.
It makes no difference that the other industry is also a priority industry.
The co existence of two industries in common ownership was not intended by Parliament to result in the misfortune of one being visited on the other.
The legislative intention was to give to the meritorious its full reward.
To construe section 80E to mean that one must determine the net result of all the priority industries and then apply the benefit of the deduction to the figure so obtained will be, to undermine the object of the section.
[172B E] In the instant case, both the industries carried on by the assessee find place in the list in the Fifth Schedule and represent separate priority industries.
[172A]
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 365 of 1981.
From the Judgment and Order dated 23.3.
1978 of the Gujarat High Court in First Appeal No. 236 of 1971.
R.F. Nariman, P.H. Parekh and M.K. Pandit for the Appellant.
R.P. Bhatt, C.V. Subba Rao, P.P. Srivastava, Mrs. H. Wahi and M.N. Shroff, (NP) for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The plaintiff Bhavnagar Municipality are the appellants.
The suit was filed by the plaintiff for a declaration of its title and for possession of the suit property described in the schedule to the plaint.
They had also prayed for damages for wrongful occupation in respect of a portion of the property and rent for another portion, for the period from 1st January, 1964 till possession of the property is delivered to the plaintiff.
The defendants are the Union of India and.
the State of Gujarat.
The suit property is described in two parts in the schedule to the plaint.
The first part consist of a large extent of vacant land which is referred to in these proceedings as Parade Ground.
The second part is covered by Survey Nos. 162, 163, 164 and 165 on which structures of old Lancer 's lines, are standing and certain evacuees were Occupying at the time of the suit.
This second part is sometimes referred to as Lancers quarters and also sometimes ' as Rasala Lines.
The plaintiffs ' case was that by Resolution No. 37 dated 19th January, 1984 published in the Bhavnagar Darbar Gazette dated 24th January, 1948: ".
The Bhavnagar State bestowed the rights of the State of Bhavnagar to effect sales of land in the Municipal area of Bhavnagar City in Bhavnagar Municipality and by a further Order No. 77 of dated the 29th of February, 1948 the State vested the said lands except four plots of land mentioned therein in the Bhavnagar Municipality . " 222 The further case of the plaintiff was that by virtue of these orders the entire suit lands mentioned in the plaint have: "vested in and belongs to the plaintiff who entered into and remained in possession thereof till recently." And that subsequent to the erstwhile State of Bhavnagar merging in the United States of Kathiawar which was subse quently known as the State of Saurashtra, the Government of Saurashtra recognised the aforesaid Resolutions dated 19th January, 1948 and 29th February, 1948.
The further case of the plaintiff was the Government of India claiming to be the owner of the Parade Ground, in or about June, 1961 fixed the boundary marks and that the Government of India 's entry into possession constitute wrongful encroachment.
The plaintiff claimed damages for this wrongful occupation of the Parade Ground from 1st January, 1964 till they vacate the wrongful encroachment and hand over possession to the plaintiff.
So far as the Lancer quarters or Rasala Lines is con cerned it was stated in the plaint that the structures in the land covered by the Survey numbers referred to in part 2 of the schedule to the plaint did not belong to the plain tiff, that the same were occupied by the State Lancers and subsequently by the refugees, and that the plaintiff allowed the land and the structures thereon to be used free by the Government.
However, they were entitled to recover rent or compensation in respect of this land for the period from 1st January, 1954 till delivery of possession.
The Union of India filed a written statement which was adopted by the State of Gujarat.
it was contended by the defendants that the Parade Ground was used by the Ex Bhavna gar state forces and that barracks and other military build ings used for accommodation of the Ex Bhavnagar state forces known as Lancer 's Lines were in existence for a long time prior to 1948 in the suit property known as Rasala Lines and that consequent upon the Bhavnagar State acceding to the Indian Union and consequent on the Federal Financial Inte gration of States, accommodation, lands and buildings in the use or occupation of the Ex state forces were transferred to the Government o[ india and became its property.
The Board of officers consisting of six members including Executive Engineer, Public Works Department as representative of the State of Saurashtra was constituted and the buildings known as infantry lines and Lancer 's lines were taken over on 7th June, 195 1 by the Government of India.
They further stated that the 223 State of Saurashtra admitted the ownership of the suit property and the structures vested in the Defence Ministry from the date of Financial integration and when the State of Saurashtra, (as it was then known) required the land of the Parade Ground for this use that was handed over to the Saurashtra Government on 7th July, 1952 by the military engineers of the Government of India.
The defendants denied that either the Resolution No. 37 dated 19th January, 1948 or Resolution No. 77 dated 29th February, 1948 vested in the plaintiff the land of the Parade Ground or the lands and buildings known as Rasala Lines.
The defendants also denied that they were trespassers or liable to pay damages and rent in respect of the suit property.
The Trial Court held that the plaintiff had proved its title to the suit land and that they were in possession in the suit property till 7th July, 1952 when physical posses sion was handed over by the military engineers of the Gov ernment of India to the State Public Works Department of the State of Saurashtra.
Since the suit was filed on 3rd March, 1964 the suit was not barred under section 65 of the Limita tions Act, 1963.
However, on the ground that in respect of Rasala Lines the plaintiff have admitted that they did not own the buildings thereon, they are not entitled to recover possession of the lands covered by the Survey numbers de scribed in the second part of the schedule to the plaint.
Accordingly, the suit for possession was decreed in respect of the Parade Ground and dismissed in respect of the Rasala Lines.
The first defendant Union of India, filed an appeal to the High Court of Gujarat against this judgment and decree of the Trial Court and the Bhavnagar Municipality filed cross objections in so far as the suit was dismissed in respect of the land comprised in the Rasala Lines.
The High Court dismissed the cross objections filed by the Municipal ity holding that Resolution No. 37 dated 19th January, 1948 was confined to open lands and not to lands below standing structures and that, therefore, the cross objections relat ing to the Rasala Lines could not be sustained.
The High Court however allowed the appeal of the Union of India in the view that even assuming that by virtue of the Resolution No. 37 dated 19th January, 1948 the title to the Parade Ground had come to be vested in the Municipality, there was nothing on record to show that the Municipality was formally handed over the land in question, that its right over the land was never recognised by the Union of India or the State Government and that the various documents filed in this case, would go to show that as early as July, 1950 these lands and other properties which were in occupation of the 224 erstwhile state military had been taken over and remained under the control of the Defence Ministry of the Union of India and that the possession was handed over by the Union of India to the State Government on 7th July, 1952 for use.
The High Court also held since the plaintiff had not shown possession of the suit building within 12 years prior to 3rd March, 1964 when the suit was filed, the suit was also liable to be dismissed as barred by limitation, and that therefore it was not necessary either to deal with the argument of the defendants that the vesting that was contem plated in the Resolution 37 dated 19th January, 1948 and Resolution 77 dated 29th February, 1948 was not intended to be vesting in its full amplitude, but was meant only to appoint the Municipality as agent of the State to dispose of the land.
The plaintiff Municipality have filed this appeal under Article 136(1) of the Constitution against this judg ment of the High Court of Gujarat.
The learned counsel for the appellant contended that the High Court should have given a finding on title as Article 65 of the is applicable to this case since the suit was filed on 3rd March, 1964, and that on the finding of the Trial Court in favour of the plaintiff on the question of title in respect of 'Parade Ground ', and in the absence of specific plea of adverse possession in the writ ten statement, the Trial Court 's decree should have been confirmed.
He also assailed the finding of the High CoUrt on the question whether the plaintiff was handed over or taken possession of the suit property in pursuance of the Resolu tion dated 19th January, 1948.
We are of opinion that the learned counsel for the appellant is well founded in his contention that Article 65 of the is applicable in this case as the suit was filed on 3rd March, 1964 but the Act had come into force on 1st January, 1964.
Therefore, since the suit is for possession based on title to the suit property and the defendants had denied title, of the plaintiff, it is necessary for the Court to give a finding on title of the plaintiff even if the defendants in possession had not pleaded adverse possession.
We also think that it is just and necessary that we ourself consider the question of title and that it is not necessary to remand the case for that purpose.
We, therefore, proceed to consider the question of title of the plaintiff to the suit proper ties.
In order to understand the nature and implication of the Resolution No. 37 and the other documents relied on by the learned counsel for the appellants in support of the claim of title of the Municipality for the Parade Ground and the land in Rasala Lines or Lancer quarters it is necessary to trace briefly the constitutional history of accession and 225 integration of the Indian States with the Union of India.
The federal scheme embodied in the Government of India Act, 1935, was the first effort to provide for a constitutional relationship between the Indian States and the Government of India on a federal basis.
Section 311 of the Government of India Act, 1935 defined as 'Indian State ' as meaning any territory not being part of 'British India '.
whether de scribed as a State, an Estate, a Jagir or otherwise.
Part II of the Government of India Act, 1935 provided for the estab lishment of a Federation of India by accession of Indian States.
In spite of the protracted negotiations that fol lowed the enactment of Government of India Act the Federa tion envisaged under the Act could not come into existence in view of the States not opting for accession.
But by the setting up of the new dominions under the Indian Independ ence Act, 1947 the suzerainty of the British Crown over indian States lapsed along with it all functions, obliga tions, powers, rights, authority or jurisdiction exercisable by the Crown.
However, the proviso to section 7 provided that effect shall, as nearly as may be continued to be given by the Dominion Government, to the provisions of any agree ment between the Indian State and the Crown in regard to matters specified therein until the same are denounced by either of the parties.
It was in this background the Domin ion Government of India created a new department called the State Department on the 5th July, 1947 to deal with matters arising between the Central Government and the Indian States.
This department was in charge of Sardar Patel.
After persistent negotiations and persuation, barring three States, all the Indian States in the geographical limits of India had acceded to the Indian Dominion by 15th August, 1947.
The integration of States however did not follow uniform pattern in all cases.
Merger of States in the prov inces geographically contiguous to them was one form of integration; the second was the conversion of States into Central administered areas.
The third category are those cases where several small groups of States which could be consolidated into sizeable units by uniting them to form unions of States on the basis of full transfer of power from the rulers to the people.
This form of consolidation of States was adopted in Kathiawar covering 222 States and Estates with varying territories and jurisdiction.
The scheme for the constitution of the United State of Kathia war, later known as Saurashtra was finalised and the cove nant was signed on 23rd January, 1948 and the new State of Saurashtra inaugurated on the 15th February, 1948, vide Government of India, Ministry of States, "White Paper on Indian States".
The financial integration was simultaneously taken up with accession and territorial integration.
The Indian States Finances 226 Enquiry Committee headed by Shri V.T. Krishnamachari was constituted by Resolution dated 27th October, 1948 of the Government of India and the recommendations were incorporat ed in the Constitution.
On the adoption of the new Constitu tion of India the process of territorial integration of States thus became complete.
Under the new Constitution all the constituent units both Provinces and States were classi fied into three classes.
namely, Part 'A ' States which correspond to the former Governor 's Provinces; Part 'B ' States which comprised the Union of States and the States of Hyderabad, Mysore and Jammu and Kashmir; and Part 'C ' States which correspond to the former Chief Commissioners ' Prov inces.
This territorial integration of States is effected by defining in Article 1 of the Constitution that the territo ries of India include the territories of all the States specified in Parts A, B and C of the First Schedule.
Thus with the inauguration of the new Constitution on the 26th November, 1949 the merged States have lost a11 vestiges of existence as separate entitles.
With the accession and completion of territorial and financial integration and the Part 'B ' States forming part of Indian Union, the lands and buildings in the use or occupation of the former Indian State Governments, have distinguished from the private properties of the rulers, were transferred and vested in the Government of India and became its property.
The documents which the learned counsel for the plain tiff strongly relied in support of title to the suit proper ty are Resolution No. 37 dated 19th January, 1948 and Reso lution No. 77 dated 29th February, 1948.
A translation of these documents which are in Gujarati, have been marked as exhibit 87 and they reads as under: "It may be noted by your Honourable Highness that we have personally made application regarding some matter regarding our Bhavnagar State in respect of the Scheme of making one State of Saurashtra: Kathiawar: and the fol lowing arrangement is required to be made.
1,2,3,4 5.
The right of the State to sell the land in the limit of the Municipalities of Bhavnagar City and of the District Towns (Kasba) vested hereby in the Municipalities concerned hence forth; and the amount of the rent and lease of the Town Planning area shall be given to the Bhavnagar City 227 Municipality henceforth.
Sheth Abdul Hussain Gulamhussain and Sheth Masumali Zafarali has given their plot for Mahatma Gandhi Mandir.
And they have made application for getting the plot of the land of the same area for building their own houses.
I have made recommendation thereunder for giving the same to them without taking Premium (Sukhadi).
And if the recommen dation which I have made is accepted the said approval may not get disturbed in these rights are given to Municipality.
6, 7, 8, 9, 10, 11, 12, 13, 14.
Forwarded with compliments to the Honourable Your Highness for passing necessary order in favour with kindness, regarding the implemen tation accordingly in respect of the approval of the scheme of the above stated Paragraphs No. 1 to 14 after going through the above stated facts.
Sd/ Anantrai Prabhashanker, Chief Diwan Sansthan Bhavnagar H.D.R. No. 37 Upon considering all the facts stated above, under the above recommendation, the schemes according to the Darakast made in the afore said paragraphs from 1 to 14 are sanctioned.
Papers returned to Chief Diwans.for informa tion and for necessary action to be taken.
19.1.1948 Sd/ Krishkumarsinhji Maharaj section Bhavna gar." "The right of the State to sell the land in the limits of the Municipalities of Bhavnagar City and of the District Towns (Kasba) has been vested in the Municipalities concerned under the Di.
R. No. 37 dated 19.1.1948 of His Highness.
228 It is deemed proper to make clarification that the council of Ministers had decided to keep in reserve the below mentioned lands in Bhav nagar for the use of the State.
Therefore the same are not included in the lands handed over to the Municipality.
Particulars of the lands: 1.
Open land of Gangajalia Talav situated at South side of the theatre and the temple and wire fencing done near Gangajalia Talav.
The open square plot (Chogan) situated opposite to Gangnath Mahadev Towards Darbar Hall and Nakubag.
The open square plot (Chogan) opposite to Darabari Motor Garrage.
A triangular piece of the land opposite to Sir Takhatsinhji Hospital near Kailasbaug.
Information regarding this resolution may be sent to the parties concerned.
29.3.48 Sd/ Jadanji K. Mode chief Minister" The translation also does not appear to be accurate, as in another translation made, which were filed with the special leave petition the first operative portion is translated as follows: "the right of the State to sell the land be transferred to the Municipalities of proper Bhavnager and other Municipalities of Kasbas, and the rent which is being realised of the plots of Town Planning Area henceforth be realised by Bhavnagar Municipality.
" Again the first paragraph of Resolution No. 77 is translated as: "Proper Bhavnagar and Kasba Municipalities have been given the right of the State to sell the land within the limits of the Municipality as in H.D.R. No. 37 dated 19.1.1948.
" In fact, in the suit notice under section 80, Civil Proce dure Code the 229 plaintiff have stated that these orders "bestowed the rights of the then State of Bhavnagar to effect the sales of land in the Municipal area.
" We have already noticed that the Saurashtra State was formed by consolidation of several small States.
The scheme referred to in the first paragraph was the scheme of consol idation of the States into United States of Saurashtra.
The 14 proposals in that letter were the arrangements that were required to be made in order to give effect to the scheme.
There should have been number of Municipalities in the States which had merged into a union under the covenant.
The land within the limits of Municipalities referred to in the orders extracted above were the lands of the Government of the States concerned because obviously the covenants of accession and integration under the scheme of forming Union of States could not deal with the private properties of the rulers.
The right to sell such lands of the State Government were with the Government concerned.
It is that right in our view, that was given to the Municipalities after the forma tion of the Union of the United States of Saurashtra.
It cannot be treated, therefore, as a transfer of title in respect of those lands to the municipality but the right to execute the sale deed in respect of those lands of the Government was transferred or vested in the Municipalities concerned.
It amounts conferring an authority or authorising the Municipalities to execute the sale deeds in respect of Government lands situate within the Municipality, which should normally have been done by the State Government.
The subsequent correspondance and orders of the Government also show that the Government of India understood and treated these orders only as authorisation or transferring of power to execute sale deeds and collect rent in respect of Govern ment lands situated within the Municipality.
The Government had treated those orders as liable for cancellation or modification.
If the effect of those orders were transfer and vesting of title in the Municipalities, no question divesting of title would or could arise.
Resolution 77 itself was subsequent to Resolution 37 but excluded certain lands from the scope of Resolution 37.
This could only be on the basis that the title had not vested in the Municipali ties under Resolution 37.
Again this authorisation itself was cancelled by the Government of Gujarat under Order No. LMN 546 14576 A.G. dated 26.3.63.
But since a number of Municipalities made representation to the Government to reconsider the same, the Government reconsider the entire case and decided that the right to sell plots of land given under Resolution No. 37 dated 19th January, 1948 by the State of Bhavnagar to all 230 the Municipalities of Old Bhavnagar States, and the right to give the same on rent lease and to take the income therefrom shall be enjoyed by the Municipalities subject to the condi tions mentioned in the letter of the Government dated 10th August, 1965.
These conditions read as follows: "1.
The right to sell the land and to give it on rent lease and to get the out come there from shall apply to the land of the Government coming within the limit to the Municipality decided fixed on the date of the Order of the State of Bhavnagar i.e. dt.
19.1.48.
And the same shall not apply to the land falling within the extended limit if the limit of the Municipality is increased.
The procedure to be followed for giving this land in sale or on rent lease shall generally be followed according to the rules of Government, that is to say public auction shall be made.
If the approximate value of the land to be given on sale or on rent lease comes to Rs.25 per sq.
metre or it is more than that the sale or the lease land shall be considered final after permission of the revenue department of the Government for sale or lease is obtained.
The sale or rent lease of this land shall be done according to the purpose decided in the scheme following the Town Development Scheme of the Municipality, that is to say if the locality is fixed in the development scheme for industrial or residential purpose the land of the suit locality shall be given for that particular purpose.
And if some lands are fixed to be reserved for keeping open or for the purpose of garden or for some public purpose in the development scheme, the said land shall not be given on sale or on lease for private purpose.
The Municipalities shall have to deposit the income obtained from sale or rent lease of the land of the aforesaid land of the Govern ment, in a separate fund and the same shall be used for the work of the development of the city town" These conditions are inconsistent with the plaintiff 's case of absolute 231 ownership in themselves.
We have, therefore, no doubt that what was conferred on the Municipality under Resolution 37 dated 19th January, 1948 was only a right or an authorisa tion to sell the land as representing the Government but not a vesting of the title itself in the Municipality.
The other documents relied on by the learned counsel in support of his contention that the title itself should have been vested in the Municipality may now be noticed.
exhibit 95 dated 2lst July, 1950 is a copy of the proceedings of the Board of Officers of the Defence Department in which they have described detailed inventory of Defence department assets, accommodations, installations, furniture, fitting and connected stores pertaining to Saurashtra state forces in Bhavnagar.
In this while referring to the suit lands which was stated to be in their possession a remark has been made to the effect: "The Bhavnagar Municipality claims the land in question on the basis that the whole assets of the Bhavnagar town planning Department had been transferred to them by the orders of his Highness, Bhavnagar, State in 1948 and they are collecting the Revenue from the farmers.
The claim will subsequently have to be veri fied.
" We are unable to see how on the basis of this letter the Municipality could claim a title.
At best it may be treated as evidence that in July, 1950 the Municipality made a claim for the land.
But at the same time it may be pointed that the document is evidence against the Municipality in so far as it treated the properties as belonging to the Defence Department of the Government of India and that the Defence Department were in possession of the same.
In the two let ters exhibit 73 dated 30.11.1950 and exhibit 72 dated 15.6. 1951 which are communications from the Government of Saurashtra it is only stated that suit lands do not vest to the Govern ment of Saurashtra.
As seen earlier, possession of the lands were handed over by the Government of India to the State Government only on 7.7.
1952 and, therefore, these letters cannot be of any help to the appellant.
However, it may be mentioned, that the Government of Saurashtra have corrected themselves in their communication dated 6th May, 1952 and stated that the claim of the plaintiff that the lands were vested in Bhavnagar Municipality was erroneous and that the land is vested and is in the possession of Government of India.
The plaintiff have also admitted that the structures in Rasala Lines are not shown to be that of the Municipality in the Municipal records and even in the plaint they did not claim the 232 structures as belonging to the Municipality.
In the suit notice the plaintiff have also not claimed that they "en tered into and remained in possession" of the land as stated in the plaint para 5.
It is also in evidence that these buildings were there long before 1948 and that, therefore, the land alone could not have been vested in the Municipali ty without buildings.
In fact, the Resolution No. 37 dated 19th January, 1948 which is relied on does not make any distinction and it refers to only lands and not buildings.
We, therefore, agree with the finding of the High Court that possession of the land was also not taken by the Municipali ty at any time.
It is not open to the appellant to rely on the principle that possession follows title.
In this case not only there is evidence to show that physical possession was with the defendant but also there could not be any legal possession with the plaintiff as the title to the land is not vested in them.
Since the suit itself is for possession based on title and the plaintiff have not proved title it is not necessary for the defendant to plead or prove adverse possession.
In the result the appeal fails and it is dismissed.
However, the parties will bear their respective costs in this Court.
Y. Lal Appeal dis missed.
[/INST]The Expenditure Tax Act, 1987, envisaged a tax at 10% ad valorem on chargeable expenditure incurred in the class of hotels wherein room charges for any unit of residential accommodation were Rs.400 per day per individual.
Section 5 of the Act defined chargeable expenditure to include expend iture incurred in or payments made in such class of hotels in connection with the provision of any accommodation, residential, or otherwise, food or drink whether at or outside the hotel, or for any accommodation in such hotel on hire or lease or any other services envisaged in that Sec tion.
The petitioners, who were engaged in, or associated with the hotel industry challenged the constitutional validity of the Act on grounds of 919 lack of legislative competence and violation of Articles 14 and 19(1)(g) of the Constitution.
It was contended that the Act, in its true nature and character, was not one imposing an expenditure tax, as known to law, accepted notions of Public Finance, and to legislative practice but was, in pith and substance, either a tax on luxuries falling within Entry 62 of List II of the Seventh Schedule, or a tax on the consideration paid for the purchase of goods constituting an impost of the nature envisaged in entry 54 of List II, and was clearly outside the legislative competence of the Union Parliament; that the Act was violative of Article 14 as the basis on which the hotels were classified was arbitrary an unintelligible, having no rational nexus with the taxing policy under the Act, inasmuch as persons similarly situat ed, and who incurred the same extent and degree of expendi ture on the same luxuries, were differentiated on the sole basis that in one case the expenditure was incurred in a hotel where one of the rooms had a charge of Rs.400 per day per individual marked for it, while in the other though equally wasteful expenditure was incurred in a more luxuri ous restaurant, the latter expenditure was exempt, that even if more sophisticated and expensive food and drinks and other services, envisaged in clauses (a) to (d) of Section 5 were provided in a hotel or catering establishment which fell outside the class, the expenditure incurred thereon is unaffected by the law, that the standards and measures for the computation of the chargeableexpenditure under the Act was vague and arbitrary, that the expression 'other similar services ' in clauses (d) of Section 5 was non specific and vague; and that the Act was violative of petitioners ' funda mental right under Article 19(1)(g) as it imposed unreasona ble onerous restrictions on their freedom of business.
The respondent Union of India sought to sustain the legislative competence of Parliament to enact the law under Article 248 read with Entry 97 of List I of the Seventh Schedule, contending that the law, in pith and substance, was not one 'with respect to luxuries under Entry 62, List 1, and the tax on expenditure, as the legislative had chosen to conceive it, was referrable to residuary power, that the economists ' concept of such an expenditure tax was at best an idea of the manner of effectuation of fiscal programme and was no limitation on the legislative power, that the legislative power recognised the demarcation of distinct aspects of the same matter as distinct topics of legislation and that the challenge to legislative competence overlooked the dichotomy of these distinct aspects, the line of demar cation, though sometimes thin and subtle, being real, that the measure adopted for the levy of the tax did not neces sarily determine its essential character and that the object on which the expenditure was laid out might or might not be an item of 920 luxury, or the expenditure might constitute the price of the goods but, what was taxed was the expenditure aspect which, in itself, was susceptible of recognition, as a distinct topic of legislation.
Dismissing the Writ Petitions, this Court HELD: (R.S. Pathak, CJ., Sabyasachi Mukharji, section Natara jan and M.N. Venkatachaliah Per: Venkatachaliah, J.) 1.1 A law imposing the expenditure tax is well within the legislative competence of Union Parliament under Article 248 read with Entry 97 of List I. [940E F] 1.2 The tax envisaged by the Expenditure Tax Act, 1987, is essentially a tax on expenditure and not on luxuries or sale of goods falling within the State power.
The distinct aspect, namely, the expenditure aspect of the transaction failing with the Union power must be distinguished and the legislative competence to impose a tax thereon sustained.
[947D E] 2.1 If a legislature with limited or qualified jurisdic tion transgresses its powers, such transgression may be open, direct and overt, or disguised, indirect and covert.
The latter kind of trespass is figuratively referred to as "colourable legislation", connoting that although apparently the legislature purports to act within the limits of its own powers yet, in substance and in reality, it encroaches upon a field prohibited to it, requiring an examination, with some strictness, the substance of the legislation for deter mining as to what the legislature was really doing.
[939E F] Prafulla Kumar Mukherjee and Ors.
vs Bank of Commerce, , referred to.
2.2 Wherever legislative powers are distributed between the Union and the States, situations may arise where the two legislative fields might apparently overlap.
It is the duty of the Courts, however difficult it may be, to ascertain to what degree and to what extent, the authority to deal with matters failing within these classes of subjects exists in each legislature and to define, in the particular case before them, the limits of the respective powers.
It could not have been the intention that a conflict should exist; and, in order to prevent such a result the two provisions must be read together and the language of one interpreted, and, where necessary modified by that of the other.
[939F G] 921 Union Colliery Co. of British Columbia vs Bryden, at 587; Lefroy Canada 's Federal System., referred to.
2.3 The law 'with respect to ' a subject might inciden tally 'affect ' another subject in some way; but that is not the same thing as the law being on the latter subject.
There might be overlapping; but the overlapping must be in law.
The same transaction may involve two or more taxable events in its different aspects.
But the fact that there is an overlapping does not detract from the distinctiveness of the aspects.
[941E] Governor General in Council vs Province of Madras, at 193 and Laskin Canadian Constitu tional Law, referred to.
2.4 The consequences and effects of the legislation are not the same thing as the legislative subject matter.
It is the true nature and character of the legislation and not its ultimate economic results that matters.
[944C] 2.5 The scope of the present legislation cannot be considered by reference to legislative practice because firstly, the question of legislative practice as to what a particular legislative entry could be held to embrace is inapposite while dealing with a tax which is suigeneris or non descript imposed in exercise of the residuary powers so long as such tax is not specifically enumerated in Lists II ing that the appropriate legislature had limited the notion of a tax of this kind within any confines.
[944E G] Walace Brothers and Company Ltd. vs Commissioner of Income Tax, Bombay City and Bombay Suburban District, [1948] LR 75, IA 86; Navinchandra Mafatlal vs CIT, Bombay City, [1955] 1 SCR 829; Union of India vs H.S. Dhillon, ; at 61; Attorney General for Ontario vs Attorney General for Canada, at 581; Croft vs Dunphy, and Azam Jha Bahadur vs Expenditure Tax Offi cer; , referred to.
2.6 The subject of a tax is different from the measure of the levy.
The measure of the tax is not determinative of its essential character or of the competence of the legisla ture.
[946F G] M/s. Sainik Motors vs State of Rajasthan, ; and Encyclopaedia Britannica on Luxury Tax, Vol.
14 p. 459, referred to.
922 3.1 Though taxing laws are not outside Article 14, however, having regard to the wide variety of diverse eco nomic criteria that go into the formulation of a fiscal policy, legislature enjoys a wide latitude in the matter of selection of persons, subject matter, events, etc., for taxation.
A legislature does not, have to tax everything in order to be able to tax something.
if there is equality and uniformity within each group, the law would not be discrimi natory.
The tests of the vice of discrimination in a taxing law are, accordingly, less rigorous.
[948G H] 3.2 In examining the allegations of a hostile, discrimi natory treatment what is looked into is not its phraseology, but the real effect of its provisions.
The classification must be rational and based on some qualities and character istics which are to be found in all the persons grouped together and absent in the others left out of the class.
Besides, differentia must also have a rational nexus with the object sought to be achieved by the law.
However, no precise or set formulae or doctrinaire tests or precise scientific principles of exclusion or inclusion are to be applied.
The test could only be one of palpable arbitrari ness applied in the context of the felt needs of the times and societal exigencies informed by experience.
[949A, C E] 3.3 Classification based on differences in the value of articles or the economic superiority of the persons of incidence are well recognised.
A reasonable classification is one which includes all who are similarly situated and none who are not.
In order to ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law.
[949E F] Jaipur Hosiery Mills Ltd. vs State of Rajasthan, ; Hiralal vs State of U.P., ; ; State of Gujarat vs Sri Ambika Mills Ltd., ; ; G.K. Krishnan vs Tamil Nadu, [1975] 2 SCR 715; I.T.O. vs N. Takim Roy Limbe, ; ; Secretary of Agriculture vs Central Roig Refining Co.; , ; M/s. Hoechst Pharmaceuticals Ltd. vs State of Bihar, ; and Wallace Mendelson: Supreme Court Statecraft; The Rule of Law and Men, p. 4, referred to.
3.4 In the present case, the bases of classification cannot be said to be arbitrary or unintelligible nor as being without a rational nexus with the object of the law.
A hotel where a unit of residential accommodation is priced at over Rs.400 per day per individual is, in the legislative wisdom, considered a class apart by virtue of the economic superiority of those who might enjoy its custom, comforts and services.
923 This legislative assumption cannot be condemned as irration al.
Judicial veto is to be exercised only in cases that leave no room for reasonable doubt.
Constitutionality is presumed.
[952B C] 3.5 The words "other similar services" in Section 5(d) were intended to embrace services like but not identical with those described in the preceding words.
The content of the expression "other similar services" following, the preceding expressions "by way of beauty parfour, health club, swimming pool or . . "has a definite connotation in the interpretation of such words in such statutory con tents.
The matter is one of construction whether any partic ular service fails within the section and not one of consti tutionality.
[953E F] 4.
A taxing statute is not, per se, a restriction of the freedom under Article 19(1)(g).
The policy of a tax, in its effectuation, might, of course, bring in some hardship in some individual cases.
But that is inevitable, so long as law represents a process of abstraction from the generality of cases and reflects the highest common factor.
The mere excessiveness of a tax or even the circumstance that its imposition might tend towards the diminution of the earnings or profits of the persons of incidence does not, per se, and without more.
constitute, violation of the rights under Article 19(1)(g).
[954F G] Per Ranganathan, J. (Concurring), 5.1 In the context of the social and economic conditions that prevailed in India, it was a luxury for any person to stay in hotels charging high rents and providing various types of facilities, amenities and conveniences such as telephone, television, air conditioner, etc.
An expenditure on something which is in excess of what is required for economic and personal well being would be expenditure on luxury although the expenditure may be of a nature which is incurred by a large number of people including those not economically well off.
[958G H] Abdul Kadir & Sons vs State of Kerala, ; , relied on.
5.2 The legislature has, particularly in a taxing stat ute, a considerable amount of latitude and it cannot be held that, in fixing the standards of indication of luxury, the legislature, has not applied its mind.
In fact, the figures have been amended from time to time and, it has to be pre sumed that the legislature had good reason for fixing these standards.
From the scheme of the legislations, the state legislations fall 924 within the scope of Entry 62, List I and are, therefore, clearly within the competence of the State legislatures and are not liable to be challenged.
[959D; 957C] 6.1 In interpreting the scope of the legislative entries in the three lists, it has to be kept in mind that, while on the one hand, it is desirable that each entry in each of the lists should receive the broadest interpretation, it is equally important, on the other, that the three lists should be read together and harmoniously.
[959E F] 6.2 The power of the State legislature to make laws with respect to any of the matters enumerated in List II is subject to the exclusive power of Parliament to make laws with respect to any of the matters enumerated in List I. Hence, if a matter is covered by an entry in the Union List, no restrictions can be read into the power of Parliament to make laws in regard thereto.
[959G H; 960A] 6.3 The legislative entries are so arranged that the power to enact laws in general and the power to impose taxes are separately dealt with.
Under Article 246(1), the Parlia ment has exclusive powers to make laws with respect to any of the matters, including power to impose taxes, enumerated in List I. [960B C] M.P.V. Sundararamier & Co. vs The State of Andhra Pra desh Another; , at pp.
1479 and 1490, referred to.
It cannot be held that the tax cannot be considered to be an expenditure tax because it is not on expenditure generally but is restricted to specific types of expendi ture.
There is no legal, judicial, economic or other concept of expenditure tax that would justify any such restrictive meaning.
If, conceptually, the expenditure incurred by a person can be a subject matter with reference to which a tax can be levied, such taxation can be restricted only to certain items or categories of expenditure, and its base need not necessarily be so wide as to cover all expenditure incurred by an assessable entity.
Selection of objects and goods for taxation is the essence of any tax legislation and any limitation is an unlimited curtailment of this selective power of taxation of Parliament.
[960H; 961A B, F] 8.1 There is not much of legislative practice which would justify importing any limitation on the concept of a tax on expenditure under entry 97 of List I. Once it is granted that the tax need not exhaust the entire universe of the subject matter, the extent of the subject matter 925 that should be covered or selected for imposing tax should be entirely left to Parliament subject only to any criteria of discrimination or unreasonableness that may attract the provisions of Part 1II of the Constitution.
[962D E, F G] State of Madras vs Gannon Dunkerley Co., ; ; Navinchanda Mafat Lal vs CIT. [1955] 1 SCR 829; Naynit Lal vs AAC, ; ; Harikrishna Bhargava vs Union, ; and Bhagwandas Jain vs Union of India, ; , referred to.
8.2 Legislative lists cannot be interpreted on the assumption that there is a deemed entry "Taxes on Expendi ture" added to List I as a result of the decision in Azam Jha 's case; , Entries cannot be added to the legislative Lists on the basis of decisions of this Court.
In Azam Jha 's case, the pith and substance of the Act con sidered did not fail under any of the entries in List II or III.
However, in the instant case, the legislation coveres only certain types of expenditure.
The decision in Azam Jha 's case cannot help in determining whether the Expendi ture Act 1987 should be construed as imposing tax on expend iture or and on luxuries.
[964A C] Azam Jha Bahadur vs Expenditure Tax Officer, ; distinguished.
Merely because the 1987 Act as well as the State Acts levy taxes which have ultimate impact on persons who enjoy certain luxuries, the pith and substance of both cannot be considered to be the same.
The object of a tax on luxury is to impose a tax on the enjoyment of certain types of bene fits, facilities and advantages on which the legislature wishes to impose a curb.
The idea is to encourage society to cater better to the needs of those who cannot afford them.
Such a tax may be on the person offering the luxury or the person enjoying it.
It may be levied on the basis of the amount received for providing, or the amount paid for or expended for enjoying, the luxury.
Conceivably, it could be on different bases altogether.
The object of an expenditure tax is to discourage expenditure which the legislature considers lavish or Ostentatious.
The object of the first would be to discourage certain types of living or enjoyment while that of the second would be to discourage people from incurring expenditure in unproductive or undesirable chan nels.
If a general Expenditure Tax Act, like that of 1957, had been enacted, no challenge to its validity could have been raised because it incidentally levied the tax on ex penditure incurred on luxuries.
The fact that there will be some overlapping then or that here there is a good deal of such 926 overlapping, because the States have chosen to tax only some types of luxuries and the Centre to tax, atleast for the time being, only expenditure which results in such luxuries, should not be allowed to draw a curtain over the basic difference between the two categories of imposts.
[968E H; 969A B] This distinction is not obliterated merely because of the circumstances that both legislatures have chosen to attack the same area of vulnerability, one with a view to keep a check on 'luxuries ' and the other with a view to curb undesirable 'expenditure '.
[969C] Kerala State Electricity Board vs Indian Aluminium Co., ; In the Central Provinces & Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, ; Province of Madras vs Boddu Paidanna & Sons, ; G.G. in Council vs Province of Madras, ; Ralla Ram vs East Punjab, ; Bhagwan Dass Jain vs Union, ; ; Hingir Rampur Coal Co. Ltd. vs State of Orissa; , and Sainik Motors vs State of Rajasthan, ; , referred to.
A.H.F. Lefroy: Canadian Constitution and Laskin: Canadi an Constitutional Law, referred to.
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<s>[INST] Summarize the judgementAppeal No. 1718 of 1984.
From the Order dated 17.11.83 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED (SB) (T) 338/78 D (Order No. 698/83 D).
A.K. Ganguli, B. Sen, A.K. Chitale, B.R.L. Iyengar J. Ramamurti, Mrs. Radha Rangaswami, P. Parmeswaran, C.V. Subba Rao, C. Ramesh, Virender Kaushal, Praveen Kumar, Vivek Gambhir, S.K. Gambhir, P.H. Parekh, B.N. Agarwal, A.V. Phadnis, Kh.
Nobin Singh, M. Veerappa, Ashok Sagar, Ravinder Narain, D.N. Misra (For JBD & Co.,) E.C. Vidyasagar for L.R. Singh, R. Vaigai and R.K. Maheshwari for the appearing parties.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
With a view to induce the Sugar Factories in the country to produce more and also to commence their operations early in the year, the Government of India have been issuing notifications, from time to time, providing for rebate in the Excise Duty in certain circumstances.
These notifications were issued by the Central Government 763 in exercise of the power conferred by Sub Rule (1) of Rule 8 of the Central Excise Rules, 1944.
We are concerned in these appeals with four such notifications namely (1) the Notification dated 28.9.72 (applicable to the Sugar Year 1972 73), (2) Notification dated 4.10.73 (applicable to the Sugar Year 1973 74), (3) Notification dated 12.10.74 (applicable to the Sugar Year 1974 75) and (4) the Notification dated 30.9.76 (applicable to the Sugar Year 1976 77). 'Sugar year ' means the year commencing on and with 1st October and ending with the 30th of September of the following year.
The interpretation of these notifications is involved in this batch of appeals.
In so far as it is material, the notification dated 28.9.72 and the notification dated 4.10.73 are similar.
So are the notifications dated 12.10.74 and 30.9.76.
It would be appropriate if we set out the notification dated 28.9.72 in its entirety "Notification No. 203172 dated 28.9.1972 In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts sugar, described in column(2) of the Table below and failing under sub item (1) of Item No.1 of the First Schedule to the (1 of 1944), from so much of the duty of excise leviable thereon as is specified in the corresponding entry in column (3) of the said Table.
TABLE section No. Description of Sugar Duty of Excise (1) (2) (3) 1.
Sugar produced in a factory during the Rupees period commencing from the 1st day of forty per October, 1972 and ending with the 30th quintal day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971.
764 2.Sugar produced in a factory during the period commencing from the 1st day of December, 1972 and ending with the 30th day of April, 1973 Rupees which is in excess of 115% of the quantity twenty of suggar produced during the period commencing per from the 1st day of Decmber, 1971 and ending with quintal the 30th day of April, 1972.
3.Sugar produced in a factory during the period commencing from the 1st day of May, 1973 and Rupees ending with 30th day of June, 1973 which is in twenty excess of the quantity of sugar produced per during the corresponding period in 1972.
quintal 4.Sugar produced in factory during the period commencing from the 1st day of July 1973 and ending with the 30th day of September, 1973 Rupees which is in excess of the quantity of sugar twenty produced during the corresponding period in 1972.
per quintal Provided that the exemption under this notification shall not be admissible to a factory (a) which did not work during the base period, or (b) which had only a trial run in the base period, or (c) which commences production for the first time on or after the 1st day of October, 1972 : Provided further that in computing the production of sugar during the periods mentioned in column (2) of the said Table, (a) the data, as furnished in Form R.G. 1 prescribed in Appendix I to the Central Excise Rules, 1944, or in such other record as the Collector may prescribed under rule 53 or rule 173G of the said rules, shall be adopted : 765 (b) any sugar obtained from reprocessing of sugarhouse products left over in process at that end of the base period or earlier shall b e taken into account ; and (c) any sugar obtained by refining gur or Khandasari sugar, or any sugar obtained by reprocessing of defective or damaged sugar or brown sugar, if the same has already been included in the quantity of sugar produced, shall not be taken into account.
Explanation I A factory shall be deemed to have had a trial run during the base period only if, on first going into production, the period during which actual crushing was done during the base period was less than 40 per cent of the average duration of the season in the State in which the factory is situated.
Explanation 11 In this notification, the expression, 'base period ', means the period commencing from the 1st day of October, 1971 and ending with the 30th day of September, 1972.
" Though the Sugar Year extends over a period of twelve months commencing from 1st of October, the period commencing with 1st December and ending with 30th April is said to be the peak production period.
Most of the sugar factories were commencing their operations only in the month of December.
Either with a view to induce these sugar factories to produce more or with a view to induce them to commence their operation early in the sugar year, the rebate provided for producing sugar in the months of October and November in excess of the corresponding period in the previous sugar year was kept relatively high.
The scheme of the notification dated 28.9.72 appears to be this (1) If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, such factory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned.
(2) Rebate for the period 1st December 1972 to 30th April, 1973 was 766 available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned.
(3) For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year.
The said rebate was available again only with respect to the excess production.
(4) For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twenty per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year.
This rebate too was confined to the excess production.
However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base period '.
The expression 'base period ' was defined in Explanation 11.
It meant the period commencing from the 1st day of october 1971 and ending with the 30th day of September, 1972 (Previous Sugar Year).
The sugar factories (concerned with the sugar year 1972 73) did not produce any sugar in one or the other of the four blocks (mentioned in the table contained in the Notification) in the base year (previous sugar year).
During the current sugar year, however, they produced certain quantity of sugar during that block period.
To be more precise, take factory A.
It produced 1000 quintals of sugar in the months of October November, 1972 (Block period (1) but had not produced any sugar whatsoever in the corresponding period (October November, ' 1971) in the base year.
The question arose whether in such a situation, Factory A was entitled to the benefit of rebate provided in Clause (1) of the Table contained in the aforesaid notification with respect to the said 1,000 quintals ? The contention of the factory was that it was so entitled, whereas according to the Revenue, it was not.
It is brought to our notice that even before the controversy actually arose between the parties, the Committee of the Sugar Mill Owners ' Association addressed a letter to the Ministry of Finance, Government of 767 India seeking a clarification as to the meaning and purport of the aforesaid notification.
The letter written by the Committee read as follows "I am to refer to the Notification No. G.S.R. dated 28th September, 1972, issued by the Union Ministry of Finance (Department of Revenue & Insurance), New Delhi, on the above subject (copy enclosed for ready reference).
In this connection, the Government had issued a similar Notification on 13th Oct. 1971, on the same subject.
On this Notification, in response to an enquiry made by the Committee of the Association, the Board had clarified as per their letter No. F. No.14/33 71/CX. 1 dated 26th November, 1971, that a factory which had worked during the base period i.e. during the period commencing from 1st day of October, 1970 and ending with 30th day of September, 1971, though it had not worked during the period from 1st October, 1970 to 30th November, 1970, and the production during this period was nil, would be entitled to the excise rebate at the notified rate on its entire production achieved during the month of October and November, 1971.
As th e Notification issued this year is also on similar lines, the Committee presume that the clarification given by the Board last year will apply to the Notification issued this year also, i.e., where a factory has worked in the base period (1st October, 1971 to 30th September, 1972) it will be entitled to the full rebate on its entire production during the various periods mentioned in the Notification, although during the corresponding periods in the last season, the production may be nil.
The Committee shall be glad if you kindly confirm whether their above presumption is correct.
Thanking you for a line in reply '.
In this letter dated 1st November, 1972 the Ministry of Finance intimated the Committee that the presumption made by the Committee is confirmed in respect of the established factories only.
Later on, however, the Government of India revised their opinion which has led to the present controversy.
768 It is brought to our notice that the sugar factories are governed by and follow the procedure prescribed by Rule 173 G of the Central Excise Rules, which rule occurs in Chapter VII A 'Removal of Excisable Goods on Determination of Duty by producers, Manufacturers or Private WareHouse Licencees.
" Rule 173 G requires every assessee to keep an accountcurrent with the Collector separately for each excisable goods, in the suc form and manner, as the Collector may require.
The rule requires the assessee to make credit periodically in such account current, by cash payment into the treasury, so as to keep the balance in such account cumrent sufrent to cover the duties due on the goods intended to be removed at any time.
Every such assessee has to pay the duty determined for each consignment by debit to such account current before removal of goods.
The Rules further require every assessee to furnish a monthly return in the prescribed form, on the basis of which, assessment is completed by the appropriate officer.
Coming back to the facts of these appeals, the claim for rebate made by these factories was allowed in the first instance but later proceedings were initiated to recover back, or re adjust, as the case may be, the benefit already allowed.
This was the phenomenon all over the country.
These disputes were carried to High Courts.
The main dispute was the same as indicated hereinabove.
The factory has produced a certain quantity of sugar in block period (i) (or, for, that matter, any other block period) in the sugar year 1972 73, but had not produced any sugar whatsoever in the corresponding period in the base year (previous sugar year) but has produced some quantity of sugar during the base year as such; whether such factory is entitled to the rebate prescribed in clause (i) (or such other clause, as may be applicable) of the said Notification ? Since the Notifications for 1972 73 and 1973 74 are more or less similar, disputes raised before High Courts pertained to both these years.
(Indeed, the said issue is common to the other two notifications concerned herein as well, with some difference, as we shall indicate at the proper stage).
It appears that almost all the High Courts except Karnataka have held in favour of the factories.
In Patna High Court, there appears to be a conflict of opinion.
Karnataka High Court has, however, held in favour of the Union of India.
The first of the reported decisions is of the Andhra Pradesh High Court (Chinnappa Reddy, J., as he then was) in Etikoppaka Co operative 769 Agricultural Society vs Union of Inida, The reasoning in the said Judgment has been followed by most of the other High Courts.
See ; 1982 (59) E.L.T. 409 (AHahabad) ; & Haryana); and Shri Ganguli, learned counsel for the Union of India contends as follows : Language of the Notifications (pertaining to the year 1972 73 and 1973 74) is quite clear and unambiguous.
The benefit of rebate is available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971" to take clause (i) of the Notification relating to 1972 73.
The clause contemplates and is based on the premise that sugar is produced during October November, 1972 as well as October November, 1971.
If no sugar was produced during the corresponding period in the previous sugar year (October November, 1971), the very clause is inapplicable.
The contention of the factory owners, which has no doubt been accepted by a majority of High Court, does voilence to the plain language of the clause.
The interpretation placed by the factoryowners leads to certain absurd consequences.
Learned counsel gave more than one illustration to emphasise his submission.
Take a. case where a factory has produced one thousand quintals of sugars in October November 1971 and has also produced one thousand quintals in October November 1972.
In such a situation the factory would not get any rebate in terms of the notification dated 28.9.72, whereas another factory which may not have produced any sugar whatsoever in October November 1971 but has produced one thousand quintals of sugar in October November 1972, gets the rebate at the rate of rupees forty per quintal.
This would really amount to, says the counsel, punishing the first factory more efficient factory for producing the sugar in the previous year And to rewarding the second one the indolent factory which did not produce any sugar during OctoberNovember, 1971.
Another illustration given by the learned counsel is this; a factory had produced five thousand quintals of sugar during the period 1st December, 1971 to 30th April, 1972; it produces the very some quantity again during the period 1st December 1972 to 30th April, 1973; such a factory would not be entitled to any rebate under clause (2) of the said notification; but another factory which had produced, say, just 1000 quintals during the period December 1, 1971 to April 30, 1972 but produces 770 five thousand quintals during the period December 1, 1972 to April 30, 1973 would get the benefit of rebate on 4000 quintals.
This again amounts to, says the counsel, rewarding the inefficient and indolent and punishing the efficient.
The learned counsel seeks to reinforce his argument by referring to clause (2).
It relates to the period 1st December 1972 to 30th April 1973.
Rebate in the sugar produced during this period is available only if it is in excess of 115 per cent of the quantity of sugar produced during the period December 1, 1971 to April 30, 1972.
If the production is nil during the corresponding period in the previous sugar year, asks the counsel, how is one to work out 115% of it.
What is 115% of zero ? asks he.
For all these reasons counsel says, nil production cannot be equated to "the quantity of sugar produced. . in clause (1).
Counsel also says that Clause (1) of the first Proviso in the said notification should be harmonised with the several clauses mentioned in the Table and that no interpretation should be adopted which renders any part of the said notification superfluous.
We find ourselves unable to agree with the learned counsel for the Union of India.
While we agree that the several clauses in the Notification must be read together, harmonised and reasonably understood, we cannot also ignore the underlying object and purpose of the notification.
We Also agree that an interpretation which leads to absurd consequences should be avoided.
Even so, we are afraid, we cannot agree with the learned counsel.
The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year.
The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise.
Running the factories during the off season (we are told, off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production.
Be that as it may, the main issue is whether the words " the quantity of sugar produced during the corresponding period. . do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period ? On a consideration of the rival points of view, we are of the opinion that it does take in.
Holding otherwise would have this absurd consequence : a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quin 771 tals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify.
How does this interpretation advance the purpose of the notification, is difficult to appreciate.
Coming to the second illustration given by the learned counsel, we must say that the idea behind the said notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be.
If this is the object there is nothing absurd in saying that a factory which has produced five thousand tons during December 1, 1971 to April 30, 1972 and produces the.
very same quantity during the period December 1, 1972 to April 30, 1973, does not qualify for rebate under clause (2).
There is no reason or occasion for granting him any rebate.
But where a factory has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded.
It may be remembered that no manufacturer produces sugar merely for the sake of rebate.
Rebate is an inducement, an additional attraction.
It is not as if without rebate provided by these notifications, no one would have produced sugar.
We are also unable to see any difficulty in operating clause (2) of the said notification.
There is no arithmetical difficulty in working out 115% of zero; it is zero.
What applies to clause (1) applies equally to clauses (2), (3) and (4).
Our understanding is reinforced and supported by clause (a) of the first proviso.
It says that the benefit of the said rebate would not be available to a factory 'which did not work during the base period.
" Why does it say so? What is its meaning and implication? It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year.
We may point out that a majority of the High Courts in the country have adopted the very same interpretation as has been placed by us.
It is then argued by the learned counsel for the appellant that exemption notifications should be strictly concluded.
There is no quarrel with the proposition but there is another equally valid principle that such notifications should be given their due effect, keeping in view the purpose 772 underlying.
We must reiterate that no factory owner would keep his factory idle during a particular period only with a view to produce sugar during the same period in the next sugar year and earn rebate in the next year.
More particularly, it can not reasonably be expected that a factory owner would deliberately keep his factory idle during the peak production period (December to April) only with a view to produce sugar during that period next year and earn rebate in such next year.
It would be unrealistic to say so.
Actually these notifications were being issued every year confined to that year.
They were being issued just on the eve of the sugar year or a few days after the commencement of the sugar year and there were variations in the relevant clauses from year to year.
Construed realistically, we see no room for any absurdity resulting from our interpretation ' The case of October November appears to be rather an exception.
Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors.
Indeed, these unfavorable factors appear to be present to a large extent even during the months June to September.
These notifications were evidently meant to compensate the factory owners for producing during these months as well.
As stated already, one must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits.
For the above reasons, we are of the opinion that the interpretation placed upon the said notifications by the majority of the High Courts is the correct one.
We do not agree with the view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988.
For the same reason, we do not also agree with the view taken by the Patna High Court in Civil Writ Jurisdiction Case No. 865 of 1966.
Now coming to the Notifications for the years 1974 75 and 1976 77, the concept of base year is not to be found here; otherwise they are similar to those relating to 1972 73 and 1973 74.
In the notification dated 12.10.74 (relating to the sugar year 1974 75) the sugar year is divided into two blocks/periods.
The first block comprises October and November 1974 whereas the second block takes in December 1974 to September 1975.
Here too, the question is identical to that arising in the years 1972 73 and 1973 74.
The answer too will naturally be the same.
773 In view of the aforesaid conclusion, it is not necessary for us to go into the other questions raised by the factory owners except the following: There is a minor controversy with respect to the working of Clause (2) in Notification No. 146/74 dated 12.10.74 relating to the sugar year 1974 75.
Clause (2) the table contained in the notification reads as follows: TABLE No. Description of Sugar Duty of excise 1 2 Free Sale Levy of Sugar Sugar 3 4 1. . . . . 2.
Sugar produced in a factory during the period commencing on the 1st day of December, 1974, and ending with the 30th day of September, 1975 which is in excess of the average production of the corresponding period of the preceding five sugar years, that is, (a) on excess production upto Rs. 20/ per Rs. 5/ per 7.5% quintal quintal (b) on excess production on the Rs. 40/ per Rs. 10/ per next 10% quintal quintal (c) on excess production on the Rs.501 per Rs. 14/ per next 10% quintal quintal (d) on excess production on the Rs.60/ per Rs. 18/ per next 10% quintal quintal (e) on excess production beyond Rs. 82/ per Rs. 22/ per 37.5% quintal quintal ============================================================ Mr. Ganguli, learned counsel for the Union of India says that some of the Courts have applied the percentages mentioned in sub clauses (a) to (e) to the excess production and not to the average production of the preceding five sugar years.
We may take an illustration to explain what the learned counsel says.
Take a case.
where the average production of a factory during the corresponding period (December 1 to September 30) of 774 the preceding five sugar years is 1000 quintals.
That factory produces 2,500 quintals during the period December 1, 1974 to September 30, 1975.
In such a case, the ascending percentages mentioned in sub clauses (a) to (e) of clause (2) have to be applied for working out the rebate.
According to us, it must be done in the following manner, keeping in mind that the basis for these percentages in the average production of the previous five years and not the excess production.
Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the five previous sugar years i.e., 1000 quintals should be deducted first, which means the excess production during the current year is 1500 quintals.
7.5% of 1000 quintals is 75 quintals.
On this quantity of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. 20 per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy sugar.
Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal in the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar.
The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs.50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar.
Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintal in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugar.
The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar.
This is the interpretation and understanding contended for by Shri Ganguli and we must say that none of the counsel for the factory owners ' disputed the same.
It is accordingly directed that the above method shall be followed in working out clause (2) of the notification dated 12.10.74.
Accordingly all the civil appeals except Civil Appeal Nos.
3831 32 of 1988, fail and are dismissed.
Civil Appeals No. 3831 32 of 1988 are allowed.
The authorities will take action in accordance with this judgment.
There will be no order as to costs.
V.P.R. CA Nos. 3831 32/88 allowed.
Rest of the appeals dismissed.
[/INST]The prosecution case was that on 23.8.1981 between 12 30 1.00 p.m., on hearing screams and cry of the deceased, aged about 18 years, P.W.2 alongwith her father PW3, and PW4 rushed to the house of the appellant They saw the father of appellant No. 1 (father in law of the deceased) alongwith the husband and mother in law of the deceased hurriedly com ing out of the kitchen while the deceased was lying on the floor engulfed in flames.
As the appellant No. 1, did not respond to the request of PW2 to give her something to extinguish the fire, PW2 requested the father of the appellant No. 1 to give a bed sheet or blanket while the father of the appellant No. 1 was passing on a bed sheet to PW2, the appellant No. 2 (mother in law of the deceased) objected.
In the meanwhile PW2 took the bed sheet from the father of the appellant No. 1 and tried to extinguish the fire.
The deceased asked PW2 for some water.
PW3 removed the burning petticoat from the body of the deceased to save her from further burning.
While doing so he also received some burn injuries.
PW2 poured water into the deceased 's mouth and enquired from her as to what had happened.
667 The deceased told PW2 that her mother in law had poured kerosene over her and her husband had set fire to her.
The deceased asked for more water, which was again given to her by PW2.
The deceased 's statement made to PW2 was overheard by PW3 PW5 and some others who also reached the spot on hearing her cries.
PW5 went away to inform the matenal uncle of the deceased with one Ramakrishna on his motor cycle.
There PW5 found PW1, the brother of the deceased and informed about the burning of the deceased and also what he had heard the deceased telling PW2.
PW1 reached the house of the appellant with Ramakrishna on his motor cycle.
He saw a number of persons including PWs 2 and 3 gathered there.
The deceased was lying on the floor and she had no clothes on her.
PWl noticed that she had received burn injuries from her breasts downwards to her legs.
On seeing her plight, PWl started crying and hitting his head against a piller.
When the deceased noticed PW1 had come, she asked PW2 to bring her brother inside.
PW2 went out and brought PWI to the kitchen.
The deceased took the palm of her brother, PWl into her own palms and told him to tell mother and father that her mother in law poured kerosene on her and her husband set her or fire.
She requested him that he should not fight, "anyhow she was dying." She also told PWl to take back the cash given to her and to divide it amongst her sisters in equal share and to get them married to nice persons.
The appellant No. 1, the husband of the deceased came inside the kitchen with folded hands and begged her for forgiveness saying that he would not repeat what he had done.
PWI got wild and caught hold of the neck of the appellant No. 1.
FIW2 and PW3 rushed towards them and released the appellant No. 1 from the hold of PW1.
They sent PWI to another uncle 's house and told the uncle to take care of PW1.
When PWI returned to the house of the deceased after one hour he saw that PW6, a local Doctor, was giving first aid to the deceased and she was lying on a cot in the verandah.
PW6 advised at about 3.30 p.m. to remove the deceased to the Government Hospital.
The deceased was brought to the hospital at about 5 p.m.
At about 5.30 p.m., PW9, a doctor examined the deceased and declared her dead.
PWl along with his uncle went to the Police Station, adjacent to the hospital and lodged the FIR.
A case under section 302 IPC was registered 668 and police investigation was started.
Both the appellants were not found in the village when search for them was made by the investigating officer.
The appellant No. 1 surrendered in the Court on 10.11.1981 while the appellant No. 2 surrendered in the Court on 7.12.1981.
The Trial Court held that there was no motive for the appellant to commit the crime; that the evidence of PWs 2 to 4 could not be relied upon; that PW1 had made improvements in his statements recorded at the trial and, therefore the oral dying declaration made to him could not be relied upon.
The Trial Court also held that there was unexplained delay in lodging report with the policy.
It acquitted the appellants, holding that the case was one of suicide and not of murder.
The State filed appeal in the High Court.
The High Court held that the chain of the established circumstances was complete and the circumstances were sufficient to establish that the appellants alone had committed the crime of murder of the deceased.
The High Court convicted both the appellants for the offence under section 302/34 IPC and sentenced each one of them to imprisonment for life.
Hence this appeal before this Court under section 2(a) of the .
The appellants contended that since the Trial Court had acquitted the appellants, the High Court was not justified in recording an order or conviction, as the findings recorded by the Trial Court could not be said to be perverse; that the dying declarations were not worthy of reliance and the motive was feeble and not established; that the surrendering of the appellants themselves in the court on 10.11.1981 and 7.12.1981 itself was enough to show that they had no guilty conscious and the prosecution was not justified in relying upon this conduct as an adverse conduct against the appellants; and that since all neighbors had become hostile, out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital.
The respondent State submitted that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the wit 669 nesses was disbelieved on mere surmises; that the Trial Court did,not properly discuss the two dying declarations made by the deceased and since the dying declarations have been proved by reliable evidence, these by themselves could form the basis of conviction of the appellants; that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity,, and that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeal deserved to be dismissed.
Dismissing the appeal, this Court, HELD:1.01.
In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and these circumstances must be conclusive in nature.
Moreover, all the established circumstances should be complete and there should be no gap in the chain of evidence.
The proved circumstances must be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence.
The courts have, therefore, the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter find whether the chain of the established circumstances is complete or not before passing an order of conviction.
[679 E F] 1.02.In a case based on circumstantial evidence, motive assumes great significance as its existence is an enlightening factor in a process of presumptive reasoning.
The motive in this case is alleged to be the greed of dowry.
[679 H] 1.03.The evidence led by the prosecution to establish, the existence of motive is wholly reliable and is also consistent.
The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead.
The motive, has, been conclusively established by the prosecution.
[682 D] 1.04.Both the dying declarations are oral.
They have been made to friends and to the brother of the deceased respectively.
In view of the close relationship of the witnesses to whom the oral dying declarations were 670 made, it becomes necessary for the court to carefully scruitinize and appreciate the evidence of the witnesses to the dying declarations [683.
B] 1.05.PW1 is the brother of the deceased and therefore a very close relation, but mere relationship cannot be a ground to discard his testimony, if it is otherwise found to be reliable and trustworthy.
In the natural course of events, the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries.
PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully.
Nothing has been brought out in the cross examination to discredit his testimony at all.
[683 C D] 1.6.Despite searching cross examination of both PW2 and PW3, nothing has been brought out in their cross examination to discredit them or doubt their veracity at all.
After carefully analysing their evidence, it is found that PWs 2 and 3 as witnesses worthy of credence and trustworthy.[684 F] 1.07.From the evidence of PWs 1,2 and 3, both the dying declarations are provedto have been made by the deceased.
They are the statements made by thedeceased and relate to the circumstances leading to her death.
Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events.
They have a ring of truth about them.
[684 G] 1.08The medical evidence, fully corroborates the prosecution case and lendssupport to the dying declaration and more particularly the manner inwhich the deceased had been set on fire.[686 D] 1.09.The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and.
save the life of the person.
Though, the appellants were the closest relations of the deceased, they did not do anything of the kind.
They rendered no first aid to the deceased.
Their conduct at the time of the occurrence, therefore, clearly points towards their guilt and is inconsistent with their innocence.
The appellants did not even accompany the deceased to the hospital in the matador van.
Had the husband not been a party to the crime, one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned 671 to save her life.
An innocent mother in law would have also done the same, even if she had no love or emotional feelings for her daughter in law.
Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital let alone accompany her to the hospital.
This conduct also is inconsistent with their innocence and consistent only with the hypothesis, as stated by the deceased in her dying declarations, that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames.
[686 H, 687 A D] 1.10.The prosecution has, thus, successfully established that the conduct ofboth the appellants both at the time of the occurrence and immediatelythereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innocence.
[688 B] 1.11.Absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police, but coupled with the other circumstances, the absconding of the appellants assumes Importance and significance.
The prosecution has successfully established this circumstance also to connect the appellants with the crime.
[688 E F] 1.12.The prosecution has successfully established all the circumstances appearing in the evidence against the appellants by clear, cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution.
All the established circumstances are consistent only with the hypothesis that it was the appellants alone who committed the crime and the circumstances are inconsistent with any hypothesis other than their guilt.
[688 G H, 687 A] 2.01.Under Section 32, when a statement Is made by a person, as to the cause of death or as to any of the circumstances which result In his death, in cases in which the cause of that person 's death comes into question, such a statement, oral or in writing, made by the deceased to the witness is a relevant fact and is admissible in evidence.
The statement made by the deceased, called the dying declaration, falls in that category provided it has been made by the deceased while in a lit mental condition.
[684 H, 685 A B] 672 2.02.A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment, a person is most unlikely to make any untrue statement The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death.
A dying declaration, therefore, enjoys almost a sacrosanct status, as a piece of evidence, coming as it does from the mouth of the deceased victim.
Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts, it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embelishment such a dying declaration, by itself, can be sufficient for recording conviction even without looking for any coroboration.
If there are more than one dying declarations, then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy.
The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same.
[685 C E] 2.03.Both the dying declarations are consistent with each other in all material facts and particulars.
That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before this Court.
Both the dying declarations have passed the test of credit worthiness and they suffer from no infirmity whatsoever.
[685 F G] 2.04.The prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both, the appellants and disclosing the manner in which she had been put on fire shortly before her death.
This circumstance, therefore, has been established by the prosecution beyond every reasonable doubt by clear and cogent evidence.
[685 G H] 3.01.There has been an alarming increase in cases relating to harassment, torture, abetted suicides and dowry deaths of young innocent brides.
This growing cult of violence and exploitation of the young brides, though keeps on sending shock waves to the civilised society whenever it happens, continues unabated.
There is a constant erosion of the basic 673 human values of tolerance and the spirit of "live and let live '.
Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime.
It is the woman who plays a pivotal role in this crime against the younger woman, as in this case, with the husband either acting as a mute spectator or even an active participant in the crime, in utter disregard of his matrimonial obligations.
[689 C D] 3.02.Awakening of the collective consciousness is the need of the day.
Change of heart and attitude is what is needed.
If man were to regain his harmony with others and replace hatred, greed, selfishness and anger by mutual love, trust and understanding and if woman were to receive education and become economically independent, the possibility of this pernicious social evil dying a natural death may not remain a dream only.
[690 D] 3.03.The legislature, realising the gravity of the situation has amended the laws and provided for stringent punishments in such case and even permitted the raising of presumptions against the accused in cases of unnatural deaths of the brides within the first seven years of their marriage.
[690 H] 3.04.The was enacted in 1961 and has been amended from time to time, but this piece of social legislation, keeping in view the growing menance of the social evil, also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few.
[691 A] 3.05.Laws are not enough to combat the evil.
A wider social movement of educating women of their rights, to conquer the menace, is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation.
[691 B] 3.06.The role of courts, under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacune in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished.
The courts are expected to be sensitive in cases involving crime against women.
[691 C] 674 State (Delhi Administration) vs Lavnan & Ors., Crl.
Appeals 93 and 94 of 1984 decided on 23.9.1985, referred to.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No.951 of 1977.
From the Judgment and Order dated 29.7.1976 of the Madras High Court in S.A. No.89 of 1972.
A.T.M. Sampath and P.N.Ramalingam for the Appellant.
S.Balakrishnan and S.Prasad for the Respondent.
The Judgment of the Court was delivered by THOMMEN, J.
The appellant is the defendant in a suit insti 392 tuted by the respondent to set aside a transfer of property made by the guardian of a minor and for recovery of possession of the property.
The suit was decreed, and the decree was confirmed by the first appellate court as well as by the High Court.
The plaintiff respondent purchased the suit property from an ex minor within three years after the minor attained majority.
During his minority, the property was sold by his father as his natural guardian to a person from whom the present appellant purchased the property.
All the courts found that the guardian had not obtained the permission of the Court for the sale of the property, as required by section 8 of the Hindu Minority & Guardianship Act, 1956 ("the Guardianship Act") and that the sale of the property was not for legal necessity.
Dismissing the second appeal, the High Court held that the suit was rightly instituted by the respondent as a transferee from the ex minor within three years after the minor attained majority and that the contention of the defendant that the suit by a transferee from the ex minor was hit by section 6(e) of the was unsustainable.
The only question which arises in the present appeal, as it did before the High Court, is (to quote the words of the High Court) "Whether a transferee from a minor after he attained majority, can file a suit to set aside the alienation made by the minor 's guardian or the said right is one to be exercised only by the minor?".
The relevant facts are that the suit property belonged to one Veerammal.
She had a daughter by name Kaliammal.
Veerammal died shortly after she purchased the property in 1948.
She left behind her husband Kandayya and their duaghter Kaliammal.
Subsequently, Kandayya married a second time when his daughter Kaliammal was a minor.
She thereupon left her father 's house and resided with her maternal grand father who protected and maintained her.
During her minority, Kandayya sold the property on 29.10.1959 to Jainulavudeen.
On 25.4.1966, Jainulavudeen in turn sold the property to the defendant appellant.
Subsequently, on 26.5.1966 the plaintiff obtained a deed of sale of the suit property in his favour from Kaliammal who had by then attained majority.
The Plaintiff thereafter instituted the present suit (O.S. No. 491 of 1968) against the appellant to set aside the transfer of property made by Kandayya and for recovery of its possession.
393 The question is whether the respondent in his capacity as a transferee from the ex minor was competent to bring a suit to set aside the sale effected by the minor 's guardian.
It is no longer disputed that the suit was brought within three years after the minor attained majority.
Nor is it any longer contended that the father of the minor, as her natural guardian, had obtained the permission of the Court or that the sale effected by him was one for legal necessity.
These two vital points have been concurrently found against the appellant.
The only contention which Mr. Sampath, appearing for the appellant, is in a position to urge is as regards the question whether the suit is hit by section 6(e) of the T.P. Act.
Counsel says that all that the ex minor was in a position to transfer, was her mere right to sue to set aside the sale and recover possession of the property transferred by her father as her natural guardian.
The property itself had been transferred by the father prior to its sale by the ex minor.
The minor had, therefore, no property to sell, except a right to set aside the sale.
Accordingly, whatever transfer that was effected by the minor in favour of the plaintiff was nothing more than a mere right to sue and such transfer was invalid by reason of section 6(e) of the T.P. Act.
Mr. Balakrishnan, appearing for the respondent plaintiff, contends that the ex minor was fully competent to bring a suit to set aside the sale within a period of three years after attaining majority and any person claiming under her is equally competent to institute action for the same purpose.
He refers to the provisions of section 8(3) of the Guardianship Act.
He contends that a suit to set aside a sale is not for the enforcement of any personal right, but a right in property, and is, therefore, not hit by section 6(e) of the T.P. Act.
In any view, counsel says, section 8(3) of the Guardianship Act sepcifically allows such a suit to be brought by a person claiming under a minor and, therefore, such a statutory right specially granted by an enactment dealing with the protection of the minor cannot be defeated by the general provisions of an earlier enactment.
The two provisions, counsel says, can be read harmoniously so as to avoid an artificial conflict.
What the Guardianship Act intends to protect is the right of a person claiming under a minor to sue for setting aside the sale of property sold otherwise than as permitted by section 8 of the Act.
On the other hand, the T.P. Act only prohibits suits in the the nature of champerty and maintenance based on bare or naked right of litigation.
The general provision contained in section 6(e) of the T.P. Act does not derogate from the special protection of the minor 's interest and the interest of a person claiming under him, as afforded by the Guardianship Act, which is addressed to a specific problem, In any view, counsel says a sale by the guardian 394 otherwise than as permitted by section 8 is void and is, therefore, incapable of passing a title.
For all these reasons, Mr. Balakrishna submits that the suit was competent and was rightly decreed on the facts found and the appeal by the defendant has no merits.
As concurrently found by the courts below, the sale effected by the guardian during the minority of his daughter was not in compliance with the provisions of section 18(i) of the Guardianship Act.
The property was transferred by him without obtaining the previous permission of the Court and the transfer was not for the benefit of the minor.
Such a sale by the minor 's father who is his natural guardian is, unlike in the case of transfer by a de facto guardian (Section 11), not a void sale, but only a voidable sale.
Such a sale until set aside is sufficiently effective to pass title, but being a voidable sale, what the buyer has obtained is a defeasible title which is liable to be set aside at the instance of the person entitled to impeach it.
Section 8(3) of the Guardianship Act says: "Any disposal of immovable property by a natural guardian, in contravention of sub section (1) or sub section (2), is voidable at the instance of the minor or any person claiming under him." (emphasis supplied) The effect of this sub section is that any disposal of immovable property by a natural guardian otherwise than for the benefit of the minor or without obtaining the previous permission of the Court is voidable.
A person entitled to avoid such a sale is either the minor or any person claiming under him.
This means that either the minor, or his legal representative in the event of his death, or his successor in interest claiming under him by reason of transfer inter vivos, must bring action within the period prescribed for such a suit, i.e., three years from the date on which the minor died or attained majority, as the case may be.
In the present case, the suit was brought, as found by the courts below, within three years after the minor attained majority.
Mr. Sampath, however, contends that a person claiming under a minor, referred to in section 8(3), can only be a legal representative of a deceased minor and not a person succeeding to the interests of the minor by reason of transfer inter vivos.
He refers to the decisions in Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors, ; Mon Mohan Bhattacharjee & Ors.
vs Bidhu Bhusan Dutta & Ors., ; Palani Goundan & Anr.
vs Vanjiakkal & 395 Anr., ; Premprakash Surajmal vs Maharashtra Revenue Tribunal, Nagpur & Ors., AIR 1969 Bom.361 and Ghanshyam Dass vs Dr. Shiva Shankar Lal & Ors., [1980] All.
Law Journal 130 and other cases in which certain High Courts have taken the view that the right of the minor is a personal right and it cannot be transferred otherwise than by inheritence.
The "person claiming under him" mentioned under section 8(3) of the Guardianship Act, counsel says, can only be a representative and not a purchaser or transferee inter vivos.
He refers to Article 60 of the and submits that the provision refers only to a legal representative and not any other successor.
In Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors.
, , it was held: "what was assigned by the minor to the plaintiff in that suit was not the property in question but his right to sue for it, and if he could establish his allegation, to have the sale avoided, this I think was no more than a right of suit, and if I am correct such a transfer is forbidden by section 6, Cl.
(e), T.P. Act.
" Similar reasoning was adopted in the other decisions cited by Mr. Sampath on the point.
The rationale of these decisions is that the right to impeach a sale effected by the guradian is a personal right vested in the minor and it is not transferable inter vivos.
The expression "person claiming under him", according to this line of reasoning, must, therefore, be understood as a legal representative and not an assignee.
On the other hand, a Division Bench of the Madras High Court in P. Kamaraju vs C. Gunnayya & Ors., AIR 1924 Madras 322 held that the right of the minor was not a bare right to sue and it was an assignable right.
The High Court held: ".
.By selling the property to the plaintiff on the footing that the sale by the mother was not binding on him he has chosen to avoid it, and the result of it is that from his point of view he has got a complete title.
The title no doubt will only be effective if the Court ultimately finds that the sale by the mother is not binding on him.
But contingent on that event he has got a complete title and this title is not a bare right to sue and is, therfore, assignable. . " 396 In Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817, Viswanatha Sastri, J. observed: "Where an ex minor transfers property unauthorisedly sold by his guardian during his minority he transfers not a mere right to use but his interest in the property, though a suit may be necessary to avoid the transfer by the guardian & recover possession of the property from his alienee.
Conversely, the liability of the transferee from the guardian is not a liability to pay damages for the unauthorised act of the guardian, but is a liability to restore the property to the rightful owner or his transferee".
Similar view was expressed in Karnam Nagabhushana Rao vs Karnam Gowramma & Ors., [1968] 2 Andhra Weekly Reporter 57.
These decisions on which reliance was placed by the Madras High Court in the impugned judgment are to the effect that the right of the minor is not a bare or naked right to sue but a right in property which is assignable.
In Halsbury 's Laws of England, 4th edn.
, Vol. 6, paragraphs 86 87 at pages 49 50, this is what is stated "A bare right of litigation, such as a mere right to damages for a wrongful act, is not assignable, on the principle that the law will not recognise any transaction savouring of maintenance or champerty.
By way of exception to the rule stated in the previous paragraph there is nothing unlawful in the purchase of property which the purchaser can only enjoy by defeating existing adverse claims, or in the assignment (for example by mortgage) of property, being the fruits of litigation.
In every case it is a question whether the purchaser 's real object was to acquire an interest in the property, or merely to acquire a right to bring an action, either alone or jointly with the vendor . ".
In the instant case, on the facts found, the transfer of the property made by the guardian was a voidable transaction and it was, therefore, open to the minor to challenge it and seek recovery of possession.
Such a right of the minor is a right or interest in property 397 which he himself or "any person claiming under him" may enforce by instituting a suit [Section 8(3) of the Guardianship Act].
"Any person claiming under him" must necessarily include a purchaser.
Section 8(3) confers a right of suit in the special circumstances postulated in that provision.
The object of the Act being the protection of the minor, the legislature has thought it fit to confer a right of suit in certain circumstances not only on the minor, but also on a person to whom the minor has transferred his rights.
The right transferred is an interest in property which is capable of enforcement at the instance of the transferee as it was at the instance of the ex minor prior to the transfer.
Such a provision, indeed specially for the protection of the interests of the minor, must be read in harmony and consistently with the general provisions contained in section 6 of the T.P. Act.
[See The J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh & Ors., ; , 194 and Ashoka Marketing Ltd. & Anr.
vs Punjab National Bank & Ors., [1990] 3 JT SC 417, 439].
The transfer made by the father during his son 's minority was voidable at the instance of his son who was the real owner, and any person purchasing such property from the natural guardian obtained only a defeasible title.
The minor retained a right in the property to defeat existing adverse claims, and such right is an assignable right.
We are in complete agreement with what has been stated on the point in Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817 and in P. Kamaraju vs C. Gunnayya & Ors., AIR 1924 Madras 322.
We do not agree with the contrary view expressed on the point in Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors., ; Mon Mohan Battacharjee & Ors.
vs Bidhu Bhushan Dutta & Ors., and Palani Goundan & Anr.
vs Vanjiakkal & Anr., A construction which is unduly restrictive of the statutory provisions intended for the protection of the interest of the minor must be avoided.
This is all the more so in view of section 5(b) of the Guardianship Act which says.
Save as otherwise expressly provided in this Act (a) . . . . . . . . (b) any other law in force immediately before the com 398 mencement of this Act shall cease to have effect in so far as it is inconsistent with any of the provisions contained in this Act.
" For the reasons stated by us, we see no merit in the challenge against the judgment under appeal.
The appeal is accordingly dismissed.
We do no, however, make any order as to costs.
V.P.R. Appeal dismissed.
[/INST]The appellant purchased the suit property of the minor from a person, to whom the same was sold by the father, the natural guardian, whereas the respondent purchased the suit property from the minor within three years on his attaining majority.
The respondent plaintiff instituted a suit against the appellant defendant, to set aside the transfer of property made by the natural guardian and for recovery of possession of property.
The suit was decreed and the decree was confirmed by the appellate Court as well as by the High Court.
Dismissing the second appeal, the High Court held that the suit instituted bythe respondent as a transferee from the ex minor within three years after the minor attained majority was not hit by section 6(e) of the , against which the present appeal preferred by the appellant defendant.
The appellant contended that the suit was hit by section 6(e) of the , as all that the ex minor was in a position to transfer was the mere right to sue to set aside the sale and recover possession of the property transferred by the natural guardian; and 390 that a person claiming under a minor, referred to in section 8(3) of the Hindu Minority and Guardianship Act, 1956 can only be a legal representative of a deceased minor and not a person succeeding to the interest of the minor by reason of transfer inter vivos.
The contentions of the respondent were that the ex minor was competent to bring a suit to set aside the sale within a period of three years of his attaining majority and any person claiming under the minor was equally competent to institute action for the same purpose; that the suit to set aside a sale was not for the enforcement of any personal right, but a right in property and the suit was not hit by Section 6(e) of the T.P.Act; and that the provisions contained in Section 6 of the T.P. Act and Section 8 of the Guardianship Act were to be read together.
On the question, whether the respondent in his capacity as a transferee from the ex minor was competent to bring a suit to set aside the sale effected by the minor 's guardian, who had sold the property without obtaining the permission of the Court as required under Section 8 of the Hindu Minority and Guardianship Act 1956 and without any legal necessity.
Dismissing the appeal of the appellant defendant this Court, HELD: 1.
In the instant case, on the facts found, the transfer of the property made by the guardian was a voidable transaction and it was, therefore, open to the minor to challenge it and seek recovery of possession.
Such a right of the minor is a right or interest in property which he himself or "any person claiming under him" may enforce by instituting a suit (Section 8(3) of the Guardianship Act).
"Any person claiming under him" must necessarily include a purchaser.
[396G 397A] 2.
Section 8(3) confers a right of suit in the special circumstances postulated therein.
The object of the Act being the protection of the minor, the legislature has though it fit to confer a right of suit in certain circumstances not only on the minor, but also on a person to whom the minor has transferred his rights.[397A B] 3.
The right transferred is an interest in property which is capable of enforcement at the instance of the transferee as it was at the instance of the ex minor prior to the transfer.
Such a provision intended specially for the protection of the interests of the minor, must be read in harmony and consistently with the general provisions con 391 tained in section 6 of the T.P. Act.
[397B C].
A construction which is unduly restrictive of the statory provisions intended for the protections of the interests of the minor must be avoided.
[397F G] 5.
The transfer made by the father during his son 's minority was voidable at the instance of his son who was the real owner, and any person purchasing such property from the natural guardian obtained only a defeasible title.
The minor retained a right in the property to defeat existing adverse claims, and such right is an assignable right.
[397D E] The J.K.Cotton Spinning & Weaving Mills Co.Ltd.
vs The State of Uttar Pradesh & Ors., [1961] 3 S.C.R.185, 194 and Ashoka Marketing Ltd. & Anr.
vs Punjab National Bank & Ors., , 439, followed.
Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817 and P.Kamaraju vs C.Gunnayya & Ors., AIR 1924 Madras 322, approved.
Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors., AIR 1933 Bom.42; Mon Mohan Battacharjee & Ors.
vs Bidhu Bhusan Dutta & Ors., and Palani Goundan & Anr.
vs Vanjiakkal & Anr., [1956] I.L.R. Mad.1062, over ruled.
Preprakash Surajmal vs Maharashtra Revenue Tribunal.
Nagpur &Ors., A.I.R. 1969 Bom.361; and Ghanshyam Dass vs Dr.
Shiva Shankar Lal & Ors., [1980] All Law Journal 130, referred to.
</s>
|
<s>[INST] Summarize the judgementCivil Appeal Nos.
4904 4908 of 1984.
From the Judgment and Order dated 19.9.83 of the Bombay 376 High Court in Special Civil Application Nos.
97B/80, 98B/80, 100B/80, 99B/80 and 67B/80.
VA Bobde, K.J. John and Ms. N. Srivastava for the appellant.
F.S. Nariman, Miss A. Subhashini M.S. Usgaocar, S.K. Mehta, P.N. Puri and M.K. Dua for the respondents.
The Judgment of the Court was delivered by DESAI, J.
Special leave granted.
Again the rigmarole of an utterly unsustainable preliminary objection, and valuable time of a decade is wasted in this bizarre exercise frustrating the search for socio economic justice, making it a distant dream, if not an optical illusion.
The Central Government as an appropriate Government referred the Industrial dispute between the appellant Goa Sampling Employees ' Association ( 'Association ' for short) and the first respondent ( 'employer ' for short) in each petition under Sec.
10 (1) (d) of the ( 'Act ' for short) to the Central Government Industrial Tribunal No. 2, Bombay by different orders made in the year 1974 and 1975.
Five separate references were made because even though the Association representing employees is common in all references, employer is different but each raising a common question.
When the references came up before the Tribunal for hearing, it appears that the employer in each case raised a preliminary objection but what was the earliest preliminary objection eluded us.
The Tribunal overruled the preliminary objection whereupon the employer filed some appeal to an authority which is not made clear in the record.
It appears the matters were remitted to the Tribunal and thereafter all the five references stood transferred to the Central Government Industrial Tribunal No. 1 ( 'Tribunal ' for short).
When the references again came up before the Tribunal for hearing, the history repeated.
A preliminary objection was raised that the Central Government was not the appropriate Government in relation to the industrial dispute between the Association and the employer and therefore, the Central Government had no power under Sec.
10 (1) (d) of the to make the reference 377 and accordingly the Tribunal will have no jurisdiction to entertain A the same.
The Association attempted to repell this contention by urging that the workmen were dock workers within the meaning of the expression in and as they are working in a major port, the Central Government will be the appropriate Government in relation to the industrial dispute between the Association and the workmen and therefore, the reference is valid and the Tribunal should deal with the same on merits according to law.
As a second string to the bow, it was contended that in relation to a union territory Central Government is the appropriate Government.
It appears that evidence was led before the Tribunal by both the sides.
The Tribunal after exhaustively examining the evidence held that the workmen covered by the reference would be comprehended in the definition of expression 'Dock Workers ' as defined in the and as they were working at Mormugao Port which is a major port, in respect of the industrial dispute raised by them the Central Government would be the appropriate Government.
The Tribunal then proceeded to examine whether the reference would be competent on the assumption that the employees are not covered by the expression 'Dock Workers ' and held that the work performed by the employees is in a major port and the dispute arise out of the duty performed and work rendered in the major port and therefore, the Central Government would be the appropriate Government to make the necessary reference.
The Tribunal then proceeded to consider the alternative submission whether the reference would be competent even if the State Government is the appropriate Government in view of the fact that Goa, Damen and Diu constitute Union Territory as set out in the First Schedule to the Constitution and its administration is carried on by the Administrator appointed by the President under article 239 of the Constitution.
Therefore, also the Central Government is the appropriate Government.
After discussing the rival contentions the Tribunal did not record a finding on this contention.
The Tribunal overruled the preliminary objection and set down the reference for final hearing by its order dated July 14, 1980.
The employer in each reference filed special civil application under article 227 of the Constitution in the High Court of Judica 378 ture at Bombay.
All the five special civil applications came up before the Panaji Bench of the Bombay High Court for final hearing and they were disposed of by a common judgment The High Court held that the iron ore samplers, the workmen represented by the appellant association are not involved in any work connected with or related to a major port.
The High Court further held that the industrial dispute in which iron ore samplers are involved is not an industrial dispute concerning the major port within the meaning of Sec 2 (a) (i) of the nor are the workmen comprehended in the expression 'Dock Workers ' as defined in the and therefore the Central Government is not the appropriate Government for referring the industrial dispute to the Tribunal.
Dealing with the second limb of the submission that the Central Government itself can be said to be the State Government for the Union Territory of Goa, Daman and Diu, the High Court held that the Central Government is not the State Government for the Union Territory of Goa, Daman and Diu under Sec 2 (a) (ii) of the but it is the administrator appointed under Art, 239 of the Constitution of India who is the State Government for the Union Territory of Goa Daman and Diu and he is the appropriate Government within the meaning of Sec. 2 (a) of the .
The High Court felt that if the Central Government is also held to be the State Government for this purpose there would be two State Governments for the Union Territory of Goa, Daman and Diu and this would lead to utter confusion: The High Court accordingly concluded that the Administrator is the appropriate Government for the purpose of Sec 2(a) of the and therefore the Central Government was not the appropriate Government and had no jurisdiction to make the impugned references.
In accordance with this finding, the High Court made the rule absolute quashing the references.
Hence these appeals by special leave.
The question that must engage our attention is whether in relation to the industrial dispute between the employees represented by the Association and the employer which is the appropriate Government which can exercise power under Sec.
10 of the .
10 provides that 'where the appropriate Government is of opinion that any industrial dispute exists or is 379 apprehended, it may at any time by order in writing refer the dispute etc.
to a Tribunal for adjudication. ' There are two A provisos to the section.
which are not material for the present purpose.
Thus the power is conferred on the appropriate Government to make the reference for adjudication of an industrial dispute which either exists or is apprehended. 'Appropriate Government ' is defined in Sec. 2 (a) of the to mean C(i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government (omitting the words not relevant for the present purpose), a major port.
The ( central Government, and (ii) in relation to any other industrial dispute, the State Government. ' The employer contended that the employees represented by the Association in each case are iron ore samplers and they are not connected with the work of a major port or their duties are not ancillary or incidental to the working of a major port and therefore, Sec. 2 (a) (i) would not be attracted.
As a corroleory, it was submitted that the case would fall in the residuary clause (ii) and therefore, the State Government would be the appropriate Government.
The employees repelled the contention by saying that they are employees working in a major port and the industrial dispute directly touches the functioning and administration of a major port and therefore, the Central Government is the appropriate Government.
Alternatively it was contended on behalf of the Association/appellant herein that any rate in relation to a Union Territory, there is no State Government and the Central Government, if it at all can be said to be one, is the only Government and in the absence of a State Government the Central Government will also have all the powers of the State Government and therefore, the Central Government would be the appropriate Government for the purpose of making the reference.
It is the second limb which we propose to examine in these appeals because in our opinion it goes to the root of the matter and the appeals can be finally disposed of by answering this contention.
Before we deal with the contention on merits, it is necessary to focus attention on constitutional and statutory provisions relevant to the contention.
380 article 239 (1) provides that 'save as otherwise provided by Parliament by law, every Union Territory shall be administered by the President acting, to such extent as he thinks fit through an Administrator to be appointed by him with such designation as he may specify. ' article 239A which was inserted by the Constitution (Fourteenth Amendment) .
1962 confers power Parliament by law to create local legislatures or Council of Ministers or both for certain Union Territories including Goa, Damen and Diu.
The law by which the local legislature and/or Council of Ministers are created will also specify their constitution, powers and functions in each case.
By sub art.(2) it was ensured that such law when enacted shall not be deemed to be an amendment of the Constitution for the purpose of article 368.
article 240 confers power on the President to make regulations for the peace, progress and good government of the Union Territories specified therein.
article 246 (4) provides that 'Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. ' The expression 'Central Government ' has been defined in Sec. 3 (8) of the (omitting the words not relevant for the present purpose) as under: "(8) "Central Government" shall (a) . . . ; . . . . . . . (b) in relation to anything done or to be done after the commencement of the Constitution, mean the President, and shall include, (i) (ii) (iii) in relation to the administration of a Union Territory, the administrator thereof acting within the scope of the authority given to him under Article 239 of the Constitution.
" The expression 'State Government ' is defined in Sec. 3 (60) (omitting the words not necessary for the present purpose,) as under: "(60) "State Government", 381 (a) . . . . . . (b) . . . . . . . (c) as respects anything done or to be done after the commencement of the Constitution (Seventh Amendment) Act, 1956, shall mean, in a State, the Governor, and in a Union Territory, the Central Government ;" The expression 'Union Territory ' is defined in Sec. 3 (62A) to mean "Union Territory specified in the First Schedule to the Constitution and shall include any other territory comprised within the territory of India but not specified in that Schedule.
" Parliament enacted the ( '1963 Act ' for short).
Its long title reveals the object underlying the enactment, namely to provide for Legislative Assemblies and Council of Ministers for certain Union Territories and for certain other matters.
Union Territory of Goa, Daman and Diu is governed by the 1963 Act (See Sec.
The expression 'Administrator ' has been defined in Sec. 2 (a) of the 1963 Act to mean 'the Administrator of a Union Territory appointed by the President under article 239. ' Sec.
18 specifies the extent of legislative power of the Legislative Assembly of a Union Territory to encompass any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule.
44 provides that there shall be a Council of Ministers in each Union territory with the Chief Minister at the head to aid and advise the Administrator in exercise of his functions in relation to matters with respect to which the Legislative Assembly of the Union Territory has power to make laws except in so far as he is required by or under the Act to act in his discretion or by or under any law to exercise any judicial or quasi judicial functions.
There is a proviso to Sec 44 (1) which sheds light on the position of the Administrator and powers of the Council of Ministers.
According to the proviso in the event of a difference of opinion between the Administrator and the Ministers of any matter, the Administrator shall refer it to the President for decision given therein by the President etc.
Thus the executive power of the Administrator extends to all subjects covered by the legislative power.
But in the event of a difference of opinion the President 382 decides the point.
When President decides the point, it is the Central Government that decides the point.
And that is binding on the Administrator and also the Ministers.
Section 45 provides that 'the Chief Minister of a Union Territory shall be appointed by the President. ' Section 46 confers power on the President to make rules for the conduct of business.
Section 55 provides that 'all contracts in connection with the administration of a Union Territory are contracts made in the exercise of the executive power of the Union and all suits and proceedings in connection with the administration of a Union Territory shall be instituted by or against the Government of India. ' In exercise of the power conferred by Article 240, the President has infer alia enacted the Goa, Daman and Diu (Laws) Regulation, 1962.
By clause (3) of the regulation, the Acts enumerated in the Schedule appended to the Act were extended to the Goa, Daman and Diu subject to the modifications, if any, specified in the Schedule.
The Schedule includes as a whole without any modification.
Section 10 (l) of the Act confers power on the appropriate Government to refer an industrial dispute for adjudication to one or the other of the various authorities enumerated in the section.
Thus the power is the power of the appropriate Government to make the reference.
The cotention which found favour with the High Court is that in relations to the industrial dispute raised by the workmen represented by the Association by broadly described as iron ore samplers.
the appropriate Government is the State Government and not the Central Government and that as the reference in this case is made by the Central Government, the same being without jurisdiction, the Industrial Tribunal did not acquire any jurisdiction to adjudicate upon the same.
Would it be constitutionally correct to describe Administration of a Union Territory as State Government ? Article 1 provides that 'India, that is Bharat, shall be a Union of States '.
Sub article (2) provides that 'the States and the territories thereof shall be as specified in the First Schedule ' Sub article (3) introduced a dichotomy between the State as understood in the Constitution and the Union Territory when it provides that 'the territory of India shall comprise (a) the territories of the States, and (b) the Union Territories specified in the First Schedule.
The provisions of Part 383 VI of the Constitution do not apply to the Union Territories.
Part VI of the Constitution which deals with States clearly indicates that A the Union Territory is not a State.
Therefore, the Union Territory constitutionally speaking is something other than a State.
As far as the States are concerned, there has to be a Governor for each State though it would be permissible to appoint the same person as Governor of two or more States.
Part VIII provides for administration of Union Territories.
Article 239 conferred power on the president for administration of Union Territories unless otherwise provided by an act of Parliament.
Therefore, apart from the definitions of the expressions 'Central Government ', 'State Government ' and 'Union Territory ' as enacted in the , the Constitution itself makes a distinction between State and its Government called the State Government and Union Territory and the Administration of the Union Territory.
Unless otherwise clearly enacted, the expression 'State will not comprehend Union Territory ' and the 'State Government ' would not comprehend Administration of Union Territory.
Now if we recall the definition of three expressions 'Central Government ' (Section 3 (8), 'State Government ' (Section 3 (60)) and Union Territory ' ( Section 3 (62A)) in the , it would unmistakably show that the framers of the Constitution as also the Parliament in enacting these definitions have clearly retained the distinction between State Government and Administration of Union Territory as provided by the Constitution.
It is especially made clear in the definition of expression 'Central Government ' that in relation to the Administration of a Union Territory, the Administrator thereof acting within the scope of the authority given to him under Article 239 of the Constitution, would be comprehended in the expression 'Central Government '.
When this inclusionary part is put in juxta position with exclusionary part in the definition of the expression 'State Government ' which provides that as respects anything done or to be done after the commencement of the Constitution (Seventh Amendment) Act, 1956, it shall mean, in a State, the Governor, and in a Union Territory, the Central Government, the difference conceptually speaking between the expression 'State Government ' and the 'Administration of a Union Territory ' clearly emerges.
Therefore, there is no room for doubt that the expression 'Administration of a Union Territory ', Administrator howsoever having been described, would not be comprehended in the expression state Government ' as used in any enactment.
These definitions have been modified to being them to their present format by 384 adaptation of laws (No. 1) Order 1956.
Section 3 of the provides that in all General Acts and Regulations made after the commencement of the Act unless there is anything repugnant in the subject or context, the words defined therein will have the meaning assigned therein.
lndisputably the lndustrial Disputes Act, 1947 is ' a Central Act enacted after the commencement of the and the relevant definitions having been recast to meet the constitutional and statutory requirements, the expressions 'Central Government, 'Stale Government ' and 'Union Territory ' must receive the meaning assigned to each in the unless there is anything repugnant in the subject or context in which it is used.
No such repugnancy was brought to our notice.
Therefore, these expressions must receive the meaning assigned to them.
The High Court after referring to the definitions of the aforementioned three expressions as set out and discussed herein first observed that on a careful reading of the definition, it appears 'that in relation to the administration of a Union Territory, the administrator thereof acting within the scope of the authority given to him under Article 239 of the Constitution is the Central Government. ' So far there is no dispute.
The High Court then observed that it must follow that the Administrator is the State Government in so far as the Union Territory is concerned, and it is so provided in the definition of the State Government in Section 3(60) of the . ' The High Court fell into an error in interpreting clause (c) of Section 3 (60) which upon its true construction would show that in the Union Territory, there is no concept of State Government but wherever the expression 'State Government ' is used in relation to the Union Territory, the Central Government would be the State Government.
The very concept of State Government in relation to Union Territory is obliterated by the definition.
Our attention was, however, drawn to the two decisions of this Court in Satya Dev Bushahri vs Padam Dev & Ors.
( ') and the decision of this Court in The State of Madhya Pradesh vs Shri Moula Bux & Ors.(2) in which with reference to Part States, some observations have been made that the authority conferred under Article 239, as it then stood, to administer Part States has (1) ; (2) ; 385 not effect of converting those States into the Central Government, and that under Article 239 the President occupies in regard to Part States, a position analogous to that of a Governor in Part A States and of a Rajpramukh in Part in States. ' It was also observed that 'though the Part States are centrally administered under the provisions of Article 239, they do not cease to be States and become merged with the Central Government. ' It was then urged that by the amendment to Articles 239 and 240 by the Constitution (Seventh Amendment) Act, 1956 and introduction of Article 239 A and 239 by the Constitution (Fourteenth Amendment) Act, 1962, only the nomenclature of the Part States has undergone a change, now being described as Union Territory, but the position the Union Territory is the same as it was as Part States and therefore, the view taken in the aforementioned decisions that the administration of Part States could appropriately be described as State Government would mutatis mutandis apply to the administration of Union Territories.
In other words, it was said that they can be appropriately described as State Governments for various purposes.
Both the decisions were rendered prior to the amendment of Part VIII of the Constitution in 1956 and the insertion of the Articles 239 A and 239 in 1962 and more specifically after the enactment of the 1963 Act.
The concept of Union Territory with or without a Legislative Assembly and with or without a Council of Ministers with specified legislative and executive powers have been set out in the 1963 Act.
Coupled with this, modifications were made in the definitions of aforementioned three expressions.
Therefore, the two decisions are of no assistance in resolutation of the present controversy.
It was then pointed out that the definition of the expression 'appropriate Government ' in Section 2(a)(i) of the Act unless it is shown in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or the enumerated industries or a banking or an insurance company, a mine, an oilfield, a Cantonment Board, or a major port, the appropriate Government will be the Central Government and in any other case a State Government It was therefore, submitted that unless it is shown that in relation to the industrial dispute raised by the Association, the appropriate Government would be the Central Government, the case would fall under the residuary provision, namely, that in relation to any other industrial dispute, the appro 386 priate Government would be the State Government.
The submission does not commend to us because before one can say that the appropriate Government is the State Government in relation to an industrial dispute, there has to be some State Government in which power must be located for making the reference.
If there is no State Government but there is some other Government called the Administration of Union Territory, the question would arise whether in such a situation the Administration of Union Territory should be described as State Government for the purpose of Section 2(a)(i) read with Section 10(1) ? The High Court clearly fell into an error when it observed that the inclusive definition of the expression 'State Government ' does not necessarily enlarge the scope of the expression, but may occasionally point to the contrary.
Let as assume it to be so without deciding it.
But where the High Court fell into the error was when it held that the President representing the Central Government and the Administrator, and appointee of the President and subject to all orders of the President constitute two different governments for a Union Territory.
The position, the power, the duties and functions of the Administrator in relation to the President have been overlooked.
On a conspectus of the relevant provisions of the Constitution and the 1963 Act, it clearly transpires that the concept of State Government is foreign to the Administration of Union Territory and Article 239 provides that every Union Territory is to be administered by the President.
The President may act through an administrator appointed by him.
Administrator is thus the delegate of the President.
His position is wholly different from that of a Governor of a State.
Administrator can differ with his Minister and he must then obtain the orders of the President meaning thereby of the Central Government.
Therefore, at any rate the administrator of Union Territory does not qualify for the description of a State Government, Therefore, the Central Government is the 'appropriate Government '.
If the Central Government as the appropriate Government has made the reference, the High Court was clearly in error in quashing the reference.
Learned counsel for the appellant Association made an alter native submission that the workmen involved in the dispute are workmen working in a major port and are dock workers and there 387 fore, also the Central Government will be the appropriate Government for the purpose of making reference under Sec.
10(1).
This contention found favour with the Tribunal.
The High Court reached a contrary conclusion observing that the iron ore samplers are not involved in any work connected with or related to a major port nor are they dock workers.
We do not propose to examine this alternative submission because if the reference is held to be competent, it is not necessary to undertake elaborate examination of the second contention to sustain the reference.
It is, however, urged that this aspect is likely to figure again before the Tribunal while examining the industrial dispute referred to it for adjudication on merits.
In this situation the proper thing is to keep the contention between the parties open.
The Tribunal will be at liberty to examine this contention whether iron ore samplers are involved in any work connected with or related to a major port or are dock workers.
The Tribunal may come to its own decision uninfluenced by the view taken by the High Court and if the question does require examination the same will have to be examined over again.
Accordingly, all these five appeals are allowed and the judgment of the High Court is quashed and set aside and the award of the Tribunal on the preliminary point especially about the competence of the Central Government to make the reference under Section 10(1) of the , for the reasons hereinmentioned is confirmed.
The respondents shall pay the costs of the appellant in each case quantified at Rs. 1,000 in all Rs. 5,000 shall be paid by the respondents to the appellant as costs.
As the dispute is an old one, hanging resolution for years, the Tribunal is directed to give top priority to it and dispose it of on merits within a period of six months from today, N.V.K. Appeals allowed.
[/INST]Section 14 of the U.P. Urban Buildings (Regulation of Letting Rent and Eviction) Act (For short, the Act) as it stood prior to its amendment in 1976 and also after its amendment by the U.P. Act No. 28 of 1976 deals with regularisation of occupation of existing tenants.
The unamended section 14 of the Act provided that a person must satisfy two conditions in order to get the benefit of this section, namely, (i) that he was a tenant in occupation of a building with the consent of the landlord immediately before the commencement of this Act and (ii) that he was not a person against whom proceedings under section 7A of the old Act are pending immediately before such commencement.
The amended section 14 of the Act lays down that a person shall be deemed to be an authorised licensee or tenant of building if (i) any licensee or tenant is in occupation of a building with the consent of the landlord immediately before the commencement of the Act as amended by the U.P. Act No. 28 of 1976 and (ii) that he was not a person against whom any suit or proceeding for eviction is pending before any court or authority on the date of such commencement.
Section 3(a) of the Act provides that a tenant in relation to a building means a person by whom its rent is payable, and on the tenant 's death, in the case of a non residential building, his heirs.
On the death of Naubat Singh a tenant in a shop situated in Bulandshahr, the landlord started eviction proceedings section 12 read with section 16 of the Act for the release of his shop.
The appellant a nephew of the deceased tenant, resisted the eviction application on the grounds: (i) that he was entitled to get the benefit of the amended and/or unamended section 14 of the Act since he had been helping the deceased tenant in his business for the last several years and remained in continuous possession of the disputed shop after his death; and (2) that he was an heir of the deceased tenant on the basis of a will executed by the deceased tenant in his favour and therefore be was a tenant within the meaning of section 3(a) of the Act.
890 The Rent Control and Eviction officer rejected the application holding that the appellant was entitled to get the tenancy rights under the unamended section 14 of the Act.
In revision the Additional District Judge held that, since even after the death of Naubat Singh on 31st August 1974, the appellants been, permitted to continue in possession of the premises, he got the benefit of amend ed section 14 of the Act and therefore dismissed the revision petition.
Thereupon the landlord filed a writ petition under Article 226 in the High Court against the orders of the two authorities below.
The High Court negatived all the contentions of the appellants, allowed the writ petition and quashed the orders of the authorities below and directed the Rent Control and Eviction officer to decide the release application afresh in accordance with the law.
Hence this appeal by special leave.
Dismissing the appeal, ^ HELD: (1) Admittedly Naubat Singh was the tenant of the shop on the date immediately preceding the commencement of the Act, that is, 15th July 1972 and he was alive and therefore no question of the appellant being regularised as a tenant arises.
The appellant also could not get the benefit of amended sec.
14, since at the relevant time the application for release filed by the landlord against the appellant was pending in the court of Additional District Judge by way of revision petition wherein the landlord had contested the claim of tenancy by appellant.
[893 H; 894, B C] (2) The word 'heir ' has been construed both in a wider as well as in a narrower sense.
Which sense will be applicable to the facts of a particular case will depend upon the intention and scheme of a particular legislation in which the question occurs.
[895 G] Smt.
Rukmani vs III Addl.
District Judge, Kanpur (1) and Munni Lal vs Smt.
Shiva Devi 1981 ARC (S.N. 13); referred to Gulzara Singh vs Smt.
Tej Kaur, AIR 1961 Punjab 288, approved.
(3) It is clear from a survey of ss 3(g), 11, 12,13 and 15 of the Act that there are restrictions placed by the Act on the right of the tenant to transfer or sublet the tenancy rights and he can keep possession of the building or premises for himself and for the purpose of his family, for his business and for the business of his family members.
He obviously cannot be allowed to transfer a tenancy right.
A fortiori, the scheme of the Act does not warrant the transfer of the tenancy right to be effective after his lifetime.
[897 G H] (4) In the instant case, the appellant was neither a tenant of the disputed shop nor he was an heir of the deceased tenant since he is not a member of the family of the deceased tenant as defined section 3(g) of the Act.
Besides, on a plain reading of the will it is evident that the will has been executed in respect of other properties including his business but not in respect of the tenancy right.
There fore, this Court sees no reason to differ from the finding of the High Court.
[898 A B]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 563 of 1967.
Appeal from the judgment and order dated September 15, 16, 19, 1966 of the Bombay High Court in Civil Reference No. 8 of 1964.
G.B. Pai, Bhuvanesh Kumari and O. C. Mathur, for the appellants.
L. M. Singhvi, Ram Panjawani and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by P.Jaganmohan Reddy, J.
In exercise of the powers under Sec.
96(1)(b)of the (hereinafter referred to as 'the Act ') relating to "the procedure to be followed in proceedings before such Courts and the execution of orders made by such Courts", the Government of Bombay made the following Rule; "17.
Limitation: (1) Every application to the Court shall be brought within twelve months from the date on which the cause of action arose or as the case may be the claim became due : Provided that the Court may entertain an application after the said period of twelve months if it is satisfied that the applicant had sufficient reasons for not making the application within the said period.
870 (2)Subject as aforesaid the provisions of and III of the Indian Limitation Act, 1908 (IX of (1908), shall so far as may be appli ed to very such application", The vires of this Rule was challenged by the Employees State Insurance Corporation (hereinafter referred to as 'the Corporation) when it filed an application on 7th October 1963 against the Appellant in the Employees Insurance Court (hereinafter referred to as the Insurance Court ') claiming payment of the contributions due from it for the period 1st September 1957 to 31st July 1963.
In those proceedings the Appellant had 'taken the plea that the application was barred under Rule 17 as it was not presented within twelve months from the date when the cause of action arose or as the case may be when the amount became due.
As the plea raised before ' it was important the Insurance Court made a reference under Section 81 of the Act on the following question for the decision of the High Court of Bombay : (1)Whether rule 17 of the Employees ' State Insurance Rule is ultra vires the rule making power of the State Government under Sec.
96(1) of the ? (2)If yes, what, if any, limitation applies to appli cationsfiled by the Corporation to the Employees ' In surance Court ? The High Court of Bombay having considered the several cases and the contentions and submissions mad .
before it held that the clear and unambiguous terms of section 96 (1) (b) exclude the grant of the power to any State Government to make a rule prescribing a period of limitation on claims ennumerated in Sec.75(2).
It was lb further of the view that where two interpretations of the terms of Sec.
96(1) (b) were possible that interpretation should be accepted which excludes the grant of such a power, because it appeared to it clear from the scheme of the Act and the provisos thereof that the legislature did not intend to confer such power on the State Governments.
It therefore answered the first question in affirmative namely that Rule 17 is ultra vires the rule making power of the State Government under See.
96(1) (b) of the Act.
On the second question it held that an application filed in a Court before 1 1 1964 for relief under Sec.
75 of the Act was not subject to any period of limitation, but an application filed on or after 1 1 64, would, however, be covered by article 137 of the Limitation Act of 1963 which provides a limitation of 3 years from the date when the right to apply accrues.
This appeal has been filed against that decision by certificate under article 1 3 3 (1) (c) of the Constitution.
871 This question has been the subject matter of the decisions in Employees State Insurance Corporation vs Madhya Pradesh Government & Ors.
(1) M/s Solar Works, Madras vs Employees State Insurance cc Corporation, Madras & Anr.(2) M/s. A. K. Brothers vs Employees ' State Insurance Corporation, ( 3 ) United India Timber Works, Yamunanagar & Anr.
vs Employees State Insurance Corporation, Amritsar, ( 4 ) Roshan Industries Pvt.
Ltd. Yamunagar vs Employees ' State Insurance Corporation(3), E.S.L.C. Hyderabad vs A. P. State Electricity Board, Hyderabad (6) .
All the High Courts in these cases except that of Allahabad held that the rule is ultra vires the powers conferred on the State Government under Sec.
9 6 ( 1 ) (b) inasmuch as it is not empowered to make rules prescribing periods of limitation for applications to be filed before the Court, though in Madhya Pradesh case it was also said that "Even if it be taken that clause (b) of Sec.
96(1), as it is worded, is wide enough to cover a rule of limitation, that cannot authorize the Government to frame a rule regulating limitation for the recovery of contributions. . . because according to it the validity of the rule does not necessarily depend on the ascertainment of "whether it confers rights or merely regulates procedure, but by determining whether it is in conformity with the powers conferred by the statute and whether it is consistent with the provisions of the statute".
These decisions also held that the scheme of the Act was such that the Legislature did not and could not have intended to confer any power upon the State Government to make rules prescribing a period of limitation for application under Sec.
75(2).
The question which directly confronts us is whether the power to prescribe periods of limitation for initiating proceedings before the Court is a part of, and is included, in the power to prescribe "the procedure to be followed in proceedings before such Courts".
The answer to this question would involve the determination of the further question whether the law relating to limitation is pro cedural or substantive or partly procedural and partly substantive.
If it is procedural law does it make any difference whether it relates to the time of filing application for initiation of proceedings before the Court or whether it relates to interlocutory applications or other statements filed before it after the initiation of such pro ceedings,.
The contention on behalf of the Appellant is that the law relating to limitation is merely procedural, as such it makes (1) AIR 1964 (Vol.
51) Madhya Pradesh 75.
(2) AIR 1964 (Vol.
51) Madras 376.
(3) AIR 1965 (Vol.
52) Allahabad 410.
(4) AIR 1967 (Vol. 54) Punjab 166 (FB).
(5) AIR 1968 (Vol.
55) Punjab 56 (SB).
(6) 1970 Labour & Industrial cases 921.
872 no difference whether it relates to the time of filing an application or it deals with the time for filing interlocutory applications or other statements.
There is also it is submitted no indication in the scheme of the Act that it is otherwise or that there is any impediment for the Government to prescribe under the rule making authority the period of limitation for applications under Sec.
75 (2).
Before we consider the scheme of the Act it may be necessary to examine the scope and ambit of the terms 'procedure ' as used in Sec. 96(1)(b).
The topic of procedure has been the subject of academic de bate and scrutiny as well as of judicial decisions over a long period but in spite of it, it has defied the formulation of a logical test or definition which enables us, to determine and demarcate the bounds where procedural law ends and substantive law begins, or in other words it hardly facilitates us in distinguishing in a given case whether the subject of controversy concerns procedural law or substantive law.
The reason for this appears to be obvious, because substantive law deals with right and is fundamental while procedure is concerned with legal process involving actions and remedies, which Salmond defines "as that branch of law which governs the process of litigation", or to put it in another way, substantive law is that which we enforce while procedure deals with rules by which we enforce it.
We are tempted in this regard to cite a picturesque aphorism of Therman Arnold when he says "Substantive law is canonised procedure.
Procedure is unfrocked substantive law(1)".
The manner of this approach may be open to the criticism of having over simplified the distinction, but nonetheless this will ,enable us to grasp the essential requisites of each of the concepts which at any rate "has been found to be a workable concept to point out the real and valid difference between the rules in which stability is of prime importance and those in which flexibility is a more important value (2 ) ".
Keeping these basic assumptions in view it will be appropriate to examine whether the topic of limitation belongs to the Branch of procedural law or is outside it.
if it is a part of the procedure whether the entire topic is covered by it or only a part of it and if so what part of it and the tests for ascertaining them.
The law of limitation appertains to remedies because the rule is that claims in respect of rights cannot be entertained if not commenced within the time prescribed by the statute in respect of that right.
Apart from Legislative action prescribing the time, there is no period of limitation recognised under the general law and therefore any time fixed by the statute is neces (1) XLV Harvard Law Journal 617 & 645.
(2) American Juris prudence Vol.
51 (Second Edn.) 605.
873 sarily to be arbitrary.
A, statute prescribing limitation however does not confer a right of action nor speaking generally does it confer on a person a right to relief which has been barred by eflux of time prescribed by the law.
The necessity for enacting periods of limitation is to ensure that actions are commenced within a particular period, firstly to assure the availability of evidence documentary as well as oral to enable the defendant to contest the claim against him; secondly to give effect to the principle that law does not assist a person who is inactive and sleeps over his lights by allowing them when challenged or disputed to remain dormant, without asserting them in a court of law.
The, principle which forms the basis of this rule is expressed in the maxim vigilantibus, non dormientibus, jura subveniunt (the laws give help to those who are watchful and not to those who sleep).
Therefore the, object of the statutes of limitations is to compel a person to exercise his right to action within a reasonable time as also to dis courage and suppress stale, fake or fraudulent claims.
While this is so there are two aspects of the statutes of limitation the one concerns the extinguishment of the right if a claim or action is not commenced with a particular time and the other merely bars the claim without affecting the right which either remains merely as a moral obligation or can be availed of to furnish the consideration for a fresh enforceable obligation.
Where a statute prescribing the limitation extinguishes the right, it affects substantive rights while that which purely pertains to the commencement of action without touching the right is said to be procedural.
According to Salmond the law of procedure is that branch of the law of actions which governs the process of litigation, both Civil and Criminal.
"All the residue" he says "is substantive law, and relates not to the process of litigation but to its purposes and sub , ject matter".
It may be stated that much water has flown under the bridges since the original English theory justifying a statute of limitation on the ground that a debt long overdue was pre sumed to have been paid and discharged or that such statutes are merely procedural.
Historically there was a period when substantive law was inextricably intermixed with procedure; at a later period procedural law seems to have reigned supreme when forms of action ruled.
In the words of Maine "So great is the ascendancy of the Law of Actions in the infancy of Courts of Justice, that substantive law has at first the look of being gradually secreted in the interstices of procedure()".
Even after the forms of action were abolished Maitland in his Equity was still able to say "The forms of action we have buried but they still rule us from their graves", to which Salmond added "In their life they were powers of evil and even in death they have not wholly ceased from troubling(2)".
Oliver Wendal Holmes had however observed in "The (1) Maine, Early Law and Custom 389.
(2) 874 Common Law", "wherever we trace a leading doctrine of sub stantive law far enough back, we are likely to find some forgotten circumstance of procedure at its source".
It does not therefore appear that the statement that substantive law determ.nes rights and procedural law deals with remedies is wholly valid, for neither the entire law of remedies belongs to procedure nor are rights merely confined to substantive law, because as already noticed rights are hidden even "in the interstices of procedure".
There is therefore no clear cut division between the two.
A large number of decisions have been referred before us both English and Indian some of antiquity in support of the proposition that the law prescribing the time within which an action can be commenced is purely procedural and therefore when a statute empowers the Govt.
to make rules in respect of procedure it confers upon it also the rights to prescribe limitation.
To this end have been cited the cases of Manoel Francisco Lopez & Ors.
vs Lieut.
Godolnhon James Burslem(l), and Ruckmaboye vs Lulloobhoy Mottichund(2).
An examination of these cases would.
show that what was being considered was whether the law of limitation was part of the lex fori which foreigners and persons not domiciled in the country have to follow if they have to have recourse to actions in that country.
In the latter case the Privy Council observed at page 265 "The arguments in support of the plea are founded upon the legal character of a law of limitation or prescription, and it is insisted, and the Committee are of opinion, correctly insisted, that such legal character of 'the law of prescription has been so much considered and di cussed among writers upon jurisprudence, and has been so often the subject of legal decision in the courts of law of this and other countries, that it is no longer subject to doubt and uncertainty.
In truth, it has become almost an axiom in jurisprudence, that is law of prescription, or law of limitation, which is meant by that denomination, is a law relating to procedure having reference only to the lex fori".
These observations as well as those in the earlier case must be understood in the light of the principles governing conflict of laws.
What was in fact being examined was whether they are part of the procedural law in the sense that the Municipal laws will be applicable on the question of limitation for the commencement of actions because if limitation was purely a question of substantive law that would be governed by the law of the country of the (2) (1849 54)_(V_Moore Indian Appeals 234).
875 domicile of the person who is having recourse to the Courts of the other country.
In other words the substantive rights of the parties to an action are governed by a foreign law while all matters pertaining to procedure are governed exclusively by the lex fori.
The cases cited at the Bar, of the various High Courts in this country show that they were construing the rules prescribing limitation in respect of proceedings in Court i.e. proceedings afterthe institution of the suit or filing of the Appeal.
In Sennimalai Goundan vs Palani Goundan & 4nr.(1), the question was.
whether &,,a High Court by framing a rule under Sec.
122 Civil Procedure Code could make Section 5 of the Limitation Act applicable to applications under sub rule (2) of Rule 13 of Order IX.
While holding that it could, Coutts Trotter, J as he then was made this pertinent observation : "Whatever may be the case of the statute prescribing say 3 years for an action to be brought I am quite clear that the Articles in the Act limiting applications of this nature which are almost entirely interlocutory deal clearly with matters of procedure. .
This was also the view of the Full Bench in Krishnamachariar vs Srirangammal & Ors.(2), which was followed by the Bombay High Court in Bandredas vs Thakurdev ( 3 ).
It was contended in Velu Pillai vs Sevuga Perumal Pillai(4), that rule 41 (A) (2) of the Appellate side Rules of the Madras High Court providing for the presentation of a petition to the High Court within 90 days from the date of the order passed in an execution proceedings was ultra vires, because the High Courts were not entitled by rules to regulate or enlarge the periods in the Limitation Act in respect of the proceedings to which the Limitation, Act apply 'This contention was negatived on the ground that such a powerwas inherent in Sec.
122 of the Civil Procedure Code.
The argument of the petitioner that he had a vested right to go up in revision at any time and that the decision of the Full Bench in Krishnamachariar vs Srirangammal & Ors.
(2 ) does not affect his right, was rejected on the ground that Sec.
122 Civil Procedure Code empowers the High Courts to make rules regu lating their own procedure and the procedure of the subordinate Courts subject to their superintendence.
There were earlier decisions of the Allahabad High Court and Lahore High Court as also a decision of the Bombay High Court rendered under Sec.
602 of the old Civil Procedure Code 1.
AIR 1917 Madras 957.
(2) ILR 47 Madras 824.
(3) ILR 53 Bombay 453.
(4) AIR 1958 Madras 392.
876 referred to by Krishnan, J., in his referring order in Krishnamachariar 's case which took the view that the High Court has riot the power by rule under Sec.
122 or the corresponding Sec.
602 of the old Civil Procedure Code to make rules for altering the period of limitation prescribed by the Indian Limitation Act see Narsingh Sahai vs Sheo Prasad(l), and Chunilal Jethabhai vs Dahvabhai Amulakh(2).
Again a similar question arose as to whether clause 27 of the Letters Patent of the Lahore High Court (there are similar clauses in the Letters Patent of the other High Courts) could validly empower the making of rule 4 prescribing a period for filing an appeal under Clause 10 of the Letters Patent.
Clause 27 of the Letters Patent empowered the High Court from time to time to make rules and orders for regulating the practice of the Court etc.
This Court in Union of India vs Ram Kanwar & Ors.
( 3 ) , approved the view of a Full Bench of the Punjab High Court in Punjab Cooperative Bank Ltd. vs Official Liquidators Punjab Cotton Press Company Ltd. (in liquidation) (4), where it was held that rule 4 is a special law within the meaning of Sec. 29 (2) of the Limitation Act.
Subba Rao, J., as he then was said at page 320 "Rule 4 is made by the High Court in exercise of the legislative power conferred upon the said High 'Court under cl. 27 of the Letters Patent.
As the said rule is a law made in respect of special cases covered by it, it would certainly be a special law within the meaning of section 29(2) of the Limitation Act".
In that case no question was raised as to whether rule 4 was dealing with a procedural matter or dealt with a substantive right.
These cases are of little assistance and if at all they lay down the principle that interlocutory proceedings before the Court do not deal with substantive rights and are concerned with mere procedure and can be dealt with by rules made under the powers conferred on the High Court to regulate the procedure.
It is therefore apparent that whether the fulfilment of a particular formality as a condition of enforceability of a particular right is procedural or substantive has not been, as we had already noticed free from difficulty.
What appears to be a self evident principle will not become so evident when we begin to devise tests for distinguishing procedural rule from substantive law.
It appears to us that there is a difference between the manner in which the jurisprudential lawyers consider the question and the %way in which the Judges view the matter.
The present tendency (1) All. 1 (FB).
(2) , Bom.
14 (FB).
877 is that where a question of limitation arises, the distinction between so called substantive and procedural statutes of limitation may not prove to be a determining factor but what has to be considered is whether the statute extinguishes merely the remedy or extinguishes the substantive right as well as the remedy.
Instead of generalising on a principal the safest course would IV to ' examine each case on its own facts and circumstances and determine for instance whether it affects substantive rights and extinguishes% them or whether it merely concerns a procedural rule only dealing with remedies or whether the intendment to prescribe limitation is discernible from the scheme of the Act or is inconsistent with the rule making power etc, Apart from the implications inherent in the term procedure appearing in Sec. 96(1)(b) the power to prescribe by rules any matter falling within the ambit of the term must be the "Procedure to be followed in proceedings be fore such Court".
The word 'in ', emphasised by us, furnishes a clue to the controversy that the procedure must be in relation to proceedings in Court after it has taken decision of the matter, which obviously it takes when moved by an application presented before it.
If such be the meaning the application by which the Court is asked to adjudicate on a matter covered by Sec.
75(2) is outside the scope of the rule making power conferred on the Government.
In the East & West Steamship Company, George Town, Madras vs section K. Ramalingam Chettiar(1), one of the questions that was considered by this Court was whether the clause that provides for a suit to be brought within one year after the delivery of the goods or the date when the goods should have been delivered, only prescribes a rule of limitation or does it also provide for the extinction of the right to compensation after certain period of time.
It was observed by Das Gupta, J, at page 836 : "The distinction between the extinction of a right and the extinction of a remedy for the enforcement of that right, though fine, is of great importance.
The legislature could not but have been conscious of this distinction when using the words "discharged from all liability" in an article purporting to prescribe rights and immunities of the shipowners.
The words are apt to express an intention of total extinction of the liability and should, specially in view of the international character of the legislation, be construed in that sense.
878 It is hardly necessary to add that once the liability is extinguished under this clause, there is no scope of any acknowledgement of liability thereafter".
What we have to consider is, apart from the question that the Government on the terms of Sec.
96(1) (b) is not em powered to fix periods of limitation for filing applications under Sec. 75 (2) to move the Court, whether on an examination of the Scheme of the Act, rule 17 affects substantive rights by extinguishing the claim of the Corporation to enforce the liability for contributions payable by the Appellant.
An examination of the purpose and intendment of the Act and the scheme which it effectuates, leaves no doubt that it was enacted for the benefit of the employees and their dependents, in case of sickness, maternity and 'employment injury ', as also to make provision for certain other matters.
40 makes the employer liable in the first instance to pay the contributions of the employer as well as the employee to the Corporation subject to the recovery from the employee of the.
amount he is liable to contribute.
This liability on the employer is categorial and mandatory.
He is further required under Sec. 44 to submit to the Corporation returns as specified therein.
Chapter V com prised of Sections 46 to 73, deals with the benefits which includes among others, sickness and disablement benefit of the employee, his eligibility for receiving payments and.
the compensation payable to his dependents.
If the employee fails or neglects to pay the contributions as required, the Corporation has the right to recover from him under Sec.
68, the amounts specified in that Section as an arrear of land revenue.
94 provides that the contributions due to a corporation are deemed to be included in the debts under the Insolvency Acts and the Company 's Act, and are given priority over other debts in the distribution of the pro perty of the insolvent or in the distribution of the assets of a Company in liquidation.
Chapter VI deals with adjudication of disputes and claims, of which Sec.
74 provi des for he Constitution of the Insurance Court; Sec.
74 specifies the matters to be decided by that Court; Sec. 76 and Sec.
77 deal with the institution and commencement of proceedings and Sec.
78 with the powers of the Insurance Court.
80 deals with the non admissibility of the claim, if not made within twelve months after the claim is due while Sec.
82(3) prescribes the period within which an appeal should be filed against the order of the Insurance Court.
These provisions in our view unmistakably indicate that the whole scheme is dependent upon the contributions made by the employer not only with respect to the amounts payable by him but also in respect of those payable by the employee.
No limitation has been fixed for the recovery of these amounts 879 by the Corporation from the employer; on the other hand Sec.
68 empowers the Corporation to resort to coercive process.
If any such steps are proposed to be taken by the Corporation and the employer is aggrieved he has a right to file and apply to the Insurance Court and have his claim adjudicated by it in the same way as the Corporation can prefer a claim in a case where the liability to pay is disputed.
75 (2) (d) clearly envisages this course when it provides that "the claim against a principal employer under Sec.
68" shall be decided by the Employees Insurance Court.
It may be useful to read Sec.
68 and 75 (2) (d) which are given below Sec.
68 (1)If any principal employer fails or neglects to pay any contribution which under this Act he is liable to pay in respect of any employee and by reason thereof such person becomes disentitled to any benefit or entitled to a benefit on a lower scale, the Corporation should have been paid by the principal employer, pay to the person the benefit at the rate to which he would have been paid by the principal employer, pay to the person the benefit at the rate to which he would have been entitled if the failure or neglect had not occurred and the Corporation shall be entitled to recover from the principal employer either (i) the difference between the amount of benefit which is paid by the Corporation to the said person and the amount of the benefit which would have been payable on the basis of the contributions which were in fact paid by the employer; or (ii) twice the amount of the contribution which the employer failed or neglected to pay; whichever is greater.
(2)The amount recoverable under this Section may be recovered as if it were on arrear of land revenue.
Sec.75 (2) The following claim shall be decided by the Employees ' Insurance Court, namely (d)Claim against a principal employer under Section 68; It is contended by the learned Advocates for the Appellant that Sec.
68 is a crucial provision as it indicates that the right of the Corporation to enforce its claim for payment has been preserved 880 subject to tile provision that the omission or neglect by the principal employer to make contribution deprives the employee of any benefit either totally or 'at a reduced scale.
It is only in these circumstances he submits that the Corporation can recover the amount by coercive process but in any other case the Corporation 's claim to recover by an application to the Insurance Court can be made subject to a period of limitation by a rule made under Sec. 96(1)(b).
We are unable to appreciate the logic of this submission because the benefit of an employee can be negatived or partially admitted for instance either by reason of the employer not showing him in the return as an employee of his or showing him as drawing a lesser wage than what he is entitled to or as it may happen mostly, when he fails to make the payments even according to the returns made by him.
In all these cases the employee 's benefits will be affected because the basis of the scheme of conferring benefit on the employee is the contribution of both the employer and the employee.
It is clear therefore that the right of the Corporation to recover these amounts by coercive process is not restricted by any limitation nor could the Government by recourse to the rule making power prescribe a period in the teeth of Sec.
What Sec.
75(2) is empowering is not necessarily the recovery of the amounts due to the Corporation from the employer by recourse to the Insurance Court but also the settlement of the dispute of a claim by the Corporation against the principal employer which implies that the principal employer also can, where he disputes the claim made and action is proposed to be taken against him by the Corporation under See.
68 to recover the amounts said to be due from him.
While this is so there is also no impediment for the Corporation itself to apply to the Insurance Court to determine a dispute against an employer where it is satisfied that such a dispute exists.
In either case neither Sec.
69 nor Sec. 75 (2) (d) prescribes a period of limitation.
It may also be mentioned that Sec. 77 which deals with the commencement of the proceedings, does not provide for any limitation for filing an application to the Insurance Court even though it provides under sub sec.
(2) of that Section that every such application shall be in such form and shall contain such particulars and shall be accompanied by.such fee, if any, that may be prescribed by rules made by the State Government in consultation with the Corporation.
This was probably an appropriate provision in which the legislature if it had intended to prescribe a time for such applications could have provided.
Be that as it may in our view the omission to provide a period of limitation in any of these provisions while providing for a limitation of a claim by an employee for the payment of any benefit under the regulations, shows clearly that the legis lature did not intend to fetter the claim under Sec.
75(2)(d).
It appears to us that where the legislature clearly intends to pro 881 vide specifically the period of limitation in respect of claims arising thereunder it cannot be considered to have left such matters in respect of claims under some similar provisions to be provided for by the rules to be made by the Government under its delegated powers to prescribe the procedure to be.
followed in proceedings before such Court.
What is sought to be conferred is the power to make rules for regulating the procedure before the Insurance Court after an application has been filed and when it is seized of the matter.
That apart the nature of the rule bars the claim itself and extinguishes the right which is not within the pale of procedure.
Rule 17 is of such a nature and is similar in terms to Sec. 80.
There is no gain saying the fact that if an employee does not file an application before the Insurance Court within 12 months after the claim has become due or he is unable to satisfy the Insurance Court that there was a reasonable excuse for him in not doing so, his right to receive payment of any benefit conferred by the Act is lost.
Such a provision affects substantive rights and must therefore be dealt with by the legislature itself and is not to be inferred from the rule making power conferred for regulating the procedure unless that is specifically provided for.
It was pointed out that in the Constitution also where the Supreme Court was authorised with the approval of the President to make rules for regulating generally the practice and procedure of the Court, a specific power was given to it by article 145 (1) (b) to prescribe limitation for entertaining appeals before it.
It is therefore apparent that the legislature does not part with the power to prescribe limitation which it jealously retains to itself unless it intends to do so in clear and unambiguous terms or by necessary intendment.
The view taken by the Madhya Pradesh, Madras, Punjab and Andhra Pradesh High Courts in the cases already referred to are in consonance with the view we have taken.
In the decision of the Punjab High Court, Dua, J, as he then was expressed the view of the Full Bench with which Palshaw C. J., and Mahajan J, agreed.
After examining the provisions of the Act he observed at page 170 171 "At this stage, I consider it appropriate to point out, what is fairly well recognised, that what is necessarily or clearly implied in a statute is an effectual as that, which is expressed because it often speaks as plainly by necessary inference as in any other manner.
The purposes and aims of an Act as discernible from its statutory scheme are accordingly important guideposts in discovering the true legislative intent.
One who considers only the letter, of an enactment, goes but, skin deep into its true meaning; to be able to fathom the real statutory intent it is always helpful to inquire into the object intended to be accomplished.
882 Considering the entire scheme of the Act before us, it is quite clear that fixation of any period of limitation for the Corporation to realise the contributions from the employer may tend seriously to obstruct the effective working and enforcement of the scheme of insurance".
It may be of interest to notice that Palshaw C. J. had earlier taken a different view in Chanan Singh vs Regional Director, Employees State Insurance Corporation(1), but said that he, had no hesitation in agreeing with Dua J 's view because he realised that his earlier view was based on an over simplification.
In the latest case the Andhra Pradesh High Court also following the earlier decision of Madhya Pradesh, Madras and Punjab held that the State Government had exceeded its powers to frame Rule 17 as no such power to prescribe limitation under the provisions ,of Sec. 96 (1 ) (b) or under Sec.
78 (2) can be said to have been delegated to the State Government.
We, however, find that Sec.
78(2) does not delegate any power to the Government to make rules but only requires the Insurance Court to follow "such pro cedure as may be prescribed by rules made by the State Government" which rules can only be made under Sec.
96 of the Act.
In the view we have taken it is unnecessary to examine the question whether legislative practice also leads to the same conclusion though in the Madras and the Punjab decisions that was also one of the grounds given in support of their respective conclusions.
The contrary view expressed by a Bench of the Allahabad High Court is in our opinion not good law.
We may before parting with this case point out that the legislature since chosen to specifically prescribe 3 years as limitation period by addition of sub sec.
(1A) to Sec. 77 while deleting Sec. 80.
See 77(1A) provides that "Every such application shall be made within a period of three years from the date on which the cause of action arose".
By this amendment the claim under clause (d), as well as, the one under clause (f) of sub section (2) of Section 75 which provides for the adjudication of a claim by the Insurance Court for the recovery of any benefit admissible under the Act for which a separate limitation was fixed under Sec. 80, is now to be made within 3 years from the date of the accrual of the cause of action.
amendment also confirms the view taken by this Court that the power under Section 96 (1) (b) does not empower the Government to prescribe by rules a period of limitation for claims under Sec. 75.
In the result this appeal is dismissed with costs.
K.B.N. Appeal dismissed.
[/INST]Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, provided as follows: (1) The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of an essential commodity, or for securing their equitable distribution and availability at fair prices, may by notified order, provide for regulating or prohibiting the production, supply and distribution thereof, and trade and commerce therein.
Without prejudice to the generality of the powers conferred by sub section
(1) an order made thereunder may provide . (j) for any incidental and supplementary matters.
including in particular the entering, and search of premises, vehicles, vessels and aircraft, the seizure by a person authorised to make such search of any articles in respect of which such person has reason to believe that a contravention has been, is being, or is about to be commit ted. " In exercise of the powers conferred on the Central Government by cl.
(j) of sub section
(2) of section (3) of the above said Act, which had been delegated to the Provincial Govern ment in relation to food stuffs, the Governor of Bihar made an order authorising the District Magistrate, Patna, and the Special Officer in charge of rationing, Patna, to search the stock of sugar held by a company of which the appellant was the General Manager and directing the seizure of 5,000 maunds of sugar held in stock by the said company, on the ground that the company was about to commit a contravention of an order of the Chief Controller of Prices and Supplies made under the Sugar and Sugar Products Control 304 Order, 1947.
The appellant obstructed the officers who went to search and seize the goods and was convicted under section 186, Indian Penal Code.
Held, (i) the power "to provide for regulating or prohib iting production, supply and distribution" conferred by the Act on the Central Government included the power to regu late or prohibit by issuing directions to a particular producer or dealer or by requiring any specific act to be done or foreborne in regard to production etc., and the order of the Governor was not therefore invalid on the ground that it was not a rule or regulation of general application but an order concerning a particular company alone; (ii) sub section (2) of section 3 conferred no further or other powers than what were conferred by sub section
(1) and the enumeration of certain matters in sub section
(2) was merely illustrative, as such enumeration was "without prejudice to the generality of the powers conferred by sub section
(1) "; (iii) seizure of an article being within the purview of sub section
(1) of section 3 it was therefore competent to the Cen tral Government, and its delegate the Provincial Government, to make an order for seizure under sub section
(1) apart from and irrespective of the anticipated contravention of any other order as contemplated in el.
(j) of sub section (2); (iv) even assuming that the order of the Chief Control ler of Prices under the Sugar Control Order was incomplete and inoperative and there could be no question of its con travention, the reference to that order in the order made by the Governor would be a mere redundancy and would not affect the validity of the latter order, and the appellant was rightly convicted under section 186, Penal Code.
Quaere: Whether for an offence under section 186, Penal Code, it is necessary that the act which was obstructed must be duly authorised and otherwise lawful.
King Emperor vs Sibnath Banerjee applied.
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<s>[INST] Summarize the judgementAppeal No. 212 of 1961.
From the judgment and decree dated December 11, 1957, of the Bombay High Court in First Appeal No. 640 of 1957.
G. section pathak, N. D. Karkhanis, B. Datta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant.
C.K. Daphtary, Solicitor General of India, N.S. Bindra and R. H. Dhebar for P. D. Menon, for the respondents.
February 8.
The judgment of the Court was delivered by GAJENDRAGADKAR, J.
The short question which this appeal raises for our decision is whether the appellant Shankar Narayan Ranade has established his title to the running water of the river Valdevi which runs through his Inam village Vadner.
The said village had been granted to the ancestors of 887 the appellant by the Peswa Government in 1773 A.D.
This grant was continued by the British Government when the British Government came in power.
The river Valdevi has its origin in the hills of Trimbak and from those hills it flows to Vadner and then to Chehedi where it joins the river Darna and thus loses its individuality.
The total length of this river is about 25 miles, while its length within the limits of Vadner village is about 2 miles 82 furlongs.
The Darna river after its conjunction with Valdevi proceeds towards Sangvi and there is merged with Godavari river : The appellant is one of the sharers in the Inam village of adner and he brought the present suit No. 12/1950 in the Court of the Civil judge (Senior Division) at Nasik, claiming reliefs against the Union of India and the State of Bombay, respon dents 1 & 2 respectively, on the basis of his title to the running water of the said river.
It appears that in 1942, during the period of the 11 Would War, the Military authorities constructed barracks and other residential quarters for the army personnel within and outside the limits of Vadner.
They also built a dam across the river Valdevi within the limits of Vadner and dug a well near the bank of the river.
This well was fed with water carried by two channels drawn from the river.
When the water reached the well, it was pumped from the well and duly stored in four reservoirs where it was filtered and then it was carried by means of pipes to the residential area occupied by the military personnel.
The appellant then approached the military authorities and also the Government of Bombay and claimed compensation for the use of the water and the lands by the military authorities.
Since his request for adequate compensation was not met, he filed the present suit on March 11, 1950, in a representative character under O. 1 r. 8 C. P. C. 888 In this suit, the appellant speaking for himself and for the other sharers in the Inam village of Vadner alleged that the jagirdars of the village were, full owners of the entire area of that village, including the land, the stream and the water flowing through the stream within the limits of the village.
According to the plaint, the acts of diversion of water committed by the military authorities had deprived the appellant and the other Inamdars of their right to utilise that water for their own gains and thus, had caused injury and damage to them.
As compensation for this damage, the appellant claimed Rs. 1,11,250/ from the respondents.
The appellant further made a claim for Rs. 750/ as compensation for the use of his land by the military authorities.
The diversion of water and the use of land continued from 1942 to 1949.
Some other incidential reliefs were also claimed by the appellant.
Respondent No. 2 contested the appellant 's claim.
It urged that the Inamdars were not the grantees of the soil, but were the grantees of the royal share of the revenue only; and it was urged that in any case, they had no ownership over the flowing water of the Valdevi river.
Respondent No. 1 adopted the written statement of respondent No. 2 and filed the Purshis in that behalf.
According to the respondents, the river Valdevi had become a notified canal by virtue of a notification issued on February 17, 1913 under section 5 of the Bombay Irrigation Act, 1879, and in consequence, the Inamdars had lost their rights, if any, in the waters of the said river and respondent No. 2 had the absolute right of the use of the said water.
A plea of limitation was also made by both the respondents.
The learned trial judge made findings in favour of the appellant on all the issues.
He held that the Inamdars were the grantees of the soil, that the 889 river Valdevi and its flowing water belonged to them, that the notification on which reliance was placed by the respondents was invalid, that the acts of the military authorities were unauthorised and that the appellant was consequently entitled to the compensation for the use, by the military authorities, of the water of the river and his lands and also for the loss of his income from the river bed.
According to the trial Court, the appellant was entitled to this compensation only for two years before the date of the suit and the rest of his claim was barred by time.
Accordingly, it passed a decree in favour of the appellant for an amount of Rs. 26,788/1/as compensation for the use of water up to December 31, 1949, directed that the compensation for the use of water for the period subsequent to January 1, 1950 should be ascertained in execution.
proceedings, and awarded compensation @ Rs. 100/ per annum for the use of the land, and Rs. 50/ per annum for the loss of income from the river bed during the period that the act of the military authorities continued.
This decree was challenged both by the appellant and the respondents by cross appeals Nos.
634/1954 and 640/1953 respectively. 'The appellant claimed a larger amount of compensation, whereas, according to the respondents, no compensation was payable in respect of the alleged diversion of the running water of the river Valdevi.
It appears that before the High Court, the respondents did not dispute the finding of the trial Court that the Inamdars were the grantees of the soil and conceded that the rights of the Inamdars such as they were to the waters of the river Valdevi had not been extinguished by the notification issued under the Bombay Irrigation Act.
It was, however, urged that the Valdevi river being a notified canal, the military authorities could have used its water by making appropriate applications under 890 sections 17 and 27 of the said Irrigation Act; but since there was no evidence to show that any such applications had been made, the said point did not survive.
The main argument urged by the respondents in their appeal was that the appellant was not the owner of the running water of the stream and so, he had no right to claim any compensation for the alleged diversion of the said water by the military Authorities.
The High Court has substantially accepted this contention.
It has held that as owners of the lands in the village situated on both banks of the river the Inamdars were entitled to the use of the water of the river as riparian owners and what belonged to them was water which they took out from the river and appropriated to their use; they were, however, not entitled to claim title over the flowing water of the river and so, the diversion of the flowing water of the river cannot sustain their claim for compensation.
The decree passed by the trial Court in respect of compensation for the wrongful use of the lands was not challenged by the respondents.
In the result, the High Court modified the decree passed by the trial Court by setting aside that part of it which related to, the compensation for the use of the water of the Valdevi river by the military authorities and confirmed the rest of the directions issued by the decree.
It is against this decree that the appellant has come to this Court with a certificate issued by the High Court ; and the main point which has been urged before us by Mr. Pathak on behalf of the appellant is that the high Court was in error in rejecting the appellant 's claim that the Inamdars of the village were the owners of the running water of the river Valdevi during its course within the limits of the Inam village of Vadner.
In support of the appellant 's case, Mr. Pathak has urged that in construing the Sanad on which the appellant 's title is founded, it would be necessary to 891 bear in mind two important considerations.
The first consideration is that the flowing water of a river constitutes property which can belong to a citizen either by grant or otherwise and assistance is sought for this argument from the provisions of section 37 of the Bombay Land Revenue; Code (Act V of 187(9).
Section 37 (1) provides, inter alia, that all public roads, lanes and paths which are not the property of individuals, belong to the Crown, and amongst the items of property specified in this clause are included rivers, streams, nallas, lakes, tanks and all canals and watercourses, and all standing and flowing water The argument is that this sub section Postulates that the items of property specified by it can belong to private individuals, and it provides that if they are not shown to belong to private individuals, they would vest in the State.
Therefore, in construing the Sanad, We ought to remember that the river and its flowing water constitute property which can be granted by the Ruler to a citizen.
The other consideration on which Mr. Pathak has relied is that tinder the provisions of section 8 of the Transfer of Property Act, it should be assumed that unless a different intention is expressly or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof.
Mr. Pathak contends that assuming that prior to the grant, the Peshwa Government as the ruling power of the day was the owner of the river and its flowing water,, when the said Government made a grant to the appellant 's predecessors, the principle enunciated by section 8 of the Transfer of Property Act should be applied and the grant should be construed to include all rights, title and interest of the grantor, unless there is a contrary provision either expressly made, or implied by necessary implications.
892 Bearing those two considerations in mind, let us consider the terms of the Sanad itself.
The Sanad is drawn in terms which are consistent with the pattern prevailing in that behalf in those days and contains the usual familiar recitals.
The relevant portion of the Sanad reads as follows : " 'Seeing the respectable Erahsins, performing Snan Sandhya (bath and prayer) leading ascetic life, devoted to the performance of their duties as laid down in Shrities and Smrities, the Government has constructed houses there and given to (them).
Thinking that if the same are given to them, it would be beneficial to the Swami and to the Kingdom of Swami, the village of mouje Vadner, Pargana aforesaid in (a) (b) Swarajya as well as Moglai Dutarfa (on both sides) has been given to them as Nutan (New) (c) (d) Inam together with Sardeshmukhi, Inam Tizai, (e) (f) (g) Kulbab Kulkanu, Hali Patti, and Pestr Patti excluding (the rights of) Hakkadar and Inamdar and together with water, trees, grass, wood stones and hidden treasures, for maintenance of their families." The Sanad then defines the shares in the current revenue of the said village amongst the respective shares.
In the concluding portion, it makes certain other provisions with which we are not concerned in the present appeal.
This Sanad was executed in 1773 A. D. During the British rule, this Sanad was confirmed in 1858 A. D.
It is common ground that the material terms which have been construed for the purpose of determining the title of the appellant are contained in the earlier sanad.
It would be noticed that the Sanad refers to the rights in water, trees, grass, wood, stones and hidden 893 treasures.
It is well settled that the word "water (jal)" refers to water in tanks or wells and does not refer to the flowing water of the river.
Indeed, if a grant of the river including its flowing water is intended to be made, the Sanad would have definitely used the word " 'river (nadi)", because it is wellknown that when rivers, drains or culverts are intended to be gifted, the Sanads usually use the words "nadi and nalla".
Therefore, on a plain construction of the relevant words used in the Sanad, there can be no doubt that what is conveyed to the grantee by the Sanad is stationary or static water in the ponds or wells and not the flowing water of the river.
The specific reference to water meaning water of the well or the pond serves two purposes ; it defines the kind of water which is conveyed, and by necessary implication, excludes the grant of flowing water of the river.
Sanads containing words like these have frequently been considered by the Bombay High Court in the past and it has been consistently held that the word "water" means only water in the ponds or wells and does not refer to the flowing water of the river, vide Annapurnabai Gopal vs Government of Bombay (1).
Therefore, the two considerations on which Mr. Pathak strongly relied in support of his construction of the Sanad do not really assist him.
The language of the Sanad precisely defines the nature of the water that is conveyed and in doing so, by necessary implication, excludes the flowing water of the river.
Mr. Pathak, however, suggests that it is not disputed by the respondents that the Sanad in question grants title to the soil of the village and is not confined to the royal share of the revenue only ; and he, argues that the grant of the soil necessarily means the grant of the bed of the river while it flows within the limits of the Inam village.
If the bed of the river has been granted to the appellant 's predecessors by the Sanad, why does it not follow that the water flowing (1) , 894 on the said bed during the said limits belongs to the appellant ? The title to the running water of the river must, Mr. Pathak says, go with the title to the bed of the river.
There are two difficulties in accepting this contention.
The first difficulty is that the use of the word "water (jal)" in the Sanad, as we have already held, excludes the running water of the river.
Besides, it is by no means clear that the title to the flowing water of the river necessarily goes with the title to the bed of the river.
As was observed by Lord Selborne in Lyon vs Fish mongers ' Company. " 'The title to the soil constituting the bed of a river does not carry with it only exclusive right of property in the running water of the stream, which can only be appropriated by severance, and which may be lawfully so appropriated by every one having a right of access to it.
Therefore, the argument that the grant of the soil of the village including the bed of the river must necessarily include the grant of the title to the flowing water of the river can not be accepted.
In this connection, it is necessary to remember that the river Valdevi flows through the village only for the distance of 2 miles & 2 furlongs.
It is not a case where the whole of the stream of the river from its origin to its merging in another river runs entirely through this village.
If a river takes its origin within the limits of an Inam village and its course is terminated within the limits of the same village, that would be another matter.
In the present case, if the appellant 's right to the following water of the river is conceded, it would mean that the Inamdars would be able to divert the water completely and destroy the rights of the other riparian owners whose lands are situated outside the village.
They may be able to pollute the water or do anything with it to the prejudice of the said riparian owners.
Such rights cannot be claimed by the appellant unless the Sanad in his favour makes the grant 895 of,the running water in terms.
As we have already seen, the Sanad not only does not make any such grant, but by necessary implication also excludes the running water from the purview of the grant.
Mr. Pathak then attempted to argue that the diversion of the water of the river Valdevi during the relevant period affected the appellant 's right as the riparian owner and that, according to him, would furnish him with a cause of action for claiming damages against the respondents.
In this connection, Mr. Pathak invited our attention to the observations of Parke, B. in Embrey vs Owen.
(1). "Flowing water," said Parke, B., "is public juris in this sense only that all may reasonably use it who have a right of access to it, and that none can have any property in the water itself, except in the particular portion which he may choose to abstract from the stream and take into his possession, and that during the time of his possession only.
The right to have a stream of water flow in its natural state, without diminution or alteration, is an incident to the property in the land through which it passes ; but this is not an absolute and exclusive right to the flow of all the water, but only subject to the right of other riparian proprietors to the reasonable enjoyment of it; and consequently it is only for an unreasonable and unauthorised use of this common benefit that any action will lie." In this connection, Mr. Pathak has also referred us to the decision of the Privy Council in the Secretary of State for India vs Subbararayudu (1).
In that case, the Privy Council has elaborately considered the nature and extent of the rights which a riparian owner can claim.
"A riparian owner observed Viscount Dunedin, "is a person who owns land abutting on a stream and who as such has a certain right to take water from the stream.
In ordinary cases, the fact that his land abuts on the stream makes him the proprietor of the bed of the (1)(1851) 6 E,.c.
353 : ; (2) (1931) L,R. 59 I.A. 56, 63 64, 896 stream usque ad medium filum.
But he may not be.
He may be ousted by an actual grant to the person on the other side, or he may be and often is ousted by the Crown when the stream is tidal and navigable, the solum of the bed belongs to the Crown.
" It was also observed that "the right of a riparian owner to take water is first of all, for domestic use, and then for other uses connected with the land, of which irrigation of the lands which form the property is one.
This right is a natural right and not in the strict sense of the word an easement, though in many cases it has been called an easement.
" We do not, however, think that it is possible for us to allow Mr. Pathak to raise this alternative argument before us, because it is clear that the reliefs claimed by the appellant were based only on one ground and that was, the title to the flowing water of the river.
In paragraph 8 of the plaint the appellant has specifically stated that he was claiming the amount of compensation for the use of water belonging to the plaintiff and in paragraph 3 it has been clearly averred that the running water of the river belongs to the appellant and so, by the unauthorised acts of the military authorities, the appellant and the Inamdars were not able to let out their bed of the stream for the plantation of water melons etc., and were thus put to loss.
In other words, the plaint has made no allegation even alternatively that the appellant and the other Inamdars of the 'village had certain rights in the flowing water of the river as riparian owners and the illegal acts of the military authorities had affected the said rights and thereby caused damage to them.
In fact, as the High Court has pointed out, there is no evidence on the record which would sustain the appellant 's claim that the acts of the military authorities had prejudicially affected the appellant 's rights as a riparian owner to the use of the water, and that means, on the record 897 there is nothing to show that any damage had been caused to the Inamdars of the village as a result of the diversion of the water caused by the military authorities.
Therefore, we are satisfied that the appellant cannot now make an alternative case on the ground of his rights as a riparian owner.
The result is, the appeal fails and is dismissed with costs, two sets; one hearing fee.
Appeal dismissed.
[/INST]The appellant was one of the sharers in the Inam village of vadner and brought a suit against respondents claiming relief on the basis of his title to the running water of river valdevi.
During World War 11, the military authorities constructed residential quarters within and outside the limits of vadner.
They built a dam across the river within the limits of vadner and dug a well near the bank of the river which was fed by the river water and the water was carried to the residential areas.
The diversion of water and the use of land continued from 1942 to 1959, which deprived the appellant and the other Inamdars of their right to utilise that water for their own gain and of others ; this had caused injury and damage to them, for which, the appellant claimed compensation from the respondents.
According to the respondents, by virtue of a notification under section 5 of the Bombay Irrigation Act, 1879, the river had become a notified canal and consequently the Inamdars had lost their rights, if any, in the waters of the said river.
They also took a plea of limitation.
The trial court decreed the suit and held that the appellant was entitled to the compensation only for two years before the date of the suit and the rest of his claim was barred by time.
The decree was challenged both by the 886 appellant and the respondents by cross appeals in the High Court.
The High Court dismissed the appeal with modifications.
Then followed an appeal to this court on certificate.
Held, that the use of the word "water " in the sanad, pro perly construed, excludes the running water of the river and it could not be said that title to the flowing water of the river went with the title to the bed of the river.
If the sanad made no grant of the running water in terms, the appellant could not claim the same as the riparian owner.
Anapurnabai Gopal vs Government of Bombay (1931) 47 Bom.
L. R. 839 and Lyen vs Fish Mongers ' Company [1876] 1 App.
Cas. 662, referred to.
Held, further, that the appellant could not be allowed to make an alternative case on the ground of his rights as a riparian owner as there was neither any allegation in the plaint nor any evidence on the record to that effect.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 193 of 1979.
From the Judgment and Order dated 23 1 1979 of the Gujarat High Court in Special Criminal Application No. 8/79.
P. H. Parekh and M. Mudgol for the Appellant.
N. M. Phadke, section P. Nayyar and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Kanchanlal Maneklal Chokshi who is in preventive detention under the provisions of the and whose petition for the issue of a writ of Habeas Corpus was rejected by the High Court of Gujarat is the appellant in this appeal.
The High Court, while rejecting the petition, granted a certificate under Article 133(1) of the Constitution that the case involved a substantial question of law of general importance which needed to be decided by the Supreme Court.
The substantial question of law so certified was 'whether it is necessary for the detaining authority to consider whether a person should be prosecuted before an order of detention is made against him '.
The Division Bench of the Gujarat High Court in rejecting the particular contention of the appellant 5 475 SCI/79 56 purported to follow an earlier decision of another Division Bench of the same Court in Ashok Murlidhar vs State of Gujarat.(1) In that case Divan C. J., and Majumdar, J., though inclined to the view that the possibility of a criminal prosecution being launched should be present to the mind of the detaining authority, felt constrained to hold otherwise because of what, they thought had been decided by this Court in Hardhan Saha & Anr.
vs State of West Bengal & Ors.(2).
In our view, this Court did not say in Hardhan Saha vs State of West Bengal that the possibility of a prosecution being launched was an irrelevant consideration which need never be present to the mind of the detaining authority.
On the other hand, we do not also think that it is axiomatic, as sought to be contended by the learned Counsel for the appellant, that the detaining authority must invariably consider the possibility of launching a prosecution before making an order of detention and that, if not, the order of detention must necessarily be held to be bad.
In Hardhan Saha vs State of West Bengal, the vires of the provisions of the Maintenance of Internal Security Act was in question.
One of the contentions was that Section 3 of the Act offended Article 14 of the Constitution as it permitted 'the same offence to be a ground for detention in different and discriminatory ways '.
It was submitted that while A might be prosecuted but not detained preventively, might not be prosecuted but only detained preventively and C might be both prosecuted and detained preventively.
Dealing with the contention, a Bench of five judges of this Court explained the basic distinction between preventive detention and detention following upon conviction and observed: "The power of preventive detention is qualitatively different from punitive detention.
The power of preventive detention is precautionary power exercised in reasonable anticipation.
It may or may not relate to an offence.
It is not a parallel proceeding.
It does not overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched.
An order of preventive detention may be made before or during prosecution.
An order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal.
The pendency of prosecution is no bar to an order of preventive detention.
An order of preventive detention is also not a bar to prosecution".
57 The Court then referred to various earlier decisions and deduced the following principles: "First merely because a detenu is liable to be tried in a criminal court for the commission of a criminal offence or to be proceeded against for preventing him from committing offences dealt with in Chapter VIII of the Code of Criminal Procedure would not by itself debar the Government from taking action for his detention under the Act.
Second, the fact that the police arrests a person and later on enlarges him on bail and initiates steps to prosecute him under the Code of Criminal Procedure and even lodges a first information report may be no bar against the District Magistrate issuing an order under the preventive detention.
Third, where the concerned person is actually in jail custody at the time when an order of detention is passed against him and is not likely to be released for a fair length of time, it may be possible to contend that there could be no satisfaction on the part of the detaining authority as to the likelihood of such a person indulging in activities which would jeopardise the security of the State or the public order.
Fourth, the mere circumstance that a detention order is passed during the pendency of the prosecution will not violate the order.
Fifth, the order of detention is a precautionary measure.
It is based on a reasonable prognosis of the future behaviour of a person based on his past conduct in the light of the surrounding circumstances".
Clearly, the Court did not lay down that the possibility of a prosecution being launched was an irrelevant consideration, not to be borne in mind by the detaining authority.
All that was laid down was that the mere circumstance that a detenu was liable to be prosecuted was not by itself a bar to the making of an order of preventive detention.
It does not follow therefrom that failure to consider the possibility of a prosecution being launched cannot ever lead to the conclusion that the detaining authority never applied its mind and the order of detention was, therefore, bad.
In Bhutnath Mate vs State of West Bengal(1) Krishna Iyer and Sarkaria JJ., declared the detention illegal for denial of opportunity to make effective representation.
On the question whether the failure of criminal prosecution was a bar to preventive detention the answer was a definite 'no '.
The learned judges however expressed 58 apprehension against the danger to the democratic way of life inherent in 'the potential executive tendency to shy at Courts for prosecution of ordinary offences and to rely generously on the easier strategy of subjective satisfaction '.
The question presently under consideration, namely, whether the failure of the detaining authority to keep in mind the possibility of a prosecution would necessarily vitiate the order of detention was not considered by the learned judges.
In Srilal Shaw vs State of West Bengal & Ors.(1), the prosecution was dropped and thereafter an order of preventive detention was passed.
The substance of the allegation against the detenu was that he was in unlawful possession of scrap metal belonging to the Railway.
The Court came to the conclusion that on the material which was available to the detaining authority, it was impossible to arrive at the conclusion that the possession of the petitioner was unlawful.
The Court found that the reason given by the District Magistrate for dropping the prosecution was unacceptable.
It was observed that the prosecution was in all probability dropped as the petitioner might have been able to establish that his possession of the goods was not unlawful.
The case struck the Court as a typical case in which for no apparent reason a person who could easily be prosecuted under the punitive law was being preventively detained.
It is seen that the decision turned on the peculiar facts of the case and throws no light on the question presently raised before us.
In Abdul Gaffer vs State of West Bengal(2) the order of detention was passed on the basis of a few instances of theft of Railway property for which the detenu could well and easily have been prosecuted.
The contention before the Court was that the order of detention was passed by the detaining authority mechanically without applying its mind to the question whether the facts disclosed the tendency of the petitioner to act prejudicially in the manner mentioned in the detention order.
The bald and sweeping allegation was made in the counter filed on behalf of the State that material witnesses were afraid of giving evidence in the Court against the detenu.
The material witnesses were members of the Railway Protection Force.
In that situation Sarkaria J., observed that the version given in the counter was incredible and could not be swallowed.
The learned Judge then observed "the conclusion therefore is inescapable that the petitioner has been proventively detained without application of mind as to whether the prosecution against him was foredoomed to failure on the ground of witnesses being afraid to depose against the detenu 59 in Court.
The impugned order has been made in a casual and cavalier manner".
It is seen that there was an express allegation that recourse was had to preventive detention despite the fact that criminal prosecutions could well have been successfully launched, based as the case was on the evidence of members of the Railway Protection Force.
The reason given by the State for taking recourse to preventive detention was found to be fantastic.
The decision thus stands on the special facts of the case.
In Dulal Roy vs The District Magistrate, Burdwan & Ors.,(1) the Court had to consider a situation where a month after a person was arrested in connection with a criminal case he was discharged but was taken into custody on the same day pursuant to an order of detention.
Krishna Iyer and Sarkaria, JJ., while observing that as an abstract legal proposition an order of preventive detention could be validly passed against a person in jail custody on the same facts on which he was being prosecuted for a substantive offence in a Court, pointed out that such an order of detention was readily vulnerable to the charge that the detaining authority was taking recourse to preventive detention in order to circumvent the penal law and the process of the Court.
The learned Judges were satisfied that the discharge of the detenu in a criminal case was not due to any shortcoming in the evidence or difficulty in its production in Court.
The order of detention was, therefore, quashed on the ground of non application of mind by the detaining authority.
In Salim vs State of West Bengal,(2) Chandrachud J., speaking for the Court observed that the fact that the detenu could have been prosecuted for the acts attributed to him did not affect the validity of the order of preventive detention.
The further question whether it was incumbent on the detaining authority to consider the question of possibility of prosecution was not considered by the Court.
In Ashok Murlidhar vs State of Gujarat, (supra) Divan C.J., and Majumdar, J., appeared to think that the Bench of five Judges of this Court which decided Hardhan Saha & Anr.
vs State of West Bengal & Ors.
, (supra) had taken a view different from that expressed in Bhuthnath Mate vs State of West Bengal, Abdul Gaffer vs State of West Bengal, Srilal Shaw vs State of West Bengal & Ors., Dulal Roy vs The District Magistrate, Burdwan & Ors.
, (supra) We do not think that there is any such conflict as thought by the Division Bench of the Gujarat High Court.
The principles emerging from a review of the 60 above cases may be summarised in the following way: The ordinary criminal process is not to be circumvented or short circuited by ready resort to preventive detention.
But, the possibility of launching a criminal prosecution is not an absolute bar to an order of preventive detention.
Nor is it correct to say that if such possibility is not present to the mind of the detaining authority the order of detention is necessarily bad.
However, the failure of the detaining authority to consider the possibility of launching a criminal prosecution may, in the circumstances of a case, lead to the conclusion that the detaining authority had not applied its mind to the vital question whether it was necessary to make an order of preventive detention.
Where an express allegation is made that the order of detention was issued in a mechanical fashion without keeping present to its mind the question whether it was necessary to make such an order when an ordinary criminal prosecution could well serve the purpose, the detaining authority must satisfy the Court that that question too was borne in mind before the order of detention was made.
If the detaining authority fails to satisfy the Court that the detaining authority so bore the question in mind the Court would be justified in drawing the inference that there was no application of the mind by the detaining authority to the vital question whether it was necessary to preventively detain the detenu.
The facts of the present case are that the grounds of detention served on the appellant contain a very elaborate statement of facts quite clearly pointing to an application of the mind by the detaining authority.
The appellant did not complain in the Writ Petition that the detaining authority had not applied its mind and in particular had not considered the question of the possibility of a prosecution.
Nor are there any facts appearing from the record which can lead us to infer that the detaining authority did not apply its mind to relevant considerations.
We do not, therefore, think that the order of detention is in any manner infirm.
The appeal is accordingly dismissed.
P.B.R. Appeal dismissed.
[/INST]The services of the appellant, who was appointed as an Assistant Sub Inspector of Police on July 2, 1973 were terminated in September 1977.
The High Court rejected his petition impugning the order of termination of his services.
In appeal to this Court it was contended that on completion of the three year period of probation in accordance with r. 12.8(1) of the Punjab Police Rules the appellant should be deemed to have been confirmed in the post and that the order terminating his services was illegal.
Dismissing the appeal, ^ HELD.
: There is no legal error in the order passed by the Senior Superintendent of Police terminating the appellant 's services.
[490C] 1.
It is well settled that a person is appointed on probation only when he is appointed against a substantive post.
The appellant, having been appointed against a temporary vacancy, was not on probation.
Rule 12.8, which deals with officials appointed on probation, does not apply to this case.
[489 F G] 2.
Assuming that r. 12.8 was applicable, the officer could not be deemed to be confirmed unless there is any rule providing that, in the 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 and hence the period of probation must be presumed to have been extended.
in the State of Punjab vs Dharam Singh, ; this Court held that when a first appointment is made on probation for a specific period a and the employee is allowed to continue in the post 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 the Service Rules.
In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post.
[489B C] In the instant case since no order of confirmation had been passed after the appellant completed three years, it must be presumed that his probation had been extended 488 State of Punjab vs Dharam Singh [1968] 3 SCR applied.
Supdt.
of Police Ludhiana and Anr.
vs Dwarka Das etc.
; over ruled.
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<s>[INST] Summarize the judgementminal Appeal No. 132 of 1954.
Appeal by Special Leave granted by the Supreme Court by its Order dated the 3rd September, 1954 from the Judgment and Order dated the 15th June ' 1954 of the High Court of Judicature for the State of Punjab at Simla in Criminal in Appeal No. 287 of 1954 arising out of the Judgment and Order dated the 14th April 1954 of the Court of Additional Sessions Judge in Session Case No. 4 of 1954.
J.G. Sethi, (Naunit Lal, with him), for the appellant.
1204 Gopal Singh and P. G. Gokhale, for the respondent.
January 25.
The Judgment of the Court was delivered by IMAM J.
This appeal by Nanak Chand comes by special leave against the judgment of the Punjab (1) High Court.
The appellant was convicted by the High Court under section 302 of the Indian Penal Code and the sentence of death passed on him by the Additional Sessions Judge of Jullundur was con firmed.
On the facts alleged by the prosecution there can be no doubt that Sadhu Ram was killed on the 5th of November, 1953, at about 6 45 P.m. at the shop of Vas Dev P. W. 2.
It is alleged that the appellant along with others assaulted Sadhu Ram.
The appellant was armed with a takwa.
Numerous injuries were found on the person of Sadhu Ram.
According to the doctor, who held the postmortem examination, injuries 1, 3 and 4 were due to a heavy sharp edged weapon and could be caused by a takwa.
It was denied by the prosecution that the deceased was assaulted by any other person with a takwa.
According to the Medical evidence, injuries 1, 3 and 4 individually, as well as collectively, were enough to cause: death in the ordinary course of nature.
In the Court of Sessions the appellant along with others was charged under section 148 and section 302, read with section 149 of the Indian Penal Code.
The Additional Sessions Judge, however, held, that the charge of rioting was not proved.
He, accordingly found the appellant and three others guilty under section 302 read with section 34 of the Indian Penal Code.
He acquitted the other three accussed There was an appeal by three convicted persons to the High Court and the high court convicted the appellant alone under section 302 of the Indian Penal Code, confirming the sentence of death but altered the conviction of the other accused 'from section 302/34 to section 323, Indian Penal Code.
it held that the provisions of section 34 of the Indian Penal Code did not apply.
1205 On behalf of the appellant questions of law and questions of fact were urged.
It will be unnecessary to deal with the questions of fact if the argument on points of law is accepted.
The principal question of law to be considered is as to whether the appellant could legally be convicted for murder and sentenced under section 302, Indian Penal Code when he was not charged with that offence.
It was urged that as the appellant had been acquitted of the charge of rioting and the offence under section 302/149 of the Indian Penal Code, he could not be convicted for the substantive offence of murder under section 302, Indian Penal Code, without a charge having been framed against him under that section.
Reliance has been placed on the provisions of the Code of Criminal Procedure relating to the framing of charges, the observations of the Privy Council in Barendra Kumar Ghosh vs Emperor(1) and certain decisions of the Calcutta High Court to which reference will be made later on.
It was urged that for every distinct offence of which a person is accused, there shall be a separate charge and every such charge shall be tried separately except in cases mentioned under sections 234, 235, 236) 237 and 239 of the Code of Criminal Procedure.
Section 149 of the Indian Penal Code creates a specific offence and it is a separate offence from the offence of murder punishable under section 302 of the Indian Penal Code.
The provisions of sections 236, 237 and 238 of the Code of Criminal Procedure did not apply to the facts and circumstances of the present case.
Off behalf of the Prosecution, however, it was urged that section 149 did not create any offence at all and therefore no separate charge was obligatory under section 233 of the Code of Criminal Procedure and that in any event the provisions of sections 236 and 237 of the Code of Criminal Procedure did apply and the appellant could have been convicted and sentenced, under section 302 of the Indian Penal Code, although no charge for the substantive offence of murder had been framed against him.
(1) Cal, 197, 1206 It is necessary, therefore, to examine the provisions of section 149 of the Indian Penal Code and consider as to whether this section creates a specific offence.
Section 149 of the Indian Penal Code is to be found in Chapter VIII of that Code which deals with offences against the public tranquillity.
Section 149 of the Indian Penal Code reads: "If an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence, is a member of the same assembly, is guilty of that offence".
This section postulates that an offence is committed by a member of an unlawful assembly in prosecution of the common object of that assembly or such as a member of the assembly knew to be likely to be committed in prosecution of that object and declares that in such circumstances every person, who was a member of the same assembly at the time of the commission of the offence, was guilty of that offence.
Under this section a person, who is a member of an unlawful assembly is made guilty of the offence committed by another member of the same assembly, in the circumstances mentioned in the section, although he had no intention to commit that offence and had done no overt act except his presence in the assembly and sharing the common object of that assembly.
Without the provisions of this section a member of an unlawful assembly could not have been made liable for the offence committed not by him but by another member of that assembly.
Therefore when the accused are acquitted of riot and the charge for being members of an unlawful assembly fails, there can be no conviction of any one of them for an offence which he had not himself committed.
Similarly under section 150 of the Indian Penal Code, a specific offence is created.
Under this section a person need not be a member of an unlawful assembly and yet he would be guilty of being a member of an unlawful assembly and guilty of an offence which may be committed by 1207 a member of the unlawful assembly in the circumstances mentioned in the section.
Sections 149 and 150 of the Indian Penal Code are not the only sections in that Code which create a specific offence.
Section 471 of the Indian Penal Code makes it an offence to fraudulently or dishonestly use as genuine any document which a person knows or has reason to believe to be a forged document and it provides that such a person shall be punished in the same manner as if he had forged such document.
Abetment is an offence under the Indian Penal Code and is a separate crime to the principal offence.
The sentence to be inflicted may be the same as for the principal offence.
In Chapter XI of the Indian Penal Code offences of false evidence and against public justice are mentioned.
Section 193 prescribes the punishment for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a judicial proceeding.
Section 195 creates an offence and the person convicted of this offence is liable in certain circumstances to be punished in the same manner as a person convicted of the principal offence.
Sections 196 and 197 to 200 of the Indian Penal Code also create offences and a person convicted under any one of them would be liable to be punished in the same manner as if he had given false evidence.
It was, however, urged on behalf of the Prosecution that section 149 merely provides for constructive guilt similar to section 34 of the Indian Penal Code.
Section 34 reads: "When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone".
This section is merely explanatory.
Several persons must be actuated by a common intention and when in furtherance of that common intention a criminal act is done by them, each of them is liable for that act as if the act bad been done by him alone.
This section does not create any specific offence.
As was pointed out by Lord Sumner in Barendra Kumar Ghosh vs Emperor(1) " 'a criminal act ' means that (1) Cal. 197, 1208 unity of criminal behaviour which results in something, for which an individual would be punishable, if it were all done by himself alone, that is, in a criminal offence".
There is a clear distinction between the provisions of sections 34 and 149 of the Indian Penal Code and the two sections are not to be confused.
The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime.
In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime.
In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone. ' There is no question of common intention in section 149 of the Indian Penal Code.
An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled.
Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence.
In Barendra Kumar Ghosh vs Emperor(1) Lord Sumner dealt with the argument that if section 34 of the Indian Penal Code bore the meaning adopted by the Calcutta High Court, then sections 114 and 149 of that Code would be otiose.
In the opinion of Lord Sumner, however, section 149 is certainly not otiose,, for in any case it created a specific offence.
It postulated an assembly of five or more persons having a common object, as named in section 141 of the Indian Penal Code and then the commission of an offence by one member of it in prosecution of that object and he referred to Queen vs Sabid Ali and (1) Cal, 197, 1209 Others(1).
He pointed out that there was a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in respect that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, was replaced in section 149 by membership of the assembly at the time of the committing of the offence.
It was argued, however, that these observations of Lord Sumner were obiter dicta.
Assuming though not conceding that may be so, the observations of a Judge of such eminence must carry weight particularly if the observations are in keeping with the provisions of the Indian Penal Code.
It is, however, to be remembered that the observations of Lord Sumner did directly arise on the argument made before the Privy Council, the Privy Council reviewing as a whole the provisions of sections 34, 114 and 149 of the Indian Penal Code.
On behalf of the appellant certain decisions of the Calcutta High Court were relied upon in support of the submission made, viz. Panchu Das vs Emperor(2), Reazuddi and Others vs King Emperor(3) and Emperor vs Madan Mandal and Others( ' ).
These decisions support the contention that it will be illegal to convict an accused of the substantive offence under a section without a charge being framed if he was acquitted of the offence under that section read with section 149 of the Indian Penal Code.
, On the other hand, the prosecution relied upon a decision of the.
Full Bench of the Madras High Court in Theetkumalai Gounder and Others vs King Emperor(5) and the case Queen Empress vs Bisheshar and Others(6).
The decision of the Madras High Court was given in April, 1924, and reliance was placed upon the decision of the Allahabad High Court.
The decision of the Privy Council in Barendra Kumar Ghosh 's case was in October, 1924.
The Madras High Court, therefore, did not have before it the decision of the Privy Council.
It is impossible to, say what view might have been expressed (1) [1873] 20 W.R. (Cr.) 5.(2) Cal.
(3) [1961] 6 O.W.N 98.(4) ,Cal.
(5) Mad. 746.(6) All.
1210 by that court if the Privy Council 's judgment in the aforesaid case had been available to the court.
The view of the Calcutta High Court had been noticed and it appears that a decision of the Madras High Court in Taikkottathil Kunheen(1) was to the effect that section 149 of the Indian Penal Code is a distinct offence from section 325 of the Indian Penal Code.
Because of this it was thought advisable to refer the matter.
to a Full Bench.
Two questions were referred to the Full Bench: (1) When a charge omits section 149, Indian Penal Code, and the conviction is based on the provisions of that section, is that conviction necessarily bad, or does it depend on whether the accused has or has not been materially rejudiced by the omission? (2) When a charge has been framed under sections 326 and 149, Indian Penal Code, is a conviction under section 326, Indian Penal Code, necessarily bad, or does this also depend on whether the accused has or has not been materially prejudiced by the form of the charge? The Full Bench agreed with the view expressed by Sir John Edge in the Allahabad case that section 149 created no offence, but was, like section 34, merely declaratory of a principle of the common law, and its object was to make it clear that an accused who comes within that section cannot put forward as a defence that it was not his hand which inflicted the grievous hurt.
It was observed by Spencer, J. that a person could not be tried and sentenced under section 149 alone, as no punishment is provided by the section.
Therefore the omission of section 149 from a charge does not create an illegality by reason of section 233 of the Code of Criminal Procedure which provides that for every distinct offence of which any person is accused there shall be a separate charge.
They did not agree, with the general statement in Reazuddi 's case(2) that it is, settled law that when a person is charged by implication under section 149, he cannot be convicted of the substantive offence.
A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc.
is for a distinct and separate offence from that under section (1) [1928] 18 L.W. 946.
(2) (1901] 1211 302, read with section 149 or section 325, read with section 149, etc.
and to that extent the Madras view is incorrect.
It was urged by reference to section 40 of the Indian Penal Code that section 149 cannot be regarded as creating an 'offence ' because it does not itself provide for a punishment.
Section 149 creates an offence but the punishment must depend on the offence of which the offender is by that section made guilty.
Therefore the appropriate punishment section must be read with it.
It was neither desirable nor possible to prescribe one uniform punishment for all cases which may fall within it.
The finding that all the members of an unlawful assembly are guilty of the offence committed by one of them in the prosecution of the common object at once subjects all the members to the punishment prescribed for that offence and the relative sentence.
Reliance was also placed upon the decision of the Patna High Court in Ramasray Ahir vs King Emperor(1) as well as the decision of the Allahabad High Court in Sheo Ram and Others vs Emperor(1).
In the former case the decision of the Privy Council in Barendra Kumar Ghosh 's case was not considered and the decision followed the Full Bench of the Madras High Court and the opinion of Sir John Edge.
In the latter case the Allahabad High Court definitely declined to answer the question as to whether the accused charged with an offence read with section 149, Indian Penal Code, or with an offence read with section 34, Indian Penal Code, could be convicted of the substantive offence only.
After an examination of the cases referred to on behalf of the appellant and the prosecution we are of the opinion that the view taken by the Calcutta High Court is the correct view namely, that a person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed 'as required by section 233 of the Code of Criminal Procedure.
It was urged that in view of the decision of this Court in Karnail Singh and another vs State of Punjab(1) a conviction under section 302, read with see (1) Patna 484.
(2) A.I.R. 1948 All. 162, (3) , 155 1212 tion 149, could be converted into a conviction under section 302/34 which the trial Court did.
There could be no valid objection, therefore, to converting a conviction under section 302/34 into one under section 302 which the High Court did. ' This argument is unacceptable.
The High Court clearly found that section 34 was not applicable to the facts of the case and acquitted the other accused under section 302/34, that is to say the other accused were wrongly convicted by the trial court in that way but the appellant should have been convicted under section 302.
The High Court could not do what the trial court itself could not do, namely, convict under section 302, as no separate charge had been framed under that section.
It was urged by the Prosecution that under the provisions of section 236 and section 237 of the Code of Criminal Procedure a person could be convicted of an offence which he is shown to have committed although he was not charged with it.
Section 237 of the Code of Criminal Procedure is entirely dependent on the provisions of section 236 of that Code.
The provisions of section 236 can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed.
In these circumstances if there had been an omission to frame a charge, then under section 237, a conviction could be arrived at on the evidence although no charge had been framed.
In the present case there is no doubt about the facts and if the allegations against the ap pellant that he bad caused the injuries to the deceased with takwa was established by evidence, then there could be no doubt that the offence of murder bad been committed.
There was no room for the application of section 236 of the Code of Criminal Procedure.
It had been argued on behalf of the prosecution that no finding or sentence pronounced shall be deemed invalid merely on the ground that no charge was framed.
Reliance was placed on the provisions of section 535 of the code of criminal procedure 1213 Reference was also made to the provisions of section 537 of that Code.
Section 535 does permit.
a court of appeal or revision to set aside the finding or sentence if in its opinion the non framing of a charge has resulted in a failure of justice.
Section 537 also permits a court of appeal or revision to set aside a finding or sentence if any error, omission or irregularity in the charge has, in fact, occasioned a failure of justice.
The explanation to the section no doubt directs that the court shall have regard to the fact that the objection could and should have been raised at an earlier stage in the proceedings.
In the present case, however, there is no question of any error, omission or irregularity in the charge because no charge under section 302 of the Indian Penal Code was in fact framed.
Section 232 of the Code of Criminal Proce.
dure permits an appellate court or a court of revision, if satisfied that any person convicted of an offence was misled in his defence in the absence of a charge or by an error in the charge, to direct a new trial to be had upon a charge framed in whatever manner it thinks fit.
In the present case we are of the opinion that there was an illegality and not an irregularity curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure.
Assuming, however, for a moment that there was merely an irregularity which was curable we are satisfied that, in the circum stances of the present case, the irregularity is not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code.
By framing a charge under section 302, read with section 149 of the Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged.
In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease, Attention has been 1214 drawn to the Medical evidence.
With reference to injury No. I the doctor stated that the wounds were not very clean cut.
It is further pointed out that the other incised injuries on the head were bone deep.
The bone, however, had not been out.
Injuries on the head although inflicted by a blunt weapon may sometimes assume the characteristics of an incised wound.
Reference was made to Glasgow on Medical Jurisprudence, 9th Ed., at page 241, where it is stated that under certain circumstances, and in certain situations on the body, wounds produced by a blunt instrument may stimulate the appearance of an incised wound.
These wounds are usually found over the bone which is thinly covered with tissue, in the regions of the head, forehead, eyebrow, cheek, and lower jaw, among others.
It is also pointed that Vas Dev P.W. 2 bad admitted that Mitu took away the takwa from the appellant after Sadhu Ram had been dragged out of the shop but no takwa blow was given outside the shop.
Prakash Chand P.W. 4, another eye witness, also admitted that Mitu had taken the takwa from the appellant when they had come out of the shop.
It was urged that if a specific charge for murder had been framed against the appellant, he would have questioned the doctor more closely about the incised injuries on the head of the deceased, as well as the prosecution witnesses.
It is difficult to hold in the circumstances of the present case that the appellant was not prejudiced by the non framing of a charge under section 302, Indian Penal Code.
Having regard to the view expressed on the question of law, it is unnecessary to refer to the arguments on the facts.
The appeal is accordingly allowed and the conviction and the sentence of the appellant is set aside and the case of the appellant is remanded to the court of Sessions at Jullundur for retrial after framing a charge under section 302 of the Indian Penal Code and in accordance with law.
Appeal allowed.
[/INST]The appellants entrusted with the duties of carrying out improvement schemes under the Bombay Land Improvement Scheme Act, 1942, were charged with the offence of preparing false documents and committing criminal breach of trust in respect of certain amount.
It was alleged that even though no work had been done and no amount had been disbursed they prepared documents 'showing the doing of the work and payment of the amount, They were convicted under section 218 read with section 34, section 477A read with section 34 and section 409 read.
with section 34 of the Indian Penal Code as well as section 5(2).
read with section 5(1)(d) of the Prevention, of Corruption Act.
The High Court affirmed the conviction.
in the appeal to this Court it was contended that after the matter had been reported to the, higher authorities the rectification work was done and the money was disbursed for the purpose for which it had been entrusted; that the conviction was bad because of non compliance with section 5A of the Prevention of Corruption Act; and that the prosecution was barred by time under section 23 of the Bombay Land Improvement Schemes Act, 1942.
Dismissing the appeal, HELD : (i) There is no cogent ground to disagree with the trial court and the High Court that the accused had prepared false documents, bad also committed criminal breach of trust and were in the discharge, of their duties guilty of criminal misconduct as defined in section 5 of the Prevention of Corruption Act.
(ii)It is no answer to a charge of criminal misappropriation that after the matter bad been reported to the higher authorities the accused got the rectification work done or the money was subsequently disbursed for the purpose for which it had been entrusted.
According to explanation 1 to section 403 Indian Penal Code a dishonest misappropriation for a time only is "misappropriation" within the meaning of that section.
[515 D] (iii)It is well established that cognizance of a case, has, in fact, been taken by the court on a police report following investigation conducted in breach of provisions of section 5A of the Prevention of Corruption Act, the result of the trial cannot be set aside unless the illegality in the 511 investigation can be shown to have brought about a miscarriage of justice.
The reason for the above dictum is that an illegality committed during the course of investigation does not effect the competence and jurisdiction of the Court to, try the accused.
Where, therefore, the trial of the case has proceeded to termination, the invalidity of the preceding investigation would not vitiate the conviction of the accused as a result of the trial unless the illegality in the investigation has caused prejudice to the accused.
Since there has been no miscarriage of justice in the present case because of the alleged non compliance with section 5A the conviction of the appellants cannot be set aside on that score.
[515 H] H.N. Rishbud and Inder Singh vs The State of Delhi, ; , referred to.
(iv)Sub section (i) of the Bombay Land Improvement Schemes Act 1942 has plainly no application as it relates to anyth ing done in the good faith.
It cannot also be said that the acts of the appellants in preparing false documents and committing criminal breach of trust as also the act of criminal misconduct were done "under" the Bombay Land Improvement Schemes ' Act within the meaning of sub section (2).
The subsection has no application where something is done not under the Act even though it has been done by a public servant who has been entrusted with the duties of carrying improvement schemes under this Act.
The impugned acts of the appellants was not in discharge of their duties under the Act but in obvious breach and flagrant disregard of their duties.
[516 G 517 D]
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<s>[INST] Summarize the judgementSpecial Leave Petition (Civil) No. 11015 of 1986.
From the Judgment and Order dated 2.5.86 of the High Court of Punjab & Haryana at Chandigarh in Regular Second Appeal No. 1504 of 1977.
R.K. Jain, D.S. Mehra and Ms. Abha Jain for the Petitioners.
Ram and Hari Chand are sons of one Kesaria.
The suit land be longed jointly to Respondents 5 to 7.
They sold it to Re spondents 1 to 4Nathi Mal Kejriwal, Radhey Shayam Kejriwal, Smt.
Daropdi Devi and Nagar Mal Kejriwal, who were strangers to their family for a consideration of Rs.33,000 under a sale deed registered on 25.10.1971.
The petitioners, who claimed themselves to be the sons and nephews of the ven dors, instituted a suit in Civil Suit No. 466 of 1972 on the file of the Sub Judge, 1st Class, Palwal for possession of the suit land on payment of Rs.33,000 claiming that they were entitled to the right of pre emption in respect of the suit land either under clause 'First ' or 'Secondly ' of Section 15(1)(a) of the Punjab Pre emption Act, 1913 (here inafter referred to as 'the Act ') as in force in the State of Haryana or under clause 'First ' or 'Secondly ' of Section 15(1)(b) of the Act.
The learned Sub Judge upheld the plea of the petitioners and decreed the suit for possession of the suit land against Respondents 1 to 4 who had purchased the suit land as well as against Respondents 5 to 7 who had sold it subject to the petitioners paying a sum of Rs.36,642 ' which included the consideration of Rs.33,000 and interest thereon at 8 per cent per annum.
The learned Sub Judge further directed the petitioners to deposit the sum of Rs.36,642 minus the zare punjam amount on or before 3rd May, 1976 and that on their failure to deposit the said amount, he directed that the suit should be deemed to have been 70 dismissed with costs.
Aggrieved by the judgment of the learned SubJudge, Respondents 1 to 4 filed an appeal before the District Judge, Gurgaon in Civil Appeal No. 69 of 1976.
The appeal was dismissed.
Against the judgment of the learned District Judge, Respondents 1 to 4 filed a second appeal before the High Court of Punjab and Haryana in Regu lar Second Appeal No. 1504 of 1977.
That second appeal was taken up for hearing on 2nd May, 1986.
By that time this Court had delivered its judgment in Atam Prakash vs State of Haryana and Others, ; declaring clauses 'First ', 'Secondly ' and 'Thirdly ' of Section 15(1)(a), clauses 'First ', 'Secondly ' and 'Thirdly ' of Section 15(1)(b), clauses 'First, 'Secondly ' and 'Thirdly ' of Sec tion 15(1)(c) and the whole of Section 15(2) of the Act as ultra vires the Constitution.
Following the said decision the High Court allowed the second appeal and dismissed the suit since the provisions under which the petitioners claimed the right of pre emption had been declared void by this Court.
This petition is filed praying for special leave to prefer an appeal against the judgment of the High Court in the second appeal.
At the hearing of this Special Leave Petition the learned counsel for the petitioners contended that even though the petitioners were not able to claim the right of pre emption under clauses 'First ', and 'Secondly ' of Section 15(1)(a) or clauses 'First ' and 'Secondly ' of Section 15(1)(b) by reason of the decision in the Atam Prakash 's case (supra) they were entitled to claim the right of pre emption under clause 'Fourthly ' in Section 15(1)(b) of the Act.
Section 15(1)(b) reads thus: "15.
Persons in whom right of pre emption vests in respect of sales of agricultural land and village immovable property (1)The right of pre emption in respect of agricultural land and village immovable property shah vest ( a ) . . . . . . . . (b) where the sale is of a share out of joint land or property and is not made by all the co sharers jointly First, in the sons or daughters or sons or daughters ' sons of the vendor or vendors; Secondly, in the brothers or brother 's sons of the vendor or vendors; 71 Thirdly, in the father 's brother or father 's brother 's sons of the vendor or vendors; Fourthly, in the other co sharers; Fifthly, in the tenants who hold under tenancy of the vendor or vendors the land or property sold or a part thereof; . . . . . . . . . . " It is argued by the learned counsel for the petitioners that since the suit land belonged to the joint family and it had not been sold by all the co sharers they were entitled to claim the right of pre emption under clause 'Fourthly ' of Section 15(1)(b) of the Act because they happened to be the non alienating co sharers Although there is no specific finding that the property is the joint property in this case, we shall assume for purposes of this judgment that the suit land was joint property.
In order to understand the meaning of the ' words 'other co sharers ' in Section 15(1)(b) we have to read of the Act as it stood before the decision in Atam Prakash 's case (supra).
It is seen that the expres sion 'other co sharers ' in clause 'Fourthly ' of Section 15(1)(b) of the Act refers to only those co sharers who do not fall under clause 'First ' or 'Secondly ' or 'Thirdly ' of Section 15(1)(b) of the Act.
Since the petitioners admitted ly fall either under clause 'First ' or under clause 'Second ly ' of Section 15(1)(b) of the Act they are clearly outside the scope of clause 'Fourthly '.
Therefore, the petitioners cannot claim the right of pre emption under clause 'Fourth ly '.
We do not, therefore, find any substance in this con tention which was urged for the first time before the High Court The suit was, therefore, rightly dismissed by the High Court holding that the petitioners were no longer entitled to any relief under the Act.
This petition, there fore, fails and it is dismissed.
M.L.A. Petition dis missed.
[/INST]A State Roadways bus met with an accident resulting in the death of three persons.
On an application being filed on behalf of one of the persons, the Motor Accident Claims Tribunal awarded a compensation of Rs.93,600 to the widow and the minor children of the deceased, with interest at 6 per cent per annum.
The claimants as well as the State appealed to the High Court, which dismissed the claimants ' appeal, and partly allowed the appeal by the State.
While holding that the accident was caused by the rash and negligent act of the driver of the bus, the High Court reduced the compensation to Rs.79,200 but confirmed the award of interest made by the Tribunal.
In the special leave petition it was contended for the petitioners claimants that they were entitled to an even greater amount of compensation on account of the different sources of income arising to the deceased.
Disposing of the special leave pention, the Court, ^ HELD: The High Court erred in reducing the quantum of compensation awarded by the Tribunal.
There was sufficient material on the record to justify the quantification determined by the Tribunal and there was no reason why the amount should have been reduced.
The amount of compensation assessed by the Tribunal should, therefore, be maintained.
[1097B D] The petitioners are entitled to interest at 12 per cent per annum 1096 from the date of the application for compensation to the date of payment.
[1097] Narchinva V Kamat & Anr.
vs Alfredo Antonio Doe Martins & Ors., ; and Smt.
Chameli Wati & Anr.
vs Municipal Corporation of Delhi & Ors., , referred to.
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<s>[INST] Summarize the judgementAppeal No. 274 of 1964.
494 Appeal by special leave from the award dated May 31, 1963 of the Industrial Tribunal, Maharashtra in Reference (I.T.) No. 59 of 1963.
section B. Naik and K. R. Chaudhury, for the appellants.
section V. Gupte, Solicitor General, G. B. Pal, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent No. 1.
A. section R. Chari, K. Raiendra Chaudhury, M. section K. Aiyangar and M. R. K. Pillai, for respondent No. 2.
A. section R. Chari, M. K. Ramamurthi, for interveners.
The Judgment of the Court was delivered by Wanchoo, J.
The only question raised in this appeal by spe cial leave is the propriety of a service condition in the respondent concern by which unmarried women in a particular department have to resign on their getting married.
A dispute was raised about this condition by the appellant union on behalf of the workmen and was referred to the Industrial Tribunal, Maharashtra, in the following terms "The existing bar on ladies that on their getting married they have to leave the service of the company should be removed.
" The respondent is a pharmaceutical concern.
It appears that there is a rule in force in the respondent concrn according to which if a lady workman gets married, her services are treated as automatically terminated.
It appears that such a rule is in force in other pharmaceutical concerns in that region and the matter came up on two occasions before industrial tribunals for adjudication with reference to other pharmaceutical concerns, and on both occasions the challenge by the workmen to such a rule failed.
On the first occasion the dispute was between the Boots Pure Drug Co. (India) Limited vs Their Workmen(1) and a similar rule was upheld in 1956.
On the second occasion the dispute was between Sandoz (India,) Limited vs Workmen employed under it(2).
There was agitation in the respondent concern in connection with this rule and the present reference was eventually made in February 1963.
The tribunal followed its earlier decision in Sandoz Limited case(2 ) and rejected the contention that the rule be abrogated.
The appellant obtained special leave to appeal from this Court; and that is how the matter has come up before us.
(1) B.G.G. Part I L, dated Jan. 26,1966.
(2) (1962) Industrial Court Reporter 22.
495 Ordinarily we see no reason for such a rule requiring un married women to give up service on marriage, particularly when it is not disputed that no such rule exists in other industries.
It is also not in dispute that no such rule exists in other departments of the respondent concern itself and it is only in one department that the rule is in force.
It can only be upheld if the respondent shows that there are good and convincing reasons why in this particular department of the pharmaceutical industry it is necessary to have such a rule.
The only reason given for enforcement of this rule in this department of the respondent concern is that the workmen have to work in teams in this department and that requires that they should be regular and that this cannot be expected from married women for obvious reasons, and that there is greater absenteeism among married women than among unmarried women or widows against whom there is no bar of this kind.
We are not impressed by these reasons for retaining a rule of this kind.
The work in this department is not arduous for the department is concerned with packing, labelling, putting in phials and other work of this kind which has to be done after the pharmaceutical product has been manufactured.
Nor do we think that because the work has to be done as a team it cannot be done by married women.
We also feel that there is nothing to show that married women would necessarily be more likely to be absent than unmarried women or widows.
If it is the presence of children which may be said to account for greater absenteeism among married women, that would be so more or less in the case of widows with children also.
The fact that the work has got to be done as a team and presence of all those workmen is neces sary, is in our opinion no disqualification so far as married women are concerned.
It cannot be disputed that even unmarried women or widows are entitled to such leave as the respondent 's rules provide and they would be availing themselves of these leave facilities.
The only difference in the matter of absenteeism that we can see between married women on the one hand and unmarried women and widows on the other is in the matter of maternity leave which is an extra facility available to married women.
To this extent only, married women are more likely to be absent than unmarried women and widows.
But such absence can in our opinion be easily provided for by having a few extra women as leave reserve and can thus hardly be a ground for such a drastic rule as the present which requires an unmarried woman to resign as soon as she marries.
We have been unable to understand how it can be said that it is necessary in the interest of efficient ope 496 ration and in the company 's economic interest not to employ married women.
So far as efficient operation is concerned, it can hardly be said that married women would be less efficient than unmarried women or widows so far as pure efficiency in work is concerned, apart of course from the question of maternity leave.
As to the economic interest of the concern, we fail to see what difference the employment of married women will make in that ,connection for the emoluments whether of an unmarried woman ,or of a married woman are the same.
The only difference between the two as we have already said is the burden on account ,of maternity leave.
But as to that the respondent contends that the reason for having this rule is not the respondent 's desire to avoid the small burden to be placed on it on account of maternity leave.
If that is so, we fail to see any justification for a rule ,of this kind which requires an unmarried woman to give up service immediately she marries.
We are therefore of opinion that there is no good and convincing reason why such a rule should continue in one department of the pharmaceutical industry.
The fact that such a rule exists in other such concerns is no justification, if the rule cannot be justified on its own merits.
Then it is urged that the employer was free to impose any condition in the matter of employment when he employs a now workman and that industrial adjudication should not interfere with this right of the employer.
AR that need be said in this connection is that it is too late in the day now to stress the absolute freedom of an employer to impose any condition which he likes on labour.
It is always open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary, unless the employer ran justify an ,extraordinary condition like this by reasons which carry conviction.
In the present case the reasons which the respondent has advanced and which were the basis of the two decisions referred to earlier do not commend themselves to us as sufficient for such a rule.
We are therefore of opinion that such a rule should be abrogated in the interest of social justice.
Lastly it is urged that a similar rule exists in certain government services and in this connection our attention is drawn in particular to r. 5(3) of the 1954 Indian Administrative Service (Recruitment) Rules.
That rule reads as follows : "No married woman shall be entitled as of right to be appointed to the Service, and where a woman appointed to the Service subsequently marries, the Central Government may, if the maintenance of the 497 efficiency of the Service so requires, call upon her to resign.
" It will be seen that this rule for the Indian Administrative Service is not unqualified like the rule in force in the respondent 's concern.
It only lays down that where an unmarried woman marries subsequently, the Central Government may, if the maintenance of the efficiency of the Service so requires call upon her to resign.
Therefore this rule does not compel unmarried women to resign on marriage as a matter of course as is the case in the respondent concern.
It is only when the Central Government considers that marriage has impaired the efficiency of the woman concerned that the Central Government may call upon her to resign.
The rule which is in force in the respondent concern however assumes that merely by marriage the efficiency of the woman employee is impaired and such an assumption in our opinion is not justified.
At any rate this rule for the Indian Administrative Service which has been brought to our notice only for purposes.
of comparison does not justify the drastic rule that we have in the present case where an unmarried woman is compelled to resign immediately she marries without regard to her continued efficiency.
On a careful consideration of the reasons advanced on behalf of the respondent in support of the existing rule we are of opinion that the reasons do not justify such a drastic rule.
We therefore allow the appeal and direct that the rule in question in the form in which it exists at present be abrogated.
The abrogation shall take effect from the date of this judgment.
The appellants will get their costs from the respondent company.
Appeal allowed.
[/INST]The respondents, who were the workmen of the appellant, applied to the Second Labour Court, Bombay, under section 33C(1) of the , claiming compensation for lay off during a certain period.
The appellant contended that : (i) the Labour Court had no jurisdiction as the dispute fell to be tried under the C.P. and Berar Industrial Disputes (Settlement) Act, 1947; and (ii) the application under section 33C was incompetent, because, it was not a claim for money due and calculations had to be made for ascertaining the money due.
The Labour Court, as well as the High Court under articles 226 and 227 of the Constitution.
rejected the contentions.
In the appeal to this Court.
HELD : (i) The argument that the controversy was wrongly before Labour Court was entirely erroneous.
Chapter V A of the , which was inserted by section 3 of the Industrial Disputes (Amendment) Act, 1953, is the only Chapter in which there is provision regarding lay off or compensation for lay off.
Though the C.P. and Berar Act applies to the textile industry, it contain* no provision either for recovery of money or for compensation for lay off and they are not matters over which the C.P. and Berar Act has any jurisdiction.
Therefore, if a workman has a claim for lay off, it can only come up for decision under the .
Even if sections 31 and 25J save the application of the C.P. and Berar Act, they do so, subject to the condition that the question of lay off must be decided in accordance with Chapter V A. Since section 33C provides that a dispute for any money due under Chapter V A has to go before the appropriate Government or its delegate, and since the delegate is the Second Labour Court, the respondents were entitled to go before the Labour Court to realise due from the appellant under Chapter V A. [769 F] (ii) It is not essential that the claim which can be brought before the Government or its delegate under section 33C(1) most always be for a predetermined sum.
[769 G H] Kays Construction Co. (P) Ltd. vs State of U P. & Ors.
; , followed.
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<s>[INST] Summarize the judgementCivil Appeal No. 219 of 1970.
Appeal by Special Leave from the Judgment and Decree dated 30 4 1969 of the Rajasthan High Court in section B. Civil Regular Second Appeal No. 569/65.
section M. Jain, section K. Jain and Indira Makwana for the Appellant.
R. K. Garg, V. J. Francis and Sushil K. Jain for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
A deed of adoption is alleged to have been executed by one Mansaram on August 10, 1944, stating that he had adopted the appellant, Madan Lal.
A suit to challenge that deed was dismissed by the trial Court.
The learned District Judge, Jodhpur, confirmed the judgment of the trial Court but in second appeal No. 569 of 1965, a learned single Judge of the Rajasthan High Court set aside the judgment of the Courts below and decreed the suit.
By this appeal by special leave, the defendant questions the correctness of the High Court 's judgment dated April 30, 1969.
The principal point of controversy involved in the suit was whether Mansaram was in a fit state of mind when he executed the deed of adoption.
This, substantially, is a question of fact but we find that the trial Court and the District Court wholly ignored the weight of preponderating circumstances on the record and allowed their judgments to be influenced by inconsequential matters.
The High Court was, therefore, justified in reappreciating the evidence and in coming to its own independent conclusion on the basis of that evidence.
596 Earlier, Mansaram had allegedly executed another deed of adoption in favour of the appellant Madan Lal but the Registrar refused to register that deed by his order Exhibit 2 dated January 29, 1940 on the ground that Mansaram, who presented the deed for registration, appeared to him to be a lunatic.
The matter was remanded by the Mahakma Khas to the Registrar with a direction that Mansaram be recalled and the question whether the deed should be registered decided afresh.
The Registrar thereupon examined Mansaram and passed an order Exhibit 3 dated July 14, 1940, stating that Mansaram, no doubt, appeared to be a little better but that, while at one time he talked like a same man, he would, on occasions, fall into a reverie and was completely lost to the world.
The Registrar noted that Mansaram was unable to understand the simplest questions put to him, that he took an unreasonably long time to answer those questions and gave wholly incorrect answers to elementary questions like whom he had adopted and whether he himself was married or unmarried.
The Registrar, therefore, reaffirmed his pre remand view and refused to register the deed.
A suit was then brought by the appellant on September 11, 1940 for the compulsory registration of the aforesaid deed of adoption.
The Court of Joint Kotwal (No. 2), in which the suit was filed, was, concededly, a regular Civil Court of competent jurisdiction at the relevant time.
A written statement was filed in that suit by one Shri Raj Narain, advocate, on behalf of Mansaram admitting the appellant 's claim that he was validly adopted by Mansaram.
The authority of that admission having been challenged, the learned Chief Justice of the High Court, sitting in revision, made an order Exhibit 15 dated August 16, 1941, stating that the matter did not appear to him to be "absolutely clear".
He observed that Mansaram claimed to be an M.A. in English though, in fact, he did not understand a simple sentence in English.
The learned Chief Justice, therefore, examined the matter further and made an order Exhibit 18 dated December 4, 1941, directing that an issue be framed on the question whether Mansaram was of sound mind and was capable of protecting his own interest in the suit.
After the remand, the learned Joint Kotwal recorded the statement of Mansaram on December 14, 1943.
That statement is at Exhibit 5.
Mansaram 's wit and wisdom is reflected in a part of that statement wherein he said that he was 65 years of age and that his mother was about 50 years old.
When the fundamental absurdity of this hypothesis was pointed out to him, he made a feeble attempt to correct himself by saying that his mother may be of 70 years of age.
In fact, the record of the evidence given by Mansaram before the Joint Kotwal shows that he gave, at one time, an impression 597 that his mother was alive and was living with him although, admittedly, she had died long since.
In the circumstances, the Joint Kotwal passed an order on January 4, 1944 (which was the only order to pass) that he had no hesitation in holding that Mansaram was not of sound mind and was incapable of protecting his interest in the suit.
The learned Judge formed the impression, which he recorded in the proceedings, that Mansaram was tutored to make certain statements on the questions arising in the suit and that he looked like a "frightened animal".
The deed of adoption dated August 10, 1944, which is impugned in the present suit, contains a bald assertion that Mansaram had taken the appellant Madan Lal in adoption.
But, significantly, the deed does not mention the year, the date or the place of adoption.
It does not either mention, as adoption deeds generally mention, the names of persons who were present at the time of adoption.
In fact, on the record of this case there is no evidence whatsoever to show when and where the adoption took place and even whether the necessary ceremonies were performed.
We cannot accept the submission, though strongly pressed upon us by Shri Sobhagmal Jain who appears on behalf of the appellant, that what the plaintiff had challenged in the suit was the validity of the deed of adoption and not the factum of adoption.
On a broad and careful reading of the plaint we are left in no doubt that the real drift of the plaint is that Mansaram was not in a fit state of mind at the relevant time, that no adoption could have taken place in fact and that, therefore, the deed of adoption cannot confer on the appellant the rights of an adopted son.
Relying on the evidence of Somdatt D.W. 2, Shri Raj Narain D.W. 6, a lawyer, Moolraj D.W. 9 and Dr. Umraomal, D.W. 10, Shri Sobhagmal Jain argues that Mansaram was in a fit state of mind when he executed the impugned deed.
We are unable to accept this submission.
Indeed, the halting evidence of Dr. Umraomal itself throws a cloud on the mental capacity of Mansaram and renders it improbable that he could perform or authorise the performance of the act of adoption or that he could have executed the deed of adoption with an understanding mind.
His mental faculties were evidently too enfeebled to enable him to enter into a transaction which, in law has a religious cum spiritual significance and which, in a worldly way, affects valuable rights to property.
The High Court has examined every facet of the evidence with great care and we are in agreement with the learned Judge that Mansaram was not in a fit state of mind when he executed the deed of adoption.
He could 598 not have, possibly, understood the nature and consequences of what he was doing.
In the result, the appeal fails and is dismissed but there will be no order as to costs.
May we add that this judgment, properly understood, will not be a charter for interference by the High Courts with findings of facts recorded by the final Court of facts.
The situation, here, was of an exceptional character where evidence which was incapable of supporting more than one conclusion was considered as justifying a conclusion which no reasonable tribunal could rationally reach.
N.K.A. Appeal dismissed.
[/INST]A deed of adoption was executed by one M on August 10, 1944 stating that he had adopted the appellant.
A suit to challenge this deed was filed contending that M was not in a fit state of mind when he executed the deed.
The suit was dismissed by the Trial Court and this order was confirmed by the District Court.
In second appeal the High Court set aside the judgments of the Courts below and decreed the suit.
Earlier M had executed another deed of adoption in favour of the appellant, but the Registrar refused to register that deed on the ground that the executant appeared to him to be a lunatic.
The matter was remanded by the Mahakma Khas to the Registrar with a direction that the executant be recalled and the question decided afresh.
The Registrar thereupon examined the executant and finding him unable to understand the simplest questions put to him, and giving wholly incorrect answers to elementary questions like whom he had adopted, reaffirmed his pre remand view and refused to register the deed.
A Suit was then brought by the appellant on September 11, 1940 for the compulsory registration of the aforesaid deed of adoption.
A written statement was filed on behalf of M admitting the appellant 's claim that he was validly adopted.
The authority of that admission having been challenged, the High Court, in revision, examined the matter further and directed that an appropriate issue has been framed on the question.
After the remand, the Joint Kotwal passed an order on January 4, 1944 holding M was not of sound mind and was incapable of protecting his interest in the suit.
The High Court agreed with the findings of the Joint Kotwal.
On appeal by special leave, and dismissing the appeal, it was, ^ HELD: (1) Apart from the bald assertion that the appellant was taken in adoption, the deed does not mention the year, the date or the place of adoption.
It does not either mention the names of persons who were present at the time of adoption.
In fact there is no evidence whatsoever to show when and where the adoption took place and even whether the necessary ceremonies were performed.
[597 C D] (2) The real drift of the plaint is that M was not in a fit state of mind at the relevant time, that no adoption could have taken place in fact and that, therefore, the deed of adoption cannot confer on the appellant the rights of an adopted son.
[597 E] 595 (3) The argument that M was in a fit state of mind when he executed the deed cannot be accepted.
Indeed the halting evidence of the doctor, one of the witnesses, throw a cloud on the mental capacity of M and renders it improbable that he could perform or authorise the performance of the act of adoption or that he could have executed it with an understanding mind.
His mental faculties were evidently too enfeebled to enable him to enter into a transaction which in law has a religious cum spiritual significance and which, in a wordly way, affects valuable rights to property.
[597 F H] (4) The trial court and the District Court wholly ignored the weight of prepondering circumstances on the record and allowed their judgments to be influenced by inconsequential matters.
The High Court was, therefore, justified in re appreciating the evidence and coming to its own independent conclusion on the basis of that evidence.
[H] (5) The situation here was of an exceptional character, where evidence which was incapable of supporting more than one conclusion was considered as justifying a conclusion which no reasonable Tribunal could rationally reach.
This judgment will not be a charter for interference by the High Courts with findings of facts recorded by the Final Court of facts.
[598 B C]
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<s>[INST] Summarize the judgementAppeals Nos. 15 and 16 of 1969.
Appeals from the judgment and order dated December 3, 1968 of the Gujarat High Court in Letters Patent Appeals Nos. 43 and 42 of 1966 respectively.
M. C. Chagla, P. C. Bhartari, P. N. Tiwari and J. B. Dada chanji, for the appellants (in both the appeals).
I. N. Shroff, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Hegde, J.
Common questions of law arise for decision in these appeals, by certificate.
The suits from which these appeals arise have been considered together and decided by common judgments, 838 both in the High, Court as well as in the courts below.
It is convenient to do so in this Court as well.
The suits in questions are representative suits.
The plaintiffs appellants who are consumers of electricity in the Godhra area sued the respondent company on behalf of all the consumers in that area seeking to restrain the respondent from enforcing the enhanced charges sought to be collected from the consumers of power used for lights and fans as well as of motive power.
The facts leading to these appeals may no,%, be stated.
On November 19, 1922, the then Government of Bombay granted a licence under the to a concern called Lady Sulochna Chinubhai & Co. authorising it to generate and supply electricity to the consumers in Godhra area.
Clause 10 of the licence prescribed the maximum charges that the licensee could levy for the power supplied.
The respondent is the successor of the said licensee.
After the (to be hereinafter referred to as the Supply Act) came into force, a rating committee was constituted under section 57(2) of the Supply Act at the request of the respondent on January 19, 1950.
On the recommendation of that committee, the Government fixed with effect from February 1, 1952, the following charges for the power supplied: (i) 0 7 9 pies per unit for the electricity supplied for lights and fans with a minimum of Rs. 3/ per month per installation and (ii) for motive power at 4 annas per unit with a minimum of Rs. 4 8 0 per month per installation.
The Supply Act was amended in 1956.
The respondent increas the charges for motive power from January 1, 1963 to 35 NP.
per unit with a minimum of Rs. 7/ per month for every installation.
On June 22.
, 1963, the rates for light and fans were increased with effect from July 1, 1963 to 70 NP.
per unit with a minimum of Rs. 51 per month for every installation.
The contention of the appellants is that the respondent wag not competent to enhance the charges, in question without the matter having been considered by a rating committee.
Their suits to restrain the respondent from levying the proposed increased charges were decreased by the trial court.
Those decrees were affirmed by the first appellate court as well as by a single judge of the Gujarat High Court in second appeals but the appellate bench of the Gujarat High Court reversed those decrees and dismissed the suits holding that under the Supply Act as amended in 1956 the respondent has a unilateral right to enhance the charges subject to the conditions prescribed in the VI Schedule to that Act.
It is 839 as against those decisions these appeals have been brought.
Civil Appeal No. 15 of 1969 relates to the enhancement of charges for electricity power for lights and fans and Civil Appeal No. 16 of 1969 relates to the enhancement of charges for the motive power.
The only question that arises for decision in these appeals is whether under the provisions of the Supply Act as amended in 1956, the respondent was competent to unilaterally enhance the charges.
In these appeals we are not concerned with the provisions of the Electricity Act, 1916.
There is no dispute as regards the charges fixed by the Government with effect from February 1, 1952, under section 57(2)(c) of the Supply Act on the basis of the recommendation made by the rating committee.
The appellants admit their liability to pay enhanced charges that may be fixed by ' the Government on the basis of any recommendation by a freshly, appointed rating committee.
They merely challenge the respondent 's right to unilaterally enhance the charges.
According to the appellants they have a vested right to be governed by the charges fixed in 1952 until the same is revised by the Government on the basis of the recommendation of a rating committee.
It was urged on their behalf that the amendments made in 1956 ' do not affect the charges fixed in 1952 and they continue to rule till altered by the Government in accordance with law.
The respondent repudiates those contentions.
It denies that the appellants have any vested right in the charges fixed.
It was urged on its behalf that the amendments made to the Supply Act in 1956 have substantially altered the scheme as regards levying charges; it is now open to a licensee to alter the charges fixed by the Government unilaterally subject to the conditions prescribed in section 57(A) and in Sch.
VI of the Supply Act.
We may mention at this stage that even according to the appellants the charges that may be fixed by the Government now on the basis of the recom mendation of a rating committee can be unilaterally altered by the licensee after the period fixed in the Government order in accordance with cl.
(e) of section 57(A)(1), expires.
In order to decide the point in controversy, we have to take into consideration the relevant provisions of the Supply Act as it stands now and as it stood prior to its amendment in 1956.
For the sake of convenience we shall set out side by side the relevant provisions.
The Supply Act as it stood before The Supply Act 1956 as amended In 1956 section 57.
Licensee 's charges to consu section 57.
The mers Provisions of the Sixth Schedule and the Seventh Schedule 840 ( 1st column of page no 840) (1) The Provisions of the Sixth Schedule and the Table ap pended to the Seventh Schedule shall be deemed to be incorporated in the licence of every licences not being a local authority, from the date of the commencement of the licensees next succeeding year of account.
and from such date the licensee shall comply therewith accordingly and any provisions of such licence or of the (I.X of 1910), or any other law, agreement or strument applicable to the licensee shall, in relation to the licensee, be void and of no effect in so far as they are inconsistent with the provisions of this section and the said Schedule and Table.
(2) Where the provisions of the.
Sixth Schedule and the Table appended to the Seventh Schedule are under sub section (1) deemed to be incorporated in the licence of any licensee, the following provisions shall have effect in relation to the said licensee, namely : (a) The Board or where 'no Board is constituted under this Act, the Provincial Government, may, if it is satisfied that the licensee has failed to comply with any provisions of the Sixth Schedule and shall when requested so to do by the licensee.
constitute a rating committee to examine the licensee 's charges for the supply of electricity and to recommend thereon to the Provincial Government; Provided that no rating commitee shall be constituted in respect of a licensee within three ( 2nd column of the page no 840) shall be deemed to be incorporated in the licence of every licensee.
not being a local authority (a) in the case of a licence granted before the commencement of this Act, from the date of the commencement of the licences next succeeding year of account; and (b) in the case of a licencee granted after the commencement of this Act, from the date of the commencement of supply, and as from the said date.
the licensee shall comply with the provisions of the said Schedules accordingly , and any provisions of, the , and the the licence granted, to him thereunder and of any other law.
agreement or instrument applicable to the licensee shall, in relation to the licensee, be void and of no effect in so far as they are inconsistent with the provisions of section 57A and the said Schedules.
section 57(A) (1) : where the provisions of the Sixth Schedule and the Seventh Schedule are under section 57 deemed, to be incorporated in the licence of any licensee, the following provisions shall have effect in relation to the said licensee namely : (a) the Board or where no Board is constituted under this Act, the State Government (i) may, if satisfied that the licensee has failed to comply with any of the provisions of the Sixth Schedule, and (ii) shall, when so requested by the licensee in writing constitute a rating committee to examine the licensee 's charges for the supply of electricity and 841 (1st column of the page no 841) years from the date on which such a committee has reported in respect of that licensee, unless the Provincial Government declares that in its opinion circumstances have arisen rendering the orders passed on the recommendation of the previous rating committee unfair to the licensee or airy of his consumers.
(b) The rating committee shall after giving the licensee a reasonable opportunity of being heard and after taking into consideration the efficiency of operation and management and the potentialities of his undertaking report to the Provincial Government making recommendations (and giving reasons therefore)regarding the charges for electricity which the licencee may make to any class or classes of consumers so however that the recommendations are not likely to prevent the licensee from earning clear profits sufficient when taken with the sums available in the Tariffs and Dividends Control Reserve to afford him a reasonable return during his next succeeding three years of account if the potentialities of the undertaking of the licensee, with efficient operation and management so permit.
(c) Within one, month after the receipt of the report under Clause (b) the Provincial Government shall cause the report to be published in the, offcial Gazette.
and may at the same time make an order in accordance therewith fixing the Been see 's charges for the supply (2nd column of the page no 841) to make recommandations in that behalf to the State Government Provided that where it is proto constitute a rating committee under this section on account failure of the licensee to comply with any provisions of the Sixth Schedule.
such committee shall not be constituted unless the licensee has been given a notice in writing of thirty clear days (which period, if the circumstances so warrant may be extended from time to time) to show cause against the action proposed to be taken Provided further that no such rating committee shall be constituted if the alleged failure of the licensee to comply with any provisions of the Sixth Schedule raises any dispute or difference as to the interpretation of the said provisions or any matter arising therefrom and such difference or dispute has been referred by the licensee to the arbitration of the Authority under paragraph XVI of that Schedule before the notice referred to in the preceding proviso was given or is so referred within the period of the said notice Provided further that no rating committee shall be constituted in respect of a 'licensee within three years from the date on which such a committee has reported in respect of that licensee, unless the State Government declares that in its opinion circumstances have arisen rendering the orders passed on the recommendations of the previous rating.
committee unfair to the licensee or any of the consumers : (b) a rating committee under clause (a) shall: (i) where such committee is to be, constituted under subclause (i) of that clause.
be constituted not later than three months after the 842 (1st column of the page no 842) of electricity with effect from such date, not earlier than two months after the date of publication of the report, as may be specified in the order; and the &Msee shall forth with give effect to such order Provided that nothing in this clause shall be deemed to pre vent a licensee from reducing at any time any charges, so fixed.
THE SIXTH SCHEDULE 1.The Licensee shall so adjust his rates for the Sale of electricity by periodical revision that his clear profit in any year shall not as far as possible exceed the amount of reasonable return Provided that the licensee shall not be considered to have failed so to adjust his rates if the clear profit in any year of account has not exceeded the. amount of &be reasonable return by more than thirty per centum of the amount of the reasonable return.
(1) If the clear profit of a licensee in any year of account is in excess of the amount of reasonable return one third of such excess.
not exceeding 7 1/2 per cent of the amount of reasonable return shall be at the disposal of the undertaking.
Of the balance of the excess, one half shall be appropriated to a reserve which shall be called the Tariffs and Dividends Control Reserve and the remaining half, shall either be distributed in the form of a proportionable rebate on the amounts collected from the sale of electricity and meter rentals 'or carried forward in the accounts of the licensee for distribution, to the consumers in future, in (2nd column of the page no 842) expiry of the notice referred to in 'the first proviso to that clause (ii) where such committee is to be constituted at the request of the licensee, be constituted within three months of the date of such request; (c) a rating committee shall, after giving the licensee a reasonable opportunity of being heard and after taking into consideration the efficiency of operation and management and the potentialities of his undertaking, report to the State Government within three months from the date of its constitution, making recommendations with reasons there for, regarding the charges for electricity which the licensee may make to any class or classes of consumers so, however.
that the recommendations are not likely to prevent the licensee from earning clear profit,, sufficient when taken with the sums available in the Tariffs and Dividends Control Reserve to afford him a reasonable return as defined in the Sixth Schedule during his next succeeding three years of account: Provided that the State Government may, if it go deems necessary, extend the said period of three months by a further period not exceeding three month within which the report of the rating committee may be submitted to it; (d) within one month after the receipt of the report under clause (c), the State Government shall cause the report to be published in.
the Official Gazette, and may at the same time make an order In accordance therewith fixing the licensee 's charges for 843 such manner as the Provincial Government may direct.
(2) The Tariffs and Dividends Control Reserve shall be available for disposal by the licensee only to the extent by which the clear profit is less than the reasonable return in any year of account.
(3) On the purchase of the undertaking under the terms of its licence any balance remaining in the Tariffs and Dividends Control Reserve shall be handed over to the purchaser and maintained as such Tariffs and Dividends Control Reserve.
(2nd column of the page no 843) supply of electricity with effect from such date,not earlier than two months or later than three months.after the date of publication of the report as may be specified in the order and the licensee shall forthwith give effect to such order; (e)the charges for the supply of electricity fixed under clause (d)shall be in operation for such period not exceeding three years as the State Government may specify in the order Provided that nothing in this clause shall be deemed to prevent a licensee from reducing at any time any charges so fixed.
THE SIXTH SCHEDULE 1.
Notwithstanding anything contained in the except sub section (2) of section 9 of 1910, 22A, and the provisions in the licence of a licensee.
the licensee shall so adjust his (charges) for the sale of electricity whether by enhancing or reducing them that his clear profit in any year of account shall not, as far as possible, exceed the amount of reasonable return Provided that such (charges) shalt not be enhanced more than once in any year of account : Provided further that the licensee shall not be deemed to have failed so to adjust his (charges) if the clear profit in any year of account has not exceeded the amount of reasonable return by (twenty) per centum of the amount of reasonable return: Provided further that the licensee shall not enhance the (charges) for the supply of,electricity until after the expiry of a notice in writing of, not less than sixty 844 (2nd column of the page no 844) clear days of his intention to so enhance the (charges) given by him to the State Government and and to the Board Provided further that if the (charges) of supply fixed in pursuance of the recommendations of a rating committee con stituted under sec.
57A are lower than those notified by the licensee under and in accordance with the preceding Proviso ', the licensee shall refund to the consumers the excess amount recovered by him from them : Provided also that nothing in this Schedule shall be deemed to prevent a licensee from levying.
with the previous approval of State Govt.
minimum charges for supply of electricity for any purpose.
The notice referred to in the third proviso to paragraph I shall be accompanied by such financial and technical data in supPort of the proposed enhancement of charges as the State Government may, by general or special order, specify.
(1) If the clear profit of a licensee in any year of account is in excess of the amount of reasonable return, one third of such excess, not exceeding (five per cent) of the amount of reasonable return, shall be at the disposal of the undertaking.
Of the balance of the excess, one half shall be appropriated to a reserve which shall be called the Tariffs and Dividends Control Reserve and the remaining half shall either be distributed in the form of a Proportional rebate on the amounts collected from the sale of electricity and meter rentals or carried, forward in the accounts of the licensee for distribution to the consumers in future, in such manner as the State Government may direct.
(2) The Tariffs and Dividends Control Reserve shall be available for disposal by the licensee only to the extent by which the clear 845 (2nd column of the page no 845) profit is less than the reasonable return in any yea of account.
(3) On the purchase of the undertaking under the terms of its licence any balance remaining in the Tariffs and Dividends Control Reserve shall be handed over to the purchaser and maintained as such Tariffs and Dividends Control Reserve: Provided that where the Undertaking is purchased by the Board or the State Government the amount of the Reserve may be deducted from the price payable to the licensee.
From an examination of these provisions it would be seen that under the Supply Act prior to its amendment in 1956, the charges fixed by the Govt.
under s ' 57(2)(c) remained in force unless reduced by the licensee in the meantime till the same were altered by a subsequent order made by the Govt.
after getting a fresh recommendation from the rating committee but under the law as it now stands the rate fixed by the Government under section 57 (A)(1)(d) would be in operation only for such period not exceeding three years as the State Govt.
may specify in the order.
Thereafter it can be enhanced by the licensee in accordance with the provisions contained in Sch.
It was urged on behalf of the appellants that the present section 57 (A (1) (e) can only govern the charges fixed under section 57(A)(1)(d) and it has not impact on an order made under the old section 57(2)(c).
According to the appellants the charges so fixed can only be modified by the Government after getting a report from the rating committee.
Mr. Chagla, learned Course for the appellants contended that the, consumers who 'get power from the respondent have a vested right in the charges fixed in 1952 and that vested right cannot be considered to have been taken away by the provisions of the Amending Act.
He argued that the provisions of the Amending Act are not retro spective in character nor is there any inconsistency between those provisions and the present provisions as the two operate on different fields; hence in view of section 6 of the , we must hold that the charges fixed by the Government in 1952 continue to be in operation.
In this connection he relied on certain observations made by this Court in State of Punjab vs Mohar Singh(") and Deep Chand vs State of U.P. & Ors.
On the other hand it was contended by the learned Counsel for the respondent that the rights and liabilities of the.respondents at present are exclusively regulated by the provisions of the Supply (1) ; (2) [1959] 2 Supp.
section C.R. 8.
846 Act as it stands now; the terms of licences as they originally stood or as they stood on the coming into force of the Supply Act in 1948 are of no consequence now; they cannot be looked into for finding out the rights or duties of the licensee as at present; for that purpose we must look into those terms as modified by the provisions of the Supply Act as It is now.
It was also urged on its behalf that there is no question of vested rights in these cases; herein we are only concerned with the procedure to be adopted in modifying the charges fixed in 1952.
In Mohar Singh 's case(1) this Court laid down that the provisions of section 6(c), (d) and (e) of the relating to the consequences of the repeal of a law are applicable not only when an Act or Regulation is repealed simpliciter but also to a case of repeal and simultaneous enactment re enacting all the provisions of the. repealed law.
In the course of its judgment this Court observed that when the repeal is followed by a fresh legislation on the same subject, the Court has undoubtedly to look into the provisions of the new Act but that only for the purpose of determining whether they indicate a different intention.
The line of inquiry would be, not whether the new Act keeps alive the old rights and liabilities but whether it manifests any intention to destroy them.
In Deep Chand 's case(2) this Court was considering the effect of repugnancy between a State Act and a Central Act.
The observations made in that context, we think, have no bearing on the point in issue in this case.
It is true that when an existing Statute or Regulation is repealed and the same is replaced by fresh Statute or Regulation unless the new Statute or Regulation specifically or by necessary implication affects rights created under the old law those rights must be held to continue in force even after the new Statute or Regulation comes into force.
But in the cases before us there is no question of affecting any vested right.
There is no dispute that the charges fixed can be altered.
The controversy relates to the procedure to be adopted in altering them.
That controversy does not touch any vested right.
The procedure in question must necessarily be regulated by the law in force at the time of the alteration of the charges.
Section 57 of the Supply Act as it stands now lays down that the provisions of Sch.
VI shall be deemed to be incorporated in the licence of every licensee not being a local authority, in 'the case of a licence granted before the commencement of the Act from the date of the commencement of the licensee 's next succeedmg year of account.
Admittedly the licence with which.
we are concerned in these cases was granted even before the Supply Act was enacted.
Therefore quite clearly the licence in question is governed by the present section 57.
Hence we have to read into that licence the provisions contained in Sch.1 VI.
If any of the earlier (1) ; (2) [1959] 2 Supp.
S.C.R. 8.
8 47 provisions in the licence either as they stood when the licence was originally granted or as they stood modified as per the provisions of the Supply Act prior to its amendment in 1956 are in consistent ,with the provisions of Sch.
VI or section 57(A) as they are now they must be held to be void and of no effect.
In other words we must read into the licence the provisions of Sch.
VI and strike out therefrom such terms as are inconsistent with those provisions and thereafter give effect to the same.
For determining the , rights and duties of the licensee as at present we have only to look into the terms of the licence as modified by Sch.
We cannot go behind them.
That much is clear from the language of the Supply Act.
The intention of the legislature is clear and unambiguous.
Therefore there is no need to call into aid any rule of statutory construction or any legal presumption.
Further no reason was advanced before us, nor can we conceive of any why those who obtained licenses prior to the amendment of Supply Act in 1956 should be in a more disadvantageous position than those who got their licenses thereafter.
Correspondingly we fail to see why those who are served by licensees who obtained their licences prior to the amendment of the Supply Act in 1956 should be placed in a better position than those served by licensees who obtained their licenses thereafter.
After all, every law has some reason behind it.
Section 57(A)(2)(e) was intended to meet the changing economic circumstances.
The purpose behind the new provisions appears to be to permit the licensees to so adjust their charges as to get reasonable profits.
, But at the same time a machinery has been provided to see whether any excess charges have been levied and if levied, get the same refunded to the consumers.
The law declared by the Amending Act does not affect any, right or privilege, accrued under the repealed provision.
It merely prescribes as to what could or should be done in future.
Therefore there is no basis for saying that it affects vested rights.
For finding out the power of the licensee to alter the charges one has to look to the terms of the licence in the light of the law as it stands the past history of that law being wholly irrelevant.
If the terms of the licence, including the deemed terms permit him to unilaterally alter the charges then he has that right.
If we merely look at those terms, as we think we ought to, then there is no dispute that the respondent was within its rights in enhancing the charges as admittedly it has followed the procedure prescribed by law.
We also do not agree with Mr. Chagla in his contention that there is no inconsistency between the present scheme relating to the enhancement of charges vis a vis the scheme provided under the Supply Act prior to its amendment in 1956.
The two schemes are substantially different. ' Under the former scheme once the Government fixes the charges the licensee cannot alter 848 it but at present at the end of the period order the licensee has a unilateral right to accordance with the conditions prescribed fixed in the Government enhance the charges in in the VI Schedule.
Therefore in view of section 57 the provisions contained in that schedule have an over riding effect.
In Amalgamated Electricity 'Co., Ltd. vs N. section Bhathena and Anr.(1) this Court was called upon to consider the scope of section 57.(A) and the Sch.
VI as it stands now.
Therein the controversy was whether the appellant therein was entitled ' to levy charges more than the maximum charges prescribed in its licence issued in 1932.
It may be noted that in that case the notice of enhancement of the charges was given on September 25, 1958.
This Court held that the maximum stipulated in the licence no longer governed the.
right of the licensee to enhance the charges; his rights were exclusively governed by the provisions contained in paragraph 1 of Sch.
VI of the Supply Act.
It is true that in that case this Court was considering the right of the licensee under the Supply Act vis a vis his right under the licence granted under the but that difference is not material.
What this Court in fact considered was the right of the licensee under the existing law to enhance the charges.
Dealing with the scope of paragraph 1 of Sch.
VI, Ayyangar, J. who spoke for the majority observed thus : "para 1 of Sch.
VI both as it originally stood and as amended, as seen already, empowered the licensee "to adjust his rates, so that his clear profit in any year shall not, as far as possible, exceed the amount of reasonable return".
We shall reserve for later consideration the meaning of the expression "so adjust his rates". ' But one thing is clear and that is that the adjustment is unilateral and that the licensee has a statutory right to adjust his rates provided he conforms to the requirements of that paragraph viz., the rate charged does not yield a profit exceeding the amount of reasonable return.
The conclusion is therefore irresistible that the maxima prescribed by the State Government which bound the licensee under the Electricity Act of 1910 no longer limited the amount which a licensee could, charge after the Supply Act, 1948 came into force since the "clear profit" and "reasonable return" which determined the rate to be charged was to be computed on the basis of very different criteria and factors than what obtained under the Electricity Act." , For the reasons above, these appeals fail and they are dismissed with costs.
One hearing fee.
G.C. Appeals dismissed.
[/INST]In respect of his assessment to wealth tax for the assessment years 1957 58, 1958 59 and 1959 60, the appellant filed returns in the status of a Hindu Undivided Family.
His family at the material time consisted of himself, his wife and two minor daughters.
The appellant claimed to be assessed in the status of a Hindu Undivided Family inasmuch as the wealth returned consisted of ancestral property received or deemed to have been received by him on partition with his father and brothers.
The Wealth Tax Officer did not accept the contention of.
the appellant and assessed him as an individual.
The Appellate Assistant Commissioner confirmed this view.
However the Appellate Tribunal held that the appellant should be assessed in the status of Hindu Undivided Family but the High Court, upon a reference, disagreed with the view of the Appellate Tribunal and held that as the appellant family did not have any other male coparcener, all the assets forming the 'subject matter of the returns filed by the appellant belonged to him as an individual and not to a Hindu Undivided Family.
On appeal to this Court, HELD:Allowing the appeal: The status of the appellant was rightly determined as that of a Hindu ,Undivided Family by the Appellate Tribunal.
The expression "Hindu Undivided Family" in the Wealth Tax Act is used in the sense in which a Hindu joint family is understood in the personal law of Hindus.
Under the Hindu system of law a joint family may consist of a single male member and his wife and daughters and there is nothing in the scheme of the Wealth Tax Act to suggest that a Hindu Undivided Family as an assessable unit must consist of at least two male members.
[886 C] Under section 3 of the Wealth Tax Act not a Hindu coparcenary but a Hindu Undivided Family is one of the assessable legal entities.
A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters.
A Hindu coparcenary is a much narrower body than the Hindu joint family; it in cludes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grand sons and great grand sons of the holder of the joint property for the time being.
[885 F H] Kalyanji Vithaldas vs Commissioner of Income Tax, 5 I.T.R. 90, Commissioner of Income Tax vs Gomedalli Lakshminarayan considered.
88 3 Commissioner of Income Tax vs A. P. Swamy Gomedalli, , Attorney General of Ceylon vs A.R. Arunachallam Chettiar , Gowali Buddanna 's [1960] 6 I.T.R. 203 referred to.
T.S. Srinivasan vs Commissioner of Income Tax 60, I.T.R. 36 distinguished.
</s>
|
<s>[INST] Summarize the judgementAppeals Nos. 187 and 190 of 1960.
Appeals from the judgment dated 22nd January, 1957, of the Punjab High Court (Circuit Bench), Delhi, in Civil Reference No. 6 of 1953.
Veda Vyasa, section K. Kapur and K. K. Jain, for the appellant.
B. Ganapathi Iyer and D. Gupta, for the respondent.
November 30.
The Judgment of the Court was delivered by KAPUR, J.
These appeals are brought by the assessee company against a common judgment and order of the Punjab High Court by which four appeals were decided in Civil Reference No. 6 of 1953.
The appeals relate to four assessment years, 1947 48, 1948 49, 1949 50 and 1950 51.
Two of these assessments, i.e., for the years 1947 48 and 1948 49 were made on the 800 appellant as successor to the two limited companies hereinafter mentioned.
Briefly stated the facts of the case are that the appellant company was incorporated in the year 1947.
Its objects inter alia were to acquire as a going concern activities, functions and business of the Delhi Stock & Share Exchange Limited and the Delhi Stock and Share Brokers Association Limited and to promote and regulate the business of exchange of stocks and shares, debentures and debenture stocks, Government securities, bonds and equities of any description and with a view thereto, to establish and conduct Stock Exchange in Delhi and/or elsewhere.
Its capital is Rs. 5,00,000 divided into 250 shares of Rs. 2,000 each on which dividend could be earned.
The appellant company provided a building and a hall wherein the business was to be transacted under the supervision and control of the appellant.
The appellant company also made rules for the conduct of business of sale and purchase of shares in the Exchange premises.
The total income for the year 1947 48 was Rs. 29,363 out of which a sum of Rs. 15,975 shown as admission fees was deducted and the income returned was Rs. 13,388.
In the profit and loss account of that year Members ' admission fees were shown as Rs. 9,000 and on account of Authorised Assistants admission fees Rs. 6,875.
The Income tax Officer who made the assessment for the year 1947 48 disallowed this deduction.
The return for the following year also was made on a similar basis but the return for the years 1949 50 and 1950 51 did not take into account the admission fees received but in the Director 's report the amounts so received were shown as having been taken directly into the balance sheet.
The Income tax Officer, however, disallowed and added back the amount so received to the income returned by the appellant.
Against these orders appeals were taken to the Appellate Assistant Commissioner who set aside the additional assessments made under section 34 in regard to the assessment years 1947 48, 1948 49 and 1949 50 and the 4th appeal in regard to the year 1950 51 was decided against the appellant.
Both sides appealed 801 to the Income tax Appellate Tribunal against the respective orders of the Appellate Assistant Commissioner and the Tribunal decided all the appeals in favour of the appellant.
It was held by one of the members of the Tribunal that the amounts received as entrance fees were intended to be and were in fact treated as capital receipts and were therefore excluded from assessment and by the other that as there was no requisite periodicity, those amounts were not taxable.
At the instance of the respondent a case was stated to the High Court on the following question: "Whether the admission fees of Members or Authorised Assistants received by the assessee is taxable income in its hands?" The High Court answered the question in favour of the respondent.
The High Court held that the appellant was not a mutual society and therefore was not exempt from the payment of income tax; that it had a share capital on which dividend could be earned and any person could become a shareholder of the company by purchasing a share but every shareholder could not become a member unless he was enrolled, admitted or elected as a member and paid a sum of Rs. 250 as admission fee.
On becoming a member he was entitled to exercise all rights and privileges of membership.
It also found that the real object of the company was to carry on business as a Stock Exchange and the earning of profits.
It was held therefore that the admission fees fell within the ambit of the expression "profits and gains of business, profession or vocation".
The further alternative argument which was raised, i.e., that the income fell under section 10(6) of the Act, was therefore not decided.
Mr. Veda Vyasa contended on behalf of the appellant that there were only 250 members of the appellant company; that the amount received as membership fees was shown as capital in the books of the company and there was no periodicity and therefore the amounts which had been treated as income should have been treated as capital receipts and therefore exempt from assessment.
It was firstly contended that the question did not arise out of the order of the 802 Tribunal and that a new question had been raised but the objection is futile not only because of the absence of any such objection at the stage of the drawing up the statement of the case but also because of failure to object in the High Court; nor do we see any validity in the objection raised.
That was the only matter in controversy requiring the decision of the court and was properly referred by the Tribunal.
It was then contended that the question had to be answered in the light of facts admitted or found by the Tribunal and that the nature of the appellant 's business or the rules in regard to membership could not be taken into consideration in answering the question.
That again is an unsustainable argument.
The statement of the case itself shows that all these matters were taken into consideration by one of the members of the Tribunal and the learned judges of the High Court also decided the matter on that material which had been placed before the Income tax authorities and which was expressly referred to in their orders and which again was placed before the High Court in the argument presented there on behalf of the appellant company.
It is wholly immaterial in the circumstances of the present case to take into consideration as to how the appellant treated the amounts in question.
It is not how an assessee treats any monies received but what is the nature of the receipts which is decisive of its being taxable.
These amounts were received by the appellant as membership admission fees and as admission fees paid by the members on account of Authorised Assistants.
As far as the latter payment is concerned that would fall within the decision of this Court in Commissioner of Income tax.
vs Calcutta Stock Exchange Association Ltd. (1) and therefore is taxable income.
The former, i.e., members admission fees has to be decided in accordance with the nature of the business of the appellant company, its Memorandum and Articles of Association and the Rules made for the conduct of business.
The appellant company was an association which carried on a trade and its profits were divisible as dividend amongst the shareholders.
(1) 803 The object with which the company was formed was to promote and regulate the business in shares, stocks and securities etc., and to establish and conduct the business of a Stock Exchange in Delhi and to facilitate the transaction of such business.
The business was more like that in Liverpool Corn Trade Association vs Monks (1).
In that case an association was formed with the object of promoting the interest of corn trade with a share capital upon which the association was empowered to declare a dividend.
The Association provided a Corn Exchange market, newsroom and facilities for carrying on business and membership was confined to persons engaged in the corn trade and every member was required to be a shareholder and had to pay an entrance fee.
The Association also charged the members and every person making use of facilities a subscription which varied according to the use made by them.
The bulk of the receipts of the Association was derived from entrance fees and subscriptions.
It was therefore contended that the Association did not carry on a trade and that it was a mutual association and entrance fees and subscriptions should be disregarded in computing assessment of the assessable profits.
It was held that it was not a mutual association whose transactions were inca pable of producing a profit; that it carried on a trade and the entrance fee paid by members ought to be included in the associations receipts for purposes of computing the profit.
Rowlatt, J. said at p. 121: "I do not see why that amount is not a profit.
The company has a capital upon which dividends may be earned, and the company has assets which can be used for the purpose of obtaining payments from its 'members for the advantages of such use, and one is tempted to ask why a profit is not so made exactly on the same footing as a profit is made by a railway company who issues a traveling ticket at a price to one of its own shareholders, or at any rate as much a profit as a profit made by a company from a dealing with its own shareholders in a line of business which is restricted to the shareholders." (1) 804 In Commissioner of Income tax, Bombay City vs Royal Western India Turf Club Ltd. (1) this Court rejected the applicability of the principle of mutuality because there was no mutual dealing between members inter se.
There was no putting up a common fund for discharging a common obligation undertaken by the contributors for their mutual benefit and for this reason the case decided by the House of Lords in Styles V. New York Life Insurance Company (2) was held not applicable.
In the present case the Memorandum of Association shows that the object with which the company was formed was to promote and regulate the business of exchange of stocks, shares, debentures, debenture stocks etc.
The income, if any, which accrued from the business of the appellant company was distributable amongst the shareholders like in every joint stock company.
According to the Articles of Association the members included shareholders and members of the Exchange and according to the rules and bye laws of the appellant company 'member ' means an individual, body of individuals, firms, companies, corporations or any corporate body as may be on the list of working members of the Stock Exchange for the time being.
In the Articles of Association cls.
7 & 8, provision was made for the election of members by the Board of Directors and Rules 9 & 10 laid down the procedure for the election of these members.
The entrance fees were payable by the trading members elected under the Rules and Bylaws of the Association, who alone with their Associates, could transact business in stocks and shares in the Association.
Therefore, the body of trading members who paid the entrance fees, and the shareholders among whom the profits were distributed were not identical and thus the element of mutuality was lacking.
It is the nature of the business of the company and the profits and the distribution thereof which are the determining factors and in this case it has not been shown that the appellants business was in any way different from that which was carried on in the (1) ; , 308.
(2) ; 805 case reported as Liverpool Corn Trade Association vs Monks (1).
In our opinion the judgment of the High Court is right and the appeals are therefore dismissed with costs.
One hearing fee.
Appeals dismissed.
[/INST]The appellant carried on various businesses and one such was the running of a Theatre and Restaurant.
In October, 1943, a subsidiary company was formed which was using the premises of the Theatre under a lease granted to it from April, 1944.
In working out the capital of the two companies for excess profits tax, a claim of rupees five lakhs for goodwill as part of the capital of the subsidiary company was not taken into account.
On reference to the High Court it held that the Tribunal should have allowed the value of the goodwill whatever it thought was reasonable at the date of transfer.
Thereafter the Tribunal took into account only the value lease hold of the site to the subsidiary company and came to the conclusion that no goodwill had been acquired by the business of the Theatre as such and whatever goodwill there was related to the site of building itself, and estimated the value of goodwill at rupees two lakhs.
Petition under sections 66(1) and 66(2) read with section 21 of the Excess Profits Tax Act being rejected by the Tribunal and the High Court, the appellants came appeal by special leave.
Held, that the goodwill of a business needed to be considered in a broader way.
It depended upon a variety of circumstances or a combination of them.
The nature, the location, the (1) 102 806 service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors went individually or together to make up the goodwill, though the locality always played a considerable part.
Shift the locality, and the goodwill may be lost but it was not everything.
The power to attract custom depended on one or more of the other factors as well.
In the instant case a question of law did arise, whether the goodwill of the Eros Theatre and Restaurant Ltd. was calculated in accordance with law.
Cruttwell vs Lye, (1810) 17 ves.
335, Trego vs Hunt, L.), Inland Revenue Commissioners vs Muller & Co. 's Margarin, Ltd., 9101 A. C. 217 (H. L.), Daniell vs Federal Commissioner of Taxation; , and Federal Commissioner of Taxation vs Williamson, ; , discussed.
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<s>[INST] Summarize the judgementtition No. 443 of 1988.
(Under Article 32 of the Constitution of India).
Rajiv K. Garg and N.D. Garg for the Petitioner.
Soli J. Sorabjee, Attorney General, M. Chandrasekharan and P. Parmeswaran for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an application under Article 32 of the Constitution.
Northern Corporation is the petitioner in the instant application and the Union of India, the Collector of Customs and the Assistant Collector of Customs (Bond Department) are the respondents.
On 11th May, 1983, the licensing authority issued import licence No. 2959845 for Rs.20, 12,729 in favour of M/s Industrial Cable India Ltd., Rajpura.
The licence holder transferred the same in favour of M/s Metalic metal Indus tries.
The transferee licence holder issued a letter of authority in favour of the petitioner for the import of MSCR defective sheets or coils.
The letter of authority was issued on 21st May, 1984.
The petitioner herein placed order on M/s Sayani Enter prises Pvt.
Ltd., Singapore for the supply of MSCR defective sheets or coils on 30th May, 1984.
The foreign supplier shipped the material in three consignments and the goods arrived at the Bombay Port on 12th June, 1984.
The clearing agent of the petitioner filed bills of entry on 30th July, 1984 for warehousing under section 59 of the .
1962 (hereinafter referred to as 'the Act '), and the same was allowed.
The goods were bounded on 7th August, 1984.
It may be mentioned that the rate of duty on the day was 60% + 40% + Rs.650 per M.T. and 10% C.V.D.
The total duty on the consignment was assessed as Rs.26,20,109.55.
624 On 21th August, 1984, the petitioner 's clearing agent filed six bills of entry for ex bond clearance.
However, the bills of entry were returned with the remark that "please obtain no objection from the income tax".
This was endorsed on 24th August, 1984.
The petitioner states that thereafter he came to know that the income tax authorities had imposed ban under section 132(1) of the Income Tax Act, 1961.
The petitioner asserted that he was ever ready and willing, rather was anxious, to get the material on payment of the then prevailing customs duty.
However, due to circumstances beyond the control of the petitioner, that it to say, by the order of the Income Tax Authorities the goods could not be released.
This factor was not of the petitioner 's making, according to the petitioner. ' On 30th March, 1988, the Income Tax Department issued the necessary no objection certificate, thus lifting the ban.
On 4th April, 1988, the petitioner 's agent contacted the customs authority for clearance of the goods.
The duty as is prevalent now is Rs.5,000 per M.T. + addl.
duty 45% and C.V.D. at Rs.325 per M.T.
The total duty came to a very large sum of money.
The demand, according to the petitioner, was arbitrary, illegal and unconstitutional.
The instant writ was filed under Article 32 of the Constitution on 16th April, 1988 and on 22nd April, 1988, this Court passed the following order: "Pending notice, there will be limited stay to the extent that the goods name, "MSCR defective sheets/coils" which have arrived at Bombay Port per S.S. "SEA PRIMROSE" will be released forthwith on petitioner 's paying customs and other duties as leviable on 21.8.84.
In addition to the above payment the petitioner will deposit Rs.5 lakhs and for the balance amount petitioner will furnish surety (which may consist of ITC bond but excluding cash/bank guarantee/NSC/FDR) to the satisfaction of the Collector of Customs.
" We directed that the notice should be given to the revenue authority to appear before us.
Learned Attorney General had appeared pursuant to the notice on behalf of the respond ents.
It is contended on behalf of the respondents that for the payment of duty, the liability of the petitioner to pay the duty is the duty at the time of clearance of the goods.
Our attention was drawn to section 15(1)(b) of the Act which postulates that the rate of duty and tariff valuation, if any, applicable 625 to any imported goods, shall be the rate and valuation in force, in case the goods are cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse.
Section 15 of the Act reads as under: "section 15.
Date for determination of rate of duty and tariff valuation of imported goods.
(1) The rate of duty and tariff valuation, if any, applica ble to any imported goods, shall be the rate and valuation in force (a) in the case of goods entered for home con sumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actual ly removed from the warehouse; (c) in the case of any other goods, on the date of payment of duty: Provided that if a bill of entry has been present ed before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards.
(2) The provisions of this section shall not apply to bag gage and goods imported by post." Learned Attorney General laid emphasis on the expression "actually removed" in clause (b) of section 15(1) of the Act.
Our attention was also drawn to section 16 of the Act which reads as under: "section 16.
Date for determination of rate of duty and tariff valuation of export goods.
(1) The rate of duty and tariff valuation, if any, applica ble to any export goods, shall be the rate and valuation in force (a) in the case of goods entered for export under 626 section 50, on the date"on which the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51; (b) in the case of any other goods, on the date of payment of duty.
(2) The provisions of this section shall not apply, to baggage and goods exported by post.
" It was contended on behalf of the revenue that in view of the aforesaid, it would not be possible for the petition er to clear the goods on payment of duty on the date when the petitioner was actualling expressed willingness to remove the goods.
Our attention was drawn to the decision of this Court in Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142.
In that case,the appellant stored on December 22, 1965 in the Customs warehouse, goods import ed by him under a licence, and cleared them on various dates between September 1, 1966 and February 20, 1967.
Under protest, they paid customs duty at the enhanced rates in accordance with the amended provisions.
Later, they claimed rebate alleging that since the consignments had been re ceived, stored and assessed to duty much before the promul gation of the Ordinance, they were liable to pay duty at the rate prevailing on the date of warehousing.
Their appeals and revision were unsuccessful.
In appeal to this Court it was contended that the material change in section 15 being only the substitution of the words "the rate of duty" the customs authorities were not entitled to take into account the new rate of exchange at the appreciated value of currency in respect of the consignments stored in the warehouse prior to the coming into force of the Ordinance.
Dismissing the appeal, this Court held that the customs authorities were right intaking the view that the rate of duty applicable to the imported goods should be determined according to the law prevalent on the date they were actually removed from the warehouse.
Section 15(1)(b) clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actually removed from the ware house.
Under section 49 and importer may apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance and he may be permitted to do so; and section 68 provides that an importer of any warehoused goods may clear them if the import duty leviable on them has been paid.
In that case, it was found that as the goods were removed from the warehouse after the amending Ordinance had come 627 into force, the customs authorities and the Central Govern ment were right in taking the view that the rate of duty applicable to the imported goods should be determined ac cording the law prevalent on the date these were actually removed from the warehouse.
Mr. Garg, appearing for the petitioner, on the other hand contended before us that his client was willing indeed to pay the duty when the goods crossed the customs barrier and were in the process of being cleared, but could not be cleared because of the prohibitory orders of the Income Tax Department under section 102 of the .
In that light, it was not possible, Mr. Garg contended, for the Income Tax Department to claim enhanced duty due to facts which were not for the fault of the petitioner.
In view of the language used in section 15(1)(b) of the Act, it is difficult to accept this contention specially in the light of the expression used 'actually removed '.
It must be ac cepted that the prohibitory orders, arbitrary or not, would postpone the date of clearance and as such would postpone the determination of the duty.
Therefore, it is difficult to accept Mr. Garg 's contention.
However, there is a far more serious objection in enter taining this application under Article 32 of the Constitu tion.
Article 32 of the Constitution guarantees the right to move the Supreme Court for enforcement of fundamental rights.
If there is breach of the fundamental rights, the petitioner can certainly have recourse to Article 32 of the Constitution provided other conditions are satisfied.
But we must, in all such cases, be circumventive of what is the right claimed.
In this case, the petitioner as such has no fundamental fight to clear the goods imported except in due process of law.
Now in the facts of this case, such clear ance can only be made on payment of duty as enjoined by the .
In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the .
The petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law.
There is procedure provided by law for determination of the payment of customs duty.
The reve nue has proceeded on that basis.
The petitioner contends that duty at a particular rate prevalent at a particular date was not payable.
The petitioner cannot seek to remove the goods without payment at that rate or without having the matter determined by the procedure envisaged and enjoined by the law for that determination.
The petitioner without seeking to take any relief within the procedure envisaged under the Act had moved this Court for breach of fundamental right.
This is not permissible and should never be 628 entertained.
In a matter of this nature where liability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute for which elaborate procedure is pre scribed, it cannot conceivably be contended that enforcing of those provisions of the Act would breach fundamental right which entitle a citizen to seek recourse to Article 32 of the Constitution.
We are, therefore, clearly of the opinion that relief under Article 32 of the Constitution is wholly inappropriate in the facts and the circumstances of this case.
It has further to be reiterated that for enforce ment of fundamental right which is dependent upon adjudica tion or determination of questions of law as well as ques tion of fact without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of the fundamental right.
Whenever a person complains and claims that there is a violation of law, it does not automatically involve breach of fundamental right for the enforcement of which alone Article 32 of the Constitution is attracted.
It appears that the facts of this nature require elaborate procedural inves tigation and this Court should not be moved and should not entertain on these averments of the Article 32 of the Con stitution.
This position is clearly well settled, but some times we are persuaded to accept that an allegation of breach of law is an action in breach of fundamental right.
In this connection, reference may be made to the decision of this Court in Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, where this Court observed at p. 842 of the report as under: "In my opinion, the correct answer to the two questions which have been referred to this larger Bench must be in the negative.
An order of assessment made by an authority under a taxing statute which is intra vires and in the undoubted exercise of its jurisdiction cannot be challenged on the sole ground that it is ,passed ,on a misconstruction of a provision of the Act or of a notification issued thereunder.
Nor can the validity of such an order be questioned in a petition under article 32 of the Constitution.
The proper remedy for correcting an error in such an order is to pro ceed by way of appeal, or if the error is an error apparent on the face of the record, they by an application under article 226 of the Constitution.
It is necessary to observe here that article 32 of the Constitution does not give this Court an appellate jurisdiction Such.
as is given by articles 132 to 136.
Article 32 guarantees the right to a constitutional remedy and relates only to the enforcement of the rights conferred 629 by Part 111 of the Constitution.
Unless a question of the enforcement of a fundamental right arises, article 32 does not apply.
There can be no question of the enforcement of a fundamental fight if the order challenged is a valid and legal order, in spite of the allegation that it is errone ous.
I have, therefore, come to the conclusion that no question of the enforcement of a fundamental fight arises in this case and the writ petition is not maintainable.
" In the aforesaid view of the matter, we are clearly of the opinion that Article 32 of the Constitution should not have been resorted to and this application does not lie under Article 32 of the Constitution.
However, it appears that this Court has passed an order on 22nd April, as indicated hereinbefore.
It is stated that the goods have been cleared pursuant to that order.
The revenue would be at liberty to take appropriate action in accordance with law for the recovery of the dues.
This writ petition is accordingly disposed of.
N.P.V. Petition disposed of.
[/INST]The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods.
The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax.
Interest was also demanded on the tax amount.
The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State.
The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest.
The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act.
But the Tribunal rejected application for reference.
Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal.
On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue.
On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State.
Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State.
Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act.
It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase.
Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State.
And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap.
The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture.
That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1.
[352H; 353A E; 354B] 1.2.
Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises.
Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State.
[353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied.
State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to.
Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax.
Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand.
[354G H] 349
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<s>[INST] Summarize the judgementivil Appeal No. 1248 of 1978.
From the Judgment and Order dated 9.3.1977 of the Madras High Court in T.C. Petition No. 362 of 1975.
B.B. Ahuja and Ms. A. Subhashini for the Appellant.
A.T.M. Sampath and P.N. Ramalingam for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an appeal by special leave from the judgment and order of the Madras High Court dated 9th March, 1977.
The appeal involves the assessment of income tax under the Income Tax Act, 1961 (hereinafter referred to as 'the Act ') for the assessment year 1966 67.
The assessee is an individual who carried on business in distribution of films for the assessment year 1966 67.
The assessee filed a return of income on 12th July, 1968 declar ing "No loss".
Subsequently, the assessee filed a revised return on 4th January, 1969 declaring a net loss of Rs.9,490.
The Income Tax Officer called for wealth state ments from the assessee The wealth statements did not reveal that the assessee had invested any amount in the plot of land in T. Nagar.
However, a raid made in the premises of E.V. Saroja and K.R. Sadayappan revealed the information that the assessee along with Smt.
P.S.S. Ekammai Achi and A.L.N. Perianna Chettiar had purchased a plot of land in T. Nagar on 13.4.1965 from Smt.
K.V. Saroja.
The plot was purchased in the name of the assessee 's son Sri Ramakrish nan.
In the assessment, it was stated that the total consid eration was Rs.80,000 out of which Rs.25,000 was the payment in respect of the portion purchased in the name of Sri Ramakrishnan.
The examination of all the materials including the document revealed that the total 258 consideration was Rs. 1,40,000.
The on money payment made by the assessee on behalf of his son was Rs. 18,750 for which the assessee could not adduce evidence to prove the nature and source of investment.
This sum of Rs. 18,750 was treated by the Income Tax Officer as the undisclosed income of the assessee and he initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income and referred the case to the I.A.C. for disposal as the minimum penalty leviable exceeded Rs. 1,000.
The I.A.C. imposed a penalty of Rs. 18,750 being equal to the income concealed holding that the assessee had not discharged the burden cast upon him by the Explanation to section 271(1)(c) of the Act in not adducing any evidence that the plot was purchased by the assessee 's son out of his own funds and against the asses see 's own.
statement recorded on 9.10.1972 that the on money payment was made by him.
The assessee filed an appeal to the Tribunal and contended that in case of rejection of asses see 's explanation for the source, the addition could not be held to be the concealed income of the assessee, and relied on certain principles laid down by the courts.
The Tribunal allowed the appeal.
It is necessary to refer to relevant portions of the Tribunal 's order in respect of which certain contentions were urged before us.
The Tribunal in its order observed, inter alia, as follows: "We have considered the rival submissions.
At first we were impressed by the argument of the Departmental Representative that it is a fit case for the levy of penalty.
However, when we find that the assessee had at no time given any false or different particulars about this property in his return of income or at any time during the assessment proceedings, there cannot be any question of his having filed any incor rect particulars and more so of the income.
The Departmental Representative was unable to point out any occasion when the assessee has stated before the Income Tax Officer during the assessment proceedings that he had purchased the property only for Rs.80,000.
On the other hand, when he was asked to state the consideration of the property during the examina tion, he accepted that there were two agreements but the real consideration was Rs. 1,40,000.
That being so, we are unable to accept that the assessee had been wilfully negli gent or fraudulent in this regard.
Then the question arises as to any concealment in the addition made by the Department as income from undisclosed sources.
Here, the assessee 's case was that he had prepared a sort of cash statements to show that there 259 was some cash available for this purpose.
The Department 's case was that this was only a cash statement and this state ment sufferred from certain defects, viz., the absence of drawings for personal expenses and even the so called sur plus followed by utilisation for other expenses.
No doubt, the Income Tax Officer may be justified to say that not only the explanation is not convincing but false, because there was no cash available to the assessee for payment towards the extra money paid.
However, rejection of explanation even on the ground of falsity will not mean that the addition represented the assessee 's income and more so of the con cealed income of the assessee.
In fact, the assessee has not accepted the addition before the Income Tax Officer though he has not gone on appeal for reasons best known to him.
Whatever it is, there was no acceptance that the addition represented the concealed income.
Having regard to all these, we are of the view that the assessee 's case falls within the ratio of the decisions in C.I.T. vs Anwar Ali, and C.I.T. vs Khoday Ramarao & Sons, In view of what we have expressed above, we find no reasons to sustain the penalty.
Accordingly, we cancel the penalty.
" The penalty was set aside.
Aggrieved by the said order the revenue moved the Tribunal under section 256(1) of the Act to refer the following questions of law to the High Court: "(i) Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in canceling the penalty levied u/s 271(i)(c) in the assessee 's case? (ii) Whether having regard to the provisions of Explanation to Section 27 1(1)(c) the Appellate Tribunal 's cancellation of penalty is sustainable in law and on the materials on record? (iii) Whether the Appellate Tribunal 's view that the addi tion of Rs. 18,750 did not represent the concealed income of the assessee is based on valid and relevant consideration and is reasonable view to take on the facts of this case?" The Tribunal refused to refer the questions stated hereinbefore.
The respondent moved the High Court u/s 256(2) of the Act.
The High 260 Court was of the opinion that no question of law arose and ob served, inter alia, as follows: "It appears that the consideration mentioned in the said deed was Rs.80,000.
Finally, as a result of a search con ducted in the premises of R.V. Saroja as well as the asses see himself certain documents were seized, which showed that the actual consideration was Rs.1,40,000 and not Rs.80,000.
In this regard, it was explained that even if it was consid ered that the purchase consideration admitted by the asses see was not adequate, surplus cash balance and the addition al payment, if any, should be deemed to have been come out of such surplus fund and not out of any undisclosed fund.
The Income Tax Officer found himself unable to accept the said explanation for the reason that the statements of receipts and payment filed by the assessee only enabled him to reasonably connect some of the payments, but the said statement could not serve the purpose of a regular cash book disclosing such cash balance, under the assessee 's personal expenses were not shown in the statement.
If these were taken note of, the surplus, if any, would be wiped off.
In the end, he came to the conclusion that the assessee had not accounted for the full consideration for the plot purchased by him in the name of his son and that the balance of the consideration should have been met out of income from undis closed sources." According to the High Court, no question of law arose.
Aggrieved thereby, the revenue moved this Court and obtained leave under Article 136 of the Constitution.
The short point is: In the facts and circumstances of this case and in the light of law as it stood at the relevant time, has the assessee been able to discharge his onus to prove the question which arose in view of the Explanation intro duced by the Finance Act, 1964, section 271 of the Act.
The said Explanation provides as follows: "Explanation where the total income returned by any person is less than 80% of the total income (hereinafter in this Explanation referred to as the correct income) as assessed u/s 143 or 144 or section 147 '(reduced by the expenditure in curred bona fide by him for the purpose of making or 261 earning any income included in the total income but which has been disallowed as a deduction), such person shaH, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the partic ulars of his income or furnished inaccurate particulars of such income for the purposes of cl.
(c) of this subsection .
" It was explained by this Court in CIT vs Mussadilal Ram Bharose, that under the law as it stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particulars or had concealed the income.
Mr. Ahuja, appearing for the revenue, urged before us that difficulties were found in proving the positive element required for concealment under the law prior to the amendment and this had to be estab lished by the revenue.
He drew our attention to the observa tion of this Court at p. 20 of the report where this Court reiterated that the effect of the Explanation was that where the total income returned by any person was less than 30% of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he did so he should be deemed to have con cealed the particulars of his income or furnished inaccurate particulars for the purpose of section 271(1) of the Act.
The position, therefore, is that the moment the stipulated difference was there, the onus to prove that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted to the assessee, but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
This Court has explained the position at page 22 of the report as follows: "The position, therefore, in law is clear.
If the returned income is less than 80% of the assessed income, the presump tion is raised against the assessee that the assessee is guilty of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the rele vancy and sufficiency of the materials If such a fact finding body, bearing the aforesaid principles in mind, comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
" 262 Mr. Ahuja and Mr. Sampath both relied on this decision to contend what was the position in law.
Relying on this decision, Mr. Sampath appearing for the assessee sought to urge that in the instant case, the Tribunal had found that there was explanation for the excess and that was the end of the matter.
No question of law arose thereafter, according to him.
It is true that the presumption that arose was rebuttable presumption that there was concealment of income and if there was cogent material to rebut the evidence that was acceptable then presumption would not stand.
In the instant case, the falsity of the explanation given by the assessee has been accepted by the Tribunal.
The Tribunal stated that in the instant case no doubt the Income Tax Officer was justified to say that not only the explanation was not convincing, but false because there was no cash available to the assessee for payment of the extra money paid.
Therefore, no explanation was forwarded as to where from the extra money came.
If that was the position and the presumption was further that the assessee was guilty of fraud, then the subsequent presumption followed that the assessee concealed the income and that can be only rebutted by cogent and reliable evidence.
No such attempt in this case was made.
In that view of the matter, in our opinion, it cannot be said that in this case the Tribunal was justi fied in rejecting the claim and penalty may be imposed.
The presumption raised as aforesaid, that is to say that the assessee was guilty of fraud or wilful neglect as a result of which the assessee has concealed the income, would be there.
This presumption could have been rebutted by cogent, reliable and relevant materials.
There was none, at least neither the tribunal nor the High Court has indicated any.
If that is the position, the High Court, in our opinion, was in error in not correctly applying the principles laid down by this Court in C.I.T. vs Mussadilal Ram Bharose, (supra) and the principles of law applicable in a situation of this type to the facts of this case and, therefore, the decision is not sustainable.
In the instant case there was no contro versy that the amount was not the income of the year in question.
In the aforesaid view of the matter, we set aside the judgment and order of the High Court and direct reference on the aforesaid question of law to the High Court.
Let a statement of the case on the aforesaid question be forwarded by the Tribunal within four months from this date, and the High Court dispose of the reference as quickly as possible.
The appeal is allowed and is disposed of in those terms.
The cost of this appeal will be the cost in the reference.
P.S.S. Appeal allowed.
[/INST]Under the Explanation added to section 271(1)(c) of the Income Tax Act 1961 by the Finance Act, 1964, the assessee, in a case where the total income returned was less than 80 per cent of the total income assessed, was to he deemed to have concealed the particulars of his income unless he proved that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part.
In his return of income for the assessment year 1966 67 the assessee respondent declared certain loss.
The wealth statements called for did not disclose investment in lands.
Later it was found that he had purchased a plot in his son 's name.
In the assessment it was stated that the total consid eration was Rs.80,000 out of which Rs.25,000 was the payment in respect of the portion purchased for his son.
The exami nation of the material and the document revealed that the total consideration was Rs. 1,40,000.
The on money payment made by him on behalf of his son was Rs. 18,750.
Since the assessee could not adduce evidence to prove the nature and source of investment the ITO treated the sum as the undisclosed income and initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income and referred the case to IAC.
The IAC imposed a penalty equal to the income concealed holding that the assessee had not discharged the burden cast upon him by the Explanation.
In appeal, the Tribunal set aside the penalty on the ground that the assessee had at no time given any false or different particulars about this property in his return of income or at any time during the assessment proceedings and, therefore, there could not he any question of his having filed any incorrect particulars; that since the assessee had not stated in the assessment proceedings that he had pur chased the pro 256 perty only for Rs.80,000, and during the examination and accepted that though there were two agreements but the real consideration was Rs. 1,40,000, it could not be said that he had been wilfully negligent or fraudulent in this regard; that as regards concealment, his explanation was that there was some cash available for purchase of the plot, and that no doubt the Income Tax Officer might be justified to say that not only this explanation was not convincing but false the rejection of explanation even on the ground of falsity would not mean that the addition represented the assessee 's income and more so of the concealed income.
It also refused to refer to the High Court the questions of law preferred by the revenue.
In the appeal by the Revenue under section 256(2) of the Act the High Court found that there was no proof to show that the said sum of Rs. 18,750 represented the income of the relevant year and accordingly held that no question of law arose.
Allowing the appeal by special leave, the Court, HELD: 1.
The High Court was in error in not correctly applying the principles of law laid down by this Court in C.I.T. vs Mussadilal Ram Bharose, to the facts of the case.
The decision, therefore, was not sustainable.
[262F] 2.1.
The presumption that could be raised against the assessee under section 271(1)(c) of the Act, as it stood at the relevant time, that he was guilty of fraud or gross or wilful neglect resulting in concealment of income was a rebuttable presumption and if there was cogent material to rebut the evidence that was acceptable, the said presumption would not stand.
1261E; 262B] 2.2.
In the instant case, the falsity of the explanation given by the assessee had been accepted by the Tribunal in as much as it had stated that the Income Tax Officer was justified to say that not only the explanation was not convincing but false because there was no cash available to the assessee for payment of the extra money paid.
Therefore, no explanation was forwarded as to where from the extra money came.
If that was the position and the presumption was further that the assessee was guilty of fraud, then the subsequent presumption followed that he had concealed the income.
[262B D] 2.3.
The presumption thus raised against the assessee that he was guilty of fraud or wilful neglect as a result of which he had concealed the 257 income, would be there.
This presumption could have been rebutted By cogent, reliable and relevant materials.
No such attempt was made in the case.
It could not, therefore, be said that the Tribunal was justified in rejecting the claim.
[262E F] [Statement of the case to be forwarded by the Tribunal within four months and the High Court to dispose of the reference as quickly as possible.] [262G]
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<s>[INST] Summarize the judgementCivil Appeal No. 577 of 1975.
Appeal by Special Leave from the Judgment and order dated the 4 11 74 of the orissa High Court in M.A. No. 75 of 1970.
G. section Pathak, Santosh Chatterjee and G. section Chatterjee for the Appellant.
Sachin Chowdhury (Respondent No. 2) and Vinoo Bhagat for the Respondent No. 1.
The Judgment of the Court was delivered by SHlNGHAL J.
, Maguni Charan Dwivedi, the appellant, filed a title suit in the Court of Munsif, Sundargarh against the State of orissa, for declaration of his title and recovery of possession of plot No. 99 meaguring 3.80 acres in khata No. 89 of village Mahulpali claiming it as his "ganju bhogra" land.
The suit was decreed on October 14, 1958, in respect of 3.45 acres.
The defendant State of orissa, did not file an appeal and the decree became final.
Decree holder Dwivedi applied for its execution.
The case was transferred to the court of the Subordinate Judge of Sundargarh.
An objection was taken there by the Notified Area Council, Rourkela, respondent No. 2, hereinafter referred to as the Council, under sections 37 and 38 and order XXI rule 58 of the Code of Civil Procedure on the ground that it was in actual physical possession of the land.
The objection application was however rejected by the execution court on March 31, 1965.
The Council applied for revision or the order of rejection, but its application was dismissed with the observation that the Council might file a regular suit for adjudication of its right if it so desired.
No suit was filed by the Council and decreeholder Dwivedi filed an application on September S, 1966 for proceeding with the execution of his decree.
The Council and the State then 77 made an application under section 47 of the Code of Civil Procedure stating A that the decree was not executable because the orissa Merged Territories (Village offices Abolition) Act, 1963, hereinafter referred to as the Act, had come into force in the area on April 1, 1966, and the "bhogra land" in question had vested in the State free from all encumbrances.
The Subordinate Judge upheld that objection and dismissed the execution application.
Decree holder Dwivedi felt aggrieved, and filed an appeal which was heard by Additional District Judge, Sundargarh, who held by his order dated May 2, 1970 that the decree was executable.
He therefore set aside the order of the execution court, and the State of orissa and the Council went up in appeal to the High Court.
The High Court held that as the decree holder was not in actual physical possession of the land, the tenure had vested in the State free from all encumbrances C under section 3 of the Act, the decree was "rendered non est", and the Collector could not settle the land with him under section S of the Act.
It therefore allowed the appeal by its impugned judgment dated November 4, 1974, and ordered that the decree holder could not execute the decree.
He applied for and obtained special leave, and has filed the present appeal.
It is not in dispute before us that the appellant held the "village office" within the meaning of section 2(j) of the Act.
It is also not in dispute that it was in that capacity that he held the "bhogra land" in question by way of emoluments of his office.
Moreover it is not in dispute that the appellant 's village office stood abolished in accordance with the provisions of section 3(a) of the Act.
The consequences of the abolition, have been stated in cls.
(a) to (g) of section 3.
It will be sufficient for us to say, for purposes of the present controversy, that as a result of the abolition of the office, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land", stood extinguished by virtue of the provisions of cl.
(b) of section 3, and all settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant stood cancelled under section 3(c).
The right of the appellant to receive the emoluments was also deemed to have been terminated under cl.
(d), and by virtue of cl.
(f) his "bhogra land" stood resumed and "vested absolutely in the State Government free from all encumbrances.
" Section 3 of the Act in fact expressly provided that this would be the result, notwithstanding anything in any law, usage, settlement, grant, sanad or order or "in any judgment, decree or order of a Court.
" All these consequences therefore ensued with effect from April 1, 1966 when, as has been stated, the Act came into force in the area with which we are concerned.
There can be no doubt therefore that from that date appellant Dwivedi suffered from these and the other disabilities enumerated in section 3 of the Act; the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession, was therefore lost to him as it vested "absolutely" in the State Government free from all encumbrances.
The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act referred to above, and there is nothing wrong if the High rt has held that it was rendered incapable of execution by operation of the law.
78 Section S of the Act deals with the settlement of the resumed "bhogra land" and has been the subject matter of controversy before us.
It provides as follows: "5.
Settlement of Bhogra lands: (1) All Bhogra lands resumed under the provisions of this Act shall subject to the provisions of sub section (2) be settled with rights of occupancy therein on a fair and equitable rent with the holder of the Village office or with him and all those other persons, if any, who may be in the enjoyment of the land or any part thereof as his co sharers or as tenants under him or under such co sharer to the extent that each such person was in separate and actual cultivating possession of the same immediately before the appointed date.
(2) The total area of such land in possession of each such person shall be subject to a reservation of a certain fraction thereof in favour of the Grama Sasan within whose limits the land is situate and the extent of such reservation shall be determined in the following manner, namely: Land in possession Extent of reservation For the first 10 acres Nil For the next 20 acres 5 per cent For the next 70 acres 10 per cent For the next 100 acres 30 per cent For the remaining 40 per cent: Provided that the area reserved shall, as far as practicable be in compact block or blocks of one acre or more." (Emphasis added) .
It would appear that once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled", with rights of occupancy thereunder, with the erstwhile holder of the village office, or with him and all those other persons, if any, who may be in enjoyment of the land or any Part thereof as his co sharer to the extent that each such person was in separate and actual cultivating possession of the same immediately before the date appointed for the coming into force of the Act.
The settlement of the land contemplated by section 5 had therefore to be with the holder of the village office and the other persons who were enjoying it (or part of it) as his co sharers or as tenants under him or his co sharers, but that was to be so on the condition that "each such person" namely, the holder of the village office, and his co sharers, or the tenants under the holder of the office or his co sharers, was in "separate and actual cultivating possession" of the land immediately before April 1, .1966.
There is nothing in sub section (1) of section S to justify the argument of Mr. Pathak that we should so interpret the words "each such person" as to exclude the holder of the village office from its purview.
In fact the same words occur in sub section
(2) of section S as well, which deals with the question of reservation of a fraction of the "bhogra land" in favour of Grama Sasan, and Mr. Pathak has not found it possible to argue that the land in possession of the holder of 79 the village office was immune from the liability to such fractional reservation.
We have no doubt therefore that in order to be entitled to the settlement contemplated by sub section (1) of section S, the village officer or the other persons mentioned in the sub section had to be in "separate and actual cultivating possession" immediately before the appointed date.
It has also been argued by Mr. Pathak that the provisions of section 3 of the Act were subject to the provisions of section 5, and that the High Court committee an error in losing sight of that requirement of the law.
He has urged that if section 3 had been read as suggested by him, it would have been found that, in spite of the resumption and vesting of the "bhogra land" under section 3, the appellant 's right to possess the "bhogra land" in question continued to subsist so long as it was not converted into a right of occupancy under sub section
(1) of section 5.
Counsel has gone on to argue that the appellant was therefore entitled to ignore any trespass on his possession of the "bhogra land", and to ask for execution of the decree for possession against the respondents as they were mere trespassers and were not co sharers or tenants within the meaning of sub section
(1) of s.5.
Reference in this connection has been made to Maxwell on Interpretation of Statutes, twelfth edition, p. 86, where it has been stated that it is necessary to interpret the words of the statute so as to give the meaning "which best suits the scope and object of the statute.
" It has been argued that grave injustice would otherwise result for, by a mere act of trespass committed on the eve of the coming into force of the Act, a village officer would lose the right of settlement of his "bhogra land" under sub section (1) of s.5.
It has also been argued that the words "each such person" occurring in that sub section do not include the holder of the village office himself, so that it was not necessary for him to show that he was in separate and actual cultivating possession of his "bhogra land".
Reliance for this proposition has been placed on a bench decision of the High Court of Orissa in State of Orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974 decided on June 27,1975) and on Meharaban Singh and others vs Naresh Singh and others(1).
As will appear, there is no force in this argument.
Section 3 of the Act expressly provides for the abolition of village offices under the Act, and the consequences of such abolition.
We have made a reference to cls.
(a) (b) (c) (d) and (f) of that section, and we have no doubt that the consequences stated in the section in regard to the abolition of village offices, the extinction of the incidents of the service tenures, cancellation of the settlements and sanads etc.
creating those office, termination of the right to receive any emoluments for the offices, the resumption and vesting of the "bhogra lands" free from all encumbrances ensued "with effect from and on the appointed date" and were not put off until after the settlement provided for in sub section (1) of section 5 had been made.
Section 3 in fact expressly made provision for those consequences and there is no justification for the argument that they remained suspended or were put off until occupancy rights were settled on the persons concerned.
As has been (1) 80 stated, sub section (1) of section S deals with the settlement of such lands, with rights of occupancy, with the holder of the village office or with him and the other persons, if any, referred to in the sub section, but such settlement was required to be made as a result of the consequences referred to in section 3 and not otherwise.
It is therefore futile to contend that the appellant did not suffer from those consequences merely because the "bhogra land" claimed by him had not been settled with rights of occupancy under sub section
(1) of section 5 because it was the subject matter of the decree which had not been executed.
We have gone through the decision in State of Orissa vs Rameshwar Patabisi (supra) and it has no doubt been held there that actual cultivating possession of the village officer was not necessary for purposes of sub section
(1) of section S, but, as has been shown, we have no doubt that the words "each such person" occurring in sub section
(1) of section 5 include the holder of the village office, so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and actual cultivating possession of the "bhogra land" immediately before the appointed date.
It appears that the earlier bench decision to the contrary, which is the subject matter of the present appeal, was not brought to the notice of the Bench which decided Rameswar Patabisi 's case.
We have gone through Maharabansingh 's(1) case also but that was quite a different case which was decided in accordance with the provisions of a different Act.
It has next been argued by Mr. Pathak that the High Court lost sight of the provisions of section 9 of the Act which provided for submission of records and delivery of possession of other land but did not require delivery of possession of the "bhogra land" even after its resumption.
The argument is however untenable because section 9 was meant to serve quite a different purpose inasmuch as it made provision for the delivery of all records maintained by the village officer in respect of the land or village held by him in relation to his office, the rendering of all accounts appertaining to his office in respect of the dues payable by and to him, and the delivery of possession of all abandoned and surrendered holdings etc.
The section did not therefore have any bearing on the question of the vesting of the "bhogra land" absolutely in the State Government and the extinction of the right of the village officer to hold it.
That had in fact been.
expressly provided in those clauses of section 3 to which reference has been made by us already.
As it is, section 9 did not deal with the question of delivery of possession of the "bhogra land" and its provisions could not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land stood resumed and vested absolutely in the State Government free from all encumbrances under section 3.
It may be mentioned that Mr. Pathak has argued further that as the application which had been filed by the Council under order XXI r. 58 C.P.C. had been rejected on March 31, 1965 and the Council did not file a suit to establish its right to the "bhogra land", the decree in favour of the appellant became final and could not be challenged for 81 any reason whatsoever, and the High Court committed an error in A taking the view that it was rendered inexecutable merely because of the coming into force of the Act.
It will be sufficient for us to say in this connection that whatever might have been the consequences of the rejection of the Council 's application under order XXI r. 58 C.P.C. and the failure to institute a suit thereafter, those normal consequences were rendered nugatory by the express provisions of the Act to which reference has been made above.
The question of executability of the decree has therefore been rightly decided with reference to the Act.
It may be mentioned that in a given case there may be no "bhogra land" to be settled with a village officer, or a village officer may feel aggrieved on the ground that the Act provides for the acquisition of property by the State, but we find that provision has been made in the Act for the payment of solatium or compensation under sections 8 and 10 in such cases and it cannot be said that they have been left without a remedy.
For the reasons mentioned above, we find no force in the arguments which have been advanced on behalf of the appellant.
It however appears to us that there is justification for the other argument of Mr. Pathak that there was really no occasion for the High Court to express the view that the appellant "had no possession of the land" so as to claim its settlement under section 5(1) of the Act, and that the Collector could not settle the land with him.
As is obvious, that was clearly a matter for the authorities concerned to examine and decide under section 5 and it was, at any rate, outside the purview of the question relating to the executability of the decree which was the subject matter of the appeal in the High Court.
While therefore the appeal fails and is dismissed, the observation of the High Court that the decree holder had no possession of the land and the Collector could not settle the land with him, is set aside, and it is left to the authorities concerned to examine the question of settlement of the land under section 5(1).
The appellant may rely on such matters as may be open applellant the law.
In the circumstances of this case, we leave the parties to pay and bear their own costs.
[/INST]In the execution proceedings to satisfy a decree dated 14 10 1958 for title and recovery of possession of certain "ganju Bhogra lands" obtained by the appellant against the State, the Notified Area Council.
Rourkela claimed the suit lands by an application u/o XXI Rule 58 r/w sections 37 and 38 Code of Civil Procedure.
The said application was rejected.
A revision against it was also dismissed with the observation that the council was free to file a regular suit for adjudication of its rights.
When the appellant took out a fresh application for execution u/s 47 of the Code` of Civil Procedure, the Council which never filed any suit, and the respondent State which never appealed against the original decree, opposed the execution application on the ground that the decree became infructuous by virtue of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963.
The Executing court upheld the objection and dismissed the execution petitition.
On appeal the Additional District Judge, by his order dated 2 5 1970, held that the decree was executable resulting in a second appeal to the High court by the respondent State.
The High Court allowed the appeal by its order dated 4 11 1974 holding that as the decree holder was not in actual physical possession of the land, the tenure has vested in the State free from all encumbrances u/s 3 of the Act and the decree was rendered "non est".
Dismissing the appeal by special leave, the Court, ^ HELD: (1) As a result of the abolition of the village office under section 3 of the OMTA, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land" stood extinguished by virtue of the provision of clause (b) of section 3, and ail settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant, stood cancelled under section 3(c).
The right of the appellant to receive emoluments was also deemed to have been terminated under Cl.
(d) and by virtue of Cl.
(f), his bhogra land stood resumed and "vested absolutely" in the State free from all encumbrances.
Section 3 of the Act, in fact, expressly provided that this would be the result, notwithstanding anything in law, usage, settlement, grant, sanad, order or "in any judgment, decree or order of a court.
" All these consequences ensued with effect from April 1, 1966 the date of coming into force of the orissa Merged territories (Village offices Abolition) Act, 1963.
From that date, the appellant suffered from these and other disabilities enumerated in section 3 of the Act, the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession was, therefore, lost to him as it vested "absolutely" in the State Government free from all encumbrances.
The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act and there is nothing wrong in holding that the decree was rendered incapable of execution by operation of law.
[77 D H] (2) Under sec.
5 of orissa Merged Territoies ((Village offices Abolition) Act, 1963, once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled" with rights of occupancy thereunder.
The settlement of the land contemplated by sec.
S had to be with the holder of the village office and the other persons who were enjoying it (or part of it) and as his co sharers, as tenants under him or his co sharers, but that was to be so on the condition 76 that "each such person, namely, the holder of the village office and his cosharers or the tenants under the holder of the office or his co sharers was in separate and actual cultivating possession" of the land immediately before April, 1966.
The words "each such person" occurring in sub section I of Sec. 5 include the holder of the village office so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and cultivating possession of the "bhogra land" immediately before April 1, 1966.
There is nothing in sub section I of Sec. 5 to justify the argument that the interpretation of the words "each such person" should be such as to exclude the holder of v the village office from its purview.
[78 E, F H] State of orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974) decided on 27 6 1975 (orissa High Court) over ruled; Meharabansingh and Ors.
vs Nareshaingh and ors.
(held not applicable).
(3) The provisions of sec.
9 do not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land.
stood resumed and vested absolutely in the State Government free from all encumbrances.
[80 E] (4) The normal consequences arising out of the rejection of the application under o. XXI, r. 58, Civil Procedure Code and the failure to institute the suit thereafter, were rendered nugatory by the express provisions of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963.
The question of executability of the decree did not arise.
[81 A B] [The Court left open to the authorities concerned to examine the question of settlement of the land under section 5(1) of the orissa Merged Territories (Village Dr offices Abolition) Act, 1963, with liberty to the village officer to rely upon such matters as may be available according to law.]
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<s>[INST] Summarize the judgementAppeal No. 199 of 1955.
Appeal by special leave from the judgment and order dated the 17th day of April 1953 of the Nagpur High Court in Miscellaneous Civil Case No. 53 of 1950.
Nur ud din Ahmad and Naunit Lal, for the appellant.
C. K. Daphtary, Solicitor General of India, G. N. Joshi and B. H. Dhebar, for the respondent.
February section The Judgment of the Court was delivered by BHAGWATI J.
This is an appeal with special leave from the Judgment and Order of the High Court of Judicature at Nagpur on a reference made by the Income tax Appellate Tribunal, Bombay Branch 'A ' under section 66(1) of the Indian Income tax Act XI of 1922 whereby the High Court answered the ref erred question against the appellant.
The appellant, a firm of Messrs Pratapmal Laxmichand of Betul consisted of 7 partners, viz., Misrilal Goti, Meghraj Goti, Panraj Goti, Phulchand, Basantibai, Ratanbai and Gokulchand Goti.
A deed of partnership was executed on the 12th February 1944 by all the partners except Gokulchand Goti who happened to be in the Seoni Jail being a security prisoner under the Defence of India Rules.
He was unable to sign the same in spite of all efforts to obtain his signature in prison.
An application for registration of the firm under section 26 A of the Act for the assessment year 1943 44 was made on the 24th March 1944 personally signed by the other 6 partners of the firm and was accompanied by the deed of partnership which also had been signed by those 6 partners.
The Special Income tax Officer, Nagpur, rejected the application on the ground that the deed itself was not valid inasmuch as it had not been signed 93 by all the partners mentioned in the body and there was no signature of Gokulchand on the deed and the application.
An appeal was taken to the Appellate Assistant Commissioner against this decision of the Special Income tax Officer on the 24th April 1944.
Gokulchand appended his signature to the deed of partnership in Seoni Jail on the 9th January 1945.
The appeal was heard before the Appellate Assistant Commissioner on the 20th March 1947 and he passed an order on the 17th February 1948 cancelling the order of the Special Income tax Officer and directing him to register the firm after obtaining the signature of Gokulchand both on the application for registration and the deed of partnership.
At the instance of the Commissioner of Income tax, C. P. and Berar, an appeal was filed against this order of the Appel late Assistant Commissioner by the Income tax Officer, Spl.
I.T. cum E.P.T. Circle, Nagpur, before the Income tax Appellate Tribunal.
The Tribunal allowed the appeal by its order dated 11/16 October 1948 observing that the Special Income tax Officer was justified in refusing to register the firm as the application for registration was not signed by Gokulchand, that Rule 2(c) of the Indian Income tax Rules, 922, on which the Appellate Assistant Commissioner teems to have relied did not apply and the Appellate Assistant Commissioner was not justified in directing the Income tax Officer "to register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and the deed of partnership".
The appellant applied for a reference to the High Court under section 66(1) of the Act and the Tribunal referred the following question arising out of its order for the opinion of the High Court: "Whether on the facts and in the circumstances of the case the Appellate Assistant Commissioner was legally competent to direct the Income tax Officer to register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership".
When the statement of the case was being drawn up by the Tribunal, counsel for the appellant suggested that the words 94 appearing in para 6 of the statement, viz., "No application was submitted to the Appellate Assistant Commissioner seeking his permission under Rule 2(c) of the Indian Income tax Rules" be deleted.
He also suggested that the concluding words in the question referred to the High Court, viz., "after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership" be deleted.
With regard to the latter suggestion the Tribunal observed that they were unable to delete the same inasmuch as the words sought to be deleted were the concluding words appearing in the Appellate Assistant, Commissioner 's order dated the 17th February, 1948 giving directions to the Income tax Officer and were words which were material to the question before the High Court.
With regard to the first suggestion counsel for the appellant had stated that the appellant had submitted three applications to the Appellate Assistant Commissioner all dated 20th March, 1947 and that it would be wrong to state that no application was submitted to the Appellate Assistant Commissioner.
The allegation made by the appellant was properly investigated subsequently and the Tribunal was satisfied that the appellant did not appear to have put in the application dated 20th March, 1947 as alleged.
This being the position the Tribunal stated that no change in the statement of case was called for as suggested by the appellant.
It was on this statement of case by the Tribunal that the referred question came to be determined by the High Court.
Before the High Court the appellant had applied on the 27th November, 1950 that the three certified copies of the three applications dated 20th March, 1947 made by the appellant to the Appellate Assistant Commissioner with their originals should be sent for by the High Court from the Incomeax Tribunal and an order had been made accordingly.
he High Court was of the opinion that the Appelate Assistant Commissioner should have ordered egistration of the firm provided there was an application before him duly signed by all the partners.
As, 95 however, there was no such application, he could not have directed the Income tax Officer to register the firm after obtaining the signature of Gokulchand on the application and also in the partnership deed .
The High Court accordingly answered the referred question in the negative.
An application under section 66 A(2) of the Act for a certificate for leave to appeal to this Court against that order was dismissed by the High Court but the appellant obtained special leave to appeal against the same from this Court on the 6th December, 1954.
The main question that arises for our determination in this appeal is: What are the powers of the Appellate Assistant Commissioner on the hearing of an appeal against the refusal by the Income tax Officer to register a firm under section 26 A of the Act and Rule 2 of the Indian Incometax Rules, 1922? Section 26 A of the Act provides: " (1) Application maybe made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or supertax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income tax Officer in such manner as may be prescribed".
Rule 2 of the Indian Income tax Rules, 1922, which was in force at the relevant period, in so far as is material for the purpose of this appeal, provided: "Any firm constituted under an Instrument of Partnership specifying the individual shares of the partners may, under the provisions of section 26 A of the Indian Income tax Act, 1922 register with the Income tax Officer the particulars contained in the said Instrument on application made in this behalf.
Such application shall be signed by all the partners 96 (not being minis) personally and shall be made (a) before he income of the firm is assessed for any year under section 23 of the Act, or (b). . or (c) with the permission of the Appellate Assistant Commissioner hearing an appeal under section 30 of the Act, before the assessment is confirmed, reduced, enhanced or annulled, or (d) (e) The decision of the Income tax Officer in regard to the invalidity of the deed of partnership inasmuch as it did not bear the signature of Gokulchand was not challenged by the appellant at any stage of the proceedings nor in the statement of case before us.
Counsel for the appellant, however, relying on a passage in the "Law and Practice of Income tax by Kanga and Palkhivala", 3rd Ed., at page 754, urged that it was not necessary that the partnership agree ment should be signed by all the partners and if the agreement had not been signed by one of the partners but that partner had assented to the agreement and put it forward along with the other partners for registration, the agreement would be admissible for registration.
In the first instance, it was not open to the appellant to urge any point which was not taken in the statement of case and even if it was open to him to urge that contention we do not think it necessary to express any opinion on the correctness or otherwise of the statement above referred to in view of the construction which we put on Rule 2 of the Indian Income tax Rules, 1922.
The Rules were framed under section 26 A(2) of the Act and bad statutory force.
Under Rule 2, the application for registration of the firm was to be made to, the Income tax Officer and the particulars contained in the Instrument of Partnership specifying the individual shares of the partners were to be registered with him on an application made in that behalf signed by all the partners (not being minors) personally.
No such application was submitted to the Special Income tax Officer in this case before he 97 made his order on the 18th March 1944, and on the materials as they stood on record then, the order of the Special Income tax Officer was perfectly justified.
No such application signed by all the partners of the firm including Gokulchand was also available before the Appellate Assistant Commissioner when he heard the appeal on the 20th March 1947.
The appellant contended that he had in fact filed in the office of the Appellate Assistant Commissioner on the said 20th March 1947 three applications one of which was such an application signed by all the partners personally including Gokulchand and it was strenuously urged on his behalf that the Appellate Assistant Commissioner passed his order dated the 17th February 1948 ignoring the said application which had been filed in his office.
It was urged that, if the Appellate Assistant Commissioner had before him the said application dated the 20th March 1947 signed by all the partners personally including Gokulchand, it was his duty to direct a registration of the firm himself without anything more inasmuch as the deed of partnership had been signed by Gokulchand on the 9th January 1945 and the application for registration of the firm dated the 20th March 1947 bore his signature.
The direction given by the Appellate Assistant Commissioner to the Income tax Officer to register the firm was, it was contended, therefore proper and we were asked to treat the words "after obtaining the signature of Seth Gokulchand in the application for regis tration and in the deed of partnership" as superfluous.
We are not impressed with this argument.
As appears abundantly clear from the terms of the order made by the Appellate Assistant Commissioner himself and also from the statement of case prepared by the Tribunal, the application signed by all the partners personally including Gokulchand was not before the Appellate Assistant Commissioner.
An application had been made by the appellant before the Tri bunal to amend the statement of case by deleting from para 6 thereof the words "no application was submitted to the Appellate Assistant Commissioner 13 98 seeking his permission under Rule 2(c) of the Indian Income tax Rules" but the same had been rejected by the Tribunal as a result of proper investigation conducted by it subsequently, the Tribunal stating that they were satisfied that the assessee did not appear to have put in an application dated the 20th March 1947 as alleged.
The reference was beard by the High Court on this statement of case prepared by the Tribunal and no steps were taken by the appellant before the High Court for having the statement of case amended by the Tribunal or for having a further statement of case submitted by the Tribunal recording therein the facts alleged by the appellant.
We must, therefore, decide this appeal on the facts stated in the statement of case by the Tribunal and on the basis that the application for registration dated the 20th March 1947 signed by all the partners personally including Gokulchand was not before the, Appellate Assistant Commissioner.
If that was the position, the only power which the Appellate Assistant Commissioner bad under Rule 2(c) was to accord permission to the appellant to make the application in proper form to the Incometax Officer signed by all the partners personally including Gokulchand before the assessment was confirmed, reduced, enhanced or annulled.
The Appellate Assistant Commissioner had, under the Rule, no power to direct the Income tax Officer to register the firm after obtaining the signature of Gokulcband both in the application for registration and in the deed of partnership as he did.
As a matter of fact the appellant did not ask for such permission from the Appellate Assistant Commissioner nor was any revision taken by the appellant before the Commissioner under section 33 A of the Act against the said order of the Appellate Assistant Commissioner.
The appellant contented himself with arguing that the order made by the Appellate Assistant Commissioner was justified and the sole controversy which arose between the parties and was the subject matter of the referred question was whether the Appellate Assistant Commissioner was legally competent to direct the Income 99 tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership.
The appellant attempted no doubt to have the words "after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership" deleted from the referred question.
That attempt, however, failed and no steps were taken by the appellant before the High Court at the hearing of the reference to either have the referred question amended or reframed in order to bring into prominence his contention in regard to the powers of the Appellate Assistant Commissioner.
On the question as framed, the only answer which the High Court could give was that the Appellate Assistant Commissioner was not legally competent to direct the Income tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership.
Rule 2(c) above quoted did not empower the Appellate Assistant Commissioner to do anything of the sort and we are of the opinion that the answer given by the High Court in the negative was, therefore, correct.
Counsel for the appellant tried to support his argument by referring to the provisions of the earlier partnership deeds between the several partners of this firm in the years 1929 and 1941 which specifically provided that in the event of retirement, or death of, or relinquishment, of his share by a partner, the partnership will not be dissolved but will be continued, in case of death of any of the partners, by such of the partners as remained and the legal representatives or nominees of the deceased partner and in the case of retirement of any of the partners by such of the partners as remained.
We fail to understand what bearing these clauses have on the determination of the referred question.
In the result, the appeal of the appellant fails and must stand dismissed with costs.
[/INST]The appellant (a firm) consisted of seven partners and a deed of partnership was executed by all the partners except one who happened to be in Jail being a security prisoner under the Defence of India Rules.
An application for registration of the firm under section 26 A of the Indian Income tax Act was made before the Incometax Officer, who, however, rejected it on the ground that the deed of partnership and the application for registration were not signed by all the partners.
On appeal, the Appellate Assistant Commissioner cancelled the order of the Income tax Officer and directed him to register the firm after obtaining the signature of the partner who had not signed before, both on the application for registration and the deed of partnership.
Held, that under Rule 2(c) of the Indian Income tax Rules, 1922, framed under section 26 A(2) of the Indian Income tax Act, the Appellate Assistant Commissioner had only the power to direct registration of the firm if an application duly signed by all the partners had been presented to him before the assessment was confirmed, reduced, enhanced or annulled and that he was not legally 92 competent to direct the Income tax Officer to register the firm after obtaining the signature of the partner who had not signed before.
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<s>[INST] Summarize the judgementNo. 205 of 1971.
Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
518 V. Mayakrishnan, for the petitioner.
section P. Mitra, G. section Chatterjee for Sukumar Basu, for the respondent.
The impugned order states that the District Magistrate was satisfied that it was necessary that the petitioner should be detained with a view to prevent him from acting in any manner prejudicial to the security of the State or the maintenance of public order as provided by section 3(1) of the Act.
According to the affidavit in reply of the District Magistrate, he reported under section 3 (4) of the Act to the State Government On March 3, 1971 regarding the fact of his having passed the order of detention together with the grounds of detention and all other.
particulars having a bearing on the name.
It is further stated that the.
petitioner was arrested on March 5, 1971 and was served on the same day with the order of detention together with the, grounds for passing the order of detention.
The petitioner was also informed that he is entitled to make a representation to the State Government against the order of detention and that such representation is to be addressed to the Assistant Secretary Home (Special) DEpartment, Government of West Bengal and forwarded through the Superintendent of Jail.
He was further informed that his case will be placed under section 10 of the Act before, the Advisory Board within 30 days from the date of the order of detention.
He was also informed that under section 11 of the Act, the; Advisory Board shall, if so desired by him, hear him in person and that the petitioner must intimate the said desire to be heard in the representations that he may make to the State Government.
The State Government considered the report of the District Magistrate together with other materials placed before it and approved, on March 11, 1971 as required by section 3 (4) of the Act, the order of detention passed by the District Magistrate.
On the same day, as required,by section 3(5) the State Government sent the necessary report to the Central Government.
The State Government on April 3, 1971 placed the case of the petitioner before the Advisory Board.
519 The petitioner sent two representations dated March 17, and April 19, 1971 denying the allegations made in the grounds for passing the order of detention and pleaded that he was innocent.
He has admitted in these representations that he was arrested on March 5, 1971.
In neither of these representations did the petitioner make a request that he should be provided an opportunity of being heard in person by the Advisory Board.
The State Government rejected the representations of the petitioner, but forwarded them to the Advisory Board for being considered.
The Advisory Board after considering the, materials placed before it relating to the detention of the petitioner including the represen tations made by him on March 17, 1971 and April 19, 1971, submitted its report on May 11, 1971 to the State Government stating that it is of opinion that there is sufficient cause for the detention of the petitioner.
The State Government passed an order on July 12, 1971 under section 12(1) of the Act confirming the order: of detention dated March 2, 1971 passed by the District Magistrate and directed that the petitioner 's detention shall be continued till the expiration of twelve months from the date of his detention.
The petitioner has challenged the order of detention on the ground that he has never committed any offence nor has he been involved in any illegal activities as alleged in the grounds of detention.
He has further stated that the various allegations mentioned against him are false and that he never participated in any of the incidents referred to in the grounds of detention.
The petitioner has further stated that he is innocent and that he has been illegally detained.
It Will be noted from his averments in the writ petition that except denying that the allegations are false and that he has never participated in any of those incidents referred to in the grounds of detention, he has not alleged any mala fides nor challenged the jurisdiction of the officer who, passed the order of detention or the various proceedings connected therewith.
Under section 3 (1) of the Act, *hat is required is the satisfaction of the State Government or the relevant District Magistrate, as the case may be, of the necessity to detain a person with a view to prevent him from acting in a manner prejudicial to the security of the State or the maintenance of public order.
In the order of detention dated March 2, 1971, the District Magistrate has stated that he was satisfied that with a view to prevent the petitioner from acting in any manner prejudicial to the security of the State or the maintenance of public order, it is necessary to detain the petitioner and that the order was being passed in exercise of the powers conferred on the District Magistrate by sub section (1) read with subsection (3) of section 3 of the Act.
In the grounds of detention 520 .
furnished to the petitioner on March 5, 1971 along with the order dated March 2, 1971 the following particulars have been given: "(1) That, on 26 1 71 between 11.00 and 12.31 hours, you along with your associates being armed with bombs, ballasts, pipe guns, lathis etc., assembled at Piali Railway Station and created terror among the passengers by charging bombs and showering ballasts indiscriminately and also moving from compartment to compartment of train Nos.
SC 193 UP and SC 195 UP in search of your rivals, shouting that "if I get the Rascal, I will kill them" and in doing so you caused injury to some innocent passengers and broke the glass panes of driver 's cab of SC 195 Up.
You created disturbance of the public order thereby.
(2)That, on 2 2 71 at about 17.39 hours, you along with your associates, being armed with bombs, daggers etc., attacked and assaulted the guard of train No. SC 199 Up at Champahati Railway Station and also created terror among the passengers by charging a bomb.
You created disturbance of the public order thereby.
(3) That on 9 2 71 at about 13.15 hours you and your associates charged bombs and ballasts on duty Police party at Jadavpur Railway Station as they seized 10 bags of rice weighing about 3 quintals from SC 195 Up, while you were taking the said stock to Calcutta rationing area illegally by train.
Your attack grew so violent that the Police party had to open fire upon you in self defence.
Your violent activities created serious panic in the Station area and the public order was disturbed thereby.
" In the two representations dated March 17 and April 19, 1971 made to the State Government, the petitioner after referring to the fact that he was arrested on March 5, 1971 has denied that he was involved in any of the types of violent activities referred to in the grounds for detention.
He has further stated that he is leading a very honest life doing the work of mason and that the allegations made against him are false.
As we have already mentioned, the petitioner did not ask for an opportunity of.
being heard,in person by the Advisory Board.
He has not also alleged in these representations and mala fides in passing the order of dention.
The District Magistrate who passed the order of detention has filed a counter affidavit.
The District Magistrate has stated that the petitioner is rice smuggler operating in Subarban Railway 521 trains in Southern Section of Eastern Railway and that he along with his associates armed with bombs and other deadly weapons attacked the passengers and the guard of railway trains and created terror by hurling bombs in Champahati and Piali Railway Stations.
The District Magistrate further proceeds to state that the petitioner was detained for acting in a manner prejudicial to the security of the State or the maintenance of public order in the Jadavpur area of the district of 24 Parganas for his having taken a leading and active part in violent activities.
It is further stated in the counter affidavit that the activities of the petitioner disturbed the public order and were so persistent and violent that he became a terror to the residents of the locality and the railway traveling public and that but for his detention he could not have been prevented from acting in a manner prejudicial to the security of the State ,or maintenance of public order.
It is further stated that the deponent after receiving reliable information relating to the anti social and prejudicial activities of the petitioner and after carefully considering these materials, he was fully satisfied that the petitioner was engaged and was indulging in activities which were prejudicial to the security of the State or the maintenance of public order, and that his detention was essential.
On being thus satisfied, the District Magistrate proceeds to state that he bona fide passed the order of detention on his own satisfaction, judgment and reasoning.
The counter affidavit then proceeds to state about the order of confirmation passed by the State Government and other matters resulting finally in the order passed by the Government on July 12, 1971.
It may be pointed out that in paragraph 6 of the counter affidavit it has been mentioned that the Advisory Board submitted its report on May 11, 1971 "after hearing the petitioner.
" This statement is obviously wrong because the petitioner never asked for being heard in person.
The Advisory Board also does not say that the petitioner was heard in person.
The counsel appearing for the State has expressed his regret regarding this mistaken averment made in the counter affidavit.
But that does not in any manner advance the case of the petitioner, as we will presently show.
We have already referred to the fact that the petitioner has merely denied his being associated with the incidents.
referred to in the grounds of detention.
We are satisfied from the averments made by the District Magistrate in the counter affidavit, which have not been further controverted by the petitioner by filing any rejoinder that the order of detention has been validly and properly passed.
Mr. V. Mayakrishnan, Amicus Curiae, appearing on behalf of the petitioner has urged that every one of the grounds has referred to the activities of the petitioner having resulted in disturbance of 522 public order.
But the order of detention refers to the fact that the District Magistrate was of the view that the petitioner should be detained with a view to preventing him from acting in any manner prejudicial to the security of the State or the maintenance of public order.
No ground showing as to how any activity of the petitioner is prejudicial to the security of the State justifying the order Of detention has been furnished to the petitioner.
Therefore, according to the learned counsel, the order of detention is illegal inasmuch as the petitioner has not been informed of any grounds as to how his activities are prejudicial to the security of the State.
Inasmuch as both the matters have been mentioned in the order of detention, it must be that the detaining authority has taken into account extrenuous and irrelevant matters in passing the order of detention.
In particular, according to the learned counsel, it is only the matters referred to in sub cl.
(1) of cl.
(a) of section 3 (2) of the Act that will relate to the activities adversely affecting the security of the State.
None of those matters have been mentioned in the grounds furnished to the petitioner.
Therefore, it is not clear whether the detaining authority passed the order to prevent the petitioner from acting in any manner prejudicial to the Security of the State or for maintenance of public order.
For all these, reasons, the counsel urged, the order of detention is illegal.
Mr. section P. Mitra, learned counsel appearing for the State drew our attention to the provisions contained in section 3(2) of the Act and pointed out that the various acts mentioned in the grounds of detention come within the expressions "acting in any manner prejudicial to the security of the State or the maintenance of public order." In particular he relied upon cl.
(d) of section 2 and pointed out that the petitioner has committed an offence under the , (Act No. 6 of 1908) and, therefore, his detention was legal.
We are not inclined to accept the contention of the learned counsel for the petitioner.
As already mentioned, under section 3(1) of the Act, what is required is the satisfaction of the State Government or the relevant District Magistrate, as the case may be, of the necessity to detain a person with a view to prevent him from acting in a manner prejudicial to the security of the State or the maintenance of public order.
As defined by sub section (2) of section 3, the expression "acting in any manner prejudicial to the security of the State or the maintenance of public order means : lm15 "(a)using or instigating any person by words, either spoken or written, or by signs or by visible representations or otherwise, to use, any lethal weapon (i) to promote or propagate any cause or ideology the promotion or propagation of which affects 523 or is likely to affect, adversely the security of the State or the maintenance of public order.
or (ii)to overthrow or to overawe the Government established by law in India.
Explanation In this clause, "lethal weapon" includes fire arms, explosive or corresive substances.
swords, spears, daggers, bows and arrows; or (b)committing mischief, within the meaning of section 425 of the Indian Penal Code, by fire or any explosive substance on any property of Government or any local authority or any corporation owned or controlled by Government or any University or other educational institution or on any public building, where the commission of such mischief disturbs, or is likely to disturb, public order; or (c)causing insult to the Indian National Flag or to any other object of public veneration, whether by mutilating, damaging, burning, defiling, destroying or otherwise, or instigating any person to do so.
Explanation In this clause, "object of public veneration" includes any portrait or statute of an eminent Indian, installed in a public place as a mark of respect to him or to his memory; or (d)committing, or instigating any person to commit, any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the or the , where the commission of such offence disturbs, or is likely to disturb, public order; or (e)in the case of a person referred to in clause (a) to (f) of section 110 of the Code of Criminal Procedure, 1898, committing any offence punishable with imprisonment where the commission of such offence disturbs or is likely to disturb, public order.
It will be seen that the Act itself furnishes a dictionary meaning.
for the two expressions and a perusal of cls.
(a) to (e) clearly shows that any of the matters referred to therein will be both " prejudicial to the security of the State or the maintenance of public order".
We are not inclined to accept the contention on behalf of the petitioner that it is only sub cl.
(1) of cl.
(a) of section 3(2) which 524 deals with the matters, which adversely affect the security of the ,State.
In fact that very sub clause refers to the 'matters mentioned therein as affecting the security of the State or the maintenance of public order.
Therefore, in this case the grounds of detention .cannot be held to be vague nor can the order of detention be held to be invalid on the ground that the petitioner must have been detained only to prevent him from acting in any manner prejudicial to the maintenance of public order and not to the security of the State.
In particular, under cl.
(d) of section 2, a person will be considered to be acting in a manner prejudicial to the security of the State or the maintenance of public order, if he commits any offence under the .
The various incidents mentioned in the grounds of detention may also come under cl.
(b) of sub section (2) of section 3 Section 3 of the , is as follows : "Sec. 3 : Any person who unlawfully and mali ciously causes by any explosive substance an explosion of a nature likely to endanger life or to cause serious injury to property shall, whether any injury to person or property has been actually caused or not, be punished with transportation for life or any shorter term, to which fine may be added, or with imprisonment for a term which may extend to ten years, to which fine may be added." ' The various grounds mentioned in the order of detention clearly bring the activities of the petitioner under section 3 quoted above.
The date and the place as well as the time when the incidents occurred, and also the train numbers which were affected, as well as the association of the petitioner with those incidents, have been fully given in the grounds of detention.
No doubt the names of the persons, who are stated to be his associates have not been given.
For all the above reasons, we are satisfied that the order of detention is valid.
In the result, rule nisi is discharged and this writ petition dismissed.
G.C. Petition dismissed.
[/INST]Section 15(4) of the Forward Contracts (Regulation) Act, 1952 is conceived in the larger interest of the public to protect them against the malpractices indulged in by members of recognised associations in respect of transactions in which their duties as agents come into conflict with their personal interest.
Parliament had made a writing, evidencing or confirming the consent or authority of a non member, as a condition of the contract if the member has entered into a contract on his own account.
So long as there was no such writing there was no enforceable contract.
Under the Act, there is not only an express prohibition but also punishment for contravention of that prohibition.
The assessee, a registered firm, was a member of the Saurashtra Oil and Oilseeds Association, and was carrying on the business of commission agency and general merchants.
It was also doing forward business.
During the assessment year 1958 59 it incurred a loss in certain transactions.
Those transactions were in contravention of the provisions of section 15(4) of the Forward Contracts (Regulation) Act.
The assessee claimed that the loss was allowable under section 10(1) of the Income tax Act, 1922, as a deduction against its other business income even if the losses were incurred in illegal transactions.
The Income tax Officer rejected the contention of the assessee, and also held that the losses incurred in illegal business could not be deducted from speculative profits under section 24 of the Income tax Act.
The Appellate Assistant Commissioner confirmed the order.
The Tribunal held that the assessee could not set off the loss against the other income under section 10(1) of the Income tax Act but was entitled to do so under section 24.
On the questions referred to the High Court namely : (1) Whether the loss was in respect of illegal contracts, (2) Whether the loss was a result of speculative transactions and therefore could be set off under section 24 of the Income tax Act, and (3) whether even if the loss was as a result of illegal transactions the assessee was entitled to set off the loss under section 10(1) of the Income tax Act, the High Court did not answer the first question but held that the losses could be set off both under section 10 and section 24 of the Income tax Act.
In appeal to this Court, HELD:(1) It is well settled that contracts which are prohibited by statute, the prohibition being either express or implied, would be illegal and unenforceable if they are entered into in contravention of the statute.
Therefore, the contracts in the present case, were illegal contracts and the loss was in respect of such illegal contracts.
[955 C D] Sunder Lal vs Bharat Handicrafts ; , followed.
951 (2)Under Explanation 2 of section 24 a speculative transaction means a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by actual delivery etc.; but the contract has to be an enforceable contract and not an unenforceable one by reason of any taint or illegality.
In the present case, the contracts were illegal and unenforceable on account of the contravention of section 15(4) of the Forward Contracts (Regulation) Act.
The High Court was therefore in error in considering that set off could be allowed under section 24(1) of the Income tax Act.
[959 D F] (3)While section 10(1) of the Income tax Act imposes a charge on profits or gains of a business it does not provide how those profits are to be computed.
Section 10(2) enumerates various items which are admissible as deductions but they are not exhaustive.
The profits and gains which are liable to tax under section 10(1) are what are understood to be such under ordinary commercial practice.
The loss for which the deduction is claimed must be one that springs directly from the carrying on of the business and is incidental to it, that is, the profit was earned and the loss was sustained in the same business.
If this is established the deduction must be allowed provided that there is no provision against it.
If the business is illegal, neither the profits earned nor the losses incurred would be enforceable in law but that does not take the profits out of the taxing statute.
Simi larly, the taint of illegality of the business cannot detract from the loss being taken into account for computation of the amount which can BE subjected to tax as profits.
Cases which deal with payment of a penalty for infraction of law or the execution of some illegal activity stand on a different footing, because, an expenditure is not deductible unless it is a commercial loss in trade and such a penalty cannot be described as such.
[956 G H. 957 A B, D E, G H; 959 H; 960 A B] [Since in the present case no finding was given by the High Court that the two businesses in which profits were made and losses were sustained were the same, the matter was remanded to the High Court for decision on this point.] Raj Woollen Industries vs C.I.T., Simla, , Chandrika Prasad Ram Swarup vs C.I.T., U.P. & C.P., 7 I.T.R. 269, Badridas Daga vs Commissioner of Income tax, 34 I.T.R. 10, Haji Aziz & Abdul Shakhor Bros vs C.I.T., Bombay City, and Allen vs Fraquharson Bros. , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 2613 of 1980.
Appeal by Special leave from the Judgment and Order dated the 18th April, 1980 of the Delhi High Court in Regular Second Appeal No. 33 of 1977.
Petitioner in Person.
Anand Prakash, C.S. Vaidyanathan, Probir Chowdhry Ms. Laxmi Anand and Samir Prakash for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against a judgment of the High Court of Delhi dismissing the appellant 's second appeal.
The appellant was appointed in 1968 to the post of Research Officer of the Institute of Constitutional and Parliamentary Studies, New Delhi, as a society registered under the , and was later designated as Assistant Director.
Subsequently, he was given additional charge of the Library of the Institute.
In March, 1974 the appellant submitted a bill of Rs. 350 to the Institute claiming reimbursement of medical expenses incurred by him in the delivery of a child to his wife during the previous month.
The Institute, however, framed a charge on November 5, 1974 against the petitioner, alleging that he was attempting to draw the sum by tendering a false bill.
A member of the Executive Council of the Institute was appointed to enquire into the charge and the appellant participated in the enquiry proceedings.
During the pendency of the proceedings the appellant appealed to the Executive Council of the Institute to change the Enquiry officer but, it is alleged by the appellant, while the appeal was pending consideration 155 the appellant received a Memorandum dated July 17/18, 1975 from the Executive Chairman of the Institute placing the appellant under suspension.
The Enquiry officer completed his report on August 9, 1975 holding that the charge of presenting a false bill was proved against the appellant.
On October 15/16, 1975 a second charge was framed against the appellant alleging that he was guilty of disobeying an officer order requiring him to hand over charge of the Library.
The appellant was also served with a notice of the same date, along with a copy of the enquiry report, requiring him to show cause why he should not be dismissed from service.
The appellant then filed a suit for declaration and injunction in the Court of the learned Subordinate Judge, Delhi on November 15, 1975 and obtained an ex parte order restraining the Institute and its officers from dismissing him.
When the matter came on for final disposal on August 24, 1976 the learned Subordinate Judge dismissed the suit without trial on the preliminary point that it was not maintainable.
He expressed the view that the appellant 's remedy lay in damages and not in a suit for declaration.
The appellant appealed, and during the pendency of the appeal the learned Senior Subordinate Judge passed an order dated August 28, 1976 declining to grant an ex parte stay order.
On September 3, 1976 the Institute filed a reply stating that the stay application had become infructuous as the appellant had been dismissed from service.
The appeal filed by the appellant was dismissed by the learned Senior Subordinate Judge on January 22, 1977, who endorsed the view of the trial court that the remedy of the appellant lay in damages instead of by a suit for declaration.
The appellant filed a second appeal in the High Court of Delhi.
During the pendency of the appeal he moved an application for amendment of the plaint.
On April 18, 1980 the High Court rejected the amendment application and also dismissed the second appeal.
And now this appeal.
The appellant attempted to place his case before us on its merits, but strong objection was taken by the respondents to the maintainability of the appeal on the ground that the order dismissing the appellant had not been challenged by him, that the order had become final and that the continued existence of the order constituted an impediment to the consideration of the reliefs claimed in the suit.
The appellant strenuously urged that the appeal continues to survive, and he attempted to establish that among the reliefs claimed in his amendment application filed in the High Court he had included a relief for declaring the order of dismissal invalid and, he said, the amendment had been wrongly refused.
Shortly before 156 concluding his submissions in this Court, he filed an application in this appeal praying for amendment of the plaint by the inclusion of such relief.
We have examined the record of the case and we find that at no stage upto the dismissal of his second appeal did the appellant attempt to include a relief in his plaint against the order of dismissal.
On the contrary, the reliefs sought to be included through the amendment application filed in the High Court proceeded on the assumption that the appellant was still continuing in service, for we find that one of the reliefs specifically mentioned in the amendment application was: "(c) "A decree for perpetual injuction he granted to the plaintiff against the defendants, restraining the defendants from dismissing the plaintiff from the post of Assistant Director and Incharge of the Library of the Institute and taking any action on the basis of the enquiry report or show cause notice and holding any second enquiry on the basis of the second charge sheet or taking any action whatsoever in these matters." Plainly, once an order of dismissal was passed against him, a different cause of action arose and it was not possible for the appellant to maintain the proceeding on the original cause of action.
The original reliefs claimed in the suit consisted of a decree of declaration that the proceedings taken against the appellant upto the framing of the second charge on October 15/16, 1975 were invalid, and a decree for perpetual injunction restraining the respondents from dismissing the appellant.
The appellant contended that the order of dismissal had not been served on him and, therefore, no occasion had arisen for challenging the order.
It was alleged that an unsigned copy of an order of dismissal had been received by him and nothing more.
We cannot accept the contention, because we find ample evidence on the record indicating that the appellant treated the order served on him as an effective order and that otherwise also he was aware that he had been dismissed.
Indeed, he took proceedings in court charging the respondents with contempt of court for passing an order of dismissal while his suit was still pending.
As regards the application now filed before us praying for leave to amend the plaint, we are constrained to reject it inasmuch 157 as it is for the first time throughout this protracted proceeding commencing with the institution of the suit in 1975 that the appellant is now seeking to include the relief although he had come to know several years ago that he had been dismissed.
No circumstance has been shown explaining why the appellant should be permitted at this late stage to amend the plaint.
It has also not been established by the appellant that if a suit is filed now against the order of dismissal it would be within the period of limitation.
Upon the aforesaid considerations, we are of opinion that the present appeal is liable to be dismissed as not maintainable.
We find it unnecessary to enter into the question whether the charge framed against the appellant, on the basis of which he has been dismissed, stands proved.
We express no opinion in the matter.
While concluding, we may record that the appellant claims arrears of pay from the Institute.
We believe it would be just and proper that the Institute should examine the claim of the appellant, and if it finds that any amount is due to the appellant it should make payment thereof with all reasonable expedition.
It is hoped that in this regard the Institute will not seek the advantage of any technical objection, including the period of limitation.
In the result, the appeal is dismissed as not maintainable.
There is no order as to costs.
H.S.K. Appeal dismissed.
[/INST]With a view to encourage national integration, a few States including respondent states agreed upon an arrangement by which a certain percentage of the seats in medical colleges was reserved for candidates from other States on a reciprocal basis.
In the year 1982 83 the respondent States made some nominations under the above arrangement.
The validity of these nominations was challenged in these writ petitions and civil appeals on the ground, inter alia, that these nominations had been made by the State Governments in their absolute and arbitrary discretion, without reference to any objective criterion, or any controlling norms or guidelines.
Partly allowing the writ petitions and the appeals, ^ HELD: The principle adopted by the State Governments of nominating candidates in their absolute and unfettered choice to seats in Medical Colleges outside the State is invalid.
But the nominations already made will not be affected.
[991 F G; E] The exercise of all administrative power vested in public authority must be structured within a system of controls informed by both relevance and reason relevance in relation to the object which it seeks to serve, and reason in regard to the manner in which attempts to do so.
article 14 of the Constitution is violated by powers and procedures which in themselves result in unfairness and asbitrariness.
There is no doubt that in the realm of administrative power the element of discretion may properly, find place, where the statute or the nature of the power intends so.
But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority.
One is power controlled by law countenanced by the Constitution, the other falls outside the Constitution altogether.
Proceeding from there, it is evident that if the State 986 Government desires to advance the objective of national integration it must adopt procedures which are reasonable and are related to the objective.
In this Age of Reason, all law must measure upto that standard, and necessarily so also must all executive acts.
[989 E F; 989 G; 990 A D] In the present cases, viewed in this context and tested on the touchstone of our constitutional values, the claim of the State Government that the nature of the objective and the means adopted to serve it entitle it legitimately to vest in itself an absolute power in choosing candidates for nomination is to deny a fundamental principle of our constitutional life and cannot be allowed to prevail.
[990 D E] Chitra Ghosh and Anr.
vs Union of India and Ors.
, ; , 420; Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; and Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., , referred to.
The Medical Council of India is directed to formulate a proper constitutional basis for determining the selection of candidates for nomination to seats in Medical Colleges outside the State in the light of the observations contained in this judgment.
Until a policy is so formulated and concrete criteria are embodied in the procedure selected, the nominations shall be made by selecting candidates strictly on the basis of merit, the candidates nominated being those, in order of merit, immediately below the candidates selected for admission to the Medical Colleges of the home State.
[991 G H; 992 A]
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<s>[INST] Summarize the judgementNo. 268 of 1989 etc.
(Under Article 32 of the Constitution of India).
K. Parasaran, Attorney General, R.K. Garg, Ms. Indira Jaising, L.N. Sinha, Dr. V. Gauri Shankar, Vepa P. Sarathi, Shanti Bhushan, Rakesh Luthra, C.L. Sahu, Indeevar Goodwill, N.S. Malik, N.S. Pundir, R.C, Kaushik, D.K. Garg, Rajeev Dhawan, Miss Kamini 620 Jaiswal, Anip Sachthey, R.C. Pathak, H.D. Pathak, Harish Uppal, S.K. Gambhir, Gopal Subramanium, D.S. Shastri, Arun Sharma, Miss A. Subhashini, C.V.S. Rao, Satish K. Agnihotri, Ashok Kumar Singh, R.K. Jain, Kailash Vasdev and Prashant Bhushan for the appearing parties.
The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ. 1.
Is the (hereinafter referred to as 'the Act ') is constitutionally valid? That is the question.
The Act was passed as a sequel to a grim tragedy.
On the night of 2nd December, 1984 occurred the most tragic industrial disaster in recorded human history in the city of Bhopal in the State of Madhya Pradesh in India.
On that night there was massive escape of lethal gas from the MIC storage tank at Bhopal Plant of the Union Carbide (I) Ltd. (hereinafter referred to as 'UCIL ') resulting in large scale death and untold disaster.
A chemical plant owned and oper ated by UCIL was situated in the northern sector of the city of Bhopal.
There were numerous hutments adjacent to it on its southern side, which were occupied by impoverished squatters.
UCIL manufactured the pesticides, Sevin and Tamik, at the Bhopal plant, at the request of, it is stated by Judge John F. Keenan of the United States District Court in his judgment, and indubitably with the approval of the Govt.
of India.
UCIL was incorporated in 1984 under the appropriate Indian law: 50.99% of its shareholdings were owned by the Union Carbide Corporation (UCC), a New York Corporation, L.I.C. and the Unit Trust of India own 22% of the shares of U.C.I.L., a subsidiary of U.C.C. 3.
Methyl Isocyanate (MIC), a highly toxic gas, is an ingredient in the production of both Sevin and Temik.
On the night of the tragedy MIC leaked from the plant in substan tial quantities.
the exact reasons for and circumstances of such leakage have not yet been ascertained or clearly estab lished.
The results of the disaster were horrendous.
Though no one is yet certain as to how many actually died as the immediate and direct result of the leakage, estimates at tribute it to about 3,000.
Some suffered injuries the ef fects of which are described as Carcinogenic and ontogenic by Ms. Indira Jaisingh, learned counsel; some suffered injuries serious and permanent and some mild and temporary.
Livestock was killed, damaged and infected.
Businesses were interrupted.
Environment was polluted and the ecology af fected, flora and fauna disturbed.
621 4.
On 7th December, 1984, Chairman of UCC Mr. Warren Anderson came to Bhopal and was arrested.
He was later released on bail.
Between December 1984 and January 1985 suits were filed by several American lawyers in the courts in America on behalf of several victims.
It has been stated that within a week after the disaster, many American law yers, described by some as 'ambulance chasers ', whose fees were stated to be based on a percentage of the contingency of obtaining damages or not, flew over to Bhopal and ob tained Powers of Attorney to bring actions against UCC and UCIL.
Some suits were also filed before the District Court of Bhopal by individual claimants against UCC (the American Company) and the UCIL.
On or about 6th February, 1985, all the suits in various U.S. Distt.
Courts were consolidated by the Judicial Panel on Multi District Litigation and assigned to U.S. Distt.
Court, Southern Distt.
of New York.
Judge Keenan was at all material times the Presiding Judge there.
On 29th March, 1985, the Act in question was passed.
The Act was passed to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
On 8th April, 1985 by virtue of the Act the Union of India filed a complaint before the U.S. Distt.
Court, Southern Distt.
of New York.
On 16th April, 1985 at the first pre trial conference in the consolidated action transferred and assigned to the U.S. Distt.
Court, Southern Distt.
, New York, Judge Keenan gave the following directions: (i) that a three member Executive Committee be formed to frame and develop issues in the case and prepare expeditiously for trial or settle ment negotiations.
The Committee was to com prise of one lawyer selected by the firm retained by the Union of India and two other lawyers chosen by lawyers retained by the individual plaintiffs.
(ii) that as a matter of fundamental human decency, temporary relief was necessary for the victims and should be furnished in a systematic and coordinated fashion without unnecessary delay regardless of the posture of the litigation then pending.
On 24th September, 1985 in exercise of powers con ferred by section 9 of the Act, the Govt.
of India framed the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985 (hereinafter called the Scheme).
622 8.
On 12th May, 1986 an order was passed by Judge Keenan allowing the application of UCC on forum non convenience as indicated hereinafter.
On 21st May, 1986 there was a motion for fairness hearing on behalf of the private plaintiffs.
On 26th June, 1986 individual plaintiffs filed appeal before the US Court of Appeal for the second circuit challenging the order of Judge Keenan.
By an order dated 28th May, 1986 Judge Keenan declined the motion for a fairness hearing.
The request for fairness hearing was rejected at the instance of Union of India in view of the meagerness of the amount of proposed settlement.
On 10th July, 1986 UCC filed an appeal before the US Court of Appeal for the Second Circuit.
It challenged Union of India being entitled to American mode of discovery, but did not challenge the other two conditions imposed by Judge Keenan, it is stated.
On 28th July, 1986 the Union of India filed cross appeal before the US Court of Appeal praying that none of the conditions imposed by Judge Keenan should be disturbed.
In this connection it would be pertinent to set out the conditions incorporated in the order of Judge Keenan, dated 12th May, 1986 whereby he had dismissed the case before him on the ground of forum non convenience, as mentioned before.
The conditions were fol lowing: 1.
That UCC shall consent to the jurisdiction of the courts of India and shall continue to waive defenses based on the statute of limita tion, 2.
That UCC shall agree to satisfy any judg ment rendered by an Indian court against it and if applicable, upheld on appeal, provided the judgment and affirmance "comport with minimal requirements of due process"; and 3.
That UCC shah be subject to discovery under the Federal Rules of Civil Procedure of the US after appropriate demand by the plaintiffs.
On 5th September, 1986 the Union of India filed a suit for damages in the Distt.
Court of Bhopal, being regu lar suit No. H 13/86.
It is this suit, inter alia, and the orders passed therein which were settled by the orders of this Court dated 14th & 15th February, 1989, which will be referred to later.
On 17th November, 1986 upon the applica tion of the Union of India, the Distt.
Court, Bhopal, grant ed a temporary injunction restraining the UCC from selling assets, paying dividends or buying back debts.
On 27th November, 1986 the UCC gave an undertaking to preserve and maintain unencumbered assets to the extent of 3 billion US dollars.
623 10.
On 30th November, 1986 the Distt.
Court, Bhopal lifted the injunction against the Carbide selling assets on the strength of the written undertaking by UCC to maintain unencumbered assets of 3 billion US dollars.
On 16th Decem ber, 1986 UCC filed a written statement contending that they were not liable on the ground that they had nothing to do with the Indian Company; and that they were a different legal entity; and that they never exercised any control and that they were not liable in the suit.
Thereafter, on 14th January, 1987 the Court of Appeal for the Second Circuit affirmed the decision of Judge Keenan but deleted the condi tion regarding the discovery under the American procedure granted in favour of the Union of India.
It also suo motu set aside the condition that on the judgment of the Indian court complying with due process and the decree issued should be satisfied by UCC.
1t ruled that such a condition cannot be imposed as the situation was covered by the provi sions of the Recognition of Foreign Country Money Judgments Act.
On 2nd April, 1987, the court made a written propos al to all parties for considering reconciliatory interim relief to the gas victims.
In September, 1987, UCC and the Govt.
of India sought time from the Court of Distt.
Judge, Bhopal, to explore avenues for settlement.
It has been asserted by the learned Attorney General that the possibili ty of settlement was there long before the full and final settlement was effected.
He sought to draw our attention to the assertion that the persons concerned were aware that efforts were being made from time to time for settlement.
However, in November '87 both the Indian Govt.
and the Union Carbide announced that settlement talks had failed and Judge Deo extended the time.
The Distt.
Judge of Bhopal on 17th December, 1987 ordered interim relief amounting to Rs.350 crores.
Being aggrieved thereby the UCC filed a Civil Revision which was registered as Civil Revision Petition No. 26/88 and the same was heard.
On or about 4th February, 1988, the Chief Judi cial Magistrate of Bhopal ordered notice for warrant on Union Carbide, Hong Kong for the criminal case filed by CBI against Union Carbide.
The charge sheet there was under sections 304, 324, 326, 429 of the Indian Penal Code read with section 35 IPC and the charge was against S/Shri Warren Anderson, Keshub Mahindra.
Vijay Gokhale, J. Mukund, Dr. R.B. Roy Chowdhay.
S.P. Chowdhary, K.V. Shetty, S.1.
Qureshi and Union Carbide of U.S.A., Union Carbide of Hong Kong and Union Carbide having Calcutta address.
It charged the Union Carbide by saying that MIC gas was stored and it was further stated that MIC had to be stored and handled 624 in stainless steel which was not done.
The charge sheet, inter alia, stated that a Scientific Team headed by Dr. Varadarajan had concluded that the factors which had led to the toxic gas leakage causing its heavy toll existed in the unique properties of very high reactivity, volatility and inhalation toxicity of MIC.
It was further stated in the charge sheet that the needless storage of large quantities of the material in very large size containers for inordi nately long periods as well as insufficient caution in design, in choice of materials of construction and in provi sion of measuring and alarm instruments, together with the inadequate controls on systems of storage and on quality of stored materials as well as lack of necessary facilities for quick effective disposal of material exhibiting instability, led to the accident.
It also charged that MIC was stored in a negligent manner and the local administration was not informed, inter alia, of the dangerous effect of the expo sure of MIC or the gases produced by its reaction and the medical steps to be taken immediately.
It was further stated that apart from the design defects the UCC did not take any adequate remedial action to prevent back flow of solution from VGS into RVVH and PVH lines.
There were various other acts of criminal negligence alleged.
The High Court passed an order staying the operation of the order dated 17.12.87 directing the defendant applicant to deposit Rs.3,500 mil lions within two months from the date of the said order.
On 4th April, 1988 the judgment and order were passed by the High Court modifying the order of the Distt.
Judge, and granting interim relief of Rs.250 crores.
The High Court held that under the substantive law of torts, the Court has jurisdiction to grant interim relief under Section 9 of the CPC.
On 30th June, 1988 Judge Deo passed an order restrain ing the Union Carbide from settling with any individual gas leak plaintiffs.
On 6th September, 1988 special leave was granted by this Court in the petition filed by UCC against the grant of interim relief and Union of India was also granted special leave in the petition challenging the reduc tion of quantum of compensation from Rs.350 crores to Rs.250 crores.
Thereafter, these matters were heard in November December '88 by the bench presided over by the learned Chief Justice Of India and hearing, continued also in January Feb ruary '89 and ultimately on 14 15th February, 1989 the order culminating in the settlement was passed.
In judging the constitutional validity of the Act, the subsequent events, namely, how the Act has worked itself out, have to be looked into.
It is, therefore, necessary to refer to the two orders of this Court.
The proof of the cake is in its eating, it is said, and it is perhaps not possible to ignore the terms of the settlement reached on 14th and 625 15th February, 1989 in considering the effect of the lan guage used in the Act.
Is that valid ' or proper or has the Act been worked in any improper way? These questions do arise.
On 14th February, 1989 an order was passed in C.A. Nos.
3187 88/88 with S.L.P. (C) No. 13080/88.
The parties thereto were UCC and the Union of India as well as Jana Swasthya Kendra, Bhopal, Zehraeli Gas Kand Sangharsh Morcha, Bhopal.
That order recited that having considered all the facts and the circumstances of the case placed before the Court, the material relating to the proceedings in the Courts in the United States of America, the offers and counter offers made between the parties at different stages during the various proceedings, as well as the complex issues of law and fact raised and the submissions made thereon, and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster, the 'Court found that the case was preeminently fit for an overall settlement between the parties covering all litigations, claims, rights and liabil ities relating to and arising out of the disaster and it was found just, equitable and reasonable to pass, inter alia, the following orders: .lm "(1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 million (Four hundred and seventy millions) to the Union of India in full settlement of all claims, fights and liabilities related to and arising out of Bhopal Gas disaster.
(2) The aforesaid sum shall be paid by the Union Carbide Corporation to the Union of India on or before 31st March, 1989.
(3) To enable the effectuation of the settlement, all civil proceedings related to and arising out of the Bhopal Gas disaster shall hereby stand transferred to this Court and shall stand concluded in terms of the settlement, and all criminal proceedings related to and arising out of the disaster shall stand quashed wherever these may be pending 15.
A written memorandum was filed thereafter and the Court on 15th February, 1989 passed an order after giving due consideration thereto.
The terms of settlement were as follows: 626 "1.
The parties acknowledge that the order dated February 14, 1989 disposes of in its entirety all proceedings in Suit No. 1113 of 1986.
This settlement shall finally dispose of all past, present and future claims, causes of action and civil and criminal proceedings (of any nature whatsoever wherever pending) by all Indian citizens and all public and private entities with respect to all past, present or future deaths, personal injuries, health effects, compensation, losses, damages and civil and criminal complaints of any nature whatsoever against UCC, Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and affiliates as well as each of their present and former directors, officers, employees, agents, representatives, attorneys, advocates and solicitors arising out of, relating to or connected with the Bhopal gas leak disaster, including past, present and future claims, causes of action and proceedings against each other.
All such claims and causes of action whether within or outside India of Indian citizens, public or private entities are hereby extinguished, including without limitation each of the claims filed or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme 1985, and all such civil proceedings in India are hereby transferred to this Court and are dismissed without preju dice, and all such criminal proceedings in cluding contempt proceedings stand quashed and accused deemed to be acquitted.
Upon full payment in accordance with the Court 's directions the undertaking given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand discharged.
It appears from the statement of objects & reasons of the Act that the Parliament recognized that the gas leak disaster involving the release, on 2nd and 3rd December, 1984 of highly noxious and abnormally dangerous gas from a plant of UCIL, a subsidiary of UCC, was of an unprecedented nature, which resulted in loss of life and damage to proper ty on an extensive scale, as mentioned before.
It was stated that the victims who had managed to survive were still suffering from the adverse effects and the further complica tions which might arise in their cases, of course, could not be fully visualised.
It was asserted by 627 Ms. Indira Jaising that in case of some of the victims the injuries were carcinogenic and ontogenic and these might lead to further genetic complications and damages.
The Central Govt.
and the Govt.
of Madhya Pradesh and various agencies had to incur expenditure on a large scale for containing the disaster and mitigating or otherwise coping with the effects thereto.
Accordingly, the Bhopal Gas Leak Disaster (Processing of Claims) Ordinance, 1985 was promul gated, which provided for the appointment of a Commissioner for the welfare of the victims of the disaster and for the formulation of the Scheme to provide for various matters necessary for processing of the claims and for the utilisa tion by way of disbursal or otherwise of amounts received in satisfaction of the claims.
Thereafter, the Act was passed which received the assent of the President on 29th March, 1985.
Section 2(b) of the Act defines 'claim '.
It says that "claims" means (i) a claim, arising out of, or connected with, the disaster, for compensation or damages for any loss of life or personal injury which has been, or is likely to be suffered; (ii) a claim, arising out of, or connected with, the disaster, for any damage to property which has been, or is likely to be, sustained; (iii) a claim for expenses incurred or required to be incurred for containing the disaster or mitigating or otherwise coping with the effects of the disaster; (iv) any other claim (including any claim by way of loss of business or employment) arising out of, or connected with, the disas ter.
A "claimant" is defined as a person entitled to make a claim.
It has been provided in the Explanation to Section 2 that for the purpose of clauses (b) and (c), where the death of a person has taken place as a result of the disaster, the claim for compensation or damages for the death of such person shall be for the benefit of the spouse, children (including a child in the womb) and other heirs of the deceased and they shall be deemed to be the claimants in respect thereof.
Section 3 is headed "Power of Central Govt.
to represent claimants".
It provides as follows: "3(1) Subject to the other provisions of this Act, the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is enti tled to make, a claim for all purposes con nected with such claim in the same manner and to the same effect as such persons.
(2) In particular and without prejudice to the generality of 628 the provisions of sub section (1), the pur poses referred to therein include (a) Institution of any suit or other proceed ing in or before any court or other authority (whether within or outside India) or withdraw al of any such suit or other proceeding, and (b) entering into a compromise.
(3) The provisions of sub section (1) shall apply also in relation to claims in respect of which suits or other proceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act: Provided that in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, the Central Govt.
shall represent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Section 4 of the Act is headed as "Claimant 's right to be represented by a legal practitioner".
It provides as follows: "Notwithstanding anything contained in section 3, in representing, and acting in place of, any person in relation to any claim, the Central Government shall have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
Section 5 deals with the powers of the Central Govt.
and enjoins that for the purpose of discharging its func tions under this Act, the Central Govt.
shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908.
Section 6 provides for the ap pointment of a Commissioner and other officers and employ ees.
Section 7 deals with powers to delegate.
Section 8 deals with limitation, while section 9 deals with the power to frame Scheme.
The Central Govt. was enjoined to frame a scheme which was to take into account, inter alia, the processing of the claims for securing their enforcement, creation of a fund for meeting expenses in connection 629 with the administration of the Scheme and of the provisions of this Act and the amounts which the Central Govt.
might, after due appropriation made by the Parliament by law in that behalf, credit to the fund referred to in clauses above and any other amounts which might be credited to such fund.
Such Scheme was enjoined, as soon as after it had been framed, to be laid before each House of Parliament.
Section 10 deals with removal of doubts.
Section 11 deals with the overriding effect and provides that the provisions of the Act and of any Scheme framed thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
A Scheme has been framed and was published on 24th September, 1985.
Clause 3 of the said Scheme provides that the Deputy Commissioners appointed under Section 6 of the Act shall be the authorities for registration of Claims (including the receipt, scrutiny and proper categorisation of such claims under paragraph 5 of the Scheme) arising within the areas of their respective jurisdiction and they shall be assisted by such other officers as may be appointed by the Central Govt.
under Section 6 of the Act for scrutiny and verification of the claims and other related matters.
The Scheme also provides for the manner of filing claims.
It enjoins that the Dy.
Commissioner shall provide the required forms for filing the applications.
It also provides for categorisation and registration of claims.
Sub clause (2) of Clause 5 enjoins that the claims received for registration shall be placed under different heads.
Sub clause (3) of clause 5 enjoins that on the consideration of claims made under paragraph 4 of the Scheme, if the Dy.
Commissioner is of the opinion that the claims fall in any category different from the category mentioned by the claimant, he may decide the appropriate category after giving an opportunity to the claimant to be heard and also after taking into consideration any facts made available to him in this behalf.
Sub clause (6) of Clause 5 enjoins that if the claimant is not satisfied with the order of the Dy.
Commissioner, he may prefer an appeal against such order to the Commissioner, who shall decide the same.
Clause 9 of the Scheme provides for processing of Claims Account Fund, which the Central Govt.
may, after due appropriation made by Parliament, credit to the said Fund.
It provides that there shall also be a Claims and Relief Fund, which will include the amounts 630 received in satisfaction of the claims and any other amounts made available to the Commissioner as donation or for relief purposes.
Subclause (3) of clause 10 provides that the amount in the said Fund shall be applied by the Commissioner for, disbursal of amounts in settlement of claims, or as relief, or apportionment of part of the Fund for disbursal of amounts in settlement of claims arising in future or for disbursal of amounts to the Govt.
of Madhya Pradesh for the social and economic rehabilitation of the persons affected by the Bhopal gas leak disaster.
Clause 11 of the Scheme deals with the disbursal, apportionment of certain amounts, and sub clause (2) thereof enjoins that the Central Govt. may determine the total amount of compensation to be apportioned for each category of claims and the quantum of compensation payable, in gener al, in relation to each type of injury or loss.
Sub clause (5) thereto provides that in case of a dispute as to disbur sal of the amounts received in satisfaction of claims, an appeal shall lie against the order of the Dy.
Commissioner to the Additional Commissioner, who may decide the matter and make such disbursal as he may, for reasons to be record ed in writing, think fit.
The other clauses are not relevant for our present purposes.
Counsel for different parties in all these matters have canvassed their submissions before us for the gas victims.
Mr. R.K. Garg, Ms. Indira Jaising, and Mr. Kailash Vasudev have made various submissions challenging the valid ity of the Act on various grounds.
They all have submitted that the Act should be read in the way they suggested and as a whole.
Mr. Shanti Bhushan, appearing for interveners on behalf of Bhopal Gas Peedit Mahila Udyog Sangathan and following him Mr. Prashant Bhushan have urged that the Act should be read in the manner canvassed by them and if the same is not so read then the same would be violative of the fundamental rights of the victims, and as such unconstitu tional.
The learned Attorney General assisted by Mr. Gopal Subramanium has on the other hand urged that the Act is valid and constitutional and that the settlement arrived at on 14th/15th February is proper and valid.
In order to appreciate the background Ms. Indira Jaising placed before us the proceedings of the Lok Sabha wherein Mr. Veerendra Patil, the Hon 'ble Minister, stated on March 27, 1985 that the tragedy that had occurred in Bhopal on 2nd and 3rd December, 1984 was unique and unprecedented in character and magnitude not only for our country but for the entire world.
It was stated that one of 631 the options available was to settle the case in Indian courts.
The second one was to file the cases in American courts.
Mr. Patil reiterated that the Govt.
wanted to pro ceed against the parent company and also to appoint a Com mission of Inquiry.
Mr. Garg in support of the proposition that the Act was unconstitutional, submitted that the Act must be exam ined on the touchstone of the fundamental rights on the basis of the test laid down by this court in state of Madras vs V.G, Row, ; , There at page 607 of the report this Court has reiterated that in considering the reasona bleness of the law imposing restrictions on the fundamental rights, both the substantive and the procedural aspects of the impugned restrictive law should be examined from the point of view of reasonableness.
And the test of reasonable ness, wherever prescribed, should be applied to each indi vidual Statute impugned, and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying purpose of the restrictions im posed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.
(The emphasis supplied).
Chief Justice Patanjali Sastri reiterated that in evaluating such elusive factors and forming their own conception of what is reasona ble, in the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision would play an important role.
Hence, whether by sections, 3, 4 & 11 the rights of the victims and the citizens to fight for their own causes and to assert their own grievances have been taken away validly and properly, must be judged in the light of the prevailing conditions at the time, the nature of the right of the citizen, the purpose of the restrictions on their rights to sue for enforcement in the courts of law or for punishment for offences against his person or property, the urgency and extent of the evils sought to be remedied by the Act, and the proportion of the impairment of the rights of the citizen with reference to the intended remedy pre scribed.
According to Mr. Garg, the present position called for a comprehensive appreciation of the national and inter national background in which precious rights to life and liberty were enshrined as fundamental rights and remedy for them was also guaranteed under Article 32 of the Constitu tion.
He sought to urge that multinational corporations have assumed powers or potencies to override the political and economic independence of the sovereign nations which have 632 been used to take away in the last four decades, much wealth out of the Third World.
Now these are plundered much more than what was done to the erstwhile colonies by imperialist nations in the last three centuries of foreign rule.
The role of courts in cases of conflict between rights of citi zens and the vast economic powers claimed by multinational corporations to deny moral and legal liabilities for their corporate criminal activities should not be lost sight of.
He, in this background, urged that these considerations assume immense importance to shape human fights jurispru dence under the Constitution, and for the Third World to regulate and control the power and economic interests of multinational corporations and the power of exploitation and domination by developed nations without submitting to due observance of the laws of the developing countries.
It therefore appears that the production of, or carrying on trade in dangerous chemicals by multinational industries on the soil of Third World countries call for strictest en forcement of constitutional guarantees for enjoying human fights in free India, urged Mr. Garg.
In this connection, our attention was drawn to the Charter of Universal Declara tion of Human Rights.
Article 1 of the Universal Declaration of Human Rights, 1948 reiterates that all human beings are born free and equal in dignity and rights.
Article 3 states that everyone has right to life, liberty and security of person.
Article 6 of the Declaration states that everyone has the right to recognition everywhere as a person before the law.
Article 7 states that all are equal before the law and are entitled without any discrimination to equal protec tion of the law.
All are entitled to equal protection against any discrimination in violation of the Declaration of Human Rights and against any incitement to such discrimi nation.
Article 8 states that everyone has the right to an effective remedy by competent National Tribunal for acts violating fundamental rights guaranteed to him by the Con stitution or by the law.
It is, therefore, necessary to bear in mind that Indian citizens have a fight to live which cannot be taken away by the Union of India or the Govt.
of a State, except by a procedure which is just, fair and reason able.
The right to life includes the fight to protection of limb against mutilation and physical injuries, and does not mean merely the fight to breathe but also includes the fight to livelihood.
It was urged that this right is available in all its dimension till the last breath against all injuries to head, heart and mind or the lungs affecting the citizen or his next generation or of genetic disorders.
The enforce ment of the right to life or limb calls for adequate and appropriate reliefs enforceable in courts of law and of equity with sufficient power to offer adequate deterrence in all cases of corporate criminal liability under strict liability, absolute liability, punitive liability and crimi nal prosecution and 633 punishment to the delinquents.
The damages awarded in civil jurisdiction must be commensurate to meet well defined demands of evolved human rights jurisprudence in modern world.
It was, therefore, submitted that punishment in criminal jurisdiction for serious offences is independent of the claims enforced in civil jurisdiction and no immunity against it can be granted as part of settlement in any civil suit.
If any Act authorises or permits doing of the same, the same will be unwarranted by law and as such bad.
The Constitution of India does not permit the same.
Our attention was drawn to Article 21 of the Consti tution and the principles of international law.
Right to equality is guaranteed to every person under article 14 in all matters like the laws of procedure for enforcement of any legal or constitutional right in every jurisdiction, sub stantive law defining the rights expressly or by necessary implications, denial of any of these rights to any class of citizens in either field must have nexus with constitution ally permissible object and can never be arbitrary.
Arbi trariness is, therefore, anti thetical to the right of equality.
In this connection, reliance was placed on the observations of this Court in E.P. Royappa vs State of Tamil Nadu & Anr., ; and Maneka Gandhi vs Union of India, [1978] 2 SCR 621 where it was held that the view that Articles 19 & 21 constitute watertight compartments has been rightly overruled.
Articles dealing with different fundamen tal rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at any point of time.
They. are all parts of an integrated scheme in the Constitution and must be preserved and cannot be destroyed arbitrarily.
Reliance was placed on the observations in R.D. Shetty vs The I.A.A. of India & Ors., ; Hence, the rights of the citizens to fight for remedies and enforce their rights flowing from the breach of obligation in respect of crime cannot be obliterated.
The Act and Sections 3, 4 & 11 of the Act in so far as these purport to do so and have so operated, are violative of Articles 14, 19(1)(g) and 21 of the Constitu tion.
The procedure envisaged by the said Sections deprives the just and legitimate rights of the victims to assert and obtain their just dues.
The rights cannot be so destroyed.
It was contended that under the law the victims had right to ventilate their rights.
It was further contended that Union of India was a joint tort feasor along with UCC and UCIL.
It had negligent ly permitted the establishment of such a factory without proper safeguards exposing the victims and citizens to great danger.
Such a person or authority 634 cannot be entrusted to represent the victims by denying the victims their rights to plead their own cases.
It was sub mitted that the object of the Act was to fully protect people against the disaster of highly obnoxious gas and disaster of unprecedented nature.
Such an object cannot be achieved without enforcement of the criminal liability by criminal prosecution.
Entering into settlement without reference to the victims was, therefore, bad and unconstitu tional, it was urged.
If an Act, it was submitted, permits such a settlement or deprivation of the rights of the vic tims, then the same is bad.
Before we deal with the various other contentions raised in this case, it is necessary to deal with the appli cation for intervention and submission made on behalf of the Coal India in Writ Petition No. 268/89 wherein Mr. L.N. Sinha in his written submission had urged for the intervener that Article 21 of the Constitution neither confers nor creates nor determines the dimensions nor the permissible limits of restrictions which appropriate legislation might impose on the right to life or liberty.
He submitted that provisions for procedure are relevant in judicial or quasi judicial proceedings for enforcement of rights or obliga tions.
With regard to alteration of rights, procedure is governed by the Constitution directly.
He sought to inter vene on behalf of Coal India and wanted these submissions to be taken into consideration.
However, when this contention was sought to be urged before this Court on 25th April, 1989, after hearing all the parties, it appeared that there was no dispute between the parties in the instant writ petitions between the victims and the Government of India that the rights claimed in these cases are referrable to Article 21 of the Constitution.
Therefore, no dispute really arises with regard to the contention of Coal India and we need not consider the submissions urged by Shri Sinha on behalf of the intervener in this case.
It has been so re corded.
By the order dated 3rd March, 1989, Writ Petitions Nos. 268/89 and 164/86 have been directed to be disposed of by this Bench. ' We have heard these two writ petitions along with the other writ petitions and other matters as indicated hereinbefore.
The contentions are common.
These writ peti tions question the validity of the Act and the settlement entered into pursuant to the Act.
Writ Petition No. 164/86 is by one Shri Rakesh Shrouti who is an Indian citizen and claims to be a practising advocate having his residence at Bhopal.
He says that he and his family members were at Bhopal on 2nd/3rd December, 1984 and suffered immensely as a result of the gas leak.
He challenges the validity of the Act on various grounds.
He contends that the Union of India should not have the exclusive right to represent the 635 victims in suits against the Union Carbide and thereby deprive the victims of their right to sue and deny access to justice.
He further challenges the right of the Union of India to represent the victims against Union Carbide because of conflict of interests.
The conduct of the Union of India was also deprecated and it was further stated that such conduct did not inspire confidence.
In the premises, the said petitioner sought a declaration under Article 32 of the Constitution that the Act is void, inoperative and unen forceable as violative of Articles 14, 19 & 21 of the Con stitution Similarly, the second writ petition, namely, writ petition No. 268/89 which is filed by Sh.
Charan Lal Sahu, who is also a practising Advocate on behalf of the victims and claims to have suffered damages as a result of the gas leak.
challenges the Act.
He further challenges the settle ment entered into under the Act.
He says that the said settlement was violative of principles of natural justice and the fundamental right of the said petitioner and other victims.
It is his case that in so far as the Act permits such a course to be adopted, such a course was not permissi ble under the Constitution.
He further asserts that the Union of India was negligent and a joint tort feasor.
In the premises, according to him, the Act is bad, the settlement is bad and these should be set aside.
In order to determine the question whether the Act in question is constitutionally valid or not in the light of Articles 14, 19(l)(g) and 21 of the Constitution, it is necessary to find out what does the Act actually mean and provide for.
The Act in question, as the Preamble to the Act states, was passed in order to confer powers on the Central Government to secure that the claims arising out of, or connected with, the Bhopal gas leak disaster are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto.
There fore, securing the claims arising out of or connected with the Bhopal gas leak disaster is the object and purpose of the Act.
We have noticed the proceedings of the Lok Sabha in connection with the enactment of the Act.
Our attention was also drawn by the learned Attorney General to the proceed ings of the Rajya Sabha wherein the Hon 'ble Minister, Shri Virendra Patil explained that the bill enabled the Govern ment to assume exclusive right to represent and act, whether within or outside India in place of every person who had made or was entitled to make claim in relation to the disas ter and to institute any suit or other proceedings or enter into any compromise as mentioned in the Act.
The whole object of the Bill was to make procedural changes to the existing Indian law which would enable the Central Govern ment to take up the responsibility of fighting litigation on behalf of these victims.
The first point was that it 636 sought to create a locus standi in the Central Government to file suits on behalf of the victims.
The object of the Statute.
it was highlighted, was that because of the dimen sion of the tragedy covering thousands of people, large number of whom being poor, would not be able to go to the courts, it was necessary to create the locus standi in the Central Government to start the litigation for payment of compensation in the courts on their behalf.
The second aspect of the Bill was that by creating this locus standi in the Central Government, the Central Government became compe tent to institute judicial proceedings for payment of com pensation on behalf of the victims.
The next aspect of the Bill was to make a distinction between those on whose behalf suits had already been filed and those on whose behalf proceedings had not yet then been instituted.
One of the Members emphasised that under Article 21 of the Constitu tion, the personal liberty of every citizen was guaranteed and it has been widely interpreted as to what was the mean ing of the expression 'personal liberty '.
It was cmphasised that one could not take away the right of a person, the liberty of a person, to institute proceedings for his own benefit and for his protection.
It is from this point of view that it was necessary, the member debated, to preserve the right of a claimant to have his own lawyers to represent him along with the Central Government in the proceedings under Section 4 of the Act, this made the Bill constitution ally valid.
Before we deal with the question of constitutionali ty, it has to be emphasised that the Act in question deals with the Bhopal gas leak disaster and it deals with the claims meaning thereby claims arising out of or connected with the disaster for compensation of damages for loss of life or any personal injury which has been or is likely to be caused and also claims arising out of or connected with the disaster for any damages to property or claims for expenses incurred or required to be incurred for containing the disaster or making or otherwise coping with the impact of the disaster and other incidental claims.
The Act in question does not purport to deal with the criminal liabili ty, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This posi tion is clear from the provisions and the Preamble to the Act.
Learned Attorney General also says that the Act does not cover criminal liability.
The power that has been given to the Central Government is to represent the 'claims ', meaning thereby the monetary claims.
The monetary claims, as was argued on behalf of the victims, are damages flowing from the gas disaster.
Such damages, Mr. Garg and Ms. Jais ing submitted, are based on strict liability, absolute liability and punitive liability.
The Act does not, either expressly or impliedly, deal with the extent of the damages or 637 liability.
Neither section 3 nor any other section deals with any consequences of criminal liability.
The expression "the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim for all purposes connected with such claim in the same manner and to the same effect as such person", read as it is, means that Central Government is substituted and vested with the exclusive right to act in place of the victims, i.e., eliminating the victims, their heirs and their legal representatives, in respect of all such claims arising out of or connected with the Bhopal gas leak disas ter.
The right, therefore, embraces right to institute proceedings within or outside India along with right to institute any suit or other proceedings or to enter into compromise.
Sub section 1 of section 3 of the Act, there fore, substitutes the Central Government in place of the victims.
The victims, or their heirs and legal representa tives, get their rights substituted in the Central Govern ment along with the concomitant right to institute such proceedings, withdraw such proceedings or suit and also to enter into compromise.
The victims or the heirs or the legal representatives of the victims, are substituted and their rights are vested in the Central Government.
This happens by operation of section 3 which is the legislation in question.
Sub section (3) of section 3 makes it clear that the provi sions of sub section (1) of section 3 shall also apply in relation to claims in respect of which suits or other pro ceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act, but makes a distinction in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, and provides that the Central Government shall repre sent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Therefore, in cases where such suits or proceedings have been instituted before the commencement of the Act in any court or before any authority outside India, the section by its own force will not come into force in substituting the Central Govern ment in place of the victims or the heirs or their legal representatives, but the Central Government has been given the right to act in place of, or along with, such claimant, provided such court or other authority so permits.
It is to have adherence and conformity with the procedure of the countries or places outside India, where suits or proceed ings are to be instituted or have been instituted.
There fore, the Central Government is authorised to act along with the claimants in respect of proceedings instituted outside India subject to the orders of such courts or the authori ties.
Is such a right valid and proper? 638 35.
There is the concept known both in this country and abroad, called "parens patriae.
Dr. D.K. Mukherjea in his "Hindu Law of Religious and Charitable Trusts", Tagore Law Lectures, Fifth Edition, at page 404, referring to the concept of parens patriae, has noted that in English Law, the Crown as parens patriae is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern.
Thus the posi tion is that according to Indian concept parens patriae doctrine recognized King as the protector of all citizens and as parent.
In Budhakaran Chankhani vs Thakur Prasad Shah, AIR 1942 Cal.
311 the position was explained by the Calcutta High Court at page 3 18 of the report.
The same position was reiterated by the said Court in Banku Behary Mondal vs Banku Behary Hazra & Anr., AIR 1943 Cal.
203 at page 205 of the report.
The position was further elaborated and explained by the Madras High Court in Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 at page 567 of the report.
This Court also recog nized the concept of parens patriae relying on the observa tions of Dr. Mukherjea aforesaid in Ram Saroop vs S.P. Sahi, [1959] 2 Supp.
SCR 583, at pages 598 and 599.
In the "Words and Phrases" Permanent edition, Vol.
35 at p. 99, it is stated that parens patriae is the inherent power and author ity of a Legislature to provide protection to the person and property of persons non suijuris, such as minor, insane, and incompetent persons, but the words "parens patriae" meaning thereby 'the father of the country ', were applied originally to the King and are used to designate the State referring to its sovereign power of guardianship over persons under disability, (Emphasis supplied).
Parens patriae jurisdic tion, it has been explained, is the right of the sovereign and imposes a duty on sovereign, in public interest, to protect persons under disability who have no rightful pro tector.
The connotation of the term "parens patriae" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and the privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaran teed by the Constitution and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the rights of the citizens.
The Preamble to the Constitution, read with the Directive Principles, Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protective measure to which the social welfare state is committed.
It is necessary for the State to ensure the funda 639 mental rights in conjunction with the Directive Princi ples of State Policy to effectively discharge its obliga tion and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
Reference may be made to Alfred L. Snapp & Son, Inc. vs Puerto Rico, ; , , 1028.
Ct, 3260 in this connection.
There it was held by the Supreme Court of the United States of America that Commonwealth of Puerto have standing to sue as parens patriae to enjoin apple growers ' discrimination against Puerto Rico migrant farm workers.
This case illustrates in some aspect the scope of 'parens patriae '.
The Commonwealth of Puerto Rico sued in the United States District Court for the Western District of Virginia, as parens patriae for Puerto Rican migrant farm workers, and against Virginia apple growers, to enjoin discrimination against Puerto Ricans in favour of Jamaican workers in violation of the Wagner Peyser Act, and the Immigration and Nationality Act.
The District Court dis missed the action on the ground that the Commonwealth lacked standing to sue, but the Court of Appeal for the Fourth Circuit reversed it.
On certiorari, the United States Supreme Court affirmed.
In the opinion by White, J. joined by Burger, Chief Justice and Brennan, Marshall, Blackman, Rennquist, Stevens, and O 'Connor, JJ., it was held that Puerto Rico had a claim to represent its quasi sovereign interests in federal court at least which was as strong as that of any State, and that it had parens patriae standing to sue to secure its residents from the harmful effects of discrimination and to obtain full and equal participation in the federal employment service scheme established pursu ant to the Wagner Peyser Act and the Immigration and Nation ality Act of 1952.
Justice White referred to the meaning of the expression "parens patriae".
According to Black 's Law Dictionary, 5th Edition 1979, page 1003, it means literally 'parent of the country ' and refers traditionally to the role of the State as a sovereign and guardian of persons under legal disability.
Justice White at page 1003 of the report emphasised that the parens patriae action had its roots in the common law concept of the "royal prerogative".
The royal prerogative included the right or responsibility to take care of persons who were legally unable, on account of mental incapacity, whether it proceeds from nonage, idiocy, or lunacy to take proper care of themselves and their property.
This prerogative of parens patriae is inherent in the supreme power of every state, whether that power is lodged in a royal person or m the legislature and is a most beneficent function.
After discussing several cases Justice White observed at page 1007 of the report that in order to maintain an action, in parens patriae, the state must artic ulate an interest apart from the interests of 640 particular parties, i.e. the State must be more than a nominal party.
The State must express a quasi sovereign interest.
Again an instructive insight can be obtained from the observations of Justice Holmes of the American Supreme Court in the case of Georgia vs Tennessee Copper Co., ; , , , which was a case involving air pollution in Georgia caused by the discharge of noxious gases from the defendant 's plant in Tennessee.
Justice Holmes at page 1044 of the report described the State 's interest as follows: "This is a suit by a State for an injury to it in its capacity of quasi sovereign.
In that capacity the State has an interest independent of and behind the titles of its citizens, in all the earth and air within its domain.
It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.
It might have to pay individuals before it could utter that word, but with it remains the final power . . .
When the States by their union made the forcible abatement of outside nuisances impossible to each, they did not thereby agree to submit to whatever might be done.
They did not renounce the possibility of making reasonable demands on the ground of their still remaining quasi sovereign inter ests" 36.
Therefore, conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Direc tive Principles, it was possible to authorise the Central Government to take over the claims of the victims to tight against the multinational Corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situation fully and properly.
On its plain terms the State has taken over the exclusive right to represent and act in place of every person who has made or is entitled to make a claim for all purposes connected with such claim in the same manner and to the same effect as such person.
Whether such provision is valid or not in the background of the requirement of the Constitution and the Code of Civil Procedure, is another debate.
But there is no prohibition or inhibition, in our opinion, conceptually or jurisprudential ly for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
The actual meaning of what the Act has provided and the validity thereof, however, will have to be examined in the light of the specific submissions advanced in this case.
641 37.
Ms. Indira Jaising as mentioned hereinbefore on behalf of some other victims drew out attention to the background of the passing of the Act in question.
She drew our attention to the fact that the Act was to meet a specif ic situation that had arisen after the tragic disaster and the advent of American lawyers seeking to represent the victims in American courts.
The Government 's view, according to her, as was manifest from the Statement of Objects and Reasons, debates of the Parliament, etc.
was that the inter ests of the victims would be best served if the Central Government was given the right to represent the victims in the courts of United States as they would otherwise be exploited by 'ambulance chasers ' working on contingency fees.
The Government also proceeded initially on the hypoth esis that US was the most convenient forum in which to sue UCC.
The Government however feared that it might not have locus standi to represent the victims in the courts of the United States of America unless a law was passed to enable it to sue on behalf of the victims.
The dominant object of the Act, therefore, according to her, was to give to the Government of India locus Standi to sue on behalf of the victims in foreign jurisdiction, a standing which it other wise would not have had.
According to her, the Act was never intended to give exclusive rights to the Central Government to sue on behalf of the victims in India or abroad.
She drew our attention to the parliamentary debates as mentioned hereinbefore.
She drew our attention to the expression 'parens patriae ' as appearing in the Words and Phrases, Volume 31 p. 99.
She contends that the Act was passed to provide locus standi only to represent in America.
She drew our attention to the "American Constitutional Law by Lau rence B. Trioe, 1978 Edition at paragraph 3.24, where it was stated that in its capacity as proprietor, a state may satisfy the requirement of injury to its own interests by an assertion of harm to the state as such.
It was further stated by the learned author there that the State may sue under the federal anti trust laws to redress wrongs suffered by it as the owner of a railroad and as the owner and opera tor of various public institutions.
It was emphasised that in its quasi sovereign capacity, the state has an interest, independent of and behind the titles of its citizens, in all the earth and air within its domain.
It was sought to be suggested that in the instant Act no such right was either asserted or mentioned.
The State also in its quasi sovereign capacity is entitled to bring suit against a private indi vidual to enjoin a corporation not to discharge noxious gases from its out of state plant into the suing state 's territory.
Finally, it was emphasised that as 'parens patr iae ' on behalf of the citizens, where a state 's capacity as parens patriae is not negated by the federal structure, the protection of the general health, comfort, and welfare of the state 's inhabitants has been held to give the state itself a sufficient 642 interest.
Ms. Jaising sought to contend that to the extent that the Act was not confined to empowering the Government to sue on behalf of those who were not sui generis but extended also to representing those who are, this exercise of the power cannot be referrable to the doctrine of 'parens patriae '.
To the extent, it is not confined in enabling the Government to represent its citizens in foreign jurisdiction but empowered it to sue in local courts to the exclusion of the victims it cannot be said to be in exercise of doctrine of 'parens patriae ', according to her.
We are unable to agree.
As we have indicated before conceptually and juris prudentially there is no warrant in the background of the present Act, in the light of circumstances of the Act in question to confine the concept into such narrow field.
The concept can be varied to enable the Government to represent the victims effectively in domestic forum if.the situation so warrants.
We also do not find any reason to confine the 'parens patriae ' doctrine to only quasisovereign right of the State independent of and behind the title of the citi zens, as we shall indicate later.
It was further contended that deprivation of the rights of the victims and denial of the rights of the vic tims or the fights of the heirs of the victims to access to justice was unwarranted and unconstitutional.
She submitted that it has been asserted by the Government that the Act was passed pursuant to Entry 13 of the List I of the Seventh Schedule to the Constitution.
It was therefore submitted that to the extent it was a law relating to civil procedure, it sets up a different procedure for the Bhopal gas victims and denies to them equality before law, violating Article 14 of the Constitution.
Even assuming that due to the magnitude of the disaster, the number of claimants and their disabili ty they constituted a separate class and that it was permis sible to enact a special legislation setting up a special procedure for them, the reasonableness of the procedure has still to be tested.
Its reasonableness, according to her, will have to be judged on the touchstone of the existing Civil Procedure Code of 1908 and when so tested, it is found wanting in several respects.
It was also contended by the Government that it was a legislation relating to "actionable wrongs" under Entry 8 of the Concurrent List of the Seventh Schedule.
But so read, she said, it could only deal with the procedural aspects and not the substantive aspect of "ac tionable wrongs".
If it does, then the reasonableness of a law must be judged with reference to the existing substan tive law of actionable wrongs and so judged it is in viola tion of many constitutional rights as it takes away from the victims the right to sue for actionable wrongs according to counsel for the victims.
According to her, it fails to take into account the law of strict liability for ultra 643 hazardous activity as clarified by this Court in M.C. Meh ta 's, case (supra).
She further submitted that it is a bad Act as it fails to provide for the right to punitive damages and destruction of environment.
It was contended on behalf of the Central Government that the Act was passed to give effect to the Directive Principle as enshrined under Article 39 A of the Constitu tion of India.
It was, on the other side, submitted that it is not permissible for the State to grant legal aid on pain of destroying rights that inhere in citizens or on pain of demanding that the citizens surrender their rights to the State.
The Act in fact demands a surrender of rights of the citizens to the State.
On the interpretation of the Act, Ms. Indira Jaising submitted that sections 3 and 4 as noted above, give exclusive power to the Government to represent the victims and there is deprivation of the victims ' right to sue for the wrongs done to them which is uncanalised and unguided and the expression "due regard" in section 4 of the Act does not imply consent and as such violative of the rights of the victims.
The right to be associated with the conduct of the suit is hedged in with so many conditions that it is illusory.
According to her, a combined reading of sections 3 and 4 of the act lead to the conclusion that the victims are displaced by the Central Government which has constituted itself as the "surrogate" of the claimants, that they have no control over the proceedings, that they have no right to decide whether or not to compromise and if so on what terms and they have no right to be heard by the court before any such compromise is effected.
Therefore, section 3 read with section 4, according to her, hands over to the Government all effective rights of the victims to sue and is a naked usurption of power.
It was submitted that in any event on a plain reading of the Act, section 3 read with section 4 did not grant the Government immunity from being sued as a joint tort feasor.
It was further urged that section 9 makes the Gov ernment the total arbitor in the matter of the registration, processing and recording of claims.
Reference was made to section 9(2)(a), (b) and (c) and disbursal of claims under sections 9(2)(f) and 10.
It was urged that the Deputy Com missioner and Commissioner appointed under the Act and the Scheme are subordinates and agents of the Central Govern ment.
They replace impartial and independent civil court by officers and subordinates of the Central Government.
Clause 11 of the Scheme makes the Central Government, according to counsel, judge in its own cause inasmuch as the Central Government could be and was in fact a joint tort feasor.
It was submitted that sections 5 to 9 of the Act read with the Scheme do not set up a machinery which is 644 constitutionally valid.
The Act, it was urged, deprives the victims of their rights out of all proportion to the object sought to be achieved, namely, to sue in foreign jurisdic tion or to represent those incapable of representing them selves.
The said object could be achieved, according to counsel, by limiting the right to sue in foreign jurisdic tion alone and in any event representing only those victims incapable of representing themselves.
The victims who wish to sue for and on their own behalf must have power to sue, all proper and necessary parties including Government of India, Government of Madhya Pradesh, UCIL and Shri Arjun Singh to vindicate their right to life and liberty and their rights cannot and should not be curtailed, it was submitted.
Hence, the Act goes well beyond its objects and imposes excessive restriction amounting to destruction of the rights of the victims, according to.
counsel.
In deciding whether any rights are affected, it is not the object of the Act that is relevant but its direct and inevitable effect on the rights of the victims that is material.
Hence no matter how laudable the object of the Act is alleged to be by the Government of India, namely, that it is an Act to give effect to Directive Principles enshrined in Article 39 A of the Constitution, the direct and inevitable effect of sec tion 3 according to counsel for the victims is to deprive the victims of the right to sue for and on their own behalf through counsel of their choice and instead empower the Central Government to sue for them.
The Act is, it was contended, unconstitutional because it deprives the victims of their right to life and personal liberty guaranteed by Article 21.
The right to life and liberty includes the right to sue for violations of the right, it was urged.
The right to life guaranteed by Article 21 must be interpreted to mean all that makes life livable, life in all its fullness.
According to counsel, it includes the right to livelihood.
Reference was made to the decision of Olga Tellis vs B.M.C., [1985] Supp.
2 SCR 51 at p. 78 83.
This right, it was contended, is inseparable from the reme dy.
It was urged that personal liberty includes a wide range of freedoms to decide how to order one 's affairs.
Reference was made to Maneka Gandhi vs Union of India, (supra), The right to life and liberty also includes the right to healthy environment free from hazardous pollutants.
The right to life and liberty, it was submitted, is inseparable from the remedy to judicial vindication of the violation of that right the right of access to justice must be deemed to be part of that right.
Therefore, the importance is given to the right to file a suit for an actionable wrong.
See Ganga Bai vs Vijay Kumar, ; at 886.
According to counsel appearing for the victims, the Act read strictly infringes the right to life and personal liberty because the right to sue by the affected person 645 for damages flowing from infringement of their rights is taken away.
Thus, it was submitted that not just some inci dents of the right to life, but the right itself in all its fullness is taken away.
Such depravation, according to counsel, of the right is not in accordance with procedure established by law inasmuch as the law which takes away the right, i.e., impugned Act is neither substantively nor procedurally just, fair or reasonable.
A law which divests the victims of the right to sue to vindicate for life and personal liberty and vests the said right in the Central Government is not just, fair or reasonable.
The victims are sui generis and able to decide for themselves how to vindi cate their claims in accordance with law.
There is, there fore, no reason shown to exist for divesting them of that right and vesting that on the Central Government.
All the counsel for the victims have emphasised that vesting of the right in Central Government is bad and unrea sonable because there is conflict of interests between the Central Government and the victims.
It was emphasised that the conflict of interest has already prejudiced the victims in the conduct of the case inasmuch as a compromise unac ceptable to the victims has been entered into in accordance with the order of this Court of 14th/15th February, 1989 without heating the victims.
This conflict of interest will continue, it was emphasised, to adversely affect the victims inasmuch as section 9 of the Act read with clauses 5, 10 and 11 of the Scheme empower the Central Government to process claims, determine the category into which these fall, deter mine the basis on which damages will be payable to each category and determine the amount of compensation payable to each claimant.
Learned counsel urged that the right to a just, fair and reasonable procedure was itself a guaranteed fundamental right under Article 14 of the Constitution.
This included right to natural justice.
Reference was made to Olga Tellis 'section case (supra) and S.L. Kapoor vs Jagmohan, ; at 753, 766.
The right to natural justice is included in Article 14 Tulsi Ram vs Union of India, [1985] Supp.
2 SCR 131.
Reference was also made to Maneka Gandhi 's, case (supra).
It was contended by counsel that the right to natural justice is the right to be heard by Court at the pre decisional stage, i.e., before any compromise is effected and accepted.
Reference was made to the decision of this Court in Swadeshi Cotton vs Union of India, ; It was submitted that natural justice is a highly effective tool devised by the Courts to ensure that a statu tory authority arrives at a just decision.
It is calculated to act as a healthy check on the abuse of power.
Natural justice is not dispensable nor is it an empty formality.
Denial of that right can and has led to the miscar 646 riage of justice in this case.
According to counsel, if the victims had been given an opportunity to be heard, they would, inter alia, have pointed out that the amount agreed to be paid by UCC was hopelessly inadequate and that UCC, its officer and agents ought not to be absolved of criminal liability, that the Central Government itself was liable to have been sued as a joint tort feasor and, according to counsel, had agreed to submit to a decree if found liable under the order dated 31st December, 1985, that suits had been filed against the State of Madhya Pradesh, Shri Arjun Singh and UCIL which said suits cannot be deemed to have been settled by the compromise/order of 14th/15th February, 1989.
It was also pointed out that Union of India was under a duty to sue UCIL, which it had failed and neglected to do.
It was submitted that to the extent that the statute does not provide for a pre decisional hearing on the fairness of the proposed settlement or compromise by Court, it is void as offending natural justice hence violative of Articles 14 and 21 of the Constitution.
Alternatively, it was contended by the counsel that since the statute neither expressly nor by necessary implication bars the right to be heard by Court before any compromise is effected such a right to a pre decisional hearing by Court must be read into section 3(2)(b) of the Act.
Admittedly, it does not expressly ex clude the right to a hearing by Court prior to any settle ment being entered into.
Far from excluding such a right by necessary implication, having regard to the nature of the rights affected, i.e., the right to life and personal liber ty, such a right to hearing must be read into the Act in order to ensure that justice is done to the victims, accord ing to all the counsel.
The Act sets up a procedure differ ent from the ordinary procedure established by law, namely, Civil Procedure Code.
But it was submitted that the Act should be harmoniously read with the provisions of Civil Procedure Code and if it is not so read, then the Act in question would be unreasonable and unfair.
In this connec tion, reliance was placed on the provisions of Order I, Rule 4, Order 23, Rule 1 proviso, Order 23, Rule 3 9 and Order 32, Rule 7 of CPC and it was submitted that these are not inconsistent with the Act.
On the contrary these are neces sary and complementary, intended to ensure that there is no miscarriage of justice.
Hence these must be held to apply to the facts and circumstances of the case and the impugned Act must be read along with these provisions.
Assuming that the said provisions do not directly apply then, provisions analogous to the said provisions must be read with section 3(2)(b) to make the Act reasonable, it was submitted.
It was urged that if these are not so read then the absence of such provisions would vest arbitrary and unguided powers in the Central Government making section 3(2)(b) unconstitutional.
The said provisions are intended to ensure the machinery of 647 accountability to the victims and to provide to them, an opportunity to be heard by court before any compromise is arrived at.
In this connection, reference was made to Rule 23(3) of the Federal Rules of Civil Procedure in America which provides for a hearing to the victims before a compro mise is effected.
The victims as plaintiffs in an Indian court cannot be subjected to a procedure which is less fair than that provided by a US forum initially chosen by the Government of India, it was urged.
Counsel submitted that Section 6 of the Act is unreasonable because it replaces an independent and impar tial Civil Court of competent jurisdiction by an Officer known as the Commissioner to be appointed by the Central Government.
No qualification, according to counsel, had been prescribed for the appointment of a Commissioner and clause 5 of the Scheme framed under the Act vests in the Commis sioner the judicial function of deciding appeals against the order of the Deputy Commissioner registering or refusing to register a claim.
It was further submitted that clause 11(2) of the Scheme is unreasonable because it replaces an inde pendent and impartial civil court of competent jurisdiction with the Central Government, which is a joint tort feasor for the purpose of determining the total amount of compensa tion to be apportioned for each category of claims and the quantum of compensation payable for each type of injury or loss.
It was submitted that the said function is a judicial function and if there is any conflict of interest between the victims and Central Government, vesting such a power in the Central Government amounts to making it a judge in its own cause.
It was urged that having regard to the fact that amount received in satisfaction of the claims is ostensibly pre determined, namely, 470 million dollars unless the order of 14th/15th February is set aside which ought to be done, according to counsel, the Central Government would have a vested interest in ensuring that the amount of damages to be disbursed does not exceed the said amount.
Even otherwise, according to counsel, the Government of India has been sued as a joint tort feasor, and as they would have a vested interest in depressing the quantum of damages, payable to the victims.
This would, according to counsel, result in a deliberate under estimation of the extent of injuries and compensation payable.
Clause 11(4) of the Scheme, according to counsel, is unreasonable inasmuch as it does not take into account the claims of the victims to punitive and exemplary damages and damages for loss and destruction of environment.
Counsel submitted that in any event the expression "claims" in section 2(b) cannot be interpreted to mean 648 claims against the Central Government, the State of Madhya Pradesh, UCIL, which was not sued in suit No. 1113/86 and Shri Arjun Singh, all of whom have been sued as joint tort feasors in relation to the liability arising out of the disaster.
Counsel submitted that if section 3 is to be held to be intra vires, the word "exclusive" should be severed from section 3 and on the other hand, if section 3 is held ultra vires, then victims who have already filed suits or those who had lodged claims should be entitled to continue their own suits as well as Suit No. 1113/86 as plaintiffs with leave under Order 1 Rule 8.
Counsel submitted that interim relief as decided by this Court can be paid to the victims even otherwise also, according to counsel, under clause 10(2)(b) of the Scheme.
Counsel submitted that the balance of $ 470 million after deducting interim relief as determined by this Court should be attached.
In any event, it was submitted that, it be declared that the word "claim" in section 2 does not include claims against Central Govt.
or State of Madhya Pradesh or UCIL.
Hence, it was urged that the rights of the victims to sue the Government of India, the State of Madhya Pradesh or UCIL would remain unaffected by the Act or by the compromise effected under the Act.
Machinery to decide suit expeditiously has to be devised, it was submitted.
Other suits filed against UCC, UCIL, State of Madhya Pradesh and Arjun Singh should to be transferred to the Supreme Court for trial and disposal, according to counsel.
It was submit ted that the Court should fix the basis of damages payable to different categories, namely, death and disablement mentioned under clause 5(2) of the scheme.
Counsel submitted that this Court should set up a procedure which would ensure that an impartial judge assisted by medical experts and assessors would adjudicate the basis on which an individual claimant would fall into a particular category.
It was also urged that this Court should quantify the amount of compen sation payable to each category of claimant in clause 5(2) of the Scheme.
This decision cannot, it was submitted, be left to the Central Government as is purported to be done by clause 11(2) of the Scheme.
This Court must set up, it was urged, a trust with independent trustees to administer the trust and trustees to be accountable to this Court.
An independent census should be carried out of number of claimants, nature and extent of injury caused to them, the category into which they fall.
Apportionment of amounts should be set aside or invested for future claimants, that is the category in clause 5(2)(a) of the Scheme, which is, according to counsel, of utmost impor tance 649 since the injuries are said to be.
carcinogenic and ontogen ic and wide affecting persons yet unborn.
Shri Garg, further and on behalf of some of the victims counsel, urged before us that deprivation of the rights of the victims and vesting of those fights in the State is violative of the rights of the victims and cannot.
be justified or warranted by the Constitution.
Neither section 3 nor section 4 of the Act gives any right to the victims; on the other hand, it is a complete denial of access to justice for the victims, according to him.
This, according to counsel, is arbitrary.
He also submitted that section 4 of the Act, as it stands, gives no right to the victims and as such even assuming that in order to fight for the rights of the victims, it was necessary to substitute the victims even then in so far as the victims have been denied the right of say, in the conduct of the proceedings, this is disproportionate to the benefit conferred upon the victims.
Denial of rights to the victims is so great and deprivation of the right to natural justice and access to justice is so tremendous that judged by the well settled principles by which yardsticks provisions like these should be judged in the constitutional framework of this country, the Act is violative of the fundamental rights of the vic tims.
It was further submitted by him that all the rights of the victims by the process of this Act, the right of the victims to enforce full liability against the multinationals as well as against the Indian Companies, absolute liability and criminal liability have all been curtailed.
All the counsel submitted that in any event, the criminal liability cannot be subject matter of this Act.
Therefore, the Government was not entitled to agree to any settlement on the ground that criminal prosecution would be withdrawn and this being a part of the consideration or inducement for settling the civil liability, he submitted that the settlement arrived at on the 14th/l5th February, 1989 as recorded in the order of this Court is wholly unwar ranted, unconstitutional and illegal.
Mr. Garg additionally further urged that by the procedure of the Act, each individual claim had to be first determined and the Government could only take over the aggregate of all individual claims and that could only be done by aggregating the individual claims of the victims.
That was not done, according to him.
Read in that fashion, according to Shri Garg, the conduct of the Government in implementing the Act is wholly improper and unwarranted.
It was submitted by him that the enforcement of the fight of the victims 650 without a just, fair and reasonable procedure which is vitally necessary for representing the citizens or victims was bad.
It was further urged by him that the Bhopal gas victims have been singled out for hostile discrimination resulting in total denial of all procedures of approach to competent courts and tribunals.
It was submitted that the Central Government was incompetent to represent the victims in the litigations or for enforcement of the claims.
It was then submitted by him that the claims of the victims must be enforced fully against the Union Carbide Corporation carry ing on commercial activities for profit resulting in unprec edented gas leak disaster responsible for a large number of deaths and severe injuries to others.
It was submitted that the liability of each party responsible, including the Government of India, which is a joint tort feasor along with the Union Carbide, has to be ascertained in appropriate proceedings.
It was submitted on behalf of the victims that Union of India owned 22% of the shares in Union Carbide and therefore, it was incompetent to represent the victims.
There was conflict of interest between the Union of India and the Union Carbide and so Central Government was incompe tent.
It is submitted that pecuniary interest howsoever small disqualifies a person to be a judge in his own cause.
The settlement accepted by the Union of India, according to various counsel is vitiated by the pecuniary bias as holders of its shares to the extent of 22%.
It was submitted that the pleadings in the court of the United States and in the Bhopal court considered in the context of the settlement order of this Court accepted by the Union of India establish that the victims ' individuality were sacrificed wontedly and callously and, therefore, there was violation, according to some of the victims, both in the Act and in its implementation of Articles 14, 19(l)(g) and 21 of the Constitution.
The principles of the decision of this Court in M.C. Mehta & Anr.
vs Union of India, ; must be so interpreted that complete justice is done and it in no way excludes the grant of punitive damages for wrongs justifying deterrents to ensure the safety of citizens in free India.
No multinational corporation, according to Shri Garg, can claim the privilege of the protection of Indian law to earn profits without meeting fully the demands of civil and criminal justice administered in India with this Court functioning as the custodian.
Shri Garg urged that the liability for damages, in India and the Third World Coun tries, of the multinational companies cannot be less but must be more because the persons affected are often without remedy for 651 reasons of inadequate facilities for protection of health or property.
Therefore, the damages sustainable by Indian victims against the multinationals dealing with dangerous gases without proper security and other measures are far greater than damages suffered by the citizens of other advanced and developed countries.
It is, therefore, neces sary to ensure by damages and deterrent remedies that these multinationals are not tempted to shift dangerous manufac turing operations intended to advance their strategic objec tives of profit and war to the Third World Countries with little respect for the right to life and dignity of the people of sovereign third world countries.
The strictest enforcement of punitive liability also serves the interest of the American people.
The Act, therefore, according to Shri Garg is clearly unconstitutional and therefore, void.
It was urged that the settlement is without juris diction.
This Court was incompetent to grant immunity against criminal liabilities in the manner it has purported to do by its order dated 14th/l5th February, 1989, it was strenuously suggested by counsel.
It was further submitted that to hold the Act to be valid, the victims must be heard before the settlement and the Act can only be valid if it is so interpreted.
This is necessary further, according to Shri Garg, to lay down the scope of heating.
Shri Garg also drew our attention to the scheme of disbursement of relief to the victims.
He submitted that the scheme of disbursement is unreasonable and discriminatory because there is no proce dure which is just, fair and reasonable in accordance with the provisions of Civil Procedure Code.
He further submitted that the Act does not lay down any guidelines for the con duct of the Union of India in advancing the claims of the victims.
There were no essential legislative guidelines for determining the rights of the victims, the conduct of the proceedings on behalf of the victims and for the relief claimed.
Denial of access to justice to the victims through an impartial judiciary is so great a denial that it can only be consistent with the situation which calls for such a drastic provision.
The present circumstances were not such.
He drew our attention to the decision of this Court in Basheshar vs Income Tax Commissioner, ; ; in Re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra etc.
vs State of U.P. & Ors. etc., and Bodhan Chowdhary vs State of Bihar, ; Shri Garg further submitted that Article 21 must be read with Article 51 of the Constitution and other directive principles.
He drew our attention to Lakshmi Kant Pandey vs Union of India, ; ; M/s Mackinnon Machkenzie & Co. Ltd. vs Audrey D 'Costa 652 and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; Shri Garg submitted that in india, the national dimensions of human rights and the international dimensions are both congruent and their enforcement is guaranteed under Articles 32 and 226 to the extent these are enforceable against the State, these are also enforceable against transnational corpora tions inducted by the State on conditions of due observance of the Constitution and all laws of the land.
Shri Garg submitted that in the background of an unprecedented disas ter resulting in extensive damage to life and property and the destruction of the environment affecting large number of people and for the full protection of the interest of the victims and for complete satisfaction of all claims for compensation, the Act was passed empowering the Government of India to take necessary steps for processing of the claims and for utilisation of disbursal of the amount re ceived in satisfaction of the claims.
The Central Government was given the exclusive right to represent the victims and to act in place of, in United States or in india, every citizen entitled to make a claim.
Shri Garg urged that on a proper reading of section 3(1) of the Act read with section 4 exclusion of all victims for all purpose is incomplete and the Act is bad.
He submitted that the decree for adjudica tion of the Court must ascertain the magnitude of the dam ages and should be able to grant reliefs required by law under heads of strict liability, absolute liability and punitive liability.
Shri Garg submitted that it is necessary to consider that the Union of India is liable for the torts.
In several decisions to which Shri Garg grew our attention, it has been clarified that Government is not liable only if the tortious act complained has been committed by its servants in exer cise of its sovereign powers bY which it is meant powers that can be lawfully exercised under sovereign rights only vide Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209 at p. 212.
There is a real and marked distinction between the sovereign functions of the government and those which are non sovereign and some of the functions that fall in the latter category are those connected with trade, commerce, business and industrial undertakings.
Sovereign functions are such acts which are of such a nature as cannot be performed by a private individual or association unless powers are delegated by sovereign authority of state.
According to Shri Garg, the Union and the State Governments under the Constitution and as per laws of the Factories, Environment Control, etc. are bound to exercise control on the factories in public interest and public purpose.
These functions are not sovereign func 653 tions, according to Shri Garg, and the Government in this case was guilty of negligence.
In support of this, Shri Garg submitted that the offence of negligence on the part of the Govt.
would be evident from the fact that (a) the Government allowed the Union Carbide factory to be installed in the heart of the city; (b) the Government allowed habitation in the front of the factory knowing that the most dangerous and lethal gases were being used in the manufacturing processes; (c) the gas leakage from this factory was a common affair and it was agitated continuously by the people journalists and it was agitated in the Vidhan Sabha right from 1980 to 1984.
These features firmly proved, according to Shri Garg, the grossest negligence of the governments.
Shri Garg submitted that the gas victims had legal and moral right to sue the governments and so it had full right to im plead all the necessary and proper parties like Union Carbide, UCIL, and also the then Chief Minister Shri Arjun Singh of the State.
He drew our attention to Order 2, rule 3, of the Civil Procedure Code.
In suits on joint torts, according to Shri Garg, each of the joint tort feasors is responsible for the injury sustained for the common acts and they can all be sued together.
Shri Garg 's main criticism has been that the most crucial question of corporate responsibility of the people 's right to life and their right to guard it as enshrined in Article 21 of the Constitution were sought to be gagged by the Act.
Shri Garg tried to submit that this was an enabling Act only but not an Act which deprived the victims of their right to sue.
He submitted that in this Act, there is denial of natural justice both in the institution under section 3 and in the conduct of the suit under section 4.
It must be seen that justice is done to all (R. Viswanathan vs Rukh ul Mulk Syed Abdul Wajid, ; It was urged that it was necessary to give a reasona ble notice to the parties.
He referred to M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
2 SCR 724.
Shri Shanti Bhushan appearing for Bhopal Gas Peedit Mahila Udyog Sangathan submitted that if the Act is to be upheld, it has to be read down and construed in the manner urged by him.
It was submitted that when the Bhopal Gas disaster took place, which was the worst industrial disaster in the world which resulted in the deaths 654 of several thousands of people and caused serious injuries to lakhs others, there arose a right to the victims to get not merely damages under the law of the torts but also arose clearly, by virtue of right to life guaranteed as fundamen tal right by Article 21 of the Constitution a right to get full protection of life and limb.
This fundamental right also, according to Shri Shanti Bhushan, embodied within itself a right to have the claim adjudicated by the estab lished courts of law.
It is well settled that right of access to courts in respect of violation of their fundamen tal rights itself is a fundamental right which cannot be denied to the people.
Shri Shanti Bhushan submitted that there may be some justification for the Act being passed.
He said that the claim against the Union Carbide are covered by the Act.
The claims of the victims against the Central Government or any other party who is also liable under tort to the victims is not covered by the Act.
The second point that Shri Shanti Bhushan made was that the Act so far as it empowered the Central Government to represent and act in place of the victims is in respect of the civil liability arising out of disaster and not in respect of any right in respect of criminal liability.
The Central Govt., according to Shri Shanti Bhushan, cannot have any right or authority in relation to any offences which arose out of the disaster and which resulted in criminal liability.
It was submitted that there cannot be any settlement or compromise in rela tion to non compoundable criminal cases and in respect of compoundable criminal cases the legal right to compound these could only be possessed by the victims alone and the Central Government could not compound those offences on their behalf.
It was submitted by Shri Shanti Bhushan that even this Court has no jurisdiction whatsoever to transfer any criminal proceedings to itself either under any provi sion of the Constitution or under any provision of the Criminal Procedure Code or under any other provision of law and, therefore, if the settlement in question was to be treated not as a compromise but as an order of the Court, it would be without jurisdiction and liable to be declared so on the principles laid down, according to Shri Bhushan, by this Court in Antulay 's case (supra).
Shri Shanti Bhushan submitted that even if under the Act, the Central Government is considered to be able to represent the victims and to pursue the litigation on their behalf and even to enter into compromise on their behalf, it would be a gross violation of the constitutional rights of the victims to enter into a settlement with the Union Carbide without giving the victims opportunities to express their views about the fairness or adequacy of the settlement before any court could permit such a settlement to be made.
Mr. Shanti Bhushan submitted that the suit which may be 655 brought by the Central Government against Union Carbide under section 3 of the Act would be a suit of the kind contemplated by the Explanation to Order 23, rule 3 of the Code of Civil Procedure since the victims are not parties and yet the decree obtained in the suit would bind them.
It was, therefore, urged by Shri Shanti Bhushan that the provi sions of Section 3(1) of the Act merely empowers the Central Government to enter into a compromise but did not lay down the procedure which was to be followed for entering into any compromise.
Therefore, there is nothing which is inconsist ent with the provisions of Order 23 Rule 3 B of the CPC to which the provisions Section 11 of the Act be applied.
If, however, by any stretch of argument the provisions of the Act could be construed so as to override the provisions of Order 23 Rule 3 B CPC, it was urged, the same would render the provisions of the Act violative of the victims ' funda mental rights and the actions would be rendered unconstitu tional.
If it empowered the Central Government to compromise the victims ' rights, without even having to apply the prin ciples of natural justice, then it would be unconstitutional and as such bad.
Mr. Shanti Bhushan, Ms. Jaising and Mr. Garg submitted that these procedures must be construed in accordance with the provisions contained in Order 23 Rule 3 B CPC and an opportunity must be given to those whose claims are being compromised to show to the court that the compromise is not fair and should not accordingly be permit ted by the court.
Such a hearing in terms, according to counsel, of Order 23 Rule 3 B CPC has to be before the compromise is entered into.
It was then submitted that section 3 of the Act only empowers the Central Government to represent and act in place of the victims and to institute suits on behalf of the victims or even to enter into compro mise on behalf of the victims.
The Act does not create new causes of action create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain unchanged.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
Shri Shanti Bhushan then argued that the cause of action of each victim is separate and entitled him to bring a suit for separate amount according to the damages suffered by him.
He submitted that even where the Central Government was empowered to file suits on behalf of all the victims it could only ask for a decree of the same kind as could have been asked for by the victims themselves, namely, a 656 decree awarding various specified amounts to different victims whose names had to be disclosed.
According to Shri Shanti Bhushan, even if all the details were not available at the time when the suit was filed, the details of the victims ' damages had to be procured and specified in the plaint before a proper decree could be passed in the suit.
even if the subject matter of the suit had to be compromised between the Central Government and the Union Carbide the compromise had to indicate as to what amount would be pay able to each victim, in addition to the total amount which was payable by Union Carbide, submitted Shri Shanti Bhushan.
It was submitted that there was nothing in the Act which permitted the Central Government to enter into any general compromise with Union Carbide providing for the lumpsum amount without disclosure as to how much amount is payable to each victim.
If the Act in question had not been enacted, the victims would have been entitled to not only sue Union Carbide themselves but also to enter into any compromise or settlement of their claims with the Union Carbide immediate ly.
The provisions of the Act, according to Mr. Shanti Bhushan, deprive the victims of their legal right and such deprivation of their rights and creation of a corresponding right in the Central Government can be treated as reasonable only if the deprivation of their rights imposed a corre sponding liability on the Central Government to continue to pay such interim relief to the victims as they might be entitled to till the time that the Central Government is able to obtain the whole amount of compensation from the Union Carbide.
He submitted that the deprivation of the right of the victims to sue for their claims and denial of access to justice and to assert their claims and the substi tution of the Central Government to carry on the litigation for or on their behalf can only be justified, if and only if the Central Government is enjoined to provide for such interim relief or continue to provide in the words of Judge Keenan, as a matter of fundamental human decency, such interim relief, necessary to enable the victims to fight the battle.
Counsel submitted that the Act must be so read.
Shri Shanti Bhushan urged that if the Act is construed in such a manner that it did not create such an obligation on the Central Government, the Act cannot be upheld as a reasonable provision when it deprived the victims of their normal legal rights of immediately obtaining compensation from Union Carbide.
He referred to section 10(b) of the Act and clause 10 and 11(1) of the Scheme to show that the legislative policy underlying the Bhopal Act clearly contemplated pay ment of interim relief to the victims from time to time till such time as the Central Government was able to recover from Union Carbide 657 full amount of compensation from which the interim reliefs paid by the Central Government were to be deducted from the amount payable to them by way of final disbursal of the amounts recovered.
The settlement is bad, according to Shri Shanti Bhushan if part of the bargain was giving up of the criminal liability against UCIL and UCC.
Shri Shanti Bhushan submit ted that this Court should not hesitate to declare that the settlement is bad because the fight will go on and the victims should be provided reliefs and interim compensation by the Central Government to be reimbursed ultimately from the amount to be realised by the Central Government.
This obligation was over and above the liability of the Central Government as a joint tort feasor, according to Shri Shanti Bhushan.
Shri Kailash Vasdev, appearing for the petitioners in Writ Petition No. 155 1/86 submitted that the Act dis placed the claimants in the matter of their right to seek redressal and remedies of the actual injury and harm caused individually to the claimants.
The Act in question by re placing the Central Government in place of the victims.
by conferment of exclusive right to sue in place of victims, according to him, contravened the procedure established by law.
The right to sue for the wrong done to an individual was exclusive to the individual.
It was submitted that under the civil law of the country, individuals have rights to enforce their claims and any deprivation would place them into a different category from the other litigants.
The right to enter into compromise, it was further submitted, without consultation of the victims, if that is the con struction of section 3 read with section 4 of the Act, then it is violative of procedure established by law.
The proce dure substituted, if that be the construction of the Act, would be in violation of the principles of natural justice and as such bad.
It was submitted that the concept of 'parens patriae ' would not be applicable in these cases.
It was submitted that traditionally, sovereigns can sue under the doctrine of 'parens patriae ' only for violations of their "quasi sovereign" interests.
Such interests do not include the claims of individual citizens.
It was submitted that the Act in question is different from the concept of parens patriae because there was no special need to be satisfied and a class action, according to Shri Vasdev, would have served the same purpose as a suit brought under the statute and ought to have been preferred because it safeguarded claimants ' right to procedural due process.
In addition, a suit brought under the statute would threaten the victims ' substantive due process rights.
It was further submitted that in order to sustain an action, it was neces sary for the Government of India to have standing 658 62.
Counsel submitted that 'parens patriae ' has received no judicial recognition in this country as a basis for recovery of money damages for injuries suffered by individu als.
He may be right to that extent but the doctrine of parens patriae has been used in India in varying contexts and contingencies.
We are of the opinion that the Act in question was passed in recognition of the right of the sovereign to act as parens patriae as contended by the learned Attorney General.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely, the Act.
We have noted the several decisions re ferred to hereinbefore, namely, Bhudhkaran Chankhani vs Thakur Prasad Shad, (supra); Banku Behary Mondal vs Banku Behari Hazra, (supra); Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavai Rajammal, (supra) and to the decision of this Court in Mahant Ram Saroop Dasji vs S.P. Sahi, (supra) and the decision of the American Supreme Court in Alfred Schnapp vs Puerto Rico, (supra).
It has to be borne in mind that conceptually and jurisprudentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territories of the country.
It is true that the doctrine has been so utilised in America so far.
In our opinion, learned Attorney General was right in contending that where citizens of a country are victims of a tragedy because of the negligence of any multinational, a peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievances and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian state because of its constitutional commitment is obliged to take upon itself the claims of the victims and to protect them in their hour of need.
Learned Attorney General was also right in submitting that the decisions of the Calcutta, Madras and U.S. Supreme Court clearly indicate that parens patriae doctrine can be invoked by sovereign state within India, even if it be contended that it has not so far been invoked inside India in respect of claims for damages of victims suffered at the hands of the multinational.
In our opinion, conceptually and jurisprudentially, there is no bar on the State to assume responsibilities analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Government has done in the instant case seems to us to be an expression of its sover eign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, 659 morals, education and good order of the people and tend to increase the wealth and prosperity of the state.
Sovereignty is difficult to define.
See in this connection, Weaver on Constitional Law, p. 490.
By the nature of things, the state sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the individual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitutional limita tions.
This is an emanation of sovereignty subject to as aforesaid.
Indeed, it is the obligation of the State to assume such responsibility and protect its citizens.
It has to be borne in mind, as was stressed by the learned Attorney General, that conferment of power and the manner of its exercise are two different matters.
It was submitted that the power to conduct the suit and to compromise, if neces sary, was vested in the Central Government for the purpose of the Act.
The power to compromise and to conduct the proceedings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
In this connection, the observations of Viscount Simonds in Belfast Corporation vs O.D. Commission, at 520 21 are relevant where it was emphasised that validity of a measure is not be determined by its application to particular cases.
This Court in Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 emphasised that the consti tutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if upon so judged it passes the test of reasona bleness, then the possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid.
See in this connection also the observations in P.J. Irani vs State of Madras, ; at 178 to 181 and D.K. Trivedi vs State of Gujarat, [1986] Supp.
SCC 20 at 60 61 64.
Sections 3 and 4 of the Act should be read together as contended by the learned Attorney General, along with other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of Objects and Reasons and the Preamble to the Act.
The Act was so designed that the victims of the 660 disaster are fully protected and the claims of compensation or damages for loss of life or personal injuries or in ' respect of other matters arising out of or connected with the disaster are processed speedily, effectively, equitably and to the best advantage of the claimants.
Section 3 of the Act is subject to other provisions of the Act which includes sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and therefore, over rides section 3.
Learned Attorney General submitted that the right of the Central Government under section 3 of the Act was to represent the victims exclusively and act in the place of the victims.
The Central Government, it was urged, in other words, is substituted in the place of 'the victims and is the dominus litis.
Learned Attorney General submitted that the dominus litis carries with it the right to conduct the suit in the best manner as it deems fit, including, the right to withdraw and right to enter into compromise.
The right to withdraw and the right to compromise conferred by section 3(2) of the Act cannot be exercised to defeat the rights of the victims.
As to how the rights should be exer cised is guided by the objects and the reasons contained in the Preamble, namely, to speedily and effectively process the claims of the victims and to protect their claims.
The Act was passed replacing the Ordinance at a time when many private plaintiffs had instituted complaints/suits in the American Courts.
In such a situation, the Government of India acting in place of the victims necessarily should have right under the statute to act in all situations including the position of withdrawing the suit or to enter into com promise.
Learned Attorney General submitted that if the UCC were to agree to pay a lump sum amount which would be just, fair and equitable, but insists on a condition that the proceedings should be completely withdrawn, then necessarily there should be power under the Act to so withdraw.
Accord ing to him, therefore, the Act engrafted a provision empow ring the Government to compromise.
The provisions under section 3(2)(b) of the Act to enter into compromise was consistent with the powers of dominus litis.
In this connec tion, our attention was drawn to the definition of 'Dominus Litis ' in Black 's Law Dictionary, Fifth Edition, P. 437, which states as follows: " 'Dominus litis '.
The master of the suit; i.e. the person who was really and directly inter ested in the suit as a party, as distinguished from his attorney or advocate.
But the term is also applied to one who, though not originally a party, has made himself such, by interven tion or otherwise, and has assumed entire control and responsibility for one side and is treated by the Court as liable for costs.
Vir ginia Electric & Power Co, vs Bowers, ISI Va., 542, ,263".
661 65.
Learned Attorney General sought to contend that the victims had not been excluded entirely either in the conduct of proceedings or in entering into compromise, and he re ferred to the proceedings in detail emphasising the partici pation of some of the victims at some stage.
He drew our attention to the fact that the victims had filed separate consolidated complaints in addition to the complaint filed by the Government of India.
Judge Keenan of the Distt.
Court of America had passed orders permitting the victims to be represented not only 'by the private Attorneys but also by the Govt.
of India.
Hence, it was submitted that it could not be contended that the victims had been excluded.
Learned Attorney General further contended that pursuant to the orders passed by Judge Keenan imposing certain conditions against the Union Carbide and allowing the motion for forum non convenience of the UCC that the suit came back to India and was instituted before the Distt.
Court of Bhopal.
In those circumstances, it was urged by the learned Attorney General that the private plaintiffs who went to America and who were represented by the contingency lawyers fully knew that they could also have joined in the said suit as they were before the American Court along with the Govt.
of India.
It was contended that in the proceedings at any point of time or stage including when the compromise was entered into, these private plaintiffs could have participated in the court proceedings and could have made their representa tion, if they so desired.
Even in the Indian suits, these private parties have been permitted to continue as parties represented by separate counsel even though the Act empowers the Union to be the sole plaintiff.
Learned Attorney General submitted that Section 4 of the Act clearly enabled the victims to exercise their right of participation in the proceedings.
The Central Govt. was enjoined to have due regard to any matter which such person might require to be urged.
Indeed, the learned Attorney General urged very strenuously that in the instant case, Zehreeli Gas Kand Sangharsh Morcha and Jana Swasthya Kendra (Bhopal) had filed before the Distt.
Judge, Bhopal, an application under Order I Rule 8 read with Order I Rule 10 and Section 15 1 of the CPC for their intervention on behalf of the victims.
They had participated in the hearing before the learned Distt.
Judge, who referred to their intervention in the order.
It was further emphasised that when the UCC went up in revision to the High Court of Madhya Pradesh at Jabalpur against the interim compensation ordered to be paid by the Distt.
Court, the intervener through its Advocate, Mr. Vibhuti Jha had participated in the proceedings.
The aforesaid Association had also intervened in the civil appeals preferred pursuant to the special leave granted by this Court to the Union of India and Union Carbide against the judgment of the 662 High Court for interim compensation.
In those circumstances, it was submitted that there did not exist any other gas victim intervening in the proceedings, claiming participa tion under Section 4.
Hence, the right to compromise provid ed for by the Act, could not be held to be violative of the principles of natural justice.
According to the learned Attorney General, this Court first proposed the order to counsel in court and after they agreed thereto, dictated the order on 14th February, 1989.
On 15th February, 1989 after the Memorandum of Settlement was filed pursuant to the orders of the court, further orders were passed.
The said Association, namely, Zehreeli Gas Kand Sangharsh Morcha was present, according to the records, in the Court on both the dates and did not apparently object to the compromise.
Mr. Charanlal Sahu, one of the petitioners in the writ petition, had watched the proceedings and after the Court had passed the order on 15th February, 1989 mentioned that he had filed a suit for Rs. 100 crores.
Learned Attorney General submit ted that Mr. Sahu neither protested against the settlement nor did he make any prayer to be heard.
Shri Charan Lal Sahu, in the petition of opposition in one of these matters have prayed that a sum of Rs. 100 million should be paid over to him for himself as well as on behalf of those vic tims whom he claimed to represent.
In the aforesaid back ground on the construction of the Section, it was urged by the learned Attorney General that Section 3 of the Act cannot be held to be unconstitutional.
The same provided a just, fair and reasonable procedure and enabled the victims to participate in the proceedings at all stages those who were capable and willing to do so.
Our attention was drawn to the fact that Section 11 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other enactment other than the Act.
It was, therefore, urged that the provisions of the Civil Procedure Code stood overridden in respect of the areas covered by the Act, namely, (a) representation, (b) powers of representation; and (c) com promise.
According to the learned Attorney General, the Act did not violate the principles of natural justice.
The provisions of the CPC could not be read into the Act for Section 11 of the Act provides that the application of the provision of the Civil Procedure Code in so far as those were inconsistent with the Act should be construed as over ridden in respect of areas covered by it.
Furthermore, inasmuch as Section 4 had given a qualified right of partic ipation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the principles of natural justice cannot be judged by any strait jacket formula.
According to him, the 663 extension of the principles of natural justice beyond what is provided by the Act in Sections 3 & 4, was unwarranted and would deprive the provisions of the Statute of their efficacy in relation to the achievement of 'speedy relief ', which is the object intended to be achieved.
He emphasised that the process of notice, consultation and exchange of information, informed decision making process, the modali ties of assessing a consensus of opinion would involve such time that the Govt. would be totally unable to act in the matter efficiently, effectively and purposefully on behalf of the victims for realisation of the just dues of the victims.
He further urged that the Civil Procedure Code before its amendment in 1976 did not have the provisions of Order l Rules 8(4), (5) & (6) and Explanations etc.
nor Order XXIII Rules 3A and 3B.
Before the amendment the High Court had taken a view against the requirement of hearing the parties represented in the suit under Order 1, Rule 8 before it before settling or disposing of the suit.
Our attention was drawn to the decision of the Calcutta High Court in Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal.
456 at 457 459, wherein it was held by the learned Single Judge that the plaintiff in a representative suit had right to compromise subject to the conditions that the suit was properly filed in terms of the provisions of that Rule and the settlement was agreed bona fide.
Learned Attorney General in that context contended that when the suit was validly instituted, the plaintiff had a right to compromise the suit and there need not be any provision for notice to the parties represented before entering into any compromise.
Reliance was placed on the decision of the Allahabad High Court in Ram Sarup vs Nanak Ram, AIR 1952 Allahabad 275, where it was held that a compromise entered into in a suit filed under Order 1 Rule 8 of the CPC was binding on all persons as the plaintiffs who had instituted the suit in representative capacity had the authority to compromise.
He further submitted that most, if not all, of the victims had given their powers of attorney which were duly filed in favour of the Union of India.
These powers or attorney have neither been impeached nor revoked or with drawn.
By virtue of the powers of attorney the Union of India, it was stated, had the authority to file the suits and to compromise the interests of the victims if so re quired.
The Act in question itself contemplates settlement as we have noted, and a settlement would need a common spokesman.
It was submitted that the Govt.
of India as the statutory representative discharged its duty and is in a centralised position of assessing the merits and demerits of any proposed course of action.
So far as the act of compro mise, abridging or curtailing the ambit of the 664 rights of the victims, it was submitted that in respect of liabilities of UCC & UCIL, be it corporate, criminal or tortious, it was open to an individual to take a decision of enforcing the liability to its logical extent or stopping short of it and acceding to a compromise.
Just as an indi vidual can make an election in the matter of adjudication of liability so can a statutory representative make an elec tion.
Therefore, it is wholly wrong to contend, it was urged, that Section 3(ii)(b) is inconsistent with individu al 's right of election and at the same time it provides the centralised decision making processes to effectively adjudge and secure the common good.
It was only a central agency like the Govt.
of India, who could have a perspective of the totality of the claims and a vision of the problems of individual plaintiffs in enforcing these, it was urged.
It was emphasised that it has to be borne in mind that a com promise is a legal act.
In the present case, it is a part of the conduct of the suit.
It is, therefore, imperative that the choice of compromise is made carefully, cautiously and with a measure of discretion, it was submitted.
But if any claimant wished to be associated with the conduct of the suit, he would necessarily have been afforded an opportunity for that purpose, according to the learned Attorney General.
In this connection, reference was made to Section 4 of the Act.
On the other hand, an individual who did not partici pate in the conduct of the suit and who is unaware of the various intricacies of the case, could hardly be expected to meaningfully partake in the legal act of settlement either in conducting the proceedings or entering into compromise, it was urged.
In those circumstances, the learned Attorney General submitted that the orders of 14 15th February, 1989 and the Memorandum of Settlement were justified both under the Act and the Constitution.
According to him, the terms of Settlement might be envisaged as pursuant to Section 3(ii)(b) of the Act, which was filed according to him pursu ant to judical direction.
He sought more than once to empha sise, that the order was passed by the highest Court of the land in exercise of extraordinary jurisdiction vested in it under the Constitution.
Our attention was drawn to several decisions for the power of this Court under Articles 136 and 142 of the Con stitution.
Looked closely at the provisions of the Act, it was contended that taking into consideration all the factors, namely, possibilities of champerty, exploita tion, unconscionable agreements and the need to represent the dead and the disabled, the course of events would reveal a methodical and systematic protection and vindication of rights to the largest possible extent.
It was observed that the rights are indispensably valuable possessions, but the rights is something which a 665 man can stand on, something which must be demanded or in sisted upon without embarrassment or shame.
When rights are curtailed, permissibility of such a measure can be examined only upon the strength, urgency and the preeminence of rights and the largest good of the largest number sought to b,e served by curtailment.
Under the circumstances which were faced by the victims of Bhopal gas tragedy, the justi fying basis, according to the learned Attorney General, or ground of human rights is that every person morally ought to have something to which he or she is entitled.
It was empha sised that the Statute aimed at it.
The Act provides for assumption of rights to sue with the aim of securing speedy, effective and equitable results to the best advantage of the claimants.
The Act and the scheme, according to the learned Attorney General, sought to translate that profession into a system of faith and possible association when in doubt.
Unless such a profession is shown to be unconscionable under the circumstances or strikes judicial conscience as a sub version of the objects of the Act, a declaredly fair, just and equitable exercise of a valid power would not be open to challenge.
He disputed the submission that the right to represent victims postulated as contended mainly by the counsel on behalf of the petitioners, a pre determination of each individual claim as a sine qua non for proceeding with the action.
Such a construction would deplete the case of its vigour, urgency and sense of purpose, he urged.
In this case, with the first of the cases having been filed in U.S. Federal Court on December 7, 1984 a settlement would have been reached for a much smaller sum to the detriment of the victims.
Learned Attorney General emphasised that this background has to be kept in mind while adjudging the valid ity of the Act and the appropriateness of the conduct of the suit in the settlement entered into.
He submitted that it has to be borne in mind that if the contentions of the petitioners are entertained, the rights theoretically might be upheld but the ends of justice would stand sacrificed.
It is in those circumstances that it was emphasised that the claimant is an individual and is the best person to speak about his injury.
The knowledge in relation to his injury is relevant for the purpose of com pensation, whose distribution and disbursement is the sec ondary stage.
It is fallacious to suggest that the plaint was not based upon necessary data.
He insisted that the figures mentioned in the plaint although tentative were not mentioned without examination or analysis.
It was further submitted by the learned Attorney General 666 that while the Govt.
of India had proceeded against the UCC, it had to represent the victims as a class and it was not possible to define each individual 's right after careful scrutiny, nor was it necessary or possible to do so in a mass disaster case.
The settlement was a substitute for adjudication since it involved a process of reparation and relief.
The relief and reparation cannot be said to be irrelevant for the purpose of the Act.
It was stated that the alleged liability of the Govt.
of India or any claim asserted against the alleged joint tort feasor should not be allowed to be a constraint on the Govt.
of India to protect the interests of its own citizens.
Any counter claim by UCC or any claim by a citizen against the Govt.
cannot vitiate the action of the State in the collective interest of the victims, who are the citizens.
Learned Attorney General submitted that any industrial activity, normally, has to be licensed.
The mere regulation of any activity does not carry with it legally a presumption of liability for injury caused by the activity in the event of a mishap occurring in the course of such an activity.
In any event, the learned Attor ney General submitted the Govt.
of India enjoys sovereign immunity in accordance with settled law.
If this were not the case, the Sovereign will have to abandon all regulatory functions including the licensing of drivers of automobiles.
Hence, we have to examine the question whether even on the assumption that there was negligence on the part of the Govt.
of India in permitting/licensing of the industry set up by the Union Carbide in Bhopal or permitting the factory to grow up, such permission or conduct of the Union of India was responsible for the damage which has been suffered as a result of Bhopal gas leakage.
It is further to be examined whether such conduct was in discharge of the sovereign functions of the Govt., and as such damages, if any, result ing therefrom are liable to be proceeded against the Govt.
as a joint tort feasor or not.
In those circumstances, it was further asserted on behalf of the Union of India that though calculation of damages in a precise manner is a logical consequence of a suit in progress it cannot be said to be a condition precedent for the purpose of settling the matter.
Learned Attorney General urged that the accountabil ity to the victims should be through the court.
He urged that the allegation that a large number of victims did not give consent to the settlement entered into, is really of no relevance in the matter of a compromise in a mass tort action.
It was highlighted that it is possible that those who do not need urgent relief or are uninformed of the issues in the case, may choose to deny consent and may place the flow of relief in jeopardy.
Thus, consent based upon individual subjective opinion can never be correlated to the proposal of an overall settlement in an urgent matter.
Learned Attorney General urged further that if indeed con sent were to be insisted upon as a mandatory 667 requirement of a Statute, it would not necessarily lead to an accurate reflection of the victims ' opinion as opinions may be diverse.
No individual would be in a position to relate himself to a lump sum figure and would not be able to define his expectations on a global criteria.
In such cir cumstances the value of consent is very much diminished.
It was urged that if at all consent was to be insisted it should not be an expression of the mind without supporting information and response.
To make consent meaningful it is necessary that it must be assertion of a fight to be exer cised in a meaningful manner based on information and com prehension of collective welfare and individual good.
In a matter of such dimensions the insistence upon consent will lead to a process of enquiry which might make effective consideration of any proposal impossible.
For the purpose of affording consent, it would also be necessary that each individual not only assesses the damages to himself objec tively and places his opinion in the realm of fair expecta tion, but would also have to do so in respect of others.
The learned Attorney General advanced various reasons why it is difficult now or impossible to have the concurrence of all.
In answer to the criticism by the petitioners, it was explained on behalf of the Union of India that UCIL was not impleaded as a party in the suit because it would have militated against the plea of multinational enterprise liability and the entire theory of the case in the plaint.
It was highlighted that the power to represent under the Act was exclusive, the power to compromise for the Govt.
of India is without reference to the victims, yet it is a power guided by the sole object of the welfare of the victims.
The presence and ultimately the careful imprimatur of the judi cial process is the best safeguard to the victims.
Learned Attorney General insisted that hearing the parties after the settlement would also not serve any purpose.
He urged that it can never be ascertained with certainty whether the victims or groups have authorised what was being allegedly spoken on their behalf; and that the victims would be unable to judge a proposal of this nature.
A method of consensus need not be evolved like in America where every settlement made by contingency fee lawyers who are anxious to obtain their share automatically become adversaries of the victims and the court should therefore be satisfied.
Here the Court arrived at the figure and directed the parties to file a settlement on the basis of its order of February 14, 1985 and the interveners were heard, it was urged.
It was also urged that notice to the victims individually would have been a difficult exercise and analysis of their response time consuming.
668 72.
The learned Attorney General urged that neither the Central Govt.
nor the State Govt.
of Madhya Pradesh is liable for the claim of the victims.
He asserted that, on the facts of the present case, there is and can be no li ability on their part as joint tort feasors.
For the welfare of the community several socio economic activities will have to be permitted by the Govt.
Many of these activities may have to be regulated by licensing provisions contained in Statutes made either by Parliament or by State Legislatures.
Any injury caused to a person, to his life or liberty in the conduct of a licensed authority so as to make the said licensing authority or the Govt.
liable to damages would not be in conformity with jurisprudential principle.
If in such circumstances it was urged on behalf of the Govt.
, the public exchequer is made liable, it will cause great public injury and may result in drainage of the treasury.
It would terrorise the welfare state from acting for development of the people, and will affect the sovereign governmental activities which are beneficial to the community not being adequately licensed and would thereby lead to public injury.
In any event, it was urged on behalf of the Govt., that such licensing authorities even assuming without admitting could be held to be liable as joint tort feasors, it could be so held only on adequate allegations of negligence with full particulars and details of the alleged act or omission of the licensing authority alleged and its direct nexus to the injury caused to the victims.
It had to be proved by cogent and adequate evidence.
On some conjecture or surmise without any foundation on facts, Govt 's right to represent the victims cannot be challenged.
It was asserted that even if the Govt.
is considered to be liable as a joint tort feasor, it will be entitled to claim sovereign immunity on the law as it now stands.
Reference was made to the decision of this Court in Kasturilal Kalia Ram Jain vs The State of U.P., ; where the conduct of some police officers in seizing gold in exercise of their statutory powers was held to be in discharge of the sovereign functions of the State and such activities enjoyed sovereign immunities.
The liability of the Govt.
of India under the Constitution has to be referred to Article 300, which takes us to Sections 15 & 18 of the Indian Independence Act, 1947, and Section 176(1) of the Govt.
of India Act, 1935.
Reference was also made to the observations of this Court in The State of Rajasthan vs Mst.
Vidhyawati, & Anr., [1962] 2 Supp.
SCR 989.
We have noted the shareholding of UCC.
The circum stances that financial institutions held shares in the UCIL would not disqualify 669 the Govt.
of India from acting as patens patriae and in discharging of its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Govt.
of India, UCIL was not a necessary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia.
on the basis of enterprise liability.
If the Govt.
of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case (supra).
Accord ing to learned Attorney General, the Union of India in the present case was not proceeding on the basis of lesser liability of UCC predicated in Mehta 's case but on a differ ent jurisprudential principle to make UCC strictly and absolutely liable for the entire damages.
The learned Attorney General submitted that even assuming for the purpose of argument without conceding that any objection can be raised for the Govt.
of India repre senting the victims, to the present situation the doctrine of necessity applied.
The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity, and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae jurisdiction or on principle analogous thereto.
After having statutorily armed itself in recogni tion of such parens patraie right or on principles analogous thereto, it went to the American courts.
No other person was properly designed for representing the victims as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent the victims before the American courts.
Private plaintiffs were also represented by their attorneys.
A Committee of three attorneys was formed before the case proceeded before Judge Keenan.
It was high lighted that the order of Judge Keenan permitted the Govt.
of India to represent the victims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
Reference may be made to Halsbury 's Laws of England, Vol. 1, 4th Edn., page 89, para 73, where it was pointed that that if all the members of the only tribunal competent to determine a matter are subject to disqualifica tion, they may be authorised and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity.
Reference was also made to De Smith 's Judicial Review of Administrative Action (4th Edn.
pages 276 277.
See also G.A. Flick Natural Justice, [1879] pages 138 141.
Reference was also made to the observations of this Court in J. Mohapatra & Co. 670 & Anr.
vs State of Orissa & Anr.
, ; , where at page 112 of the report, the Court recognised 'the principle of necessity.
It was submitted that these were situations where on the principle of doctrine of necessity a person interested was held not disqualified to adjudicate on his rights.
The present is a case where the Govt.
of India only represented the victims as a party and did not adjudicate between the victims and the UCC.
It is the Court which would adjudicate the rights of the victims.
The representation of the victims by the Govt.
of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
We are of the opinion in the facts and the circumstances of the case that this contention urged by Union of India is right.
There was no scope of violation of the principle of natural justice on this score.
It was also urged that the doctrine of de facto representation will also apply to the facts and the circum stances of the present case.
Reliance was placed on the decision of this Court in Gokaraju Rangaraju etc.
vs State of A.P.; , , where it was held that the doc trine of de facto representation envisages that acts per formed within the scope of assumed official authority in the interest of public or third persons and not for one 's own benefit, are generally to be treated as binding as if they were the acts of officers de jure.
This doctrine is rounded on good sense, sound policy and practical expediency.
It is aimed at the prevention of public and private mischief and protection of public and private interest.
It avoides end less confusion and needless chaos.
Reference was made to the observations of this Court in Pushpadevi M. Jatia vs M.L. Wadhawan; , at 389 390 and M/s. Beopar Shayak (P) Ltd. & Ors.
vs Vishwa Nath & Ors., [1987] 3 SCC 693 at 702 & 703.
Apart from the aforesaid doctrine, doctrine of bona fide representation was sought to be resorted to in the circumstances.
In this connection, reference was made to Dharampal Sing, vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammad Sulaiman vs N.C. Mohammad Ismail & Ors., ; and Malkarjun Bin Shigramappa Pasara vs Narhari Bin Shivappa & Anr., 27 IA 2 16. 77.
It was further submitted that the initiation of criminal proceedings and then quashing thereof, would not make the Act ultra vires so far as it concerned.
Learned Attorney General submitted that the Act only authorised the Govt.
of India to represent the victims to enforce their claims for damages under the Act.
The Govt.
as such had nothing to do with the quashing of the criminal proceedings and it was not representing the victims in respect of the criminal liability of 671 the UCC or UCIL to the victims.
He further submitted that quashing of criminal proceedings was done by the Court in exercise of plenary powers under Articles 136 and 142 of the Constitution.
In this connection, reference was made to State of U.P. vs Poosu & Anr., ; ; K.M. Nanavati vs The State of Bombay, ; According to the learned Attorney General, there is also power in the Supreme Court to suggest a settlement and give relief as in Ram Gopal vs Smt.
Sarubai & Ors., ; India Mica & Micanite Industries Ltd. vs State of Bihar & Ors., 78.
Learned Attorney General urged that the Supreme Court is empowered to act even outside a Statute and give relief in addition to what is contemplated by the latter in exercise of its plenary power.
This Court acts not only as a Court of Appeal but is also a Court of Equity.
See Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh Oberoi, 1.
During the course of heating of the petitions, he in formed this Court that the Govt.
of India and the State Govt.
of Madhya Pradesh refuted and denied any liability, partial or total, of any sort in the Bhopal gas Leak disas ter, and this position is supported by the present state of law.
It was, however, submitted that any claim against the Govt.
of India for its alleged tortious liability was out side the purview of the Act and such claims, if any, are not extinguished by reason of the orders dated 14th & 15th February, 1989 of this Court.
Learned Attorney General further stated that the amount of $ 470 million which was secured as a result of the memorandum of settlement and the said orders of this Court would be meant exclusively for the benefit of the victims who have suffered on account of the Bhopal gas leak disas ter.
The Govt.
of India would not seek any reimbursement on account of the expenditure incurred suo motu for relief and rehabilitation of the Bhopal victims nor will the Govt.
or its instrumentality make any claim on its own arising from this disaster.
He further assured this Court that in the event of disbursement of compensation being initiated either under the Act or under the orders of this Court, a notifica tion would be instantaneously issued under Section 5(3) of the Act authorising the Commissioner or any other officers to discharge functions and exercise all or any powers which the Central Govt.
may exercise under Section 5 to enable the victims to place before the Commissioner or the Dy.
Commis sioner any additional evidence that they would like to be considered.
The Constitution Bench of this Court presided over by the learned Chief Justice has pronounced an order on 4th May, 1989 giving 672 reasons for the orders passed on 14th 15th February, 1989.
Inasmuch as good deal of criticism was advanced before this Court during the hearing of the arguments on behalf of the petitioners about the propriety and validity of the settle ment dated 14th 15th February, 1989 even though the same was not directly in issue before us, it is necessary to refer briefly to what the Constitution Bench has stated in the said order dated 4th May, 1989.
After referring to the facts leading to the settlement, the Court has set out the brief reason on the following points: (a) How did the Court arrive at the sum of 470 million US dollars for an overall settlement? (b) Why did the Court consider the sum of 470 millions US dollars as 'just, equitable and reasonable '? (c) Why did the Court not pro nounce on certain important legal questions of far reaching importance said to arise in the appeals as to the principles of liability of monolithic, economically entrenched multina tional companies operating with inherently dangerous technologies in the developing countries of the third world? These questions were said to be of great contemporary rele vance to the democracies of the third world.
This Court recognised that there was another aspect of the review pertaining to the part of the settlement which terminated the criminal proceedings.
The questions raised on the point in the review petitions, the Court was of the view, prima facie merit consideration and therefore, abstained from saying anything which might tend to prejudge this issue one way or the other.
The basic consideration, the Court recorded, moti vating the conclusion of the settlement was the compelling need for urgent relief, and the Court set out the law 's delays duly considering that there was a compelling duty both judicial and humane, to secure immediate relief to the victims.
In doing so, the Court did not enter upon any forbidden ground, the court stated.
The Court noted that indeed efforts had already been made in this direction by Judge Keenan and the learned District Judge of Bhopal.
Even at the opening of the arguments in the appeals, the Court had suggested to learned counsel to reach a just and fair settlement.
And when counsel met for re scheduling of the hearings the suggestion was reiterated.
The Court recorded that the response of learned counsel was positive in at tempting a settlement but they expressed a certain degree of uneasiness and skepticism at the prospects of success in view of their past experience of such negotiations when, as they stated, there had been uninformed and even irresponsi ble criticism of the attempts at settlement.
673 82.
Learned Attorney General had made available to the Court the particulars of offers and counter offers made on previous occasions and the history of settlement.
In those circumstances, the Court examined the prima facie material as the basis of quantification of a sum which, having regard to all the circumstances including the prospect of delays inherent in the judicial process in India and thereafter in the matter of domestication of the decree in the U.S. for the purpose of execution and directed that 470 million US dollars, which upon immediate payment with interest over a reasonable period, pending actual distribution amongst the claimants, would aggregate to nearly 500 million US dollars or its rupee equivalent of approximately Rs.750 crores which the learned Attorney General had suggested, be made the basis of settlement, and both the parties accepted this direction.
The Court reiterated that the settlement proposals were considered on the premise that the Govt.
had the exclu sive statutory authority to represent and act on behalf of the victims and neither counsel had any reservation on this.
The order was also made on the premise that the Act was a valid law.
The Court declared that in the event the Act is declared void in the pending proceedings challenging its validity, the order dated 14th February, 1989 would require to be examined in the light of that decision.
The Court also reiterated that if any material was placed before it from which a reasonable inference was possible that the UCC had, at any time earlier, offered to pay any sum higher than an outright down payment of US 470 million dollars, this Court would straightaway initiate suo motu action requiring the concerned parties to show cause why the order dated 14th February '89 should not be set aside and the parties relegat ed to their original positions.
The Court reiterated that the reasonableness of the sum was based not only on inde pendent quantification but the idea of reasonableness for the present purpose was necessarily a broad and general estimate in the context of a settlement of the dispute and not on the basis of an accurate assessment by adjudication.
The Court stated that the question was, how good or reasona ble it was as a settlement, which would avoid delay, uncer tainties and assure immediate payment.
An estimate in the very nature of things, would not have the accuracy of an adjudication.
The Court recorded the offers, counter offers, reasons and the numbers of the persons treated and the claims already made.
The Court found that from the order of the High Court and the admitted position on the plaintiff 's side, a reasonable prima facie estimate of the number of fatal cases and serious personal injury cases, was possible to be made.
The Court referred to the High Court 's 674 assessment and procedure to examine the task of assessing the quantum of interim compensation.
The Court referred to M. C Mehta 's case reiterated by the High Court, bearing in mind the factors that if the suit proceeded to trial the plaintiff Union of India would obtain judgment in respect of the claims relating to deaths and personal injuries in the following manner: (a) Rs.2 lakhs in each case of death; (b) Rs.2 lakh in each case of total permanent disability; (c) Rs. 1 lakh in each case of permanent partial disablement; and (d) Rs.50,000 in each case of temporary partial disablement.
Half of these amounts were awarded as interim com pensation by the High Court.
The figures adopted by the High Court in regard to the number of fatal cases and cases of serious personal injuries did not appear to have been disputed by anybody before the High Court, this Court observed.
From those figures, it came to the conclusion that the total number of fatal cases was about 3,000 and of grievous and serious personal injuries, as verifiable from the records was 30,000.
This Court also took into consideration that about 8 months after the occurrence a survey had been conducted for the purpose of identification of cases.
These figures indi cated less than 10,000.
In those circumstances, as a rough and ready estimate, this Court took into consideration the prima facie findings of the High Court and estimated the number of fatal cases of 3,000 where compensation could range from Rs. 1 lakh to Rs.3 lakhs.
This would account for Rs.70 crores, nearly 3 times higher than what would have otherwise been awarded in comparable cases in motor vehicles accident claims.
The Court recognised the effect of death and reiter ated that loss of precious human lives is irreparable.
The law can only hope to compensate the estate of a person whose life was lost by the wrongful act of another only in the way the law was equipped to compensate i.e. by monetary compen sation calculated on certain well recognised principles.
"Loss to the estate" which is the entitlement of the estate and the 'loss of dependency ' estimated on the basis of capitalised present value awardable to the heirs and depend ants, this Court considered, were the main components in the computation of compensation in fatal accident actions, but the High Court adopted a higher basis.
The Court also took into account the personal injury cases, and stated that these apportionments were merely broad considerations gener ally guiding the idea of reasonableness of the overall basis of 675 settlement, and reiterated that this exercise was not a pre determination of the quantum of compensation amongst the claimants either individually or catagory wise, and that the determination of the actual quantum of compensation payable to the claimants has to be done by the authorities under the Act.
These were the broad assessments and on that basis the Court made the assessment.
The Court believed that this was a just and reasonable assessment based on the materials available at that time.
So far as the other question, name ly, the vital juristic principles of great contemporary relevance to the Third World generally, and to India in particular, touching problems emerging from the pursuit of such dangerous technologies for economic gains by multi nationals in this case, the Court recognised that these were great problems and reiterated that there was need to evolve a national policy to protect national interests from such ultra hazardous pursuits of economic gain; and that Jurists, technologists and other experts in economics.
environmen tology, futurology, sociology and public health should identify the areas of common concern and help in evolving proper criteria which might receive judicial recognition and legal sanction.
The Court reiterated that some of these problems were referred to in M.C. Mehta 's case (supra).
But in the present case, the compulsions of the need for immedi ate relief to tens of thousands of suffering victims could not wait till these questions vital though these be, were resolved in due course of judicial proceedings; and the tremendous suffering of thousands of persons compelled this Court to move into the direction of immediate relief which, this Court thought, should not be subordinated to the uncer tain promises of the law, and when the assessment of fair ness of the amount was based on certain factors and assump tions not disputed even by the plaintiffs.
Before considering the question of constitutional validity of the Act, in the light of the background of the facts and circumstances of this case and submissions made, it is necessary to refer to the order dated 3rd March, 1989 passed by the Constitution Bench in respect of writ peti tions Nos. 164/86 and 268/89, consisting of 5 learned Judges presided over by the Hon 'ble the Chief Justice of India.
The order stated that these matters would be listed on 8th March, 1989 before a Constitution Bench for decision "on the sole question whether the Bhopal Gas Leak Disaster (Process ing of Claims) Act, 1985 is ultra vires".
This is a judicial order passed by the said Constitution Bench.
This is not an administrative order.
Thus, these matters are before this Court.
The question, therefore, arises; what are these matters? The aforesaid order specifically states that these matters were placed before this Bench on the "sole question" whether the Act is ulta vires.
676 Hence, these matters are not before this Bench for disposal of these writ petitions.
If as a result of the determina tion, one way or the other, it is held, good and bad, and that some relief becomes necessary, the same cannot be given or an order cannot be passed in respect thereof, except declaring the Act or any portion of the Act, valid or in valid constitutionally as the decision might be.
In writ petition No. 268/89 there is consequential prayer to set aside the order dated 14/15th February, 1989.
But since the order dated 3rd March, 1989 above only sug gests that these matters have been placed before this Bench 'on the sole question ' whether the Bhopal Act is ultra vires or not, it is not possible by virtue of that order to go into the question whether the settlement is valid or liable to be set aside as prayed for in the prayers in these appli cations.
The provisions of the Act have been noted and the rival contentions of the parties have been set out before.
It is, however, necessary to reiterate that the Act does not in any way circumscribe the liability of the UCC, UCIL or even the Govt.
of India or Govt.
of Madhya Pradesh if they are jointly or severally liable.
This follows from the construction of the Act, from the language that is apparent.
The context and background do not indicate to the contrary.
Counsel for the victims plead that that is so.
The learned Attorney General accepts that position.
The liability of the Government is, however, disputed.
This Act also does not deal with any question of criminal liability of any of the parties concerned.
On an appropriate reading of the relevant provisions of the Act, it is apparent that the criminal liability arising out of Bhopal gas leak disaster is not the subject matter of this Act and cannot be said to have been in any way affected, abridged or modified by virtue of this Act.
This was the contention of learned counsel on behalf of the victims.
It is also the contention of the learned Attor ney General.
In our opinion, it is the correct analysis and consequence of the relevant provisions of the Act.
Hence, the submissions made on behalf of some of the victims that the Act was bad as it abridged or took away the victims ' right to proceed criminally against the delinquent, be it UCC or UCIL or jointly or severally the Govt.
of India, Govt.
of Madhya Pradesh or Mr. Arjun Singh, the erstwhile Chief Minister of Madhya Pradesh, is on a wrong basis.
There is no curtailment of any right with respect to any criminal liability.
Criminal liability is not the subject matter of the Act.
By the terms of the Act and also on the concessions made by the learned Attorney General, if that be so, then can non prosecution in criminal liability be a consideration or valid consideration for settlement of claims under the Act? 677 This is a question which has been suggested and articulated by learned counsel appearing for the victims.
On the other hand, it has been asserted by the learned Attorney General that that part of the order dated 14/15th February, 1989 dealing with criminal prosecution or the order of this Court was by virtue of the inherent power of this Court under Articles 136 & 142 of the Constitution.
These, the learned Attorney General said, were in the exercise of plenary powers of this Court.
These are not considerations which induced the parties to enter into settlement.
For the pur pose of determination of constitutional validity of the Act, it is however necessary to say that criminal liability of any of the delinquents or of the parties is not the subject matter of this Act and the Act does not deal with either claims or rights arising out of such criminal liabil ity.
This aspect is necessary to be reiterated on the ques tion of validity of the Act.
We have set out the language and the purpose of the Act, and also noted the meaning of the expression 'claim ' and find that the Act was to secure the claims connected with or arising out of the disaster so that these claims might be dealt with speedily, affectively, equitably and to the best advantage of the claimants.
In our opinion, Clause (b) of Section 2 includes all claims of the victims arising out of and connected with the disaster for compensation and damages or loss of life or personal injury or loss to the business and flora and fauna.
What, however, is the extent of liability, is another question.
This Act does not purport to or even to deal with the extent of liability arising out of the said gas leak disaster.
Hence, it would be improper or incorrect to contend as did Ms. Jaising, Mr Garg and other learned counsel appearing for the victims, that the Act circumscribed the liability criminal, punitive or absolute of the parties in respect of the leakage.
The Act provides for a method or procedure for the establishment and enforcement of that liability.
Good deal of argument was advanced before this Court on the question that the settle ment has abridged the liability and this Court has lost the chance of laying down the extent of liability arising out of disaster like the Bhopal Gas Leak disaster.
Submissions were made that we should lay down clearly the extent of liability arising out of these types of disasters and we should fur ther hold that the Act abridged such liability and as such curtailed the rights of the victims and was bad on that score.
As mentioned hereinbefore, this is an argument under a misconception.
The Act does not in any way except to the extent indicated in the relevant provisions of the Act circumscribe or abridge the extent of the rights of the victims so far as the liability of the delinquents are concerned.
Whatever are the rights of the victims and what ever claims arise out of the 678 gas leak disaster for compensation, personal injury, loss of life and property, suffered or likely to be sustained or expenses to be incurred or any other loss are covered by the Act and the Central Govt.
by operation of Section 3 of the Act has been given the exclusive right to represent the victims in their place and stead.
By the Act, the extent of liability is not in any way abridged and, therefore, if in case of any industrial disaster like the Bhopal Gas Leak disaster, there is right in victims to recover damages or compensation on the basis of absolute liability, then the same is not in any manner abridged or curtailed.
Over 120 years ago Rylands vs Fletcher, [1868] Vol.
3 LR E & I Appeal Cases 330 was decided in England.
There A, was the lessee of certain mines.
B, was the owner of a mill standing on land adjoining that under which the mines were worked.
B, desired to construct a reservoir, and employed competent persons, such as engineers and a contractor, to construct it.
A, had worked his mines up to a spot where there were certain old passages of disused mines; these passages were connected with vertical shafts which communi cated with the land above, and which had also been out of use for years, and were apparently filled with marl and the earth of the surrounding land.
No care had been taken by the engineer or the contractor to block up these crafts, and shortly after water had been introduced into the reservoir it broke through some of the shafts, flowed through the old passage and flooded As mine.
It was held by the House of Lords in England that where the owner of land, without wilfulness or negligence, uses his land in the ordinary manner of its use, though mischief should thereby be occa sioned to his neighbour, he will not be liable in damages.
But if he brings upon his land any thing which would not naturally come upon it, and which is in itself dangerous, and may become mischievous if not kept under proper control, though in so doing he may act without personal wilfulness or negligence, he will be liable in ' damages for any mischief thereby occasioned.
In the background of the facts it was held that A was entitled to recover damages from B, in respect of the injury.
The question of liability was high lighted by this Court in M.C. Mehta 's case (supra) where a Constitution Bench of this Court had to deal with the rule of strict liability.
This Court held that the rule in Ry lands vs Fletcher, (supra) laid down a principle that if a person who brings on his land and collects and keep there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused.
This rule applies only to nonnatural user of the land and does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the things which escape 679 are present by the consent of the person injured or in certain cases where there is a statutory authority.
There, this Court observed that the rule in Rylands vs Fletcher, (supra) evolved in the 19th century at a time when all the developments of science and technology had not taken place, and the same cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure.
In a modern industrial society with highly de veloped scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to be carried on as part of the developmental process, Courts should not feel inhibited by this rule merely because the new law does not recognise the rule of strict and absolute liability in case of an enterprise engaged in hazardous and dangerous activity.
This Court noted that law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country.
Law cannot afford to remain static.
This Court reiterated there that if it is found necessary to construct a new principle of liability to deal with an unusual situa tion which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, the Court should not hesitate to evolve such principle of liability merely because it has not been so done in England.
According to this Court, an enterprise which is engaged in a hazardous or inherently dangerous industry which poses potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegable duty to the community to ensure that no harm results to anyone.
The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results to anyone on account of an accident in the operation of such activity resulting, for instance, in escape of toxic gas the enterprise is strictly and absolute ly liable to compensate all those who were affected by the accident as part of the social cost for carrying on such activity, regardless of whether it is carried on carefully or not.
Such liability is not subject to any of the excep tions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
If the enterprise is permitted to carry on a hazardous or dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such activity as an appropriate item of its overheads.
The enterprise alone has the resources to discover and guard against haz ards or dangers and 'to provide warning against potential hazards.
680 This Court reiterated that the measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect.
The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.
The determination of actual damages payable would depend upon various facts and circum stances of the particular case.
It was urged before us that there was an absolute and strict liability for an enterprise which was carrying on dangerous operations with gases in this country.
It was further submitted that there was evidence on record that sufficient care and attention had not been given to safe guard against the dangers of leakage and protection in case of leakage.
Indeed, the criminal prosecution that was launched against the Chairman of Union Carbide Shri Warren Anderson and others, as indicated before, charged them along with the defendants in the suit with delinquency in these matters and criminal negligence in conducting the toxic gas operations in Bhopal.
As in the instant adjudication, this Court is not concerned with the determination of the actual extent of liability, we will proceed on the basis that the law enunciated by this Court in M.C. Mehta 's case (supra) is the decision upon the basis of which damages will be payable to the victims in this case.
But then the practical question arises: what is the extent of actual damages payable, and how would the quantum of damages be computed? Indeed, in this connection, it may be appropriate to refer to the order passed by this Court on 3rd May, 1989 giving reasons why the settlement was arrived at at the figure indicated.
This Court had reiterated that it had proceeded on certain prima facie undisputed figures of death and substantially compen sating personal injury.
This Court has referred to the fact that the High Court had proceeded on the broader principle in M.C. Mehta 's case (supra) and on the basis of the capaci ty of the enterprise because the compensation must have deterrent effect.
On that basis the High Court had proceeded to estimate the damages on the basis of Rs.2 lakhs for each case of death and of total permanent disability, Rs. 1 lakh for each case of partial permanent disability and Rs.50,000 for each case or ' temporary partial disability.
In this connection, the controversy as to what would have been the damages if the action had proceeded, is another matter.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involve both compen sation to the person injured and punish 681 ment as deference.
These problems were highlighted by the House of Lords in England in Rookes vs Barnard, [1964]AC 1129, which indicate the difference between aggravated and exemplary damages.
Salmond on the Law of Torts, 15th Edition at p. 30 emphasises that the function of damages is compen sation rather than punishment, but punishment cannot always be ignored.
There are views which are against exemplary damages on the ground that these infringe in principle the object of law of torts, namely, compensation and not punish ment and these tend to impose something equivalent to fine in criminal law without the safeguards provided by the criminal law.
In Rookes vs Barnard (supra), the House of Lords in England recognised three classes of cases in which the award of exemplary damages was considered to be justi fiable.
Awards must not only, it is said, compensate the parties but also deter the wrong doers and others from similar conduct in future.
The question of awarding exem plary or deterrent damages is said to have often confused civil and criminal functions of law.
Though it is considered by many that it is a legitimate.
encroachment of punishment in the realm of civil liability, as it operates as a re straint on the transgression of law which is for the ulti mate benefit of the society.
Perhaps, in this case, had the action proceeded, one would have realised that the fall out of this gas disaster might have been formulation of a con cept of damages, blending both civil and criminal liabili ties.
There are, however, serious difficulties in evolving such an actual concept of punitive damages in respect of a civil action which can be integrated and enforced by the judicial process.
It would have raised serious problems of pleading, proof and discovery, and interesting and challeng ing as the task might have been, it is still very uncertain how far decision based on such a concept would have been a decision according to 'due process ' of law acceptable by international standards.
There were difficulties in that attempt.
But as the provisions stand these considerations do not make the Act constitutionally invalid.
These are matters on the validity of settlement.
The Act, as such does not abridges or curtail damages or liability whatever that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
Mr. Garg tried to canvass before us the expanding of horizons of human rights.
He contended that the conduct of the multinational corporations dealing with dangerous gases for the purpose of development specially in the conditions prevailing under the Third world countries requires closer scrutiny and vigilance on the part of emerging nations.
He submitted that unless courts are alert and active 682 in preserving the rights of the individuals and in enforcing criminal and strict liability and in setting up norms com pelling the Govt.
to be more vigilant and enforcing the sovereign will of the people of India to oversee that such criminal activities which endanger even for the sake of developmental work, economy and progress of the country, the health and happiness of the people and damage the future prospects of health, growth and affect and pollute the environment, should be curbed and, according to him, these could only be curbed by insisting through the legal adjudi cation, punitive and deterrent punishment in the form of damages.
He also pleaded that norms should be set up indi cating how these kinds of dangerous operations are to be permitted under conditions of vigilance and survillence.
While we appreciate the force of these arguments, and en dorse his plea that norms and deterrence should be aspired for, it is difficult to correlate that aspect with the present problem in this decision.
We do reiterate, as mentioned in the Universal Declaration of Human Rights that people are born free and the dignity of the persons must be recognised and an effec tive remedy by competent tribunal is one of the surest method of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about meas ures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
The main question, however, canvassed by all learned counsel for the victims was that so far as the Act takes away the right of the victims to fight or establish their own rights, it is a denial of access to justice, and it was contended that such denial is so great a deprivation of both human dignity and right to equality that it cannot be justi fied because it would be affecting right to life, which again cannot be deprived without a procedure established by law which is just, fair and reasonable.
On this aspect, Shri Shanti Bhushan tried to urge before us that sections 3 & 4 of the Act.
in so far as these enjoin and empower the Central Govt.
to institute or prose cute proceedings was only an enabling provision for the Central Govt.
and not depriving or disabling provisions for the victim.
Ms. Jaising sought to urge in addition, that in order to make the provisions constitutionally valid, we should eliminate the concept of exclusiveness to the Central Govt.
and give the victims right to sue along with the Central Govt.
We are unable to accept these submissions.
683 97.
In our opinion, Sections 3 & 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give to the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and significant.
The exclusivily cannot be whittled down or watered down as suggested by counsel.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to the Central Govt.
along with the victims in instituting or proceeding for the realisation or the enforcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effec tive or equitable and would not be the best or more advanta geous procedure for securing the claims arising out of the leakage.
In that view of the matter and in view of the language used and the purpose intended to be achieved, we are unable to accept this aspect of the arguments advanced on behalf of the victims.
It was then contended that by the procedure envisaged by the Act, the victims have been de prived and denied.their rights and property to fight for compensation.
The victims, it has been asserted, have been denied access to justice.
It is a great deprivation, it was urged.
It was contended that the procedure evolved under the Act for the victims is peculiar and having good deal of disadvantages for the victims.
Such special disadvantageous procedure and treatment is unequal treatment, it was sug gested.
It was, therefore, violative of Article 14 of the Constitution, that is the argument advanced.
The Act does provide a special procedure in respect of the rights of the victims and to that extent the Central Government takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multinational and a big Indian corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and indentifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disasters situated as the victims were against a mighty multinational with 684 the presence of foreign contingency lawyers.
looming on the scene, in our opinion, there were sufficient grounds for such differentiation and different treatment.
In treating the victims of the gas leak disaster differently and provid ing them a procedure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitu tion, Article 14 is not breached.
We are, therefore, unable to accept this criticism of the.
The second aspect canvassed on behalf of the victims is that the procedure envisaged is unreasonable and as such not warranted by the situation and cannot be treated as a procedure which is just, fair and reasonable.
The argument has to be judged by the yardstick, as mentioned hereinbe fore, enunciated by this Court in State of Madras vs V.G. Rao, (supra).
Hence, both the restrictions or limitations on the substantive and procedural rights in the impugned legis lation will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into consideration.
Having considered the back ground, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settlement in USA in mass action, the strength for the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the victims as contemplated by s.4 of the Act, the Act cannot be condemned as unreasonable.
In this connection, the concept of 'parens patriae ' in jurisprudence may be examined.
It was contended by the learned Attorney General that the State had taken upon itself this onus to effectively come in as parens patriae, we have noted the long line of Indian decisions where, though in different contexts, the concept of State as the parent of people who are not quite able to or competent to fight for their rights or assert their rights, have been utilised.
It was contended that the doctrine of parens patriae cannot be applicable to the victims.
How the concept has been understood in this country as well as in America has been noted.
Legal dictionaries have been referred to as noted before.
It was asserted on behalf of the victims by learned counsel that the concept of 'parens patriae ' can never be invoked for the purpose of suits in domestic juris diction of any country.
This can only be applied in respect of the claims out of the 685 country in foreign jurisdiction.
It was further contended that this concept of 'parens patraie ' can only be applied in case of persons who are under disability and would not be applicable in respect of those who are able to assert their own rights.
It is true that victims or their representatives are sui generis and cannot as such due to age, mental capac ity or other reason not legally incapable for suing or pursuing the remedies for the rights yet they are at a tremendous disadvantage in the broader and comprehensive sense of the term.
These victims cannot be considered to be any match to the multinational companies or the Govt.
with whom in the conditions that the victims or their representa tives were after the disaster physically, mentally, finan cially, economically and also because of the position of litigation would have to contend.
In such a situation of predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interests effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Govt.
to sue for and on behalf of or instead in place of the victims, no other theory, concept or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Govt.
It displaces the victims by opera tion of Section 3 of the Act and substitutes the Central Govt.
in its place.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Govt.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
If that is the position then, in our opinion, even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially, it could be utilised to suit or alter or adapt itself in the changed circum stances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
As we have noted the Act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
We must recognize and accept it as such.
686 101.
But this right and obligation of the State has another aspect.
Shri Shanti Bhushan has argued and this argument has also been adopted by other learned counsel appearing for the victims that with the assumption by the State of the jurisdiction and power as a parent to fight for the victims in the situation there is an imcumbent obliga tion on the State, in the words of Judge Keenan, 'as a matter of fundamental human decency ' to maintain the victims until the claims are established and realised from the foreign multinationals.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prose cuted the State must protect and preserve the victims.
Otherwise the object of the Act would be defeated, its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assump tion of the power and temporary deprivation of the rights of the victims and divestiture of the rights of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
Indeed, in the language of the Act there is support for this interpre tation.
Section 9 of the Act gives power to the Central Govt.
to frame by notification, a scheme for carrying into effect the purposes of the Act.
Sub section (2) of Section 9 provides for the matters for which the scheme may provide.
Amongst others, clause (d) of Section 9(2) provides for creation of a fund for meeting expenses in connection with the administration of the Scheme and of the provisions of the Act; and clause (e) of Section 9(2) covers the amounts which the Central Govt. "may after due appropriation made by Parliament by law in that behalf, credit to the fund re ferred to in clause (d) and any other amounts which may be credited to such fund".
Clause (f) of Section 9(2) speaks of the utilisation, by way of disbursal (including apportion ment) or otherwise, of any amounts received in satisfaction of the claims.
These provisions are suggestive but not explicit.
Clause (b) of Section 10 which provides that in disbursing under the scheme the amount received by way of compensation or damages in satisfaction of a claim as a result of the adjudication or settlement of the claim by a court or other authority, deduction shall be made from such amount of the sums, if any, paid to the claimant by the Govt.
before the disbursal of such amount.
The Scheme framed is also significant.
Clause 10 of the Scheme provides for the claims and relief funds and includes disbursal of amounts as relief including interim relief to persons af fected by the Bhopal gas leak disaster and Clause 11(1) stipulates that disbursal of any amounts under the scheme shall be made by the Deputy Commissioner to each claimant through credit in a bank or postal saving account, stressing that the legislative policy underlined 687 the Bhopal Act contemplated payment of interim relief till such time as the ' Central Govt.
was able to recover from the Union Carbide full amount of compensation from which the interim reliefs already paid were to be deducted from the amount payable to them for the final disbursal.
The Act should be construed as creating an obligation oh the Central Govt.
to pay interim relief as the Act deprives the victims of normal and immediate right of obtaining compensation from the Union Carbide.
Had the Act not been enacted, the victims could have and perhaps would have been entitled not only to sue the Union Carbide themselves, but also to enter into settlement or compromise of some sort with them.
The provi sions of the Act deprived the victims of that legal right and opportunity, and that deprivation is substantial depri vation because upon immediate relief depends often the survival of these victims.
In that background, it is just and proper that this deprivation is only to be justified if the Act is read with the obligation of granting interim relief or maintenance by the Central Government until the full amount of the dues of the victims is realised from the Union Carbide after adjudication or settlement and then deducting therefrom the interim relief paid to the victims.
As submitted by learned Attorney General, it is true that there is no actual expression used in the Act itself which expressly postulates or indicates such a duty or obligation under the Act.
Such an obligation is, however, inherent and must be the basis of properly construing the spirit of the Act.
In our opinion, this is the true basis and will be in consonance with the spirit of the Act.
It must be, to use the well known phrase 'the major inarticulate premise ' upon which though not expressly stated, the Act proceeds.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construction but on the contrary, Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This ap proach to the interpretation of the Act can legitimately be called the 'constructive intuition ' which, in our opinion, is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quanti ty of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the concession of which is dangerous, the denial ruinous".
Given this freedom it is a rare 688 opportunity though never to be misused and challenge for the Judges to adopt and give meaning to the Act, articulate and inarticulate, and thus translate the intention of the Par liament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims who, it was thought, were unable to establish their own rights and fight for themselves.
it is common knowledge that the victims were poor and impoverished.
How could they survive the long ordeal of litigation and ultimate execution of the decree or the orders unless provisions be made for their sustenance and maintenance, especially when they have been deprived of the fight to fight for these claims themselves? We, there fore, read the Act accordingly.
It was, then, contended that the Central Govt.
was not competent to represent the victims.
This argument has been canvassed on various grounds.
It has been urged that the Central Govt.
owns 22% share in UCIL and as such there is a conflict of interest between the Central Govt.
and the victims, and on that ground the former is disentitled to represent the latter in their battle against UCC and UCIL.
A large number of authorities on this aspect were cited.
However, it is not necessary in the view we have taken to deal with these because factually the Central Govt.
does not own any share in UCIL.
These are the statutory independent organisations, namely, Unit Trust of India and Life Insur ance Corporation, who own 20 to 22% share in UCIL.
The Govt.
has certain amount of say and control in LIC and UTI.
Hence, it cannot be said, in our opinion, that there is any con flict of interest in the real sense of the matter in respect of the claims of Bhopal gas leak disaster between the Cen tral Govt.
and the victims.
Secondly, in a situation of this nature, the Central Govt.
is the only authority which can pursue and effectively represent the victims.
There is no other organisation or Unit which can effectively represent the victims.
Perhaps, theoretically, it might have been possible to constitute another independent statutory body by the Govt.
under its control and supervision in whom the claim of the victims might have been vested and substituted and that Body could have been entrusted with the task of agitating or establishing the same claims in the same manner as the Central Govt. has done under the Act.
But the fact that that has not been done, in our opinion, does not in any way affect the position.
Apart from that, lastly, in our opinion, this concept that where there is a conflict of interest, the person having the conflict should not be entrusted with the task of this nature, does not apply in the instant situation.
In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central 689 Govt.
was not judging any claim, but was fighting and ad vancing the claims of the victims.
In those circumstances, it cannot be said that there was any violation of the prin ciples of natural justice and such entrustment to the Cen tral Govt.
of the right to ventilate for the victims was improper or bad.
The adjudication would be done by the courts, and therefore there is no scope of the violation of any principle of natural justice.
Along with this submission, the argument was that the power and the right given to the Central Govt.
to fight for the claims of the victims, is unguided and uncanalised.
This submission cannot be accepted.
Learned Attorney General is right that the power conferred on the Central Govt.
is not uncanalised.
The power is circumscribed by the purpose of the Act.
If there is any improper exercise or transgres sion of the power then the exercise of that power can be called in question and set aside, but the Act cannot be said to be violative of the rights of the victims on that score.
We have noted the relevant authorities on the question that how power should be exercised is different and separate from the question whether the power is valid or not.
The next argument on behalf of the victims was that there was con flict of interest between the victims and the Govt.
viewed from another aspect of the matter.
It has been urged that the Central Govt.
as well as the Govt.
of Madhya Pradesh along with the erstwhile Chief Minister of the State of Madhya Pradesh Shri Arjun Singh were guilty of negligence, malfeasance and non feasance, and as such were liable for damages along with Union Carbide and UCIL.
In other words, it has been said that the Govt.
of India and the Govt.
of Madhya Pradesh along with Mr. Arjun Singh are joint tort feasors and joint wrong doers.
Therefore.
it was urged that there is conflict of interest in respect of the claims arising out of the the gas leak disaster between the Govt.
of India and the victims and in such a conflict, it is improper, rather illegal and unjust to vest in the Govt.
of India the rights and claims of the victims.
As noted before, the Act was passed in a particular background and, in our opinion, if read in that background, only covers claims against Union Carbide or UCIL.
"Bhopal gas leak disaster" or "disaster" has been defined in clause (a) of Section (2) as the occurrence on the 2nd and 3rd days of December, 1984 which involved the release of highly noxious and abnormally dangerous gas from a plant in Bhopal (being a plant of the UCIL, a subsidiary of the UCC of U.S.A.) and which resulted in loss of life and damage to property on an extensive scale.
690 104.
In this context, the Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a "claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Govt.
Therefore, the Act proceeded on the assumption that the Govt. could be a claimant being a person as such.
Further more, this construction and the perspective of the Act is strengthened if a reference is made to the debate both in the Lok Sabha and Rajya Sabha to which references have been made.
The question whether there is scope for the Union of India being responsible or liable as a joint tort feasor is a difficult and different question.
But even assuming that it was possible that the Central Government might be liable in a case of this nature, the learned Attorney Gener al was right in contending that it was only proper that the Central Government should be able and authorised to repre sent the victims.
In such a situation, there will be no scope of the violation of the principles of natural justice.
The doctrine of necessity would be applicable in a situation of this nature.
The doctrine has been elaborated, in Hals bury 's Laws of England, 4th Edition, p, 89, paragraph 73, where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification, they might be authorised and obliged to hear that matter, by virtue of the operation of the common law doctrine of necessity,, An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribu nal can be constituted.
In the circumstances of the case, as mentioned hereinbefore, the Government of India is only capable to represent the victims as a party.
The adjudica tion, however, of the claims would be done by the Court.
In those circumstances, we are unable to accept the challenge on the ground of the violation of principles of natural justice on this score.
The learned Attorney General, howev er, sought to advance, as we have indicated before, his contention on the ground of de facto validity.
He referred to certain decisions.
We are of the opinion that this prin ciple will not be applicable.
We are also not impressed by the plea of the doctrine of bona fide representation of the interests of victims in all these proceedings.
We are of the opinion that the doctrine of bonafide representation would not be quite relevant and as 691 such the decisions cited by the learned Attorney General need not be considered.
There is, however, one other aspect of the matter which requires consideration.
The victims can be divested of their rights i.e. these can be taken away from them provided those rights of the victims are ensured to be established and agitated by the Central Govt.
following the procedure which would be just, fair and reasonable.
Civil Procedure Code is the guide which guides civil proceedings in this country and in other countries procedure akin to Civil Procedure Code.
Hence, these have been recognised and ac cepted as being in consonance with the fairness of the proceedings and in conformity with the principles of natural justice.
Therefore, the procedure envisaged under the Act has to be judged whether it is so consistent.
The Act, as indicated before.
has provided the procedure under sections 3 and 4.
Section 11 provides that the provisions of the Act and of any Scheme flamed thereunder shall have effect not withstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
Hence, if anything is inconsistent with the Act for the time being, it will not have force and the Act will override those provisions to the extent it does.
The Act has not specifi cally contemplated any procedure to be followed in the action to be taken pursuant to the powers conferred under section 3 except to the extent indicated in section 4 of the Act.
Section 5, however, authorises the Central Government to have the powers of a civil court for the purpose of discharging the functions pursuant to the authority vested under sections 3 and 4 of the Act.
There is no question of Central Government acting as a court in respect of the claims which it should enforce for or on behalf or instead of the victims of the Bhopal gas leak disaster.
In this connection, it is necessary to note that it was submitted that the Act, so far as it deals with the claims of the victims, should be read in conformity with Civil Procedure Code and/or with the principles of natural justice; and unless the provisions of/the Act are so read it would be violative of Articles 14 and 21 of the Constitution in the sense that there will be deprivation of rights to/fife and liberty without following a procedure which is just, fair and reasonable.
That is the main submission and contention of the different counsel for the victims who have appeared.
The different view points from which this contention has been canvassed have been noted before.
On the other hand, on behalf of the Government, the learned Attorney General has canvassed before us that there were sufficient safeguards consistent with the principles of natural justice within this Act and beyond what has been provided for 692 in a situation for which the Act was enacted, nothing more could be provided and further reading down the provisions of the Act in the manner suggested would defeat the purpose of the Act.
The aforesaid section 3 provides for the substitu tion of the Central Government with the ' right to represent and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the con stitutional provisions, no question of giving a hearing to the parties for taking over these fights by the State arises.
For legislation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature, which indeed the present Act is within the competence of the Parliament.
We are in agreement with the submission of the learned Attorney General that section 3 makes the Central Government the dominus litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
The next aspect is that section 4 of the Act, which, according to the learned Attorney General gives limited rights to the victims in the sense that it obliges the Central Government to have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim".
Therefore, it obliges the Central Government to have 'due regard ' to any matters, and it was urged on behalf of the victims that this should be read in order to make the provisions constitutionally valid as providing that the victims will have a say in the conduct of the proceedings and as such must have an opportunity of knowing what is happening either by instructing or giving Opinions to the Central Government and/or providing for such directions as to settlement and other matters.
In other words, it was contended on behalf of the victims that the victims should be given notice of the proceedings and there by an opportunity, if they so wanted, to advance their view: and that to make the provisions of section 4 meaningful and effective unless notice was given to the victim, disabled as he is, the assumption upon which the Act has been enacted, could not come and make suggestion in the proceedings.
If the victims are not informed and given no opportunity, the purpose of section 4 cannot be attained.
693 108.
On the other hand, the learned Attorney General suggested that section 4 has been complied with, and contended that the victims had notice of the proceedings.
They had knowledge of the suit in America, and of the order passed by Judge Keenan.
The private plaintiffs who had gone to America were represented by foreign contingency lawyers who knew fully well what they were doing and they had also joined the said suit along with the Government of India.
Learned Attor ney General submitted that section 4 of the Act clearly.enabled the victims to exercise their right of participation in the proceedings.
According to him, there was exclusion of vic tims from the process of adjudication but a limited partici pation was provided and beyond that participation no further participation was warranted and no further notice was just fied either by the provisions of the Act as read with the constitutional requirements or under the general principles of natural justice.
He submitted that the principles of natural justice cannot be put into strait jacket and their application would depend upon the particular facts and the circumstances of a situation.
According to the learned Attorney General, in the instant case, the legislature had formulated the area where natural justice could be applied, and upto what area or stage there would be association of the victims with the suit, beyond that no further applica tion of any principle of natural justice was contemplated.
The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
See in this connection, the observations of this Court in Maneka Gandhi 's case (supra) and Olga Tellis 's case (supra).
Some of these aspects were noticed in the decision of this Court in Swadeshi Cotton Mills vs Union of India (supra).
That was a decision which dealt with the question of taking over of the industries under the Industries (Development and Regula tion) Act, 1951.
The question that arose was whether it was necessary to observe the rules of natural justice before issuing a notification under section 18A(1) of the Act.
It was held by the majority of Judges that in the facts of that case there had been non compliance with the implied require ment of the audi alteram partem rule of natural justice at the pre decisional stage.
The order in that case could be struck down as invalid on that score but the court found that in view of the concession a heating would be afforded to the company, the case was remitted 694 to the Central Government to give a full, fair and effective hearing.
It was held that the phrase 'natural justice ' is not capable of static and precise definition.
It could not be imprisoned in the straight jacket or a cast iron formula.
Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
This Court reiterated that audi ateram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits then such a statute would be con strued as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
The principles of natural justice have been exam ined by this Court in Union of India & Anr.
vs Tulsi Ram Patel & Ors., (supra).
It was reiterated, that the princi ples of natural justice are not the creation of Article 14 of the Constitution.
article 14 is not the begetter of the principles of natural justice but their constitutional guardian.
The principles of natural justice consist, inter alia, of the requirement that no man should be condemned unheard.
If, however, a legislation or a Statute expressly or by necessary implication excludes the application of any particular principle of natural justice then it requires close Scrutiny of the Court.
It has been canvassed on behalf of the victims that the Code of Civil Procedure is an instant example of what is a just, fair and reasonable procedure, at least the princi ples embodied therein and the Act would be unreasonable if there is exclusion of the victims to vindicate properly their views and rights.
This exclusion may amount to denial of justice.
In any case, it has been suggested and in our opinion, there is good deal of force in this contention, that if a part of the claim, for good reasons or bad, is sought to be compromised or adjusted without at least con sidering the views of the victims that would be unreasonable deprivation of the rights of the victims.
After all, it has to be borne in mind that injustice consists in the sense in the minds of the people affected by any act or inaction a feeling that their grievances.
views or claims have gone 'unheeded or not considered.
Such a 695 feeling is in itself an injustice or a wrong.
The law must,be so construed and implemented that such a feeling does not generate among the people for whose benefit the law is made.
Right to a hearing or representation before enter ing into a compromise seems to be embodied in the due proc ess of law understood in the sense the term has been used in the constitutional jargon of this country though perhaps not originally intended.
In this connection, reference may be made to the decision of this Court in Sangram Singh vs Election Tribunal, Kotah; , The Representation of the People Act, 1951 contains section 90 and the proce dure of Election Tribunals under the Act was governed by the said provision.
Sub section (2) of section 90 provides that "Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the Tribunal, as nearly as may be, in accordance with the proce dure applicable under the Code of Civil Procedure, 1908 to the trial of suits".
Justice Bose speaking for the court said that it is procedure, something designed to facilitate justice and further its ends, and cannot be considered as a penal enactment for punishment or penalties; not a thing designed to trip people up rather then help them.
It was reiterated that our laws of procedure are grounded on the principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their ab sence and that they should not be precluded from participat ing in them.
Of course, there may be exceptions and where they are clearly defined these must be given effect to.
But taking by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasona bly possible, in the light of that principle.
At page 9 of the report, Justice Bose observed as under: "But that a law of natural justice exists in the sense that a party must be heard in a Court of laW, or at any rate be afforded an opportunity to appear and defend himself, unless there is express provision to the contrary, is, we think, beyond dispute.
See the observations of the Privy Council in Balakrishna Udayar vs Vasudeva Ayyar, (ILR , 800) and especially in T.M. Barter vs African Products Ltd., (AIR where Lord Buckmaster said "no forms or proce dure should ever be permitted to exclude the presentation of a litigant 's defence".
Also Hari Vishnu 's case which we have just quoted.
In our opinion, Wallace J. was right in Venka tasubbiah vs 696 Lakshminarasimham, (AIR 1925 Mad. 1274) in holding that "One cardinal principle to be observed in trials by a Court obviously is that a party has a right to appear and plead his cause on all occasions when that cause comes on for hearing", and that "It follows that a party should not be deprived of that right and in fact the Court has no option to refuse that right, unless the Code of Civil Procedure deprives him of it".
All civilised countries accept the right to be heard as part of the due process of law where questions affecting their rights, privileges or claims are considered or adjudicated.
In S.L. Kapoor vs Jagmohan & Ors., ; at 765, Chinnappa Reddy, J. speaking for this Court observed that the concept that justice must not only be done but must manifestly be seen to be done, is basic to our system.
It has been reiterated that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been ob served.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary and it has been said that it will come from a person who has denied justice that the person who has been denied justice, is not prejudiced.
Principles of natural justice must, therefore, be followed.
That is the normal requirement: 114.
In view of the principles settled by this Court and accepted all over the world, we are of the opinion that in case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportunity should be given, would depend upon the particular situation.
Fair procedure should be followed in a representative mass tort action.
There are instances and some of these were also placed before us during the hearing of these matters indi cating how the courts regulate giving of the notice in respect of a mass action where large number of people 's views have to be ascertained.
Such procedure should be evolved by the court when faced with such a situation.
The Act does not expressly exclude the application of the 697 Code of Civil Procedure.
Section 11 of the Act provides the overriding effect indicating that anything inconsistent with the provisions of the Act in other law including the Civil Procedure Code should be ignored and the Act should prevail.
Our attention was drawn to the provisions of Order 1 Rule 8(4) of the Code.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Govt. has replaced and divested the victims.
Learned Attorney General submitted that as the provisions of the Code stood before 1976 Amendment, the High Courts had taken the view that hearing of the parties repre sented in the suit, was not necessary, before compromise.
Further reference was made to proviso to Order XXIII Rule 1.
As in this case there is no question, in our opinion, of abandonment as such of the suit or part of the suit, the provisions of this Rule would also not strictly apply.
However, Order XXIII Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement or compromise in a representative suit shall be entered into without the leave of the court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit, again, has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions of this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
In this case, indubitably the victims would be bound by the settlement though not named in the suit.
This is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 3B of Order XXIII of the Code.
If the prin ciples of this rule are the principles of natural justice then we are of the opinion that the principles behind it would be applicable; and also that section 4 should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome", as canvassed by the learned Attorney General.
In our opinion, the constitutional requirements, the language of the Section, the purpose of the Act and the principles of natural justice lead us to this interpretation of Section 4 of the Act that in case of a proposed or con templated settlement, notice should be given to the victims who are affected or whose rights are to be affected to ascertain their views.
Section 4 is significant.
It enjoins the Central 698 Govt.
only to have "due regard to any matters which such person may require to be urged".
So, the obligation is on the Central Govt.
in the situation contemplated by Section 4 to have due regard to the views of the victims and that obligation cannot be discharged by the Central Govt.
unless the victims are told that a settlement is proposed, intended or contemplated.
It is not necessary that such views would require consent of all the victims.
The Central Govt.
as the representative of the victims must have the views of the victims and place such views before the court in such manner it considers necessary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an important stage in the proceedings, opportuni ties must be given to the victims.
Individual notices may not be necessary.
The Court can, and in our opinion, should in such situation formulate modalities of giving notice and public notice can also be given inviting views of the vic tims by the help of mass media.
Our attention was drawn to similar situations in other lands , where in mass disaster actions of the present type or mass calamity actions affecting large number of people, notices have been given in different forms and it may be possible to invite the views of the victims by announcement in the media, Press, Radro, and TV etc.
intimating the victims that a certain settlement is proposed or contemplat ed and inviting views of the victims within a stipulated period.
And having regard to the views, the Central Govt. may proceed with the settlement of the action.
Consent of all is not a pre condition as we read the Act under Section 4.
Hence, the difficulties suggested by the learned Attorney General in having the consent of all and unanimity, do not really arise and should not deter us from construing the section as we have.
The next aspect of the matter is, whether in the aforesaid light Section 4 has been complied with.
The fact that there was no Learned Attorney General, however, sought to canvas the view that the victims had notice and some of them had participat ed in the proceedings.
We are, however, unable to accept the position that the victims had notice of the nature contem plated under the Act upon the underling principle of Order XXIII Rule 3B of the Code.
It is not enough to say that the victims must keep vigil and watch the proceeding.
One as sumption under which the Act is justified is that the vic tims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable 699 and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter, in our opinion, notice was necessary.
The victims at large did not have the notice.
The question, however, is that the settlement had been arrived at after great deal of efforts to give immedi ate relief to the victims.
We have noticed the order dated 4th May, 1989 passed by this Court indicating the reasons which impelled the Court to pass the orders on 14/15th February, 1989 in terms and manner as it did.
It has been urged before us on behalf of some of the victims that jus tice has not been done to their views and claims in respect of the damages suffered by them.
It appears to us by reading the reasons given by this Court on 4th May, 1989 that jus tice perhaps has been done but the question is, has justice appeared to have been done and more precisely, the question before this Court is: does the Act envisage a procedure or contemplate a procedure which ensures not only that justice is done but justice appears to have been done.
If the proce dure does not ensure that justice appears to have been done, is it valid? Therefore, in our opinion, in the background of this question we must hold that Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims; we need not now spell out the actual notice and the manner of its giving to be consistent with the mandate and purpose of section 4 of the Act.
This Court in its order dated 4th May, 1989 had stated that in passing orders on 14th/15th February, 1989, this Court was impelled by the necessity of urgent relief to the victims rather than to depend upon the uncertain promise of law.
The Act, as we have construed, requires notice to be given in what form and in what manner, it need not be spelled out, before entering into any settlement of the type with which we are concerned.
It further appears that that type of notice which is required to be given had not been given.
The question, therefore, is what is to be done and what is the consequence? The Act would be bad if it is not construed in the light that notice before any settlement under section 4 of the Act was required to be given.
Then arises the question of consequences of not giving the notice.
In this adjudication, we are not strictly concerned with the validity or otherwise of the settlement, as we have indicat ed hereinbefore.
But constitutional adjudication cannot be divorced from the reality of a situation, or the impact of an adjudication.
Constitutional deductions are never made in the vacuum.
These deal with life 's problems in the reality of a given situation.
And no constitutional adjudication is also possible unless 700 one is aware of the consequences of such an adjudication.
One hesitates in matters of this type where large conse quences follow one way or the other to put as under what others have put together.
It is well to remember, as did Justice Holmes, that time has upset many fighting faiths and one must always wagar one 's salvation upon some prophecy based upon imperfect knowledge.
Our knowledge changes; our perception of truth also changes.
It is true that notice was required to be given and notice has not been given.
The notice which we have contemplated is a notice before the settlement or what is known in legal terminology as 'pre decisional notice '.
But having regard to the urgency of the situation and having regard to the need for the victims for relief and help and having regard to the fact that so much effort has gone in finding a basis for the settlement, we, at one point of time, thought that a post decisional hearing in the facts and circumstances of this case might be consid ered to be sufficient compliance with the requirements of principles of natural justice as embodied under section 4 of the Act.
The reasons that impelled this Court to pass the orders of 14th/15th February, 1989 are significant and compelling.
If notice was given, then what would have happened? It has been suggested on behalf of the victims by counsel that if the victims had been given an opportunity to be heard, then they would have perhaps pointed out, inter alia, that the amount agreed to be paid through the settlement was hope lessly inadequate.
We have noted the evidence available to this Court which this Court has recorded in its order dated 4th May, 1989 to be the basis for the figure at which the settlement was arrived at.
It is further suggested that if an opportunity had been given before the settlement, then the victims would have perhaps again pointed out that crimi nal liability could not be absolved in the manner in which this Court has done on the 14th/l5th February, 1989.
It was then contended that the Central Government was itself sued as a joint tort feasor.
The Central Government would still be liable to be proceeded in respect of any liability to the victims if such a liability is established; that liability is in no way abridged or affected by the Act or the settle ment entered into.
It was submitted on behalf of the victims that if an opportunity had been given, they would have perhaps pointed out that the suit against the Central Gov ernment, Government of Madhya Pradesh and UCIL could not have been settled by the compromise.
It is further suggested that if given an opportunity, it would have been pointed out that the UCIL should have also been sued.
One of the impor tant requirements of justice is that people affected by an action or inaction should have opportunity to have their say.
That opportunity the victims have got when these appli cations were heard and they were heard after utmost publici ty and they would have further 701 opportunity when review application against the settlement would be heard.
On behalf of the victims, it was suggested that the basis of damages in view of the observations made by this Court in M.C. Mehta 's case (supra) against the victims of UCC or UCIL would be much more than normal damages suffered in similar case against any other company or party which is financially not so solvent or capable.
It was urged that it is time in order to make damages deterrent the damages must be computed on the basis of the capacity of a delinquent made liable to pay such damages and on the monitory capacity of the delinquent the quantum of the damages awarded would vary and not on the basis of actual consequences suffered by the victims.
This is an uncertain promise of law.
On the basis of evidence available and on the basis of the princi ples so far established, it is difficult to foresee any reasonable possibility of acceptance of this yardstick.
And even if it is accepted, there are numerous difficulties of getting that view accepted internationally as a just basis in accordance with law.
These, however, are within the realm of possibility.
It was contended further by Shri Garg, Shri Shanti Bhushan and Ms. Jaising that all the further particulars upon which the settlement had been entered into should have been given in the ' notice which was required to be given before a settlement was sanctified or accepted.
We are unable to accept this position.
It is not necessary that all other particulars for the basis of the proposed settlement should be disclosed in a suit of this nature before the final decision.
Whatever data was already there have been disclosed, that, in our opinion, would have been sufficient for the victims to be able to give their views, if they want to.
Disclosure of further particulars are not warranted by the requirement of principles of natural justice.
Indeed, such disclosure in this case before finality might jeopar dise luther action, if any, necessary so consistent with justice of the case.
So on the materials available, the victims would have to express their views.
The victims have not been able to show at all any other point or material which would go to impeach the validity of the settlement.
Therefore, in our opinion, though settlement without notice is not quite proper, on the materials so far available, we are of the opinion that justice has been done to the victims but jus tice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, we are also of the opinion that the setting aside of the settlement on this ground in view of the facts 702 and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice, was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
We are also conscious that justice is a psycho logical yearning, in which men seek acceptance of their view point by having an opportunity of vindication of their view point before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet, in the par ticular situations, one has to bear in mind how an infrac tion of that should be sought to be removed is accordance with justice.
In the facts and the circumstances of this case where sufficient opportunity is available when review application is heard on notice, as directed by Court, no further opportunity is necessary and it cannot be said that injustice has been done.
"To do a great right" after all, it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
Though entering into a settlement without the required notice is wrong, in the facts and the circum stances of this case, therefore, we are of the opinion, to direct that notice should be given now, would not result in dain justice in the situation.
In the premises, no further consequential order is necessary by this Court.
Had it been necessary for this Bench to have passed such a consequential order, we would not have passed any such consequential order in respect of the same.
The sections and the scheme dealing with the deter mination of damages and distribution of the amount have also been assailed as indicated before.
Our attention was drawn to the provisions of the Act dealing with the payment of compensation and the scheme framed therefore.
It was submit ted that section 6 of the Act enjoins appointment by the Central Government of an officer known as the Commissioner for the welfare of the victims.
It was submitted that this does not give sufficient judicial authority to the officer and would be really leaving the adjudication under the scheme by an officer of the executive nature.
Learned Attor ney General has, however, submitted that for disbursement of the compensation contemplated under the Act or under the orders of this Court, a notification would be issued under section 6(3) of the Act authorising the Commissioner or other officers to exercise all or any of the powers which the Central Government may exercise under section 6 to enable the victims to place before the Commissioner or Deputy Commissioner any additional evidence that they would like to adduce.
We direct so, and such appropriate notifica 703 tion be issued.
We further direct that in the scheme of categorisation to be done by the Deputy Commissioner should be appealable to an appropriate judicial authority and the Scheme should be modified accordingly.
We reiterate that the basis of categorisation and the actual categorisation should be justifiable and judicially reviewable the provisions in the Act and the Scheme should be so read.
There were large number of submissions made on behalf of the victims about amending the scheme.
Apart from and to the extent indicated above, in our opinion, it would be unsafe to tinker with the scheme piecemeal.
The scheme is an integrated whole and it would not be proper to amend it piecemeal.
We, however, make it clear that in respect of categorisation and claim, the authorites must act on principles of natural justice and act quasi judicially.
As mentioned hereinbefore, good deal of arguments were advanced before us as to whether the clause in the settlement that criminal proceedings would not be proceeded with and the same will remain quashed is valid or invalid.
We have held that these are not part of the proceedings under the Act.
So the orders on this aspect in the order of 14th/15th February, 1989 are not orders under the Act.
Therefore, on the question of the validity of the Act, this aspect does not arise whether the settlement of criminal proceedings or quashing the criminal proceedings could be a valid consideration for settlement or whether if it was such a consideration or not is a matter which the court reviewing the settlement has to decide.
In the premise, we hold that the Act is constitu tionally valid in the manner we read it.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained.
from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceedings in respect thereof continue the Central Government must pay interim compensation or maintenance for the victims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of this case, no useful purpose would be served by giving a post decisional hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the set tlement and further having regard to the fact that the victims had their say or on 704 their behalf their views had been agitated in these proceed ings and will have further opportunity in the pending review proceedings.
No further order on this aspect is necessary.
The sections dealing with the payment of compensation and categorisation should be implemented in the manner indicated before.
The Act was conceived on the noble promise of giving relief and succour to the dumb, pale, meek and impoverished victims of a tragic industrial gas leak disas ter, a concomitant evil in this industrial age of technolog ical advancement and development.
The Act had kindled high hopes in the hearts of the.
weak and worn, wary and forlorn.
The Act generated hope of humanity.
The implementation of the Act must be with justice.
Justice perhaps has been done to the victims situated as they were, but it is also true that justice has not appeared to have been done.
That is a great infirmity.
That is due partly to the fact that proce dure was not strictly followed as we have understood it and also partly because of the atmosphere that was created in the country, attempts were made to shake the confidence of the people in the judicial process and also to undermine the credibility of this Court.
This was unfortunate.
This was perhaps due to misinformed public opinion and also due to the fact that victims were not initially taken into confi dence in reaching the settlement.
This is a factor which emphasises the need for adherence to the principles of natural justice.
The credibility of judiciary is as impor tant as the alleviation of the suffering of the victims, great as these were.
We hope these adjudications will re store that credibility.
Principles of natural justice are integrally embedded in our constitutional framework and their pristine glory and primacy cannot and should not be allowed to be submerged by the exigencies of particular situations or cases.
This Court must always assert primacy of adherence to the principles of natural justice in all adjudications.
But at the same time, these must be applied in a particular manner in particular cases having regard to the particular circumstances.
It is, therefore, necessary to reiterate that the promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme as indicated above.
That would be a redemption to a certain extent.
It will also be necessary to reiterate that attempts should be made to formulate the principles of law guiding the Government and the authorities to permit carry ing on of trade dealing with materials and things which have dengerous consequences within sufficient specific safeguards especially in case of multinational corporations trading in India.
An awareness on these lines has dawned.
Let 705 action follow that awareness.
It is also necessary to reit erate that the law relating to damages and payment of inter im damages or compensation to the victims of this nature should be seriously and scientifically examined by the appropriate agencies.
The Bhopal Gas Leak disaster and its aftermath of that emphasise the need for laying down certain norms and standards the Government to follow before granting permis sions or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment should, therefore, examine or have the problem examined by an expert committee as to what should be the conditions on which future licences and/or permission for running industries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permissions, creation of a fund in anticipation by the industries to be available for payment of damages out of the said found in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said damages by procedure sepa rately evolved for computation and payment of damages with out exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrent or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
This case has taken some time.
It was argued exten sively.
We are grateful to counsel who have assisted in all these matters.
We have reflected.
We have taken some time in pronouncing our decision.
We wanted time to lapse so that the heat of the moment may calm down and proper atmosphere restored.
Justice, it has been said, is the constant and perpetual disposition to render every man his due.
But what 706 is a man 's due in a particular situation and in a particular circumstances is a matter for appraisement and adjustment.
It has been said that justice is balancing.
The balances have always been the symbol of even handed justice.
But as said Lord Denning in Jones vs National Coal Board Ltd., ; , at 64 let the advocates one after the other put the weights into the scales the 'nicely calculated less or more ' but the judge at the end decides which way the balance tilts, be it ever so slightly.
This is so in every case and every situation.
The applications are disposed of in the manner and with the direction, we have indicated above.
SINGH, J. 1 have gone through the proposed judgment of my learned brother, Sabyasachi Mukharji, CJI.
I agree with the same but I consider it necessary to express my opinion on certain aspects.
Five years ago between the night of December 2 3, 1984 one of the most tragic industrial disasters in the recorded history of mankind occurred in the city of Bhopal, in the State of Madhya Pradesh, as a result of which several per sons died and thousands were disabled and physically inca pacitated for life.
The ecology in and around Bhopal was adversely affected and air, water and the atmosphere waspol luted, its full extent has yet to be determined.
UnionCar bide India Limited (UCIL) a subsidiary of Union Carbide Corporation (a Transnational Corporation of United States) has been manufacturing pesticides at its plant located in the city of Bhopal.
In the process of manufacture of pesti cide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC a highly toxic gas.
On the night of the trage dy, the MIC leaked from the plant in substantial quantity causing death and misery to the people working in the plant and those residing around it.
The unprecedented catastrophe demonstrated the dangers inherent in the production of haz ardous chemicals even though for the purpose of industrial development.
A number of civil suits for damages against the UCC were filed in the United States of America and also in this Country.
The cases filed in USA were referred back to the Indian courts by Judge Keenan details of which are contained in the judgment of my learned brother Mukharji, CJI.
Since those who suffered in the catastrophe were mostly poor, ignorant, illiterate and ill equipped to pursue their claims for damages either before the courts in USA or in Indian courts, the Parliament enacted the (hereinafter re ferred to as 'the Act ') conferring power on the Union of India to take over the conduct of litigation in this regard in place of the 707 individual claimants.
The facts and circumstances which led to the settlement of the claims before this Court have already been stated in detail in the judgment of Mukharji, CJI, and therefore, I need not refer to those facts and circumstances.
The constitutional validity of the Act has been assailed before us in the present petitions.
If the Act is declared unconstitutional, the settlement which was recorded in this Court, under which the UCC has already deposited a sum of Rs.750 crores for meeting the claims of Bhopal Gas victims, would fall and the amount of money which is already in deposit with the Registry of this Court would not be available for relief to the victims.
Long and de tailed arguments were advanced before us for a number of days and on an anxious consideration and having regard to the legal and constitutional aspects and especially the need for immediate help and relief to the victims of the gas disaster, which is already delayed, we have upheld the constitutional validity of the Act.
Mukharji, CJI has ren dered a detailed and elaborate judgment with which I re spectfully agree.
However, I consider it necessary to say few words with regard to the steps which should be taken by the Executive and the Legislature to prevent such tragedy in future and to avoid the prolonged misery of victims of in industrial disaster.
We are a developing country, our national resources are to be developed in the field of science, technology, indus try and agriculture.
The need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surrounding areas.
Though working of such factories and plants is regu lated by a number of laws of our country, i.e. the Factories Act, Industrial Development and Regulation Act and Workmen 's Compensation Act etc.
there is no special legislation pro viding for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands to day, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well as the liability of the enterprise has been bound by the shackles of conservative principles laid down by the House of Lords in Ryland vs Herchief, [1868] LR 3 HL page 330.
The principles laid therein made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of the enterprise was proved.
This continued to be the position of law, till a Constitution Bench of this Court in M.C. Mehta 708 vs Union of India, , commonly known as Sriram Oleum Gas Leak case evolved principles and laid down new norms to deal adequately with the new problems arising in a highly industrialised economy.
This Court made judicial innovation in laying down principles with regard to liabili ty of enterprises carrying hazardous or inherently dangerous activities departing from the rule laid down in Ryland vs Fletcher.
The Court held as under: "We are of the view that an enterprise which is engaged in a hazardous or inherently dan gerous industry which poses a potential threat to the" health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegiable duty to the community to ensure that no harm results to any one on account of hazardous or inherently dangerous nature of the activity which it has undertaken.
The enterprise must be held to be under an obliga tion to provide that the hazardous or inher ently dangerous activity in which it is en gaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enter prise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.
Since the persons harmed on account of the hazardous or inher ently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm the enterprise must be held strictly liable for causing such harm as a part of the social cost of carrying on the hazardous or inherently dangerous activity.
If the enterprise is permitted to carry on an hazardous or inher ently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activi ty as an appropriate item of its overheads.
Such hazardous or inherently dangerous activi ty for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherent ly dangerous activity regardless of whether it is carried on carefully or not.
This 709 principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards.
We would therefore hold that where an enterprise is engaged in a hazardous or inher ently dangerous activity and harm results to anyone on account of an accident in the opera tion of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liabili ty is not subject to any of the exceptions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
" The law so laid down made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazardous or inherently dangerous activities.
In the instant cases there is no dispute that UCIL a subsidiary of UCC was carrying on activity of manufacturing pesticide and in that process it had stored MIC a highly toxic and dangerous gas which leaked causing vast damage not only to human life but also to the flora and fauna and ecology in and around Bhopal.
In view of this Court 's deci sion in M.C. Mehta 's case there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
While entering into the settlement the UCC has accepted its li ability and for that reason it has deposited a sum of Rs.750 crores in this Court.
The inadequacy of the amount of com pensation under the settlement was assailed by the counsel for the petitioners but it is not necessary for us to ex press any opinion on that question as review petitions are pending before another Constitution Bench and more so as in the present cases we are concerned only with the constitu tional validity of the Act.
The Bhopal Gas tragedy has raised several important questions regarding the functioning of multi nationals in third world countries.
After the Second world war colonial rule came to end in several parts of the globe, as a number of natives secured independence from foreign rule.
The political domination was over but the newly born nations were beset with various problems on account of lack of finances and development.
A number of multi nationals and transnational corporations offered their services to the under developed and developing countries to provide finances and technical know how by 710 setting up their own industries in those countries on their own terms that brought problems with regard to the control over the functioning of the transnational corporations.
Multi national companies in many cases exploited the under developed nations and in some cases they influenced politi cal and economic policies of host countries which subverted the sovereignty of those countries.
There has been com plaints against the multi nationals for adopting unfair and corrupt means to advance their interests in the host coun tries.
Since this was a worldwide phenomena the United Nations took up the matter for consideration.
The Economic and Social Council of the United Nations established a Commission on Transnational Corporations to conduct research on various political, economic and social aspects relating to transnational corporations.
On a careful and detailed study the Commission submitted its Report in 1985 for evolv ing a Code of Conduct for Transnational Corporations.
The Code was adopted in 1986 to which large number of countries of the world are signatories.
Although it has not been fully finalised as yet, the Code presents a comprehensive instru ment formulating the principles of Code of Conduct for transnational corporations carrying on their enterprises in under developed and developing countries.
The Code contains provisions regarding ownership and control designed to strike balance between the competing interests of the Trans national Corporation and the host countries.
It extensively deals with the political, economic, financial, social and legal questions.
The Code provides for disclosure of infor mation to the host countries and it also provides guidelines for nationalisation and compensation, obligations to inter national law and jurisdiction of courts.
The Code lays down provisions for settlement of disputes between the host States and an affiliate of a Transnational Corporation.
It suggests that such disputes should be submitted to the national courts or authorities of host countries unless amicably settled between the parties.
It provides for the choice of law and means for dispute settlement arising out of contracts.
The Code has also laid down guidelines for the determination of settlement of disputes arising out of accident and disaster and also for liability of Transnation al Corporations and the jurisdiction of the courts.
The Code is binding on the countries which formally accept it.
It was stated before us that India has accepted the Code.
If that be so, it is necessary that the Government should take effective measures to translate the provisions of the Code into specific actions and policies backed by appropriate legislation and enforcing machinery to prevent any accident or disaster and to secure the welfare of the victims of any industrial disaster.
In the context of our national dimensions of human rights, right 711 to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 5l(g), it is the duty of the State to take effective steps to protect the guaranteed constitutional rights.
These rights must be integrated and illumined by the evolving international dimensions and standards, having regard to our sovereignty, as highlighted by Clauses 9 and 13 of U.N. Code of conduct on Transnational Corporations.
The evolving standards of international obligations need to be respected, maintaining dignity and sovereignty of our people, the State must take effective steps to safeguard the constitutional rights of citizens by enacting laws.
The laws so made may provide for conditions for granting licence to Transnational Corpora tions, prescribing norms and standards for running indus tries on Indian soil ensuring the constitutional rights of our people relating to life, liberty, as well as safety to environment and ecology to enable the people to lead a healthy and clean life.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporation should also be made liable for any damage caused to the human being or ecology.
The law must require transnational corporations to agree to pay such damages as may be determined.
by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
Under the existing civil law damages are determined by the Civil Courts, after a long drawn litigation, which destroys the very purpose of awarding damages.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims we would suggest that the law made by the Parliament should provide for constitution of tribunals regulated by special procedure for determining compensation to victims of industrial disaster or accident, appeal against which may lie to this Court on limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
There is yet another aspect which needs consideration by the Government and the Parliament.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disas ter Fund", contributions to which may be made by, the Gov ernment, the industries whether they are transnational corporations or domestic undertakings public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The Fund should be permanent in nature, so that money is 712 readily available for providing immediate effective relief to the victims.
This may avoid delay, as has happened in the instant case in providing effective relief to the victims.
The Government and the Parliament should therefore take immediate steps for enacting laws, having regard to these suggestions, consistent with the international norms and guidelines as contained in the United Nations Code of Con duct on Transnational Corporations.
With these observations, I agree with the order proposed by my learned brother, Sabyasachi Mukharji, CJI.
RANGANATHAN, J. Five years ago, this country was shaken to its core by a national catastrophe, second in magnitude and disastrous effects only to the havoc wrought by the atomic explosions in Hiroshima and Nagasaki.
Multitudes of illiterate and poverty stricken people in and around Bhopal suffered damage to life and limb due to the escape of poi sonous Methyl Isocyanate (MIC) gas from one of the storage tanks at the factory of the Union Carbide (India) Limited (UCIL) in Bhopal, a wholly owned subsidiary of the multina tional giant, the Union Carbide Corporation (UCC).
A number of civil suits claiming damages from the UCC were filed in the United States of America and similar litigation also followed in Indian courts.
Fearing the possibilities of the exploitation of the situation by vested interests, the Government of India enacted, the ( 'the ') to regulate the course of such litigation.
Briefly speaking, it empowered the Union of India to take over the conduct of all litiga tion in this regard and conduct it in place of, or in asso ciation with, the individual claimants.
It also enabled the Union to enter into a compromise with the UCC and UCIL and arrive at a settlement.
The writ petitions before us have been filed challenging the constitutional validity of this statute on the ground that the divestiture of the claimants ' individual rights to legal remedy against the multinational for the consequences of carrying on dangerous and hazardous activities on our soil violates the fundamental rights guaranteed under article 14, 19 and 21 of the Constitution.
In consequence of certain proceedings before Judge Keenan of the U.S. District Courts, the venue of the litiga tion shifted to India.
In the principal suit filed in India by the Union (Civil Suit No. 1113/86) orders were passed by the trial court in Bhopal directing the UCC to deposit Rs.370 crores (reduced to Rs.250 crores by the Madhya Pra desh High Court) as interim payment to the gas victims pending disposal of the suit.
There were appeals to this Court in which the 713 UCC contested the Court 's jurisdiction to pass an order for an interim payment in a suit for money, while the Union pleaded that a much higher interim payment should have been granted.
When the matter was being argued in this Court, a settlement was arrived at between the Union and the UCC under which a sum of Rs.750 crores has been received by the Union in full settlement of all the claims of all victims of the gas leak against the UCC.
The Union also agreed to withdraw certain prosecutions that had been initiated against the officials of the UCC and UCIL in this connec tion.
This settlement received the imprimatur of this Court in its orders dated 14th & 15th February, 1989.
It is unfortunate that, though the writ petitions before us were pending in this Court at that time, neither their contents nor the need for considering first the issue of the validity of the before thinking of a settlement in pursuance of its provisions seem to have been effectively brought to the notice of the Bench which put an end to all the litigation on this topic in terms of the settlement.
The settlement thus stood approved while the issue of validity of the under which it was effected stood undecided.
When this was brought to the notice of the above Bench, it di rected these writ petitions to be listed before a different Bench 'to avoid any possible feeling that the same Bench may be coloured in its views on the issue by reason of the approval it had given to the fait accompli viz. the settle ment.
That is now these matters came before us.
The petitioners, claiming to represent a section of the victims are, firstly, against any settlement at all being arrived at with the UCC.
According to them, it is more important to ensure by penal action that multinational corporations do not play with the lives of people in de veloping and under developed countries than to be satisfied with mere compensation for injury and that the criminal prosecutions initiated in this case should have been pur sued.
Secondly, they are of the view that the amount for which the claims have been settled is a pittance, far below the amount of damages they would have been entitled to, on the principles of strict, absolute and punitive liability enunciated by this Court in Mehta 's case [1987] 1 S.C.R. 819.
Thirdly, their grievance is that no publicity at all was given, before this court passed its order, to enable individual claimants or groups of them to put forward their suggestions or objections to the settlement proposed.
Their interests were sealed, they say, without complying with elementary principles of natural justice.
They contend that the provisions of an which has made such a settlement possible cannot be constitutionally valid.
714 The arguments before us ranged over a very wide ground, covered several issues and extended to several days.
This Bench has been placed in somewhat of a predicament as it has to pronounce on the validity of the provisions of the in the context of an implementation of its provisions in a particular manner and, though we cannot (and do not) express any views regarding the merits of the settlement, we are asked to consider whether such settlement can be consistent with a correct and proper interpretation of the tested on the touchstone of the fundamental rights guaranteed under the Constitution.
Mukharji, C.J., has outlined the issues, dealt elaborately with the contentions urged, and given expression to his conclusions in a learned, elaborate and detailed judgment which we have had the advantage of perus ing in draft.
Our learned brother K.N. Singh, J., has also highlighted certain aspects in his separate judgment.
We are, in large measure, in agreement with them, but should like to say a few words on some of the issues in this case, particularly those in regard to which our approach has been somewhat different: 1.
The issue regarding the validity of the turns principally on the construction of sections 3 and 4 of the .
We are inclined to hold that the fact that a settlement has been effected, or the circumstances in which or the amount for which the claims of the victims have been set tled, do not have a bearing on this question of interpreta tion and have to be left out of account altogether except as providing a contextual background in which the question arises.
Turning therefore to the statute and its implica tions, the position is this.
Every person who suffered as a consequence of the gas leak had a right to claim compensa tion from the persons who, according to him, were liable in law for the injury caused to him and also a fight to insti tute a suit or proceeding before any court or authority with a view to enforce his right to claim damages.
In the normal course of events, such a claimant who institute a suit or proceeding would have been at complete liberty to withdraw the said suit or proceeding or enter into any compromise he may choose in that regard.
Section 3 undoubtedly takes away this fight of the claimant altogether: (a) except to the limited extent specified in the proviso to section 3(3) and (b) subject to the provisions of section 4, for this section clearly states that it is the Central Government and the Central Government alone which has the right to represent and act in place of the claimants, whether within or outside India, for all purposes in 715 connection with the enforcement of his claims.
We may first consider how far the main provision in section 3 (leaving out of account the proviso as well as section 4) is compatible with the Constitution The first question that arises is whether the legisla ture is justified in depriving the claimants of the right and privilege of enforcing their claims and prosecuting them in such manner as they deem fit and in compulsorily inter posing or substituting the Government in their place.
We think that, to this question, there can be only one answer.
As pointed out by our learned brother, the situation was such that the victims of the tragedy needed to be protected against themselves as their adversery was a mighty multi national corporation and proceedings to a considerable extent had been initiated in a foreign country, where the conduct of the cases was entrusted to foreign lawyers under a system of litigation which is unfamiliar to us here.
In the stark reality of the situation, it cannot even be plau sibly contended that the large number of victims of the gas leak disaster should have been left to fend for itself and merely provided with some legal aid of one type or another.
It is necessary to remember that, having regard to the identity of the principal ground of claim of all the vic tims, even if a single victim was not diligent in conducting his suit or entered into a compromise or submitted to a decree judging the issues purely from his individual point of view, such a decision or decree could adversely affect the interests of the innumerable other victims as well.
In fact, it appears that a settlement between one set of claim ants and the adversary corporation was almost imminent and would perhaps have been through out for the timely interven tion of the Government of India.
The battle for the enforce ment of one 's rights was bound to be not only prolonged but also very arduous and expensive and the decision of the legislature that the fight against the adversary should be consolidated and its conduct handed over to the Government of India it may perhaps have been better if it had been handed over to an autonomous body independent of the Govern ment but, as pointed out by our learned brother, the course adopted was also not objectionable was perhaps the only decision that could have been taken in the circumstances.
This is indeed a unique situation in which the victims, in order to realise to the best advantage their rights against UCC, had to be helped out by transposing that right to be enforced by the Government.
We did not indeed understand any learned counsel before us to say that the legislature erred in entrusting the Government of India 716 with the responsibility of fighting for the victims.
The only grievance is that in the process their right to take legal proceedings should not have been completely taken away and that they should also have had the liberty of partici pating in the proceedings right through.
In fact, though the contemplates the Central Government to completely act in place of the victims, the Government of India has not in fact displaced them altogether.
In all the proceedings pending in this country, as well as those before Judge Keenan, the Government of India has conducted the proceed ings but the other victims or such of them as chose to associate themselves in these proceedings by becoming par ties were not shut out from taking part in the proceedings.
In fact, as the learned Attorney General pointed out, one of the groups of litigants did give great assistance to the trial judge at Bhopal.
But even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Central Government, had been got deleted from the array of parties in the suits and proceedings pending in this country, we do not think that the result would have been fatal to the interests of the litigants.
On the con trary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corpora tion.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same as that of, "parens patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactory 'exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litiga tion better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much determination or capability as such a litigant.
But in a case of the present type one should not be con founded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable of prosecuting such a litigation in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negligible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situa tion, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Government to shoulder the responsibility by substituting itself in place of the victims 717 for all purposes connected with the claims.
Even if the had provided for a total substitution of the Government of India in place of the victims and had completely precluded them from exercising their rights in any manner, it could perhaps have still been contended that such deprivation was necessary in larger public interest.
But the is not so draconian in its content.
Actual ly, as we have said a little earlier, the grievance of the petitioners is not so much that the Government was entrusted with the functions.
of a dominus litis in this litigation.
Their contention is that the whole object and purpose of the litigation is to promote the interests of the claimants, to enable them to fight the UCC with greater strength and determination, to help them overcome limitations of time, money and legal assistance and to realise the best compensa tion possible consistent not only with the damage suffered by them but also consistent with national honour and pres tige.
It is suggested that the power conferred on the Gov ernment should be construed as one hedged in by this domi nant object.
A divestiture of the claimant 's right in this situation would be reasonable, it is said, only if the claimant 's rights are supplemented by the Government and not supplanted by it.
Assuming the correctness of the argument, the provisions of the proviso to section 3(3) and of section 4 furnish an answer to this contention.
While the provision contained in the main part of section 3 may be sufficient to enable the Government of India to claim to represent the claimants and initiate and conduct suits or proceeding on their behalf, the locus standi of the Government of India in suits filed by other claimants before the commencement of the out side India would naturally depend upon the discretion of the court enquiring into the matter.
That is why the proviso to section 3 makes the right of the Government of India to represent and act in place of the victims in such proceed ings subject to the permission of the court or authority where the proceedings are pending.
It is of course open to such court to permit the Central Government even to displace the claimants if it is satisfied that the authority of the is sufficient to enable it to do so.
In the present case it is common ground that the proceedings before Judge Keenan were being prosecuted by the Central Government along with various individual claimants.
Not only did Judge Keenan permit the association of the Government of India in these proceedings but the Government of India did have a substan tial voice in the course of those proceedings as well.
Again section 4 mandates that, notwithstanding anything 718 contained in section 3, the Central Government, in repre senting and acting in place of any person in relation to any claim, shall have due regard to any matters which such person may require to be urged with respect to his claim.
It also stipulates that if such person so desires, the Central Government shall permit, at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
In other words, though, perhaps, strictly speaking, under section 3 the Central Government can totally exclude the victim himself or his legal practitioner from taking part in the proceedings (except in pending suits outside India), section 4 keeps the substance of the rights of the victims in tact.
It enables, and indeed obliges, the Govern ment to receive assistance from individual claimants to the extent they are able to offer the same.
If any of the vic tims or their legal advisers have any specific aspect which they would like to urge, the Central Government shall take it into account.
Again if any individual claimant at his own expense retains a legal practitioner of his own choice, such legal practitioner will have to be associated with the Government in the conduct of any suit or proceeding relating to his claim.
Sections 3 and 4 thus combine together the interests of the weak, illiterate, helpless and poor victims as well as the interests of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the claimants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would, in our opinion, therefore show that there has been no real total deprivation of the right of the claimants to enforce their claim for damages in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
The validity of the is, therefore, not liable to be challenged on this ground.
The next angle from which the validity of the provision is attacked is that the provision enabling the Government to enter into a compromise is bad.
The argument runs thus: The object of the legislation can be furthered only if it per mits the Government to prosecute the litigation more effec tively and not if it enables the Government to 719 withdraw it or enter into a compromise.
According to them, the fails the impecunious victims in this vital aspect.
The authority conferred by the on the Government to enter into a settlement or compromise, it is said, amounts to an absolute negation of the rights of the claimants to compensation and is capable of being so exercised to render such rights totally valueless, as in fact, it is said, has happened.
It appears to us that this contention proceeds on a misapprehension.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accompanied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litiga tion may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to ade quately compensate the victims either on their own ' or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in a negotiated settlement.
One notices that in most of the mass disaster cases reported, proceedings finally end in a compromise if only to avoid an indefinite prolongation of the agonies caused by such litigation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to with draw the proceedings or enter into a compromise.
Some misgivings were expressed, in the course of the hearing, of the legislative wisdom (and, hence the validity) of entrusting the carriage of these proceedings and, in particular, the power of settling it out of Court, to the Union of India.
It was contended that the union is itself a joint tort feasor (sued as such by some of the victims) with an interest (adverse to the victims) in keeping down the amount of compensation payable to the minimum so as to reduce its own liability as a joint tort feasor.
It seems to us that this contention in misconceived.
As pointed out by Mukharji, C.J., the Union of India itself is one of the entities affected by the gas leak and has a claim for com pensation from the UCC quite independent of the other vic tims.
From this point of view, it is in the same position as the other victims and, in the litigation with the UCC, it has every interest in securing the maximum amount of compen sation possible for itself and the other victims.
It is, therefore, the best agency in the circumstances that could be looked up to for fighting the UCC on its own as well as on behalf of the victims.
The suggestion that the Union is a joint tort lessor has been 720 stoutly resisted by the learned Attorney General.
But, even assuming that the Union has some liability in the matter, we fail to see how it can derive any benefit or advantage by entering into a low settlement with the UCC.
as is pointed out later in this judgment and by Mukharji, C.J., the and Scheme thereunder have provided for an objective and quasi judicial determination of the amount of damages pay able to the victims of the tragedy.
There is no basis for the fear expressed during the hearing that the officers of the Government may not be objective and may try to cut down the amounts of compensation, so as not to exceed the amount received from the UCC.
It is common ground and, indeed, the learned Attorney General fairly conceded, that the settle ment with the UCC only puts an end to the claims against the UCC and UCIL and does not in any way affect the victims ' rights, if any, to proceed against the Union, the State of Madhya Pradesh or the ministers and officers thereof, if so advised.
If the Union and these officers are joint tort lessors, as alleged, the Union will not stand to gain by allowing the claims against the UCC to be settled for a low figure.
On the contrary it will be interested in settling the claims against the UCC at as high a figure as possible so that its own liability as a joint tort feasor (if made out) can be correspondingly reduced.
We are, therefore, unable to see any vitiating element in the legislation insofar as it has entrusted the responsibility not only of carrying on but also of entering into a settlement, if thought fit.
Nor is there basis for the contention that the enables a settlement to be arrived at without a proper opportunity to the claimants to express their views on any proposals for settlement that may be mooted.
The right of the claimant under section 4 to put forward his suggestions or to be represented by a legal practitioner to put forth his own views in the conduct of the suit or other proceeding certainly extends to everything connected with the suit or other proceeding.
If, in the course of the proceedings there should arise any question of compromise or settlement, it is open to the claimants to oppose the same and to urge the Central Government to have regard to specific aspects m arriving at a settlement.
Equally it is open to any claimant to employ a legal practitioner to ventilate his opinions in regard to such proposals for settlement.
The provisions of the , read by themselves, therefore, guarantee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the .
Sections 3 and 4 of the properly read, in our opinion, completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
721 Far from abridging the rights of the claimants in any man ner, these provisions are so worded as to enable the Govern ment to prosecute the litigation with the maximum amount of resources, efficiency and competence at its command as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive rule in the litigations But then, it is contended, the victims have had no opportunity of considering the settlement proposals mooted in this case before they were approved by the Court.
This aspect is dealt with later.
One of the contentions before us was that the UCC and UCIL are accountable to the public for the damages caused by their industrial activities not only on a basis of strict liability but also on the basis that the damages to be awarded against them should include an element of punitive liability and that this has been lost sight of while approv ing of the proposed settlement.
Reference was made in this context to M.C. Mehta 's case (supra).
Whether the settlement should have taken into account this factor is, in the first place, a moot question.
Mukharji, C.J. has pointed out and we are inclined to agree that this is an "uncertain province of the law" and it is premature to say whether this yard stick has been, or will be, accepted in this country, not to speak of its international acceptance which may be necessary should occasion arise for executing a decree based on such a yardstick in another country.
Secondly, whether the settle ment took this into account and, if not, whether it is bad for not having kept this basis in view are questions that touch the merits of the settlement with which we are not concerned.
So we feel we should express no opinion here on this issue.
It is too far fetched, it seems to us, to con tend that the provisions of the permitting the Union of India to enter into a compromise should be struck down as unconstitutional because they have been construed by the Union of India as enabling it to arrive at such a settle ment.
The argument is that the confers a discretionary and enabling power in the Union to arrive at a settlement but lays down no guidelines or indications as to the stage at which, or circumstances in which, a settlement can be reached or the type of settlement that can be arrived at; the power conferred should, therefore, be struck down as unguided, arbitrary and uncanalised.
It is difficult to accept this contention.
The power to conduct a litigation, particularly in a case of this type, must, to be effective, necessarily carry with it a power to settle it at any stage.
It is impossible to provide statutorily any detailed 722 catalogue of the situations that would justify a settlement or the basis or terms on which a settlement can be arrived at.
moreover, cannot be said to have conferred any unguided or arbitrary discretion to the Union in conducting proceedings under the .
Sufficient guidelines emerge from the Statement of Objects and Reasons of the which makes it clear that the aim and purpose of the is to secure speedy and effective redress to the victims of the gas leak and that all steps taken in pursuance of the should be for the implementation of the object.
Whether this object has been achieved by a particular settlement will be a different question but it is altogether impossible to say that the itself is bad for the reason alleged.
We, therefore, think it necessary to clarify, for our part, that we are not called upon to express any view on the observa tions in Mehta 's case and should not be understood as having done so.
Shri Shanti Bhushan, who supported the Union 's stand as to the validity of the , however, made his support conditional on reading into its provisions an obligation on the part of the Union to make interim payments towards their maintenance and other needs consequent on the tragedy, until the suits filed on their behalf ultimately yield tangible results.
That a modern welfare State is under an obligation to give succour and all kinds of assistance to people in distress cannot at all be gainsaid.
In point of fact also, as pointed out by the learned Chief Justice, the provisions of the and scheme thereunder envisage interim payments to the victims; so, there is nothing objectionable in this on this aspect.
However, our learned brother has accept ed the argument addressed by Shri Shanti Bhushan which goes one step further viz. that the would be unconstitutional unless this is read as "a major inarticulate promise" under lying the .
We doubt whether this extension would be justified for the hypothesis underlying the argument is, in the words of Sri Shanti Bhushan, that had the victims been left to fend for themselves, they would have had an "immedi ate and normal right of obtaining compensation from the Union Carbide" and, as the legislation has vested their rights in this regard in the Union, the should be con strued as creating an obligation on the Central Government to provide interim relief.
Though we would emphatically reiterate that grant of interim relief to ameliorate the plight of its subjects in such a situation is a matter of imperative obligation on the part of the State and not merely 'a matter of fundamental human decency ' as Judge Keenan put it, we think that such obligation flows from its character as a welfare State and would exist irrespective of what the statute may or may not provide.
In our view the validity of the does not depend upon its 723 explicitly or implicitly providing for interim payments.
We say this for two reasons.
In the first place, it was, and perhaps still is, a moot question whether a plaintiff suing for damages in tort would be entitled to advance or interim payments in anticipation of a decree.
That was, indeed, the main point on which the interim orders in this case were challenged before this Court and, in the context of the events that took place, remains undecided.
It may be men tioned here that no decided case was brought to our notice in which interim payment was ordered pending disposal of an action in tort in this country.
May be there is a strong case for ordering interim payments in such a case but, in the absence of full and detailed consideration, it cannot be assumed that, left to themselves, the victims would have been entitled to a "normal and immediate" right to such payment.
Secondly, even assuming such right exists, all that can be said is that the State, which put itself in the place of the victims, should have raised in the suit a demand for such interim compensation which it did and that it should distribute among the victims such interim compensation as it may receive from the defendants.
To say that the would be bad if it does not provide for payment of such compensa tion by the Government irrespective of what may happen in the suit is to impose on the State an obligation higher than what flows from its being subrogated to the rights of the victims.
As we agree that the and the scheme thereunder envisage interim relief to the victims, the point is perhaps only academic.
But we felt that we should mention this as we are not in full agreement with Mukharji, C.J., on this aspect on the case.
The next important aspect on which much debate took place before us was regarding the validity of the qua the procedure envisaged by it for a compromise or settle ment.
It was argued that if the suit is considered as a representative suit no compromise or settlement would be possible without notice in some appropriate manner to all the victims of the proposed settlement and an opportunity to them to ventilate their views thereon (vide Order XXIII, r. 3B, C.P.C.).
The argument runs thus: section 4 of the either incorporates the safeguards of these provisions in which event any settlement effected without compliance with the spirit, if not the letter, of these provisions would be ultra vires the .
Or it does not, in which event, the provisions of section 4 would be bad as making possible an arbi trary deprivation of the victims ' rights being inconsistent with, and derogatory of, the basic rules established by the ordinary Law of the land viz. the Code of Civil Procedure.
We are inclined to take the view that it is not possible to bring the suits brought under the within the categories of representative action envisaged in the Code of Civil procedure.
The 724 deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The divests the individual claimants of their right to sue and vests it in the Union.
In relation to suits in India, the Union is the sole plaintiff, none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be de fined at the stage of a settlement.
The litigation is car ried on by the State in its capacity, not exactly the same as but somewhat analogous to that of a "parens patriae".
In the case of a litigation by karta of a Hindu Undivided Family or by a guardian on behalf of a ward, who is non sui juris, for example, the junior members of the family or the wards, are not to be consulted before entering into a set tlement.
In such cases, the Court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best interest of all concerned.
It is later discovered that there has been any fraud or collusion, it may be open to the junior members of the family or the wards to call the karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae" would have been at liberty to enter into such settlement as it consid ered best on its own and seek the Court 's approval there fore.
However, realising that the litigation is truly fought on behalf and for the benefit of innumerable, though not fully identified victims the has considered it necessary to assign a definite role to the individual claimants and this is spelt out in section 4.
This section directs: (i) that the union shall have due regard to any matters which such person may require to be urged with respect to his claim; and (ii) that the Union shaH, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
This provision adequately safeguards the interests of indi vidual victims.
It enables each one of them to bring to the notice of the Union any special features or circumstances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
Again, the individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceed ings.
If the suits in this 725 case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views or any of them who chose to do so.
Advisedly, the statute has provided that though the Union of India will be the dominus litis in the suit, the interests of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indi cated above.
This provision of the statute is an adaptation of the principle of O.I.r. 8 and of Or.
XXIII r. 3 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation allowed to the victims is somewhat differently enunciated in the legislation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be fault ed, as has been pointed out earlier also, on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in the matter of settling the suit by way of compromise.
The difficulty in this case has arisen, as we see it, because of a fortuitous circumstance viz. that the talks of compromise were mooted and approved in the course of the hearing of an appeal from an order for interim payments.
Though compromise talks had been in the air right from the beginning of this episode, it is said that there was an element of surprise when they were put forward in Court in February, 1989.
This is not quite correct.
It has been pointed out that even when the issue regarding the interim relief was debated in the courts below, attempts were made to settle the whole litigation.
The claimants were aware of this and they could perhaps should have anticipated that similar attempts would be made in this Court also.
Though certain parties had been associated with the conduct of the proceedings in the trial court and the trial judge did handsomely acknowledge their contribution to the proceed ings they were apparently not alert enough to keep a watch ing brief in the Supreme Court, may be under the impression that the appeal here was concerned only with the quantum of interim relief.
One set of parties was present in the Court but, apart from praying that he should be forthwith paid a share in the amount that would be deposited in Court by the UCC in pursuance of the settlement, no attempt appears to have been made to put forward a contention that the amount of settlement was inade 726 quate or had not taken into account certain relevant consid erations.
The Union also appears to have been acting on the view that it could proceed ahead on its own both in its capacity as "parens patraie" as well as in view of the powers of attorney held by it from a very large number of the victims though the genuineness of this claim is now contested before us.
There was a day 's interval between the enunciation of the terms of the settlement and their approv al by the Court.
Perhaps the Court could have given some more publicity to the proposed settlement in the newspapers, radio and television and also permitted some time to lapse before approving it, if only to see whether there were any other points of view likely to emerge.
Basically speaking, however, the has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the developments leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
One of the points of view on which considerable emphasis was laid in the course of the arguments was that in a case of this type the offending parties should be dealt with strictly under the criminal law of the Land and that the inclusion, as part of the settlement, of a term requiring the withdrawal of the criminal prosecutions launched was totally unwarranted and vitiates the settlement.
It has been pointed out by Mukharji, C.J. , and we agree that the talks only of the civil liability of, and the proceedings against, the UCC or UCIL or others for damages caused by the gas leak.
It has nothing to say about the criminal liability of any of the parties involved.
Clearly, therefore, this part of the settlement comprises a term which is outside the purview of the .
The validity of the cannot, there fore, be impugned on the ground that it permits and should not have permitted the withdrawal of criminal proceedings against the delinquents.
Whether in arriving at the settle ment, this aspect could also have been taken into account and this term included in it, is a question concerning the validity of the settlement.
This is a question outside the terms of reference to us and we, therefore, express no opinion in regard thereto.
A question was mooted before us as to whether the actual settlement if not the statutory provision is liable to be set aside on the grounds that the principles of natu ral justice have been flagrantly 727 violated.
The merits of the settlement as such are not in issue before us and nothing we say can or should fetter the hands of the Bench hearing a review petition which has already been filed, from passing such orders thereon as it considers appropriate.
Our learned brother, however, has, while observing that the question referred to us is limited to the validity of the alone and not the settlement, incidentally discussed this aspect of the case too.
He has pointed out that justice has in fact been done and that all facts and aspects rele vant for a settlement have been considered.
He has pointed out that the grievance of the petitioners that the order of this Court did not give any basis for the settlement has since been sought to be met by the order passed on 4th May, 1989 giving detailed reasons, This shows that the Court had applied its mind fully to the terms of the settlement in the light of the data as well as all the circumstances placed before it and had been satisfied that the settlement pro posed was a fair and reasonable one that could be approved.
In actions of this type, the Court 's approval is the true safety valve to prevent unfair settlements and the fact is that the highest Court of the land has given thought to the matter and seen it fit to place its seal of approval to the settlement.
He has also pointed out that a post decisional hearing in a matter like this will not be of much avail.
He has further pointed out that a review petition has already been filed in the case and is listed for hearing.
The Court has already given an assurance in its order of May 4, 1989, that it will only be too glad to consider any aspects that may have been overlooked in considering the terms of the settlement.
Can it be said, in the circumstances, that there has been a failure of justice which compels us to set aside the settlement as totally violative of fundamental rights? Mukharji, C.J., has pointed out that the answer to this question should be in the negative.
It was urged that there is a feeling that the maxim: "Justice must not only be done but must also appear to be done" has not been fully complied with and that perhaps, if greater publicity had attended the hearing, many other facts and aspects could have been high lighted resulting in a higher settlement or no settlement at all.
That feeling can be fully ventilated and that deficien cy can be adequately repaired, it has been pointed out by Mukharji, C.J., in the hearing on the review petition pend ing before this Court.
Though we are prima facie inclined to agree with him that there are good reasons why the settle ment should not be set aside on the ground that the princi ples of natural justice have been violated, quite apart from the practical complications that may arise as the result of such an order, we would not express any final opinion on the validity of the settlement but would leave it open to be agitated, to the 728 extent permissible in law, in the review petition pending before this Court.
There is one more aspect which we may perhaps usefully refer to in this context.
The scheme of the is that on the one hand the Union of India pursues the litigiation against the UCC and the UCIL; on the other all the victims of the tragedy are expected to file their claims before the prescribed authority and have their claims for compensation determined by such authority.
Certain infirmities were pointed out on behalf of the petitioners in the statutory provisions enacted in this regard.
Our learned brother has dealt with these aspects and given appropriate directions to ensure that the claims will be gone into by a quasi judicial authority (unfettered by executive prescriptions of the amounts of compensation by categorising the nature of in juries) with an appeal to an officer who has judicial quali fications.
In this manner the scheme under the provides for a proper determination of the compensation payable to the various claimants.
Claims have already been filed and these are being scrutinised and processed.
A correct picture as to whether the amount of compensation for which the claims have ben settled is meagre, adequate or excessive will emerge only at that stage when all the claims have been processed and their aggregate is determined.
In these cir cumstances, we feel that no useful purpose will be served by a post decisional hearing on the quantum of compensation to be considered adequate for settlement.
For these reasons, it would seem more correct and proper not to disturb the orders of 14 15 February, 1989 on the ground that the rules of natural justice have not been complied with, particularly in view of the pendency of the review petition.
Before we conclude, we would like to add a few words on the state of the law of torts in this country.
Before we gained independence, on account of our close association with Great Britain, we were governed by the common law principles.
In the field of torts, under the common law of England, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis moritur cum persona, although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of the Fatal Accidents Act, 1846, popularly known as Lord Campell 's Act.
Soon thereafter the Indian Legislature enacted the Fatal acci dents Act, 1855.
This Act is fashioned on the lines of the English Act 729 of 1846.
Even though the English Act has undergone a sub stantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thousands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experience and evolve safeguards atleast for the future.
We are of the view that the time is ripe to take a fresh look at the outdated cen tury old legislation which is out of tune with modern con cepts.
While it may be a matter for scientists and technicians to find solutions to avoid such large scale disasters, the law must provide an effective and speedy remedy to the victims of such torts.
The Fatal Accidents Act, on account of its limited and restrictive application, is hardly suited to meet such a challenge.
We are, therefore, of the opinion that the old antiquated Act should be drastically amended or fresh legislation should be enacted which should, inter alia, contain appropriate provisions in regard to the fol lowing matters: (i) The payment of a fixed minimum compensa tion on a "no fault liability" basis (as under the Motor Vehicles Act), pending final adjudi cation of the claims by a prescribed forum; (ii) The creation of a special forum with specific power to grant interim relief in appropriate cases; (iii) The evolution of a procedure to be followed by such forum which will be conducive to the expeditious determination of claims and avoid the high degree of formalism that at taches to proceedings in regular courts; and (iv) A provision requiring industries and concerns engaged in hazardous activities to take out compulsory insurance against third party risks.
In addition to what we have said above, we should like to say that the suggestion made by our learned brother, K.N. Singh J., for the creation of an Industrial Disaster Fund (by whatever name called) deserves serious consideration.
We would also endorse his suggestion that the Central Govern ment will be well advised if, in future, it insists on certain safeguards before permitting a transnational company to do business in this country.
The necessity of such safe guards, atleast in the following two directions, is high lighted in the present case: 730 (a) Shri Garg has alleged that the processes in the Bhopal Gas Plant were so much shrouded in secrecy that neither the composition of the deadly gas that escaped nor the proper anti dote therefore were known to anyone in this country with the result that the steps taken to combat its effects were not only delayed but also totally inadequate and ineffective.
It is necessary that this type of situation should be avoided.
The Government should therefore insist, when granting licence to a transnational company to establish its indus try here, on a right to be informed of the nature of the processes involved so as to be able to take prompt action in the event of an accident.
(b) We have seen how the victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure (i) that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this country; (ii) that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; (iii) that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corpora tion, its affiliates and their assets without further procedural hurdles, in those other countries.
Our brother, K.N. Singh, J., has in this context dealt at some length with the United Nations Code of Conduct for multi national Corporations which awaits approval of various countries.
We hope that calamities like the one which this country has suffered will serve as catalysts to expedite the acceptance of an international code on such matters in the near future.
With these observations, we agree with the order pro posed by the learned Chief Justice.
G.N. Petitions dis posed of.
[/INST]Union Carbide (India) Ltd. (UCIL) is a subsidiary of Union Carbide Corporation (UCC), a New York Corporation.
UCIL was incorporated in India in 1954.
50.99% of its share holding was with UCC and 22% of the shares were held by Life Insurance Corporation of India and Unit Trust of India.
UCIL owned a chemical plant in Bhopal for the manufacture of pesticides using Methyl Isocyanate (MIC) a highly toxic gas.
On the night between 2nd and 3rd December, 1984, there was a massive escape of lethal gas from the MIC Storage tank at the Bhopal plant resulting in the tragic death of about 3,000 people.
Thousands of people suffered injuries.
The environment also got polluted, badly affecting the flora and the fauna.
On behalf of the victims, many suits were filed in various District Courts in the United States of America.
All such suits were consolidated by the Judicial Panel on Multi District Litigation and were assigned to the U.S. District Court, Southern District of New York and Judge Keenan was the Presiding Judge throughout.
Later, the legal battle shifted to Indian Courts, as it could not proceed in the U.S. Courts, on the ground of forum non conveniens.
599 Meanwhile, the Bhopal Gas Leak Disaster (Processing of claims) 1985 was passed by the Government of India with a view to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
Union of India filed a suit for damages in the District Court of Bhopal on 5.9.86.
However, there were negotiations for a settlement; hut ultimately the settlement talks had failed.
On 17.12.1987, the District Judge ordered interim relief of Rs.350 crores.
On appeal, the High Court, on 4.4.88 modified the order of the District Judge and ordered an interim relief of Rs.250 crores.
Aggrieved, the UCC as also the Union of India filed petitions for special leave before this Court.
Leave was granted.
By its orders dated 14.2.89 and 15.2.89, this Court, on the basis of a settlement arrived at between the parties, directed UCC to pay a sum of 470 million U.S. Dollars to the Union of India in full settlement of all claims, rights and liabilities related to and arising out of the Bhopal gas disaster.
The said orders were passed keeping in view the Bhopal Gas Disaster (Processing of claims) Act, 1985.
The present Writ Petitions challenge the constitutional validity of the said Act inter alia on the grounds that the Act is violative of the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution: that the Act is violative of the Principles of Natural Justice mainly on the ground that Union of India, being a joint tort feasor, in that it has permitted establishment of such factories with out necessary safeguards, has no locus standi to compromise on behalf of the victims; that the victims and their legal heirs were not given the opportunity of being heard, before the Act was passed; that in the guise of giving aid, the State could not destroy the rights inherent in its citizens; nor could it demand the citizens to surrender their rights to the State; that vesting of the rights in Central Govern ment was bad and unreasonable because there was conflict of interest between the Central Government and the victims.
since the Central Government owned 22% share in UCIL, and that would make the Central Government a Judge in its own cause.
Disposing of the Writ Petitions, this Court, 600 HELD: Sabyasachi Mukharji, CJ and K.N. Saikia, J. Per C J: 1.1 The Act is constitutionally valid.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceed ings in respect thereof continue, the Central Government must pay interim compensation or maintenance for the vic tims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of the present case, no useful purpose would be served by giving a post decision al hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the settlement and further having regard to the fact that the victims had their say, or on their behalf their views had been agitated in these proceedings, and will have further opportunity in the pending review proceedings.
[703E H; 704A] 1.2 Though settlement without notice is not quite prop er, on the materials so far available, it is seen that Justice has been done to the victims but justice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, the setting aside of the settlement on this ground in view of the facts and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
Justice is a psychological yearning, in which men seek acceptance of their view point by having an opportunity of vindication before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet in the particular situations, one has to bear in mind how an in fraction of that should be sought to be removed in accord ance with justice. "To do a great right" after all.
it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
[701G H; 702A C] 2.1 The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if so 601 judged it passed the test of reasonableness, then the possi bility of the power conferred being improperly used is no ground for pronouncing the law itself invalid.
[659E G] 2.2 Conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Directive Principles, it was possible to authorise the Central Govern ment to take over the claims of the Victims to fight against the multinational corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situa tion fully and properly.
But there is no prohibition or inhibition, for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
[640E H] 2.3 The Act does provide a special procedure in respect of rights of the victims and to that extent the Central Govt.
takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multi national and a big Indian Corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and identifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disaster, situated as the victims were against a mighty multinational with the presence of foreign contingency lawyers looming on the scene, there were sufficient grounds for such differentia tion and different treatment.
In treating the victims of the gas leak disaster differently and providing them a proce dure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitution, Article 14 is not breached.
[683E H; 684A B] Collector of Customs, Madras vs Nathella Sampathu Chet ty; , ; P.J. Irani vs State of Madras, ; D.K. Trivedi vs State of Gujarat, [1986] Suppl.
SCC 20, relied on.
Ballast Corporation vs O.D. Commission, , referred to 602 3.1 The present case is one where the Govt.
of India only represented the victims as a party ' and did not adjudi cate between the victims and the UCC.
It is the court which would adjudicate the rights of the victims.
The representa tion of the victims by the Government of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
[670B] 3.2 The connotation of the term "parens patria" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
According to Indian concept parens patria doctrine recognised King as the pro tector of all citizens as parent.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaranteed by the Constitu tion and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the right of the citizens.
The Preamble to the Constitution, read with the Directive Prin ciples contained in Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protec tive measure to which the social welfare state is committed.
It is necessary for the State to ensure the fundamental rights in conjunction with the Directive Principles of State Policy to effectively discharge its obligation and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
[638E H; 639A] 3.3 The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae juris diction or on principles analogous thereto.
After having statutorily armed itself in recognition of such parens patriae right or on principles analogous thereto, it went to the American Courts.
No other person was properly designed for representing the victims, as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent was permitted to represent the vic tims before the American courts.
Private plaintiffs were also represented by their attorneys.
The order of Judge Keenan permitted the Govt.
of India to represent the vic tims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
[669C F] 603 3.4 The Act in question has been passed in recognition of the right of the sovereign to act as parens patriae.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely the Act.
It has to be borne in mind that conceptually and jurispru dentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territo ries of the country.
It is true that the doctrine has been so utilised in America so far.
Where citizens of a country are victims of a tragedy because of the negligence of any multinational in peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievance and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian State because of its constitutional commitment is obliged to take upon itself the claim of the victims and to protect them in their hour of need.
[658B F] 3.5 There is no bar on the State to assume responsibili ties analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Govern ment has done in the instant case seems to be an expression of its sovereign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, moral, education and good order of the people and tend to increase the wealth and prosperity of the State.
Sovereignty is difficult to define.
By the nature of things, the State Sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the indi vidual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitu tional limitations.
This is an emanation of sovereignty and it is the obligation of the State to assume such responsi bilities and protect its citizens.
[658G H; 659A C] 3.6 In the instant case, the victims cannot be consid ered to be any match to the multinational companies or the Government with whom in the conditions that the victims or their representatives were after the disaster physically, mentally, financially, economically and also because of the position of litigation would have to contend.
In such a situation of 604 predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interest effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Government to sue for and on behalf of or instead in place of the victims, no other theory, concept, or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Government.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Government.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
Even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially it could be utilised to suit or alter or adapt itself to the changed circumstances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
The act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
It has to be accepted as such.
[685C H] 3.7 The concept of parens patriae can be varied to enable the Government to represent the victims effectively in domestic forum if the situation so warrants.
There is no reason to confine the 'parens patriae ' doctrine to only quasi sovereign right of the State independent of and behind the title of the citizen.
[692B C] 3.8 The power to compromise and to conduct the proceed ings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
[659C D] E.P. Royappa vs State of Tamil Nadu, ; ; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; R.D. Shetty vs International Airport Authority of India, ; followed.
605 Ram Saroop vs S.P. Sahi, relied on.
Budhkaran Chankhani vs Thakur Prasad Shah, AIR ; Banku Behari Mondal vs Banku Behari Hazra, AIR 1943 Cal 203; Medai Dalavoi T. Kumaraswamy Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 approved.
State of U.P. vs Poosu, ; K.M. Nanavati vs State of Bombay, ; ; Ram Gopal Sarubai vs Smt.
Sarubhai & Ors., ; India Mica & Mican ite Industries Ltd. vs State of Bihar & Ors. ; Alfred L Snapp & SonInc.
vs Puerto Rico, ; 73, Ed.
2d 995, 102 section ct.
3260; State of Georgia vs Tennessee Copper Co., ; , 27 section et.
618, re ferred to.
B.K. Mukherjea on Hindu Religious and Charitable Trusts, Tagore Law Lectures, 5th Edn.
p. 404; Words & Phrases, permanent Edn.
33 p. 99; Black 's Law Dictionary, 5th Edn. 1979, p. 1003; Weaver 's Constitutional Law, p. 490; American Consti tutional Law by Lawrence H. Tribe 1978 Edn. para 3.24, referred to.
4.1 Section 3 provides for the substitution of the Central Government with the right to represent and act in place of (whether within or outside India) every person who has made or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the constitutional provisions no question of giving a hearing to the parties for taking over these rights by the State arises.
For legis lation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature.
Indeed the present Act is within the competence of the Parliament.
Section 3 makes the Central Government the dominoes litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
[692A D] 4.2 Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims.
[699D] 606 4.3 Sections 3 and 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and signifi cant.
The exclusively cannot be wittled down or watered down.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to.
the Central Government alongwith the victims in instituting or proceeding for the realisation or the en forcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effective or equitable and would not be the best or more advantageous procedure for securing the claims arising out of the leakage.
[683A C] 4.4 Sections 3 and 4 of the Act should be read together alongwith other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of objects and Reasons and the Preamble to the act.
The Act was so designed that the vic tims of the disaster are fully protected and the claims of compensation or damages for loss of life or personal in juries or in respect of other matters arising out of or connected with the disaster are processed speedily, effec tively, equitably and to the best advantage of the claim ants.
Section 3 of the Act is subject to other provisions of the Act which includes Sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and, therefore overrides section 3.
[659G H; 660A B] 4.5 In the instant case, the Government of India is only capable to represent the victims as a party.
The adjudica tion of the claims would be done by the Court.
The doctrine of 'Bona fide Representation ' as also 'defacto validity ' are not applicable to the present case.
[690F] Basheshar vs Income Tax Commissioner, ; ; In re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra vs State of U.P. & Ors.
; ; Bodhan Chowdhary vs State of Bihar; , ; Lakshmi Kant Pandey vs Union of India; , ; M/s Mackinnon Mackenzie & Co. Ltd. vs Audrey D ' Costa and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; ; Gokaraju Rangaraju vs State of A.P., ; ; Pushpadevi M. Jatia vs M.L. Wadhwan. ; ; 607 M/s Beopar Sahayak (P) Ltd. & Ors.
vs Vishwanath & Ors., [1987] 3 SCC 693; Dharampal Singh vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammed Sulaiman vs N.C. Mohammed lsmail & Ors.; , ; Malkariun Bin Shidrammappa Pasare vs Narhari Bin Shivappa & Anr., 271 A 216, referred to.
Black 's Law Dictionary 5th Edn.
p. 437, referred to.
The restrictions or limitations on the substantive and procedural rights in the Act will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into considera tion.
Having considered the background, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settle ment in USA in mass action, the strength of the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the vic tims as contemplated by section 4 of the Act, the Act cannot be condemned as unreasonable.
[684C E] State of Madras vs V.G. Row, ; , referred to.
6.1 In view of the principles settled by this Court and accepted all over the world in a case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportuni ty should be given, would depend upon the particular situa tion.
Fair procedure should be followed in a representative mass tort action.
[696E F] 6.2 One assumption under which the Act is justified is that the victims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter notice was necessary.
The victims at large did not have the notice.
The Central Government as the representative of the victims must have the views of the victims and place such view before the court in such manner it considers neces 608 sary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an impor tant stage in the proceedings, opportunities must be given to the victims.
Individual notices may not be necessary.
The Court can, and should in such situation formulate modalities of giving notice and public notice can also be given invit ing views of the victims by tile help of mass media.
Howev er, it is not necessary that such views would require the consent of all the victims.
[698B C; 698G H; 699A] 6.3 One of the important requirements of justice is that people affected by an action or inaction should have oppor tunity to have their say.
That opportunity the victims have got when these applications were heard and they were heard after utmost publicity and they would have further opportu nity when review application against the settlement would be heard.
1700G H; 701A] 7.1 The Act does not expressly exclude the application of the Code of Civil Procedure.
Section 11 of the Act pro vides the overriding effect indicating that anything incon sistent with the provisions of the Act or in other laws including the Civil Procedure Code should be ignored and the Act should prevail.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Government has replaced and divested the victims.
1696H; 697A B] 7.2 In the instant case, there is no question of aban donment as such of the suit or part of the suit, the provi sions of order XXIII Rule 1 would also not strictly apply.
However, Order XXIH Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement of compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
Indubitably the victims would be bound by the Settle ment though not named in the suit.
11his is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 315 of Order XXIII of the Code.
If the principles of this rule are the principles of natural justice then we are of the opinion that 609 the principles behind it would be applicable; and also that section 4 of the Act should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome".
[697C G] 7.3 In as much as section 4 of the Act had given a qualified right of participation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the princi ples of natural justice cannot be judged by any strait jacket formula.
[662G H] R. Viswanathan vs Rukn ul Mulk Syed Abdul Wajid, ; ; M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
(2) 724; Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal. 456; Ram 'Sarup vs Nanak Ram, AIR 1952 All.
275; referred to.
The Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a 'claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Government.
Therefore, the Act proceeded on the assumption that the Government could be a claimant being a person as such.
[690A B] 9.1 The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
[693D E] 9.2 Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
Audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory au thority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application is that where a statute does not in terms exclude the rule of prior hearing but contemplates a post decisional hearing 610 amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
[694A D] 9.3 In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central Government was not judging any claim, but was fighting and advancing the claims of the victims.
The adjudication would be done by the courts, and therefore, there is no scope of the violation of any principle of natural justice.
[688G H; 689A B] Menaka Gandhi vs Union of India, [1978] 2 SCR 621; Olga Tellis vs Bombay Municipal Corporation, [1985] Supp. 2 SCR 51; Union of India vs Tulsi Ram Patel, [1985] Supp. 2 SCR 131; Swadeshi Cotton Mills vs Union of India, ; , relied on.
Ganga Bai vs Vijay Kumar, ; ; S.L. Kapoor vs Jagmohan, ; Sangram vs Election Commis sion; , , referred to.
Though not expressly stated, the Act proceeds on 'the major inarticulate premise '.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construc tion but on the Contrary.
Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This approach to the interpre tation of the Act can legitimately be called the 'construc tive intuition ' which is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quantity of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the conces sion of which is dangerous, the denial ruinous".
Given this freedom it is a rare opportunity though never to be misused and challenge for the Judges to adopt and give meaning to 611 the act, articulate and inarticulate and thus translate the intention of the Parliament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims, who, it was thought, were unable to establish their own rights and fight for themselves.
[687E H; 688A] 11.1 The circumstances that financial institutions held shares in the UCIL would not disqualify the Government of India from acting as parens patriae and in discharging its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Government of India, UCIL was not a neces sary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia, on the basis of enterprise liability.
If the Government of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case.
[668H; 669A B] M.C. Mehta vs Union of India, ; , referred to.
11.2 Even if there was any remote conflict of interests between the Union of India and the victims on account of the sharesholding, doctrine of necessity would override the possible violation of the principles of natural justice.
[669F] Kasturilal Ralia Ram Jain vs State of UP, ; ; State of Rajasthan vs Vidyawati, [1962] 2 Supp.
SCR 989; J. Mohapatra & Co. & Anr.
vs State of Orissa & Anr.
, ; , referred to.
Halsbury 's Laws of England, Vol. 1, 4th Edn.
para 73 Smith 's Judicial Review of Administrative Action, 4th Edn.
276 277; Natural Justice by G.A. Flick, [1979] Edn. pp. 138 141, referred to.
The Act does not create new causes of action or create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain un changed.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
[655F] 13.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involves both compensation to the 612 person injured and punishment as deterrence.
The Act, as such does not abridge or curtail damage or liability whatev er that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
[680G H; 681A F] Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh, Oberoi ; ; Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209; Ryland vs Flatcher, (1868) Vol 3 LR E& I Appeal Cases 330; Rookes vs Barnard, ; , re ferred to.
Salmond 's Law of Torts, 15th Edn.
p. 30, referred to.
The Act in question does not purport to deal with the criminal liability, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This position is clear from the provisions and the preamble to the Act.
[636F] 15.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prosecuted the state must protect the victims.
Otherwise the object of the Act would be defeated its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assumption of the power and temporary deprivation of the rights of the victims and divestiture of the right of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
[686B C] 16.
The promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme.
That would be redemption to a certain extent.
The law relating to damages and payment of interim damages or compensation to the victims of this nature should be seriously and scientif ically examined by the appropriate agencies.
[704F H; 705A] 17.
The Bhopal Gas Leak disaster and its aftermath emphasise the need for laying down certain norms and stand ards that the Government may follow before granting permis sion or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment, should, therefore, examine or have the problem exam ined by an expert committee as to what should be the condi tions on 613 which future licences and/or permission for running indus tries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permission, creation of a fund in anticipation by the industries to be available for payment of damages out of the said fund in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said Fund by procedure separate ly evolved for computation and payment of damages without exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrant or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
[705B F] 18.
That people are born free, the dignity of the per sons must be recognised, and competent tribunal is one of the surest methods of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about measures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
[682D E] Per Singh, J. (concurring): 1.1 In India, the need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under takings as well as by Transnational Corporations.
Many of these industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surround ing areas.
Though working of such factories and plants is regulated by a 614 number of laws of our country, there is no special legisla tion providing for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands today, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well the liability of the enterprise has been bound by the shack les of conservative principles.
[707D G] 1.2 The principles laid down in Ryland vs Fletcher made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of enterprise was proved.
[707G H] 1.3 The law laid down in Oleum Gas Leak case made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazard ous or inherently dangerous activities.
[709C] 1.4 In the instant case, there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
[709E] Ryland vs Fletcher, ; ; M.C. Mehta vs Union of India; , , referred to. 2.
In the context of our national dimensions of human rights, right to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 51(g), it is the duty of the State to take effective steps to protect the constitutional rights guaranteed.
These rights must be integrated and illumined by evolving interna tional dimensions and standards, having regard to our sover eignty as highlighted by Clauses 9 and 13 of U.N. Code of Conduct on Transnational Corporations.
Such a law may pro vide for conditions for granting licence to Transnational Corporations, prescribing norms and standards for running industries on Indian soil ensuring the above said constitu tional rights of our people.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporations should also be made liable for any damage caused to the human beings or ecology.
The law must require transnational Corporations to agree to pay such damages as may be determined by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims, the law should 615 provide for constitution of tribunals regulated by special procedure for determining compensation to victims of indus trial disaster or accident, appeal against which may lie to this Court on the limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
[710H; 711A F] 3.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disaster Fund", contributions to which may be made by the Government, the industries whether they are transnational corporations or domestic undertakings, public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The fund should be permanent in nature.
so that money is readily available for providing immediate effective relief to the victims.
[711 G H; 712A] Ranganathan and Ahmadi, J J Per Ranganathan, J. (Concur ring).
The provisions of the Act, read by themselves, guar antee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the Act.
Sections 3 and 4 of the Act completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
Far from abridging the rights of the claimants in any manner, these provisions are so worded as to enable the Government to prosecute the litigation with the maximum amount of resources, efficiency and competence at its com mand.
as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive role in the litigation.
[720G H; 721A B] 2.
Even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Cen tral Government, had been got deleted from the array of parties in the suits and proceedings pending in this coun try, the result would not have been fatal to the interests of the litigants.
On the contrary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corporation.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same, as that of, "parens 616 patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactorily exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litigation better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much deter mination or capability as such a litigant.
But in a case of the present type one should not be confounded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable or prosecuting such a litiga tion in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negli gible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situation, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Govern ment to shoulder the responsibility by substituting itself in place of the victims for all purposes connected with the claims.
[716C H; 717A] 3.
Section 4 adequately safeguards the interest of individual victims.
It enables each one of them to bring to the notice of the Union any special features or circum stances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
The individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceedings.
If the suits in this case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views of any of them who chose to do so.
The statute has provided that though the Union of India will be the dominus litis in the suit, the interest of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indicated above.
This provision of the statute is an adaptation of the principle of Order 1 Rule 8 and of order XXIII Rule 38 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation al lowed to 617 the victims is somewhat differently enunciated in the legis lation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be faulted on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in settling the suit by way of compromise.
[724G H; 725A D] 4.
Sections 3 and 4 combine together the interest of the weak, illiterate, helpless and poor victims as well as the interest of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the climants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would show that there has been no real total deprivation of the right of the claimants to enforce their claim for damage in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
[718D G ] 5.
It is not possible to bring the suits brought under the Act within the categories of representative action envisaged in the Code of Civil Procedure.
The Act deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The Act divests the individual claimants of their right to sue and vests it in the Union.
In relation to the suit in India, the Union is the sole Plaintiff.
none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be defined at the stage of settlement.
The litigation is carried on by the State in its capacity not exactly the same as, but somewhat analogous to that of "parens patriae".
In the case of a litigation by a Karta of a Hindu undivided family or by a guardian on behalf of a ward, who is non sui juris, the junior members of the family or the wards, are not to be consulted before entering into a settlement.
In such cases, court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best inter est of all concerned.
If it is later discovered that there has been any fraud or collusion, it may be open to the junior members of the 618 family or the wards to call the Karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae ' would have been at liberty to enter into such settlement as it considered best on its own and seek the Court 's approval therefore.
[723G H; 724A D] 6.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accom panied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litigation may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to adequately compensate the victims either on their own or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in negotiated settlement.
In most of the mass disaster cases reported, proceedings finally end in a compromise, if only to avoid an indefinite prolongation of the agonies caused by such liti gation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to withdraw the proceedings or enter into a compromise.
[719B E] M.C. Mehta vs Union of India, ; , referred to.
The Act has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the development leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
[726B D] 8.
In the field of torts, under the common law of Eng land, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis maritur cum persona although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of Fatal Accidents Act, 1846, popularly known as Lord Compbell 's Act.
Thereafter the Indian Legislature enacted the .
This Act is fashioned on the 619 lines of the English Act of 1840.
Even though the English Act has undergone a substantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thou sands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experi ence and evolve safeguards atleast for the future.
The time is ripe to take a fresh look at the outdated century old legislation which is out of tune with modern concepts.
[728F H; 729A B] 9.
The Central Government will be well advised to insist on certain safeguards before permitting a transnational company to do business in the country.
It is necessary to insist on a right to be informed of the nature of the proc esses involved so as to take prompt action in the event of an accident.
The victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this coun try; that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; and that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corporation, its affiliates and their assets without further procedural hurdles.
in those other countries.
[729G H; 730A E] 10.
It is hoped that calamities like the one which this country has suffered will serve as catalyst to expedite the acceptance of an international code on such matters in the near future.
[730F G]
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<s>[INST] Summarize the judgementCivil Appeal Nos. 295 & 296 (NT) of 1974.
From the Judgment and Order dated 19.7.1973 of the Kerala High Court in I.T.R. Nos. 32 and 33 of 1971.
section Poti, section Sukumaran and D.N. Mishra, for the Appellant.
G.C. Sharma, K.C. Dua and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These two appeals arise by certificate by the High Court in Income Tax Reference Nos. 32 and 33 of 1971.
The High Court of Kerala by its judgment dated 19th July, 1973 answered the following two questions in the negative and in favour of the revenue. "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the sums of Rs. 2,90,220 and Rs. 3,63,750 were not assessable as income of the assessee for the assessment years 1960 61 and 1961 62? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law and had material for holding that the sums of Rs. 2,90,220 and Rs. 3,63,750 are exempt from taxation under section 4(3)(vii) of the Indian Income tax Act, 1922 for the assessment years 1960 61 and 1961 62 respectively?" The references relates to assessment years 1960 61 and 1961 62.
The assessee 's accounting year was the calender year.
940 The assessee publishes a Malyalam daily newspaper by name Kerala Dhwani.
Till 1953, he was a lecturer in History and Political Science in the College at Kottayam.
He had his education in the United State of America, during 1953 to 1957.
During this period of stay in the U.S.A. he had the privilege of associating himself with the India Gospel Mission in the United States.
The India Gospel Mission, it was stated, was collecting money for its working abroad through the Indian Christian Crusade.
The assessee was also publishing a religious magazine called "Viswa Deepam".
The magazine was started in January, 1957.
The father of the assessee Shri K.G. Thomas was the Editor of Viswa Deepam.
Shri Thomas was also in America and he was also doing missionary work in America for some time.
In 1958, Shri Thomas, the lather of the assessee was in India the was going to America off and on.
Indian Christian Crusade, U.S.A. is an institution sponsoring religious education in India and it was admitted that the assessee was propagating the ideals of the Indian Christian Crusade on returning to India after finishing his education in the States.
Later on the assessee started publishing a paper called "Kerala Dhwani".
This paper was started in 1959.
While the assessee was in America, he took his Ph.D. degree.
For the assessment year 1960 61, the assessee filed a return disclosing a loss of Rs. 1,59,894 under the head 'business '.
The assessee, as mentioned hereinbefore, was publishing Malayalam daily newspaper called 'Kerala Dhwani '.
While t scrutinising the accounts, the Income tax Officer found in the ledger folio in the name of the assessee amounts totalling Rs. 2,57,138 credited in ' his account.
The assessee was asked to explain these credits and he represented that most of the amounts were received by the assessee as donations from U.S.A. through an organisation known as Indian Christian Crusade, U.S.A. The Income tax Officer found that the names and other details of persons who had donated the amounts were not available.
He also found that such amounts amounted in all Rs. 2,90,220.
The Income tax Officer had stated that in the absence of definite information regarding the individuals who has made the donations, it had to be presumed that the amounts had been given by the Indian Christian Crusade, U.S.A. to the assessee.
The assessee 's case before the Income tax Officer was that the amounts received by the assessee were purely personal gifts and testimonials which were given because of the esteem and regard for the personal qualities of the assessee and that the payments were purely voluntary.
The Income tax Officer rejected the contention.
He held: 941 (i) The payment of donations started simultaneously with the publication of the daily newspaper Kerala Dhwani and the donations were continued during the period the publication continued.
(ii) The donations were regular and continued for the next year also.
(iii) There was nothing to show that the amounts were given on account of the personal qualities of the assessee.
(iv) The donations were being made regularly throughout the year and these were evidently given as aid to the running of the newspaper which was the business carried on by the assessee.
(v) The Indian Christian Crusade, U.S.A. which was paying money to the assessee was an enterprise in India established for the furtherence of ideals and objectives similar to theirs.
For aforesaid reasons the Income tax Officer held that the so called donations were payments by way of remuneration for the work done by the assessee in connection with the spreading, in India, of the ideals of the Indian Christian Crusade, U.S.A. The Income tax Officer came to the conclusion that the amounts paid to the assessee were connected with the business of the assessee and were liable to be taxed as the business income of the assessee.
He, therefore, brought to tax Rs. 2,90,220 which had been received during the assessment year.
For the next assessment year, the assessee had received similar amounts totalling to Rs. 3,63,750 through the Indian Christian Crusade, U.S.A.
For the reasons given in the order of the previous year, the Income tax Officer treated this amount also as the business income for the assessment year 1961 62 and brought the same to tax.
The assessee filed appeals in respect of both the years and the Appellate Assistant Commissioner disposed of the appeals by different orders delivered on the same date.
He discussed all the contentions raised by the assessee in his appellate orders.
The main contention raised by the assessee before the Appellate Assistant Commissioner was that the various amounts credited in his bank account and in his personal account in the business represented gifts made by personal friends in the U.S.A., that the amounts were collected by the Indian Christian Crusade and forwarded to India to the assessee.
The Appellate Assistant Commissioner rejecting these contentions of the assessee found that the assessee was a journalist and it was his avocation or vocation to propagate certain ideas and ideals.
He was closely associated with the missionary work carried on by the Indian Christian Crusade in America and he was propagating the ideals of 942 Indian Christian Crusade, America in India because of his close relationship with that origination as mentioned hereinbefore.
The assessee during his stay in U.S.A. and after his return was engaged in a movement for the spread of religion and fighting the forces of atheism.
According to the assessee, his friends in America and those Who believed in the cause which he sponsored were sending him donations for helping tile movement and the amounts that were handed over to or were collected by the Indian Christian Crusade, U.S.A. were remitted to him.
In further appeal the Tribunal held that the amounts did not represent remuneration or payments for services rendered.
The tribunal further held that the receipts were clearly causal and non recurring and aid not arise in the course of the exercise of any vocation.
Then the aforesaid two questions were referred to the High Court under Section 66 (1) of the Indian Income tax Act, 1922.
The High Court held that the receipts of casual and non recurring nature would not be included in the total income of a person.
But if there were receipts arising from the exercise of a vocation, these would be included in the total income, even if these were of casual or non recurring nature or voluntary and the receipts resulting from such payments would be outside Section 4(3)(vii) of the Income tax Act, 1922 (hereinafter referred to as the ( 'Act ').
Relying on the findings of the Tribunal, the High Court held that the assessee was very actively, fully occupied with the activities connected with achieving the objects of straightening faith in God and fighting against atheism and was occupied with this affair.
The payer which he published for this purpose was a daily coming out with views in support of this mission.
Teaching and propagating religion could be an occupation.
It was not necessary that its object should be to earn a livelihood.
Anything in which a person was engaged systematically could be an occupation or vocation.
The next question would be whether receipts could be said to arise from such occupation or vocation.
There was link between the activity of the assessee and the payments, and that the payments were made by those who held similar views as those of the assessee and who were very much interested in the propagation and the acceptance of those views by the general public.
The payments were made for the purpose of helping the assessee to run the paper which was the mouth piece or medium through which the ideas were to be spread.
The 943 connection between the activity of the assessee and the donations was thus intimate.
lt arose out of the vocation or the occupation carried on by the assessee.
Therefore, the receipts arose from the exercise of an occupation by the assessee.
The high Court also considered whether such payments were excluded by Section 4(3)(vii) of the Act.
Section 4 of the Act made the total income of the previous year of any person assessable to tax and sub section (3) specified certain incomes which should not be included in the total income of the person.
Sub section (vii) of Section 4(3) was in the following terms: "(vii) any receipts not being capital gains chargeable according to the provisions of section 12B and not being receipts arising from business or the exercise of a profession, vocation or occupation, which are of a casual and non recurring nature or are not by way of addition to the remuneration of an employee.
As the section made it clear, in order to be entitled to exemption, the receipts must be of income character first.
In the instant case, there is no doubt that if a sum of money is received for the purpose in pursuance of an avocation or vocation, it arose out of this vocation or profession.
If this is so, then this was income under the Act.
Such income could only be excluded if it was specifically excluded by any provision of the Act.
The High Court held, and in our opinion rightly, that in view of the facts and circumstances of this case as found by the Tribunal, these amounts were not excluded under Section 4(3)(vii) of the Act.
The position was thus, these amounts were received by the assessee in the course of his avocation or vocation and were given to him for the purpose of the same.
These were therefore incomes which were not also of a casual or non recurring nature nor were these capital gains under Section 12B of the Act.
If that was the position, then, in our opinion, the amounts were clearly taxable as held by the Income tax Officer and by the High Court.
Several aspects of the question were placed before us on a large canvass namely that the High Court had gone into facts of the first time over ruling the findings of the fact of the Tribunal without there being a question to that effect and also there was no finding that the receipts were of income character.
In support of these contentions, several decisions of this Court were referred before us, Inter alia, Parimisetti Seetharamma vs 944 Commissioner of Income Tax, Andhra Pradesh.
, Reliance was placed on the observations appearing at pages 536, 537 and 538 of the said report.
It was urged that the burden of proof was wrongly placed by the High Court and on the facts, that the two circumstances relied on by the High Court did not establish that certain money was given to the assessee as remuneration for services and as such it could not be held that the person concerned was assessable to tax.
It was urged that the High Court wrongly placed the burden of proof upon the assessee.
But on the facts and in the circumstance of this case, the conclusion recorded by the High Court in the instant case was borne out on the facts on record.
The observations of this Court referred to above cannot be of much assistance to the assessee.
The case which is most apposite to the facts of the instant case is a decision of this Court in the case of P. Krishna Menon vs Commissioner of Income Tax, Mysore, Travancore Cochin and Coorg.
Bangalore.
, There after retirement from Government service, the appellant therein was spending his time in studying and teaching Vedanta philosophy.
L, who was one of his disciples, used to come from London at regular intervals to Trivendrum where the appellant resided, and stay there for a few months at a time and attend his discourses, and so received instructions in Vedanta and had the benefits of his teachings.
L transferred his entire balance standing to this credit in his on account at Bombay, amounting to more that Rs. 2 lakhs, to the account of the appellant opened in the letter 's name in the same bank at Bombay.
Thereafter, from time to time, L put in further sums into the appellant 's account in Bombay.
The question was whether the receipts from L. constituted the appellants income taxable under the Travancore Income Tax Act, 1121 (Malayalam Era) which was identical with the Indian Income Tax Act, 1922.
It was held that teaching was a vocation, if not a profession, and teaching Vedanta was just as much teaching as any other teaching and therefore a vocation; that in order that an activity might be called a vocation it was not necessary to show that it was an organised activity and that it was indulged with a motive of making profit; it was well established that it was not the motive of a person doing an act which decided whether the act done by him was the carrying on of a business, profession or vocation; and if any business, profession or vocation in fact produced an income, that was taxable income and none the less so because it was carried on without the motive of producing an income; that teaching of Vendetta by the appellant in that case was the 945 carrying on of a vocation by him and that the imparting of the teaching was the causa causans of the making of the gifts by L, and it was impossible to hold that the payments to the appellant had not been made in consideration of the teaching imparted by him, and that, therefore, the payments were income arising from the vocation of the appellants that the payments made by L were income arising from a vocation.
These were not casual or non recurring receipts and no question of exemption under Section 4(3)(vii) of the Act arose.
It was further observed that in order that a payment might be exempted under Section 4(3)(vii) as a casual and non recurring receipt, it had to be shown that it did not arise from the exercise of a vocation.
In the instant case before us, identical is the position.
The assessee carried on a vocation of preaching against atheism.
In the course of such vocation and for the purpose of the same he received the amounts in question as donation for the furtherance of the objects of his vocation.
The receipts arose to the assessee for the carrying on of the vocation by the assessee, and these were not casual and non recurring.
These were taxable.
These facts were found by the Income tax Officer.
These facts not in so many terms but essentially found by the Appellate Assistant Commissioner and were reiterated by the Tribunal and the High Court accepted these findings of facts and answered the question accordingly.
Reliance was also placed on the decisions of the Gujarat High Court in the case of the Acharya D.V. Pande vs Commissioner of Income tax, Gujarat., , and Commissioner of Income tax, Gujarat vs Shri Girdharram Hariram Bhagat, , decisions of the Bombay High Court in the Case of Maharaj Shri Govindlalji Ranchhodlalji vs Commissioner of Income tax, Ahmedabad, , and H.H. Maharani Shri Vijaykuverba Shed of Morvi and Another vs Commissioner of Income tax, Bombay City II, , decision of the Madras High Court in the case of S.A. Ramakrishnan vs Commissioner of Income tax, Madras, , and decision of the Delhi high Court in the case of Siddhartha Publications (P) Ltd. vs Commissioner of Income tax, Delhi, , dealing with certain facts and circumstances where income could be said be taxable.
From all these decisions, two facts emerge.
The burden is on the revenue to establish that the receipt is of a revenue character.
Once receipt is found to be of a revenue character 946 whether it comes under exemption or not, it is for the assessee to establish.
Facts must be found by the Tribunal and the High Court must proceed on the basis of the facts found by the Tribunal.
The High Court cannot afresh go to the facts over ruling the facts found by the Tribunal unless there is a question to that effect challenging the facts found by the Tribunal.
These propositions are well settled and in this case in the decision of the High Court, these principles, in our opinion, have not been breached.
It has been established that the assessee was carrying on a vocation, the vocation preaching of Christian Gospel and helping anti atheism was the vocation of his life.
He was running a newspaper in aid of that.
The donations received from America were to help him for the said purpose.
They arose out of his carrying on and continued so long as he carried on this avocation or vocation.
These receipts therefore arose out of his vocation.
These were therefore his income.
In the facts these were not exempt under Section 4(3)(vii) of the Act.
In the premises these were taxable.
Numerous decisions were referred to us on the question as to how far the High Court could interfere with the facts found by the Tribunal.
Reliance was placed on the decisions of this Court in the case Karnani Properties Ltd. vs Commissioner of Income tax, West Bengal, , Aluminium Corporation of India Ltd. vs Commissioner of Income tax, West Bengal, , Anil Kumar Roy Chowdhury and Others vs Commissioner of Income tax, West Bengal II, , Commissioner of Income tax, West Bengal III vs Kamal Singh Rampuria, , Commissioner of Income tax, West Bengal III vs Imperial Chemical Industries (India) (P) Ltd., , and the decision of the Bombay High Court in the case of Commissioner of Income tax, Bombay City II vs Deviprasad Khandelwal and Co. Ltd., , and also the decision of the Madras High Court in the case of Commissioner of Income tax vs P.S. Chelladurai.
, 145 I.T.R. 139.
We have set out the findings of the Tribunal and considered the findings of the Tribunal as well as the judgment of the High Court.
There has not been any unwarranted interference by the High Court with the facts found by the Tribunal.
Basic facts have been found by the Tribunal.
On the question where income could be said to arise, it may be relevant to refer to Strong & Co. of Romsey, Limited vs Woodifield (Surveyor of Taxes), ; There a brewery 947 company owned an inn which was carried on by the manager as part of their business.
A customer sleeping in the inn was injured by the fall of a chimney, and recovered damages and costs against the company for the injury, which was owing to the negligence of the company 's servants.
The question was whether the amounts paid as damages could be claimed as a deduction from the business of s carrying on the activities of the inn keeper.
The Lord Chancellor observed at page 452 of the report as follows: "I think only such losses can be deducted as are connected with in the sense that they are really incidental to the trade itself.
They cannot be deducted if they are mainly incidental to some other vocation or fall on the trader in some character other than that of trader.
The nature of the trade is to be considered.
To give an illustration, losses sustained by a railway company in compensating passengers for accidents in travelling might be deducted.
On the other hand, if a man kept a grocer 's shop, for keeping which a house is necessary, and one of the window shutters fell upon and injured a man walking in the street, the loss arising thereby to the grocer ought not be deducted.
Many cases might be put near the line, and no degree of ingenuity can frame a formula so precise and comprehensive as to solve at sight all the cases that may arise.
In the case of The Commissioner of Inland Revenue vs E.C. Warnes & Co. Ltd., , at page 231 of the Report, Rowlatt J. observed: "I may shelter myself behind the authority of Lord Loreburn, who, in his judgment in the House of Lords in Strong & Co. vs Woodifield, said that it is impossible to frame any formula which shall describe what is a loss connected with or arising out of a trade.
That statement I adopt, and 1 am not sure that I gain very much by going through a number of analogies; but it seems to me that a penal liability of this kind cannot be regarded as a loss connected with or arising out a trade.
In the instant case there cannot be any doubt that the receipts by the assessee arose out of the avocation of the assessee of propagating views against atheism and preaching Christian Gospel.
948 In view of the facts and circumstances of the case there was a link between the activities of the assessee and the payments received by him and the link was close enough.
In that view of the matter, in our opinion, the High Court was right in answering both the questions referred to it in the negative and in favour of the revenue.
The appeals accordingly fail and are dismissed with costs.
Civil Miscellaneous Petition No. 10046 of 1976 for condonation of delay in filing the additional papers is allowed.
A.P.J. Appeals dismissed.
[/INST]In the respondent Company there were two rival Unions of workmen, namely, Karamchari Union and Sharmik Sangh.
The Karamchari Union espoused the demand of the workmen employed by the Company in its Kanpur unit for upward revision of dearness allowance following an award of the Industrial Tribunal Delhi by which the dearness allowance of the workmen employed in the Delhi unit was linked to the consumer price index for Delhi prepared by Labour Bureau, Simla, which substantially increased the dearness allowance of workmen posted at Delhi.
The Company in its attempt to thwart the demand being pursued by the Karamchari Union, entered into a settlement with the Shramik Sangh in respect of dearness allowance and then approached the Labour Commissioner for registering the settlement Failing to obtain the registration, the Company utilaterally enforced the new scheme of dearness allowance linked to all India average consumer price index prepared by Labour Bureau, Simla.
The Karamchari Union did not accept the revised formula and pressed its demand.
The dispute was referred for adjudication.
Before the Tribunal the Company contended: (1) that the settlement would be binding on the members of the Karamchari Union and the dispute does not require adjudication on merits, and (2) that the Company is desirous of linking dearness allowance to all India average consumer price index for 112 working class with base 1960 100 and the Tribunal should avoid accepting the demand of a few workmen.
The tribunal directed that the workmen of the Kanpur unit of the Company should be paid dearness allowance linked to the all India consumer price index (1960 100) for Kanpur Centre compiled by the Labour Bureau, Simla.
On the question of neutralisation, no change was allowed.
Partly allowing the appeal of the workmen, ^ HELD: 1.
The workmen of the Kanpur unit of the Company should be paid the dearness allowance according to all India consumer price index number for Kanpur (1960 100) compiled by Labour Bureau Simla after applying conversion factor also called the linking factor of 4.83.
Their dearness allowance cannot be linked to all India average consumer price index.
[125 B C] 2.
The Tribunal Committed a grave error in accepting collusive settlement as the starting point of the revision.
[122 H] 3, Uniformity, to an uninformed mind, appears to be attractive.
But, sometimes uniformity amongst dissimilar persons becomes counter productive.
Uniformity and equality have to be amongst equals measured by a common denominator.
The implementation of the Constitutional aspiration of `equal pay for equal work ' can be appreciated.
In the matter of basic wages it is a consummation devotedly to be wished.
But when it comes to dearness allowance any attempt at uniformity between workmen in metropolitan areas and in smaller centres would be destructive of the concept of dearness allowance.
[116 G H] Dearness allowance is directly related to the erosion of real wages by constant upward spiraling of the prices of basic necessities and as a sequal to the inflationary input, the fall in the purchasing power of the rupee.
It is a notorious phenomenon hitherto unquestioned that price rise variee from centre to centre, [117 A] Dearness allowance is inextricably intertwined with price rise, it being an attempt to compensate loss in real wages on account of price rise considered as a passing phenomenon by compensation.
That is why it is called variable dearness allowance.
Any uniformity in the matter of dearness allowance may confer a boon on persons employed in smaller centres and those in bigger metropolitan areas would be hard hit.
Dearness allowance by its very form and name has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is employed.
[117 B C] Dearness allowance to workmen at a particular place should therefore depend upon the place where the workman is working irrespective of the fact that the industrial undertaking in which the workman is employed is a unit of an industrial enterprises having an all India or inter State operations.
[117 E] 113 4.
In the matter of dearness allowance the Court should lean in favour of adjudication of dispute on the principle of industry cum region because dearness allowance is linked to cost of living index of a particular centre which has a local flavour.
A workman is exposed to the vagaries of the market where he resides and works, even though he may be an employee of a national, multi national or transnational industrial empire.
Therefore.
the region cum industry principle must inform industrial adjudication in the matter of dearness allowance.
In the instant case the Tribunal has overlooked this important principle of industrial adjudication.
[117 G; 120 H; 121 A; 121 C] Dunlop Rubber Co. (India) Ltd. vs Workmen & Ors., ; , referred to.
Remington Rand of India Ltd. vs The Workmen , woolcombers of India Ltd. vs Woolcombers Workers Union & Anr. ; and Greaves Cotton & Co. and Ors.
vs Their Workmen ; and Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen ; , followed.
Any attempt of a company introducing uniformity in the matter of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau, Simla would be destructive of the concept of dearness allowance.
Not only unequals will be treated as equals but the former would suffer irreparable harm.
Such an approach would deal a fatal blow to the well recognised principle of industrial adjudication based on region cum industry because there cannot be any uniformity in the dearness allowance of the workmen working in metropolitan areas and the workmen working in smaller areas.
[118 A C] 6.
Where for a certain industrial centre a dearness allowance formula is in vogue and it is linked to some consumer price index number, whenever the base year for consumer price index number is changed, a fresh linkage requires a conversion ratio.
In the absence of a conversion ratio, the whole scheme falls out of gear and becomes unworkable, ineffective and in fact unjust.
In the instant case the conversion ratio of 4.83 in valid and correct and the Tribunal ought to have accepted the same.
[123 D; 124 F] Ahmedabad Mill Owners ' Association etc.
vs The Textile Labour Association, [1966) 1 S.C.R. 382, followed.
In the matter of dearness allowance usually the paying capacity of the employer is examined.
In the instant case, it has not at all been contended that the respondent company cannot bear the additional burden.
[124 G]
</s>
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<s>[INST] Summarize the judgementence No. 1 of 1958.
Reference by the President of India under Article 143(1) of the Constitution of India on the Kerala Education Bill, 1957.
The circumstances which led to this Reference by the President and the questions referred appear from the full text of the Reference dated March 15, 1958, which is reproduced below: WHEREAS the Legislative Assembly of the state of Kerala has passed a Bill to provide for the better Organisation and development of educational institutions in the State of Kerala (hereinafter referred to as the Kerala Educational Bill); AND WHEREAS the said Bill, a copy whereof is annexed hereto, has been reserved by the Governor of Kerala, under article 200 of the Constitution, for my consideration ; AND WHEREAS sub clause 3 of clause (3) of the said Bill enables the Government of Kerala, inter alia, to recognise any school established and maintained by any person or body of persons for the purpose of providing the facilities set out in sub clause (2) of the said clause to wit, facilities for general education, special education and for the training of teachers ; AND WHEREAS sub clause (5) of clause 3 of the said Bill provides, inter alia, that any new school established or any higher class opened in any private school, after the Bill has become an Act and the Act has come into force, otherwise than in accordance with the provisions of the Act and the rules made under section 36 thereof, shall not be entitled to be recognised by the Government of Kerala; AND WHEREAS a doubt has arisen whether the provisions of the said sub clause (5) of clause 3 of the said Bill confer upon the Government an unguided 1002 power in regard to the recognition of new schools and the opening of higher classes in any private school which is capable of being exercised in an arbitrary and discriminatory manner; AND WHEREAS a doubt has further arisen whether such power of recognition of new schools and of higher classes in private schools is not capable of being exercised in a manner affecting the right of the minorities guaranteed by clause (1) of article 30 of the Constitution to establish and administer educational institutions of their choice; AND WHEREAS sub clause (3) of clause 8 of the said Bill requires all fees and other dues, other than special fees, collected from the students in an aided school to be made over to the Government of Kerala in such manner as may be prescribed, notwithstanding anything contained in any agreement, scheme or arrangement ; AND WHEREAS a doubt has arisen whether such requirement would not affect the right of the minorities guaranteed by clause (1) of article 30 of the Constitution to administer educational institutions established by them; AND WHEREAS clauses 9 to 13 confer upon the Government certain powers in regard to the administration of aided schools;, AND WHEREAS a doubt has arisen whether the exercise of such powers in regard to educational institutions established by the minorities would not affect the right to administer them guaranteed by clause (1) of article 30 of the Constitution; AND WHEREAS clause 15 of the said Bill empowers the Government of Kerala to take over, by notification in the Gazette, any category of aided schools in any specified area or areas, if they are satisfied that for standardising general education in the State of Kerala or for improving the level of literacy in any area or for more effectively managing the aided educational institutions in an area or for bringing education of any category under their direct control it is necessary to do so in the public interest, on 1003 payment of compensation on the basis of market value of the schools so taken over after deducting therefrom the amounts of aids or grants given by that Government for requisition, construction or improvement of the property of the schools; AND WHEREAS a doubt has arisen whether such power is not capable of being exercised in any arbitrary and discriminatory manner; AND WHEREAS clause 33 of the said Bill provides that, notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in force, no courts can grant any temporary injunction or make any interim order restraining any proceedings which is being or about to be taken under the Act; AND WHEREAS a doubt has arisen whether the provisions of the said clause 33, in so far as they relate to the jurisdiction of the High Courts, would offend article 226 of the Constitution ; AND WHEREAS there is likelihood of the constitutional validity of the provisions of the Bill herein before referred to being questioned in courts of law, involving considerable litigation ; AND WHEREAS, in view of what has been here in before stated, it appears to me that the questions of law hereinafter set out have arisen and are of such nature and of such importance that it is expedient that the opinion of the Supreme Court of India should be obtained thereon; NOW, THEREFORE, in exercise of the powers conferred upon me by clause (1) of article 143 of the Constitution, 1, Rajendra Prasad, President of India, hereby refer the following questions to the Supreme Court of India for consideration and report thereon, namely : " (1) Does sub clause (5) of clause 3 of the Kerala Education Bill, read with clause 36 thereof, or any of the provisions of the said sub clause, offend article 14 of the Constitution in any particulars or to any extent ? (2) Do sub clause (5) of clause 3, sub clause (3) of 1004 clause 8 and clauses 9 to 13 of Kerala Education Bill or any provisions thereof, offend clause (1) of article 30 of the Constitution in any particulars or to any extent? (3) Does clause 15 of the Kerala Education Bill, or any provisions thereof, offend article 14 of the Constitution in any particulars or to any extent ? (4) Does clause 33 of the Kerala Education Bill, or any provisions thereof, offend article 226 of the Constitution in any particulars or to any extent ? " 1958.
April 29, 30.
May 1, 2, 5, 6, 7, 8, 9 and 12.
Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General of India, H. N. Sanyal, Additional Solicitor General of India, G. N. Joshi and R. H. Dhebar, for the President of India.
The preamble to the Constitution of India lays emphasis on liberty of thought, expression, belief, faith and worship and assures the dignity of the individual.
To give effect to these ideals the Constitution provides fundamental rights for the individuals in articles 19, 25 and 28 and for groups in articles 26, 29 and 30.
The fundamental rights in articles 29 and 30 are absolute and no restrictions can be placed on them, though restrictions can be placed on other fundamental rights.
These rights may be compared with the rights under article 44 (2) of the Irish Constitution and section 93 of the British North America Act.
The freedoms conferred by articles 26, 29 and 30 were considered by this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mulutt, ( ; at 1028 1029) and The State of Bombay vs Bombay Education Society, ( ; at 578, 580, 586).
Article 30 (1) gives absolute right to the minorities to establish and administer educational institutions of their choice.
The Constitution having ensured religious freedom under article 26 and cultural freedom in article 29, left the means to promote and conserve these freedoms to the minorities themselves to work out under article 30 (1).
Clause 3 (5) of the Kerala Education Bill which provides that the establishment of new schools and opening of higher classes shall be according to the Rules to 1005 be framed under cl. 36 to entitle them to be recognised by the Government, confers upon the executive unguided and uncontrolled powers and offends article 14.
The ' legislature does not lay down any policy, but leaves it to the executive tinder the rule making powers.
A. Thangal Kunju Musaliar vs M. Venkitachalam Potti, ([1955] 2 S.C.R. 1196 at 1239, 1241); The State of West Bengal vs Anwar Ali Sarkar, ([1952] S.C.R. 284 at 345, 346).
It is incorrect to say that Christians and Muslims are not minorities in Kerala.
When the Constitution speaks of minorities it speaks on an all India basis.
The fact that a certain community formed a very high percentage of the population in a particular State did not detract from its status as a minority.
The provisions of the Bill make illusory the rights granted by article 30 (1) to minorities.
By using the instrument of Government aid the Bill seeks to deprive the minorities of their right to administer their own schools.
Shirur Mutt Case, ( ; at 1028, 1029).
The right of the minorities under article 30(1) to establish and administer their institutions is an absolute and unfettered right and is consistent with their getting aid from the Government.
Article 337 makes special pro vision for educational grants for the benefit of the Anglo Indian community.
Article 30 (1) is infringed whether the schools go in for aid or not.
Clause 8 (3) of the Bill under which in all aided schools all fees, etc., collected from the students will have to be made over to the Government deprives the management of the right of administration.
Pierce vs Society of Holy Sisters Names, ; at 1077); Maher vs Nebraska, ; at 1044).
Clause 15 of the Bill empowers the Government to acquire any category of aided schools in any specified area.
This clause is wholly subversive of article 30 (1).
It also offends article 14 as it empowers the Government to pick and choose any schools, by suitably selecting the category and area, for acquisition, no criteria having been laid down for making the choice.
Clause 33 of the Bill prohibits all Courts from 1006 granting any temporary injunction or interim order regarding any proceedings taken under the Act.
To the extent that this clause infringes article 226 or article 32, it is void.
Interim orders are also passed under articles 226 and 32 as ancillary to the main relief.
The State of Orissa vs Madan Gopal Rungta, ( [1952] S.C.R. 28 at 34).
Halsbury 's Laws of England, 3rd Edn., Vol.
11, p. 110, para.
Kaslival, Advocate General of Rajasthan, R.H. Dhebar and T. M. Sen, for the State of Rajasthan adopted the arguments of the Attorney General for India.
G. section Pathak, with M. R. Krishna Pillai for the Kerala Christian Education Action Committee, with J. B. Dadachanji for the Kerala School Managers Association and with V. O. Abraham and J. B. Dadachanji for the Aided School Managers ' Association in Badogara and Quilandy, Catholic Union of India and Catholic Association of Bombay.
The preamble to the Constitution speaks of securing to the citizens of India fraternity assuring the dignity of the individual and the unity of the Nation.
Articles 25 to 30 have been framed to secure this unity.
article 30 is in absolute terms and does not permit regulation or restriction of the rights conferred by it. " Their choice " in article 30 cannot be controlled by the State.
It has been the normal method of running the minority institutions with aid and recognition.
Implict in article 30(1) is the right of a parent or guardian to impart such education this children as he likes.
Bombay Education Society vs The State of Bombay, at 653).
It is the right of every person of the minority community to educate his children in school administered by that community.
The State of Bombay vs Bombay Education Society, ; at 586).
The word " administer should be interpreted as in ; at 1076, 67 L. Ed. 1042 at 1045 and ; at 647.
The ordinary dictionary meaning of administer is ' to manage ' or 'carry on '.
The legislature cannot even indirectly infringe the fundamental rights.
Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co. Ltd., ( ; at 683); 1007 Punjab Province vs Daulat Singh, ( 73 1.
A. 59) ; The State of Bombay vs Bombay Education Society, ( [1955] 1 section C. R. 568 at 583).
American Jurisprudence, Vol.
11, p. 724, See.
The whole scheme of the Bill is to secularise education and, thus it infringes the fundamental rights guaranteed under article 30.
Clause 3 of the Bill which requires permission to be obtained to establish a school, cl. 10 which empowers the Government to prescribe qualifications of teachers in minority community schools and cl. 26 which makes it obligatory on parents to send their children to Government or aided schools where compulsory education is in force, all offend article 30.
Similarly cls.
6, 7, 8, 11, 12, 14, 15 and 28 are destructive of this fundamental right.
Frank Anthony and P. C. Aggarwala, for the All India Anglo Indian Association and for the Apostolic Carmel Education Society and Roman Catholic Diocese.
Under article 143 this Court has the discretion to refuse to answer the reference.
In Re Allocation of Lands and Buildings, ( [1943] F. C. R. 20 at 22).
The present reference is most incomplete and wholly unsatisfactory and the Court should, following Zafrullah Khan J. in In re Levy of Estate Duty, ( at 334, 335), decline to answer it.
The reference is incomplete as this Court has been asked to examine whether certain provisions of the Bill offend certain specified fundamental rights though actually those provisions offend other fundamental rights also.
There are several important provisions in the Bill, which have not specifically been referred, which also offend fundamental rights.
Such a reference is unfair to the Court and deadly to my clients.
If this Court is in favour of giving its opinion on the reference, the scope thereof should be extended to include all objections to the validity of the provisions of the Bill, and this Court has inherent jurisdiction to do so.
Anglo Indian schools occupy a special position.
Article 30(1) gives to the Anglo Indian community the fundamental right to establish educational institutions of their choice.
These fundamental rights were not subject to any social control.
The object of the 128 1008 Kerala Education Bill was to strike at the Christian Church, especially the Catholics, to eliminate their religion, to take away their property, to eliminate all education agencies other than those of the State so that the State may regiment education and indoctrinate children.
The Bill which sought to implement directive principles of State policy in article 45 by providing for free and compulsory education infringed article 30(1).
Directive principles must yield to fundamental rights.
The State of Madras vs Sm.
Champakam Dorairajan, ([1951] section C. R. 521 at 531).
The State cannot compel minority educational institutions not to charge fees for primary classes.
This compulsion coupled with the embargo imposed by the Bill on children going to schools not recognised by the Government would extinguish the choice of the minorities guaranteed by article 30.
Recognition was part of the right of the minorities under article 30.
Article 337 provides for special grants or aids to educational institutions run by Anglo Indians and the State cannot take that away or place conditions or restrictions on it.
Clause 3(5) of the Bill infringes both article 30(1) and article 14.
It discriminates between existing schools which could continue to charge fees and primary classes and new schools which cannot charge such fees if they want to be recognised.
The conditions imposed on the opening of new schools by the minorities are such that they deprive them of the right under article 30(1).
Nur ud Din Ahmed, section section Shukla and P. C. Aggarwala, for the All India Jamiat ul ulema e Hind.
The Bill seeks to achieve nationalisation of educational institutions and thus to deprive the minorities of their right to establish and administer schools of their own choice under article 30.
This right includes the right of the minorities to receive aid and also get Government recognition of their schools without any restrictions.
The provisions of the Bill gives powers to the State without laying down the basis and standards for the exercise of that power.
1009 G. C. Mathur and C. P. Lal for the state of U. P. adopted the arguments of the Attorney General for India.
B. K. B. Naidu, for the Kerala State Muslim League adopted the arguments of G. section Pathak and Frank Anthony.
D.N. Pritt, Sardar Bahadur and C. M. Kuruvilla, for the State of Kerala.
The questions referred to the Court by the President arose out of certain doubts entertained by the President in respect of certain provisions of the Bill.
If the President did not entertain certain other doubts, the parties cannot insist that the President must have had those other doubts also.
The Court has no power to go beyond those questions which are raised in the reference.
The State of Kerala wants the Court to reply to all the four questions referred and it would abide by the view which the Court will express on these questions.
The Kerala Education Bill is a progressive piece of legislation which seeks to provide a better organisation and development of educational institutions in the State, and a varied and comprehensive educational service throughout the State.
It seeks to provide employment to about 70,000 teachers and to give security to the teachers.
The Bill also seeks to implement the directive principles of State policy in article 45 by providing for free and compulsory primary education for all.
The Bill lays down a clear principle and policy, as stated in its objects, to provide for the better organisation and development of education.
This is further made clear by the preamble which seeks to provide for a varied and comprehensive educational service throughout the State.
Nationalisation which could have been easily and lawfully achieved was not the policy adopted by the State.
Its policy was to maintain the three different categories of schools, the Government run schools, the private aided schools and the private schools recognised by the Govern ment.
The Court could not get a complete picture until the rules were framed.
The framing of the 1010 rules had necessarily to be left to the Government. 'a Such I delegated legislation ' is an integral and inevitable part of a modern State power.
Clause 3(5) of the Bill read with cl. 36 does not violate article 14.
Jadunandan Yadav vs R. P. Singh (A. I. R. 1958 Pat.
43 at 47); Biswambhar Singh vs The State of Orissa ([1954] section C. R. 842); Pannalal Binjraj vs Union of India, ( ; at 248, 256, 262); Sardar Inder Singh vs The State of Rajasthan ( [1957] section C. R. 605).
The rules to be framed by the Government would go for scrutiny before the same legislature which passed the Bill and when passed by the legislature the rules will become part of the Act.
This was not really delegated legislation but legislation in two stages.
In order to protect certain privileges of minorities the State cannot discard the glorious principles of free and compulsory education.
The rights of minorities cannot destroy the rights of citizens to universal free education.
If the minorities want Government aid and recognition for their schools, they could be granted on the general terms and conditions applicable to others.
The words I of their choice ' cannot be interpreted to mean the establishment of schools with the aid of the tax payer 's money and also with the assurance of enough pupils to attend those schools.
Christians and Muslims are not minorities in Kerala.
Christians, forming the second largest community, constituted one fourth of the population, while Muslims, forming the third largest community, constituted one seventh of the total population.
Minorities in the context of the educational rights guaranteed under the Constitution mean only those sections of the population in particular areas of a State who are in a minority, and not those who can be regarded as minorities in the country as a whole.
The only minority community in Kerala which can claim the benefit of article 30(1) are the Jews, who do not choose to have their own educational institutions.
Schools run by minorities in Kerala were not strictly minority schools as envisaged by article 30(1) as they were not run mainly for the children of the 1011 minority community.
In most of these schools at least 75 per cent.
of the students were from non minorities.
Article 30(1) contemplates schools for the education of members of the minority communities only.
Right of the minority communities to establish and administer institutions of their choice does not include the right to receive aid and recognition on their own terms.
Article 30(2) only prohibited the State from discriminating against any educational institution on the ground of religion or language.
In order to attract the operation of article 30(1) it should be established that there is a minority community, that it has established an educational institution and that the educational institution is run for the education of the members of that community.
Ramani Kanta Bose vs The Gauhati University (I. L. R. [1951] Ass.
348 at 352).
Not one of these conditions is fulfilled in any of the educational institutions in the State.
The choice in article 30(1) lies in the establishment of a school and not in its management.
The provisions of the Bill relating to the establishment and recognition of schools, restrictions on alienation of school property, appointment of managers, selection of teachers by the State Public Service Commission and the taking over the management of the schools in public interest are all reasonable conditions imposed to ensure better Organisation of education and security of service conditions to the teachers.
The category of schools in respect of which the power of acquisition can be exercised under cl. 15 of the Bill comes under a classification which differentiates it from those other categories which are excluded from classification being such as is calculated to further the purposes and the policy underlying the legislation.
Clause 15 does not infringe article 14 at all.
In enacting cl. 33 of the Bill the State Legislature did not intend, and must be presumed not to have intended, to affect the operation of article 226 in any way.
section Easwara Iyer and K. R. Chaudhury, for the Kerala Private Secondary School Office Staff 1012 Association and Kerala Private Teachers ' Federation, adopted the arguments of D. N. Pritt.
May 22.
The opinion of Das C. J., Bhagwati, B. P. Sinha, Jafer Imam, section K. Das and J. L. Kapur, JJ. was delivered by Das C. J. Venkatarama Aiyar J. delivered a separate opinion.
DAS C. J.
This reference has been made by the President under article 143 (1) of the Constitution of India for the opinion of this Court on certain questions of law of considerable public importance that have arisen out of or touching certain provisions of the Kerala Education Bill, 1957, hereinafter referred to as "the said Bill", which was passed by the Legislative Assembly of the State of Kerala on September 2, 1957, and was, under article 200, reserved by the Governor of Kerala for the consideration of the President.
After reciting the fact of the passing of the said Bill by the Legislative Assembly of Kerala and of the reservation thereof by its Governor for the consideration of the President and after setting out some of the clauses of the said Bill and specifying the doubts that may be said to have arisen out of or touching the said clauses, the President has referred to this Court certain questions hereinafter mentioned for consideration and report.
It is to be noted that the said Bill not having yet received the assent of the President the doubts, leading up to this reference, cannot obviously be said to have arisen out of the actual application of any specified section of an Act on the facts of any particular case and accordingly the questions that have been referred to this Court for its consideration are necessarily of an abstract or hypothetical nature and are not like specific issues raised in a particular case brought before a court by a party aggrieved by the operation of a particular law which he impugns.
Further, this reference has been characterised as incomplete and unsatisfactory in that, according to learned counsel appearing for some of the institutions it does not clearly bring out all the constitutional 1013 defects attaching to the provisions of the Bill and serious apprehension has been expressed by learned counsel before us that our opinion on these isolated ' abstract or hypothetical questions may very positively prejudice the interests, if not completely destroy the very existence, of the institutions they represent and, in the circumstances, we have been asked not to entertain this reference or give any advisory opinion on the questions put to us.
It may be of advantage to advert, at the outset, to the ambit and, scope of the jurisdiction to be exercised by this Court under article 143 of the Constitution.
There is no provision similar to this in the Constitution of the United States of America or in the Commonwealth of Australia Constitution Act, 1900 (63 and 64 Vic.
12) and, accord ingly, the American Supreme Court as well as the High Court of Australia, holding that the jurisdiction and powers of the court extend only to the decision of concrete cases coming before it, have declined to give advisory opinions to the executive or legislative branches of the State.
Under section 60 of the Canadian Supreme Court Act, 1906, the Governor General in Council may refer important questions of law concerning certain matters to the Supreme Court and the Supreme Court appears to have been held bound to entertain the reference and answer the questions put to it.
Nevertheless, the Privy Council has pointed out the dangers of such advisory opinion and has, upon general principles deprecated such references.
Said the Earl of Halsbury L. C. in Attorney General for Ontario vs Hamilton Street Railway (1): " They would be worthless as being speculative opinions on hypothetical questions.
It would be contrary to principle, inconvenient, and inexpedient that opinions should be given up on such questions at all.
When they arise, they must arise in concrete cases, involving private rights; and it would be extremely unwise for any judicial Tribunal to attempt beforehand to exhaust all possible cases and facts (1) , 529. 1014 which might occur to qualify, cut down, and override the operation of the particular words when the concrete case is not before it.
" To the like effect are the observations of Lord Haldane in Attorney General for British Columbia vs Attorney General for Canada (1) : ". .
Under this procedure questions may be put of a kind which it is impossible to answer satisfactorily.
Not only may the question of future litigants be prejudiced by the court laying down principles in an abstract form without any reference or relation to actual facts, but it may turn out to be practically impossible to define a principle adequately and safely without previous ascertainment of the exact facts to which it is to be applied.
" Reference may, with advantage, be also made to the following observations of Lord Sankey I,.
C. in In Re The Regulation and Control of Aeronautics In Canada (2) : ".
It is undesirable that the Court should be called upon to express opinions which may affect the rights of persons not represented before it or touching matters of such a nature that its answers must be wholly ineffectual with regard to parties who are not and who cannot be brought before it for example, foreign Government.
" Section 4 of the Judicial Committee Act, 1833 (3 and 4 William IV, Ch. 41) provides that " It shall be lawful for His Majesty to refer to the said Judicial Committee for hearing and consideration any such other matters whatsoever as His Majesty shall think fit and such Committee shall thereupon hear and consider the same and shall advise His Majesty thereon in manner aforesaid.
" It is to be noted that it is made obligatory for the Judicial Committee to hear and consider the matter and advise His Majesty thereon.
The Government of India Act, 1935, by section 213(1), authorised the Governor General to consult the Federal Court, if at any time it appeared to the Governor General that there had arisen or was likely to arise a question of (1) , 162.
(2) , 66. 1015 law which was of such a nature and of such public importance that it was expedient to obtain the opinion of the Federal Court upon it and empowered that court, after such hearing as they thought fit, to report to the Governor General thereon.
This provision has since been reproduced word for word, except as to the name of the court, in cl.
(1) of Art 143 of our Constitution.
That Article has a new clause, being cl.
(2) which empowers the President, notwithstanding anything in the proviso to article 131, to refer a dispute of the kind mentioned in the said clause to the Supreme Court for opinion and the Supreme Court shall, after such hearing as it thinks fit, report to the President its opinion thereon.
It is worthy of note that, while under cl.
(2) it is obligatory on this Court to entertain a reference and to report to the President its opinion thereon, this Court has, under cl.
(1), a discretion in the matter and may in a proper case and for good reasons decline to express any opinion on the questions submitted to it.
In view of the language used in section 213(1), on which article 143(1) of our Constitution is based, and having regard to the difference in the language employed in cls.
(1) and (2) of our article 143 just alluded to, the scope of a reference made under article 143(1) is obviously different from that of a reference under section 4 of the Judicial Committee Act, 1833 and section 60 of the Canadian Supreme Court Act, 1906, and this Court, under article 143(1), has a discretion in the matter and consequently the observations of their Lordships of the Privy Council quoted above are quite apposite and have to be borne in mind.
There have been all told four references by the Governor General under section 213(1) of the Government of India Act, 1935, and in two of them some of the Judges of the Federal Court have made observations on the ambit and scope of such a reference.
Thus in In re Allocation of Lands and Buildings (1), Gwyer C. J. said : " On considering the papers submitted with the case we felt some doubt whether any useful purpose (I) , 22, 129 1016 would be served by the giving of an opinion under section 213 of the Act.
The terms of that section do not 'impose an obligation on the Court, though we should always be unwilling to decline to accept a Reference, except for good reason; and two difficulties presented themselves.
First, it seemed that questions of title might sooner or later be involved, if the Government whose contentions found favour with the Court desired, as the papers show might be the case, to dispose of some of the lands in question to private individuals, and plainly no advisory Opinion under section 213 would furnish a good root of title such as might spring from a declaration of this Court in proceedings taken under section 204(1) of the Act by one Government against the other.
" In In re Levy of Estate Duty (1) Spens C. J. said at p.320 of the authorised report : " It may be stated at the outset that when Parliament has thought fit to enact section 213 of the Constitution Act it is not in our judgment for the Court to insist on the inexpediency (according to a certain school of thought) of the advisory jurisdiction.
Nor does it assist to say that the opinions expressed by the Court on the questions referred " will have no more effect than the opinions of the law officers ": Attorney General for Ontario vs Attorney General for Canada (2).
That is the necessary result of the jurisdiction being advisory.
" Referring to the objection that the questions related to contemplated legislation and not to the validity or operation of a measure already passed, the learned Chief Justice observed at p. 321 : " The fact that the questions referred relate to future legislation cannot by itself be regarded as a valid objection.
Section 213 empowers the Governor General to make a reference when questions of law are " likely to arise. . . . . . . . .
In this class of cases, the reference should, in the very nature of things, be made before the legislation has been (1) , 320, 321, 350).
(2) , 589.
1017 introduced and the objection based upon the hypothetical character of the questions can have no force.
may, however, add that instances were brought to our ' notice in which references had been made under the corresponding provision in the Canadian Supreme Court Act when the matter was at the stage of a Bill.
" Zafrulla Khan J. declined to entertain the reference and to answer the questions on high authority quoted and discussed elaborately in his separate opinion.
The learned Judge, after pointing out in the earlier part of his opinion that it was " a jurisdiction the exercise of which on all occasions must be a matter of delicacy and caution ", concluded his opinion with the following observations at page 350: " In the state of the material made available to us I do not think any useful purpose would be served by my attempting to frame answers to the questions referred.
Indeed, I apprehend, that any such attempt might result in the opinion delivered being made the foundation of endless litigation hereafter, apart altogether from any question relating to the vires of the proposed law, and operating to the serious prejudice of persons whom it might be attempted to bring within the mischief of that law.
It is bound to raise ghosts far more troublesome than any that it might serve to lay.
For these reasons I am compelled respectfully to decline to express any opinion on the questions referred.
" The present reference is the second of its kind under article 143(1) of the Constitution, the first one being concerned with the In Re (1).
The nature and scope of the reference under article 143(1) was not discussed in the In Re case (1), but, we conceive, that the principles laid down by the Judicial Committee and the Federal Court quoted above will serve as a valuable guide indicating the line of approach to be adopted by this Court in dealing with and disposing of the reference now before us.
The principles established by judicial (1) ; 1018 decisions clearly indicate that the complaint that the questions referred to us relate to the validity, not of a statute brought into force but, of a Bill which has yet to be passed into law by being accorded the assent of the President is not a good ground for not entertaining the reference for, as said by Spens C. J. article 143(1) does contemplate the reference of a question of law that is " likely to arise ".
It is contended that several other constitutional objections also arise out of some of the provisions of the Bill considered in the light of other provisions of the Constitution, e.g., article 19(1)(g) and article 337 and that as those objections have not been included in the reference this Court should not entertain an incomplete reference, for answers given to the questions put may be misleading in the absence of answers to other questions that arise.
In the first place it is for the President to determine what questions should be referred and if he does not entertain any serious doubt on the other provisions it is not for any party to say that doubts arise also out of them and we cannot go beyond the reference and discuss those problems.
The circumstance that the President has not thought fit to refer other questions as to the constitutional validity of some of the clauses of the said Bill on the ground that they infringe other provisions of the Constitution cannot be a good or cogent reason for declining to entertain this reference and answer the questions touching matters over or in respect of which the President does entertain some doubt.
In order to appreciate the true meaning, import and implications of the provisions of the Bill which are said to have given rise to doubts, it will be necessary to refer first to certain provisions of the Constitution which may have a bearing upon the questions under consideration and then to the actual provisions of the Bill.
The inspiring and nobly expressed preamble to our Constitution records the solemn resolve of the people of India to constitute India into a SOVEREIGN DEMOCRATIC REPUBLIC and, amongst other things, to secure to all its citizens JUSTICE, LIBERTY, and EQUALITY and to promote among 1019 them all FRATERNIT Y assuring the dignity of the individual and the unity of the Nation.
One of the most cherished objects of our Constitution is, thus, to ' secure to all its citizens the liberty of thought, expression, belief, faith and worship.
Nothing provokes and stimulates thought and expression in people more than education.
It is education that clarifies our belief and faith and helps to strengthen our spirit of worship.
To implement and fortify these supreme purposes set forth in the preamble, Part III of our Constitution has provided for us certain fundamental rights.
Article 14, which is one of the articles referred to in two of the questions, guarantees to every person, citizen or otherwise, equal protection of the laws within the territory of India.
Article 16 ensures equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
In order to avail themselves of the benefit of this Article all citizens will presumably have to have equal opportunity for acquiring the qualifications, educational or otherwise, necessary for such employment or appointment.
Article 19(1) guarantees to citizens the right, amongst others, to freedom of speech and expression (sub cl.
(a)) and to practise any profession, or to carry on any occupation, trade or business (sub cl.
These rights are, however, subject to social control permitted by cls.
(2) and (6) of article 19.
Under article 25 all persons are equally entitled, subject to public order, morality and health and to the other provisions of Part III, to freedom of conscience and the right freely to profess, practise and propagate religion.
Article 26 confers the fundamental right to every religious denomination or any section thereof, subject to public order, morality and health, to establish and maintain institutions for religious and charitable purposes, to manage its own affairs in matters of religion, to acquire property and to administer such property in accordance with law.
The ideal being to constitute India, into a secular State, no religious instruction is, under article 28(1), to be provided in any educational institution wholly maintained out of State funds and under cl.
(3) of the 1020 same Article no person attending any educational institution recognised by the State or receiving aid out of State funds is to be required to take part in any religious instruction that may be imparted in such institution or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto.
Article 29(1) confers on any section of the citizens having a distinct language, script or culture of its own to have the right of conserving the same.
Clause (2) of that Article provides that 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.
Article 30, cl.
(1) of which is the subject matter of question 2 of this reference, runs as follows: " 30(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.
" While our fundamental rights are guaranteed by Part III of the Constitution, Part IV of it, on the other hand, lays down certain directive principles of State policy.
The provisions contained in that Part are not enforceable by any court, but the principles therein laid down are, nevertheless, fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws.
Article 39 enjoins the State to direct its policy towards securing, amongst other things, that the citizens, men and women, equally, have the right to an adequate means of livelihood.
Article 41 requires the State, within the limits of its economic capacity and deve lopment, to make effective provision for securing the right, inter alia, to education.
Under article 45 the State 1021 must endeavour to provide, within a period of ten years from the commencement of the Constitution, for free and compulsory education for all children until they complete the age of fourteen years.
Article 46 requires the State to promote with special care the education and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and to protect them from social injustice and all forms of exploitation.
Part XVI of our Constitution also makes certain special provisions relating to certain classes.
Thus article 330 provides for the reservation of seats for Scheduled Castes and Scheduled Tribes in the House of the People.
Article 331 provides for the representation of the Anglo Indian community in the House of the People.
Reservations are made, by articles 332 and 333, for the representation for the Scheduled Castes and Scheduled Tribes and the Anglo Indians in the Legislative Assembly of every State for ten years after which, according to article 334, these special provisions are to cease.
Special provision is also made by article 336 for the Anglo Indian community in the matter of appointment to certain services.
Article 337 has an important bearing on the question before us.
It provides that during the first three financial years after the commencement of this Constitution, the same grants, if any, shall be made by the Union and by each State for the benefit of the Anglo Indian community in respect of education as were made in the, financial year ending on the thirty first day of March, 1948 and that during every succeeding period of three years this grant may be less by ten per cent.
than those for the immediately preceding period of three years, provided that at the end of ten years from the commencement of the Constitution such grants, to the extent to which they are a special concessions shall cease.
The second proviso to that Article, however, provides that no educational institution shall be entitled to receive any grant under this Article unless at least forty per cent.
of the annual admissions therein are made available to members of communities other than the Anglo Indian community.
This is 1022 clearly a condition imposed by the Constitution itself on the right of the Anglo Indian community to receive the grant provided under this Article.
Article 366(2) defines an " Anglo Indian ".
Presumably to implement the directive principles alluded to above the Kerala Legislative Assembly has passed the said Bill in exercise of the legislative power conferred upon it by articles 245 and 246 of the Constitution read with entry II of List 11 in the Seventh Schedule to the Constitution.
This legislative power is, however, to be exercised under article 245 " subject to the provisons of this Constitution ".
Therefore, although this legislation may have been undertaken by the State of Kerala in discharge of the obligation imposed on it by the directive principles enshrined in Part IV of the Constitution, it must, nevertheless, subserve and not over ride the fundamental rights conferred by the provisions of the Articles contained in Part III of the Constitution and referred to above.
As explained by this Court in the State of Madras vs Smt.
Champakam Dorairajan (1) and reiterated recently in Mohd. Hanif Quareshi vs The State of Bihar (2) " The directive principles of State policy have to conform to and run as subsidiary to the Chapter on Fundamental Rights ".
Neverthe less, in determining the scope and ambit of the fundamental rights relied on by or on behalf of any person or body the court may not entirely ignore these directive principles of State policy laid down in Part IV of the Constitution but should adopt the principle of harmonious construction and should attempt to give effect to both as much as possible.
Keeping in view the principles of construction above referred to we now proceed to examine the provisions of the said Bill in order to get a clear conspectus of it.
The long title of the said Bill describes it as " A Bill to provide for the better Organisation and 'development of educational institutions in the State.
" Its preamble recites thus: " Whereas it is deemed necessary to pro (1) ; , 53I. (2) ; 1023 vide for the better Organisation and development of educational institutions in the State providing a varied and comprehensive educational service throughout the State.
" We must, therefore, approach the substantive provisions of the said Bill in the light of the policy and purpose deducible from the terms of the aforesaid long title and the preamble and so construe the clauses of the said Bill as will subserve the said policy and purpose.
Sub clause (3) of cl.
I provides that the Bill shall come into force on such date as the Government may, by notification in the Gazette, appoint and different dates may be appointed for different provisions of this Bill a fact which is said to indicate that Government will study the situation and bring into force such of the provisions of the said Bill which will best subserve the real needs of its people.
Clause 2 contains definitions of certain terms used in the said Bill of which the following sub clauses may be noted: " (1) " aided school " means a private school which is recognised by and is receiving aid from the Government; (3) " existing school " means any aided, recognised or Government school established before the commencement of this Act and continuing as such at such commencement; (6) " private school " means an aided or recognised school; (7) " recognised " means a private school recognised by the Government under this Act Clause 3 deals with " Establishment and recognition of schools.
" Sub clause (1) empowers the Government to " regulate the primary and other stages of education and courses of instructions in Government and private schools.
" Sub clause (2) requires the Government to " take, from time to time, such steps as they may consider necessary or expedient, for the purpose of providing facilities for general education, special education 130 1024 and for the training of teachers.
" Sub clause (3) provides that "the Government may, for the purpose of providing such facilities: (a) establish and maintain schools; or (b) permit any person or body of persons to establish and maintain aided schools; or (c) to recognise any school established and maintained by any person or body of persons.
" All existing schools, which by the definition mean any aided, recognised or Government schools established before and continuing at the commencement of the Bill are, by sub cl.
(4) to be deemed to have been established in accordance with this Bill.
The proviso to sub clause (4) gives an option to the educational agency of an aided school existing at the commencement of that clause, at any time within one month of such commencement after giving notice to the Government of its intention so to do, to opt to run the school as a recognised school subject to certain conditions therein mentioned.
Sub clause (5) of cl. 3, which forms, in part, the subject matter of two of the questions referred to runs as follows: " 3 (5) After the commencement of this Act, the establishment of a new school or the opening of a higher class in any private school shall be subject to the provisions of this Act and the rules made thereunder and any school or higher class established or opened otherwise than in accordance with such provisions shall not be entitled to be recognised by the Government.
" Clause 4 of the Bill provides for the constitution of a State Education Advisory Board consisting of officials and non officials as therein mentioned, their term of office and their duties.
The purpose of the setting up of such a Board is that it should advise the Government on matters pertaining to educational policy and administration of the Department of Education.
Clause 5 requires the manager of every aided school on the first day of April of each year to furnish to the authorised officer of the Government a list of properties, moveable and immoveable, of the school.
A default in furnishing such list entails, under sub cl.
(2) of that clause, the withholding of the maintenance grant.
Clause 6 imposes restrictions on the alienation of any 1025 property of an aided school, except with the previous permission ill writing of the authorised officer of the Government.
An appeal is provided against the order of the authorised officer refusing or granting such permission under sub cl.
Sub clause (3) renders any transaction in contravention of sub cl.
(1) or sub el.
(2) null and void and on such contravention the Government, under sub cl.
(4), is authorised to withhold any grant to the school.
Clause 7 deals with managers of aided schools.
Sub clause (1) authorises any Education agency to appoint any person to be a manager of an aided school, subject to the approval of the authorised officer, all the existing managers of aided schools being deemed to have been appointed under the said Bill.
The manager is made responsible for the conduct of the school in accordance with the provisions of this Bill and the rules thereunder.
Subclause (4) makes it the duty of the manager to maintain such record and accounts of the school and in such manner as may be prescribed by the rules.
The manager is, by sub cl.
(5), required to afford all necessary and reasonable assistance and facilities for the inspection of the school and its records and accounts by the authorised officer.
Sub clause (6) forbids the manager to close down any school without giving to the authorised officer one year 's notice expiring with the 31st May of any year of his intention so to do.
Sub clause (7) provides that, in the event of the school being closed or discontinued or its recognition being withdrawn, the manager shall make over to the authorised officer all the records and accounts of the school.
Sub clause (8) provides for penalty for the contravention of the provisions of sub cls.
(6) and (7).
Clause 8 provides for the recovery of amounts due from the manager of an aided school as an arrear of land revenue.
Sub clause (3) of cl. 8, which is also referred to in one of the questions, runs as follows: " 8 (3) All fees and other dues, other than special fees, collected from the students in an aided school after the commencement of this section shall, notwithstanding anything contained in any agreement, scheme 1026 or arrangement, be made over to the Government in such manner as may be prescribed.
" Clause 9 makes it obligatory on the Government to pay the salary of all teachers in aided schools direct or through the headmaster of the school and also to pay the salary of the non teaching staff of the aided schools.
It gives power to the Government to prescribe the number of persons to be appointed in the non teaching establishment of aided schools, their salaries, qualifications and other conditions of service.
The Government is authorised, under sub cl.
(3), to pay to the manager a maintenance grant at such rates as may be prescribed and under sub cl.
(4) to make grants in aid for the purchase, improvement and repairs of any land, building or equipment of an aided school.
Clause 10 requires Government to prescribe the qualifications to be possessed by persons for appointment as teachers in Government schools and in private schools which, by the definition, means aided or recognised schools.
The State Public Service Commission is empowered to select candidates for appointment as teachers in Government and aided schools according to the procedure laid down in cl. 11.
Shortly put, the procedure is that before the 31st May of each year the Public Service Commission shall select for each district separately candidates with due regard to the probable number of vacancies of teachers that may arise in the course of the year, that the list of candidates so selected shall be published in the Gazette and that the manager shall appoint teachers of aided schools only from the candidates so ,selected for the district in which the school is located subject to the proviso that the manager may, for sufficient reason, with the permission of the Commission, appoint teachers selected for any other district.
Appointment of teachers in Government schools are also to be made from the list of candidates so published.
In selecting candidates the Commission is to have regard to the provisions made by the Government under cl.
(4) of article 16 of the Constitution, that is to say, give representation in the educational service to persons belonging to the Scheduled Castes or Tribes 1027 a provision which has been severely criticised by learned counsel appearing for the Anglo Indian and Muslim communities.
Clause 12 prescribes the conditions of service of the teachers of aided schools obviously intended to afford some security of tenure to the teachers of aided schools.
It provides that the scales of pay applicable to the teachers of Government schools shall apply to all the teachers of aided schools whether appointed before or after the commencement of this clause.
Rules applicable to the teachers of the Government schools are also to apply to certain teachers of aided schools as mentioned in sub cl.
Sub clause (4) provides that no teacher of ail aided school shall be dismissed, removed, reduced in rank or suspended by the manager without the previous sanction of the authorised officer.
Other conditions of service of the teacher of aided schools are to be as prescribed by rules.
Clause 14 is of considerable importance in that it provides, by sub clause (1), that the Government, whenever it appears to it that the manager of any aided school has neglected to perform any of the duties imposed by or under the Bill or the rules made thereunder, and that in the public interest it is necessary so to do, may, after giving a reasonable opportunity to the manager of the Educational agency for showing cause against the proposed action, take over the management for a period not exceeding five years.
In cases of emergency the Government may, under sub el.
(2), take over the management after the publication of notification to that effect in the Gazette without giving any notice to the Educational agency or the manager.
Where any school is thus taken over without any notice the Educational agency or the manager may, within three months of the publication of the notification, apply to the Government for the restoration of the school showing the cause therefor.
The Government is authorised to make orders which may be necessary or expedient in connection with the taking over of the management of an aided school.
Under sub el.
(5) the Government is to pay such rent as maybe fixed by the Collector in respect of the properties taken possession of, On taking over any 1028 school the Government is authorised to run it affording any special educational facilities which the school was doing immediately before such taking over.
Right of appeal to the District Court is provided against the order of the Collector fixing the rent.
Sub cl.
(8) makes it lawful for the Government to acquire the school taken over under this clause if the Government is satisfied that it is necessary so to do in the public interest, in which case compensation shall be payable in accordance with the principles laid down in cl. 15 for payment of compensation.
Clause 15 gives power to the Government to acquire any category of schools.
This power can be exercised only if the Government is satisfied that for standardising general education in the State or for improving the level of literacy in any area or for more effectively managing the aided educational institutions in any area or for bringing education of any category under their direct control and if in the public interest it is necessary so to do.
No notification for taking over any school is to be issued unless the proposal for the taking over is supported by a resolution of the Legislative Assembly.
Provision is made for the assessment and apportionment of compensation and an appeal is provided to the District Court from the order passed by the Collector determining the amount of compensation and its apportionment amongst the persons entitled thereto.
Thus the Bill contemplates and provides for two methods of acquisition of aided schools, namely, under sub cl.
(8) of el.
14 the Government may acquire a school after having taken possession of it under the preceding sub clauses or the Government may, under el. 15, acquire any category of aided schools in any specified area for any of the several specific purposes mentioned in that clause.
Clause 16 gives power to the Government to exempt immoveable properties from being taken over or acquired.
Clause 17 provides for the establishment of Local Education Authorities, their constitution and term of office and clause 18 specifies the functions of the Local Education Authorities.
Clauses 19 and 20 are important and read as follows: 1029 " 19.
Recognised schools: The provisions of subsections (2), (4), (5), (6), (7), (8) and (9) of section 7 shall apply to recognised schools to the same extent ' and in the same manner as they apply to aided schools." " 20.
No fee to be charged from pupils of primary classes: No fee shall be payable by any pupil for any tuition in the primary classes in any Government or private school." Part II of the Bill deals with the topic of compulsory education.
That part applies to the areas specified in el.
Clause 23 provides for free and compulsory education of children throughout the State within a period of ten years and is intended obviously to discharge the obligation laid on the State by article 45 of the directive principles of State policy.
Clauses 24 and 25 deal with the constitution of Local Education Committees and the functions thereof Clause 26, which has figured largely in the discussion before us runs as follows : " 26.
Obligation on guardian to send children to school: In any area of compulsion, the guardian of every child shall, if such guardian ordinarily resides in such area, cause such child to attend a Government, or private school and once a child has been so caused to attend school under this Act the child shall be compelled to complete the full course of primary education or the child shall be compelled to attend school till it reaches the age of fourteen.
" We may skip over a few clauses, not material for our purpose, until we come to el. 33 which is referred to in one of the questions we have to consider.
That clause provides " 33.
Courts not to grant injunction Notwithstanding anything contained in the Code of Civil Procedure, 1908, or in any other law for the time being in force, no court shall grant any temporary injunction or make any interim order restraining any proceedings which is being or about to be taken under this Act.
" Clause 36 confers power on the Government to make 1030 rules for the purpose of carrying into effect the provisions of the Bill and in particular for the purpose of the establishment and maintenance of schools, the giving of grants and aid to private schools, the grant of recognition to private schools, the levy and collection of fees in aided schools, regulating the rates of fees in recognised schools, the manner in which the accounts, registers and records shall be maintained, submission of returns, reports and accounts by managers, the standards of education and course of study and other matters specified in sub cl.
(2) of that clause.
Clause 37 is as follows: " 37.
Rules to be laid before the Legislative Assembly: All rules made under this Act shall be laid for not less than fourteen days before the Legislative Assembly as soon as possible after they are made and shall be subject to such modifications as the Legislative Assembly may make during the session in which they are so laid.
" Under cl.
38 none of the provisions of the Bill applies to a school which is not a Government or a private school, i. e., aided or recognized school.
The above summary will, it is hoped, clearly bring out the purpose and scope of the provisions of the said Bill.
It is intended to serve as showing that the said Bill contains many provisions imposing considerable State control over the management of the educational institutions in the State, aided or recognised.
The provisions, in so far as they affect the aided institutions, are much more stringent than those which apply only to recognised institutions.
The width of the power of control thus sought to be assumed by the State evidently appeared to the President to be calculated to raise doubts as to the constitutional validity of some of the clauses of the said Bill on the ground of apprehended infringement of some of the fundamental rights guaranteed to the minority communities by the Constitution, and accordingly in exercise of the powers vested in him by article 143(1) the President has referred to this Court, for consideration and report the following questions: 1031 " (1) Does sub clause (5) of clause 3 of the Kerala Education Bill, read with clause 36 thereof or any of the provisions of the said sub clause, offend article 14 of the Constitution in any particulars or to any extent? (2) Do sub clause (5) of clause 3, sub clause (3) of clause 8 and clauses 9 to 13 of the Kerala Education Bill, or any provisions thereof, offend clause (1) of article 30 of the Constitution in any particulars or to any extent ? (3) Does clause 15 of the Kerala Education Bill, or any provisions thereof, offend article 14 of the Constitution in any particulars or to any extent ? (4) Does clause 33 of the Kerala Education Bill, or any provisions thereof, offend article 226 of the Constitution in any particulars or to any extent ?" On receipt of the reference this Court issued notices to persons and institutions who appeared to it to be interested in the matter calling upon them to file their respective statements of case concerning the above mentioned questions.
Three more institutions were subsequently, on their own applications, granted leave to appear at the hearing.
The Union of India, the State of Kerala and all the said persons and institutions have filed their respective statements of case and have appeared before us by counsel and taken part in the debate.
A body called the Crusaders ' League his by post sent its views but has not appeared at the hearing.
We have had the advantage of hearing very full arguments on the points arising out of the questions and we are deeply indebted to learned counsel appearing for the parties for the very great assistance they have rendered to us.
It will be necessary, at this stage, to clear the ground by disposing of a point as to the scope and ambit of questions I and 2.
It will be noticed that both these questions challenge the constitutional validity, inter alia, of clause 3 (5) of the said Bill which has already been quoted in extensor The argument advanced by the learned Attorney General and other learned counsel appearing for bodies or institutions challeng 131 1032 ing the validity of the said Bill is that the provision of cl.
3(5), namely, that the establishment of a new school "shall be subject to the provisions of this Act and the rules made thereunder " attracts all other clauses of the said Bill as if they are set out seriatim in sub el.
(5) itself.
Therefore, when questions I and 2 challenge the constitutional validity of el.
3(5) they, in effect, call in question the validity of all other clauses of the said Bill.
Learned counsel appearing for the State of Kerala, however, opposes this line of argument on several grounds.
In ' the first place, he contends that cl.
3(5) attracts only those provisions of this Bill which relate Lo the establishment of a new school.
When asked to specify what provisions of the said Bill relate to I he establishment of a new school which, according to him, are attracted by cl.
3(5), the only provision that he refers to is sub cl.
(3) of cl. 3.
Learned counsel for the State of Kerala maintains that el.
3(5) attracts only el.
3(3) and the rules that may be made under el. 36(2)(a) and no other clause of the said Bill and, therefore, no other clause is included within the scope of the questions unless, of course, they are specifically mentioned in the questions, as some of the clauses are, in fact, specifically mentioned in question 2.
If the mention of cl.
3(5) in those questions, ipso facto, attracted all other clauses of the said Bill, why, asks learned counsel, were other clauses specifically mentioned in, say, question 2 ? Learned counsel also contends that after a school is established the other clauses will proprio vigore apply to that school and there was no necessity for an express provision that a newly established school would be subject to the other provisions of the Bill.
As the other clauses of the Bill will apply to all schools established after the Bill becomes an Act without the aid of cl.
3(5), a reference to that clause in the questions cannot bring within their ambit any clause of the Bill which is not separately and specifically mentioned in the questions.
Finally learned counsel contends that even if cl.
3(5) attracts the other provisions of the Bill, it does not necessarily follow that the other provisions also form the subject matter of the questions.
In our judgement, 1033 neither of the two extreme, positions can be seriously maintained.
The contentions advanced by learned counsel for the State of Kerala appear to us to be open to several criticisms.
If the intention of sub cl.
(5) of cl. 3 was to attract only those provisions of the Bill which related only to the establishment of a new school and if sub cl.
(3) of cl. 3 was the only provision in that be half, apart from the rules to be framed under el. 36(2)(a), then as a matter of intelligible drafting it would have been more appropriate to say, in siib cl.
(3) of el. 3, that the establishment of new schools ",,;hall be subject to the provisions of this clause and the rules to be made under el. 36(2)(a) ".
Clause 3(5) is quite clearly concerned with the establishment of new schools Government, aided or recognised schools, and says that after the Bill becomes law all new schools will be subject to the other provisions of the Bill.
So far as new Government schools are concerned, el.
3(5) certainly attracts el.
3(3)(a), for that provision authorises the Government to establish new schools; but to say that el.
3(5) only attracts el.
3(3) appears to be untenable, for that sub clause does not in terms provide for the establishment of new aided or recognised schools.
As already observed, el.
3(3)(a) specifically provides for the establishment and maintenance of new schools by the Government only.
Clause 3(3)(b) provides only for the giving of permission by the Government to a person or body of persons to establish and maintain aided schools.
Likewise el.
3(3)(c) authorises the Government only to recognise any school established, and maintained by any person or body of persons.
Clause 3(4) introduces a fiction whereby all existing schools, which mean all existing Government, aided or recognised schools, shall be deemed to have been established in accordance with this Bill.
Then comes cl.
3(5) which is couched in very wide terms.
It says, inter alia, that after the commencement of the operation of the said Bill the establishment of new schools should be subject to the other provisions of the Bill and the rules made thereunder.
The rules to be framed under cl. 36(2)(a), (b) & 1034 (c) appear to be respectively correlated to cl.
3(3)(a), (b) & (c).
Bearing in mind the provisions of cl. 38 which places all schools other than Government and private, i. e., aided or recognised schools, outside the purview of the Bill, the establishment of what sort of new schools, we ask, does sub cl.
(5) contemplate and authorise ? Obviously aided or recognised schools established after the Bill becomes law.
Clause 3(5), like cl.
3(3), has apparently been very inartistically drawn, but reading the clause as a whole and particularly the concluding part of it, namely, that any school 'established otherwise than in accordance with such provisions shall not be entitled to be recognised by the Government, there can be no doubt that cl.
3(5) itself contemplates and authorises the establishment of new schools as aided or recognised schools.
The opening of new schools and the securing of aid or recognition from the Government constitute the establishment of new schools contemplated by el.
3(5) read with cl.
Reading el.
3(5) in the context of its setting, we have no doubt that its purpose is not merely to authorise the establishment of new schools but to subject the new schools to all the provisions of the said Bill and the rules made thereunder.
To accept the restrictive argument that el.
3(5) attracts only el.
3(3) will be putting a too narrow construction on sub cl.
(5) not warranted by the wide language thereof or by the language of cl.
We do not think that there is much force in the argument that it was not necessary to expressly provide for the application of the other provisions to new schools to be established after the Bill became law and that the other clauses of the said Bill would by their own force and without the aid of sub cl.
(5) apply to such newly established schools, for having, in terms, expressly made the new schools subject to the other provisions it is not open to the State of Kerala now to say that sub el.
(5) need not have made the other provisions of the said Bill applicable to new schools established after the said Bill comes into operation or that it does not attract the other.
clauses although it expressly purports to do or that it is not open to those who oppose the Bill to refer 1035 to any other clause in support of their case.
If el.
3(5) did not expressly attract the other provisions, the President would perhaps have framed the questions differently.
If, therefore, it be held, as we are inclined to do, that cl.
3(5) makes the new schools subject to the other provisions of the said Bill, what will be the position ? If, as submitted by the learned AttorneyGeneral and other counsel supporting him, some of the clauses of the said Bill impinge upon the fundamental rights of the members of the minority community or educational institutions established or to be established by them and if el.
3(5) makes those clauses applicable to the new schools they may establish after the Bill becomes law, then not only do those other clauses violate their rights but el.
3(5) which openly and expressly makes those other clauses apply to such new schools must also encounter the challenge of unconstitutionality.
In other words, the vice of unconstitutionality, if any, of those other clauses must attach to cl.
3(5) because it is the latter which in terms makes the new schools subject to those objectionable clauses.
Therefore, in a discussion on the validity of el.
3(5) it becomes germane to discuss the validity of the other clauses.
In short, though the validity of the other clauses is not by itself and independently, the subject matter of either of those questions, yet their validity or otherwise has to be taken into consideration in determining the constitutional validity of el.
3(5) which makes those clauses applicable to the newly established schools.
It is in this sense that, we think, a discussion of the validity of the other clauses comes within the purview of questions I and 2.
We do not, in the circumstances, consider it right, in view of the language employed in this el.
3(5), to exclude the consideration of the constitutional validity of the other clauses of the Bill from the discussion on questions I and 2 which challenge the constitutional validity of el.
3(5) of the said Bill.
Indeed, in the argument before us frequent references have been made to the other clauses of the said Bill in discussing questions I and 2 and we have heard the respective contentions of learned 1036 counsel on the validity or otherwise of those clauses in so far as they have a bearing on the questions put co us which we now proceed to consider and answer.
Questions 1 and 3.
Question I challenges the constitutional validity of sub cl.
(5) of el.
3 of the said Bill read with el.
36 thereof on the ground that, the same violates the equal protection of the laws guaranted to all persons by article 14 of the Constitution.
Question 3 attacks el.
15 of the said Bill on the same ground, namely, that it is violative of article 14 of the Constitution.
As the ground of attack tinder both the questions is the same, it will be convenient to deal with them together.
The true meaning, scope and effect of article 14 of our Constitution have been the subject matter of discussion and decision by this Court in a number of cases beginning with the case of Chiranjit Lal Chowdhuri vs The Union of India and others (1).
In Budhan Choudhry vs The State of Bihar (2) a Constitution Bench of seven Judges of this Court explained the true meaning and scope of that Article.
Recently in the case of Ram Krishna Dalmia and others Sri Justice section R. Tendolkar (3), the position was at length by this Court, by its judgment on March 28, 1958, and the several principles firmly established by the decisions of this Court were set out seriatim in that judgment.
The position ",as again summarised in the still more recent case of land.
Hanif Quaeshi vs The State of Bihar (1) in the following words: " The meaning, scope and effect of article 14, which is the equal protection clause in our Constitution, has been explained by this Court in a series of decisions in cases begining with Chiranjit Lal Chowdhury vs The Union Of India (1) and ending with the recent case of Ram Krishna Dalmia vs Sri Justice section R. Tendolkar (1).
It is now well established that while article 14 forbids class legislation it does not forbid reasonable classification for the purposes of legislation (1) [1950] section C. E. 869.
(2) (3) ; (4) ,g. 1037 and that in order to pass the test of permissible classi fication two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that, are grouped together from others left out of the group and (ii) such differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification, it has been held, may be founded on different bases, namely, geographical or according to objects or the occupations or the like and what is necessary is that there must be a nexus between the basis of classification and the object of the Act tinder consideration .
The pronouncements of this Court further establish, amongst other things, that there is always a presumption in favour of the constitutionality of an enactment and that the burden is upon him, who attacks it, to show that, there has been a clear violation of the constitutional principles.
The courts, it is accepted, must presume that, the legislature understands and correctly the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
It must be borne in mind that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.
" In the judgment of this Court in Ram Krishna Dalmia 's case (1) the statutes that came up for consideration before this Court were classified into five several categories as enumerated therein.
No useful purpose will be served by re opening the discussion and, indeed, no attempt has been made in, that behalf by learned counsel.
We, therefore, proceed to examine the impugned provisions in the light of the aforesaid principles enunciated by this Court.
Coming now to the main argument founded on (1) ; 1038 article 14, the Bill, it is said, represents a deliberate attempt on the part of the party now in power in Kerala to strike at the Christian Church and especially that of the Catholic persuasion, to eliminate religion, to expropriate the minority communities of the properties of their schools established for the purpose of conserving their distinct language, script and culture, and in short, to eliminate all educational agencies other than the State so as to bring about a regimentation of education and by and through the educational institutions to propagate the tenets of their political philosophy and indoctrinate the impressionable minds of the rising generation.
It is unfortunate that a certain amount of heat and passion was introduced in the discussion of what should be viewed as a purely legal and constitutional problem raised by the questions ; but perhaps it is understandable in the context of the bitter agitation and excitement provoked by the said Bill in the minds of certain sections of the people of the State.
We desire, however, to emphasise that this Court is not concerned with the merit or otherwise of the policy of the Government which has sponsored this measure and that all that we are called upon to do is to examine the constitutional questions referred to us and to pronounce our opinion on the validity or otherwise of those provisions of the Bill which may properly come within the purview of those questions.
The doubts which led to the formulation of question 1 are thus recited in the order of reference which had better be stated in its own terms: " AND WHEREAS sub clause (3) of clause 3 of the said Bill enables the Government of Kerala, inter alia, to recognise any school established and maintained by any person or body of persons for the purpose of providing the facilities set out in subclause (2) of the said clause, to wit, facilities for general education, special education and for the train ing of teachers; AND WHEREAS sub clause (5) of clause 3 of the said Bill provides, inter alia, that any new school established or any higher class opened in any private 1039 school, after the Bill has become an Act and the Act has come into force, otherwise than in accordance with the provisions of the Act and the rules made under section 36 thereof, shall not be entitled to be recognised by the Government of Kerala; AND WHEREAS a doubt has arisen whether the provisions of the said sub clause (5) of clause 3 of the said Bill confer upon the Government an unguided power in regard to the recognition of new schools and the opening of higher classes in any private school which is capable of being exercised in an arbitrary and discriminatory manner; AND WHEREAS a doubt has further arisen whether such power of recognition of new schools and of higher classes in private schools is not capable of being exercised in a manner affecting the right of the minorities guaranteed by clause (1) of article 30 of the Constitution to establish and administer educational institutions of their choice; Likewise the doubts concerning cl.
15 are formulated in the following recitals in the order of reference : " AND WHEREAS clause 15 of the said Bill empowers the Government of Kerala to take over, by notification in the Gazette, any category of aided schools in any specified area or areas, if they are satisfied that for standardising general education in the State of Kerala or for improving the level of literacy in any area or for more effectively managing the aid Id educational institutions in any area or for bringing education of any category under their direct control it is necessary to do so in the public interest, on payment of compensation on the basis of market value of the schools so taken over after deducting therefrom the amounts of aids or grants given by that Government for requisition, construction or improvement of the property of the schools; AND WHEREAS a doubt has arisen whether such power is not capable of being exercised in an arbitrary and discriminatory manner.
" 132 1040 The legal aspect of the matter arising out of the two questions is further elaborated thus by learned counsel appearing for the persons or institutions contesting the validity of the Bill: Clause 3 (5) makes all the provisions of the Bill applicable to new schools that may be established after the Bill becomes law.
Clause 3 (5) gives the Government an unguided, uncontrolled and uncanalised power which is capable of being exercised "with an evil eye and an unequal hand" and the Government may, at its whim or pleasure, single out any person or institution and subject him or it to hostile and discriminatory treatment.
The Bill does not lay down any policy or principle for the guidance of the Government in the matter of the exercise of the wide powers so conferred on it by the different clauses of the Bill.
It is pointed out that cl. 3 does not lay down any policy or principle upon which the Government may or may not permit any person or body of persons to establish and maintain an aided school or grant recognition to a school established by any person.
The Government may grant such permission or recognition to persons who support its policy but not to others who oppose the same.
Clause 6 does riot say in what circumstances the authorised officer of the Government may or may not give permission to the alienation of the property of an aided school.
He may give permission in one case but arbitrarily withhold it in another similar case.
Likewise the authorised officer may not, under el. 7, approve of the appointment of a particular person as manager of in aided school for no better reason than the prejudice or dislike of his Government for that particular person 's political views or affiliations.
The Government may, under cl. 9, pay the maintenance grant to the manager of one aided school but not to that of another.
Particular schools or categories of schools in particular areas may be singled out for discriminatory treatment under cls.
14 and 15 of the Bill.
It is next pointed out that if cl. 3 (5) is read with cls.
21, 26 and 28 of the Bill the result will be palpably discriminatory because in an area which is not an area of compulsion a new school which may be established after the Bill 1041 comes into operation and which may not seek recognition or aid can charge fees and yet attract scholars but a new school similarly established in an area of compulsion will be hit directly by cl. 26 and will have no scholars, for no guardian will be able lawfully to send his ward to a school which is neither a Government school nor a private school and such a new school will not be able to function at all, for it will have no scholar and the question of its charging fees in any class will not arise.
There is no force in this last mentioned point, for the Legislature, it must be re membered, knows the needs of its people and is entitled to confine its restriction 'to those places where the needs are deemed to be the clearest and, therefore, the restrictions imposed in areas of compulsion are quite permissible on the ground of classification on geographical basis.
Whatever other provisions of the Constitution, such restriction may or may not violate, which will be discussed later, it certainly does not infringe article 14.
A further possibility of discrimination is said to arise as a result of the application of the same provisions of the Bill to all schools which are not similarly situate.
The argument is thus developed: The Constitution, it is pointed out, deals with the schools established by minority communities in a way different from the way it deals with other schools.
Thus Anglo Indian schools are given grants under article 337 of the Constitution and educational institu tions started by all minority communities including the Anglo Indians are protected by articles 29 and 30.
The educational institutions of the minorities are thus different from the educational institutions established by the majority communities who require no special privilege or protection and yet the Bill purports to put in the same class all educational institutions although they have not the same characteristics and place equal burdens on unequals.
This indiscriminate application of the same provisions to different institutions having different characteristics and being unequal brings about a serious discrimination violative of the equal protection clause of the Constitution.
In 1042 support of this argument reliance is placed on the decision of the American Supreme Court in Cumber 'land Coal Co. vs Board of Revision (1).
That decision, in our judgment, has no application to the facts of the case before us.
There the taxing authorities assessed the owners of coal lands in the city of Cumberland by applying a flat rate of 50 per cent.
not on the actual value of the properties but on an artificial valuation of $ 260 per acre arbitrarily assigned to all coal lands in the city irrespective of their location.
It was not disputed that the value of properties which were near the river banks or close to the railways was very much more than that of properties situate far away from the river banks or the railways.
The artificial valuation of $ 260 per acre was much below the actual value of the properties which were near the river banks or the railways, whereas the value of the properties situate far away, from the riverbank or the railways was about the same as tile assigned value. 'The result of applying the equal rate of tax, namely, 50 per cent.
on the assigned value was that the owners of more valuable properties had to pay much less than what they would have been liable to pay upon the real value of those properties.
Therefore, the method of assessment worked out clearly to the disadvantage of the owners of properties situate in the remoter parts of the city and was obviously discriminatory.
There the discrimination was an integral part of that mode of taxing.
That is not the position here, for there is no discrimination in the provisions of the said Bill and consequently the principle of that decision can have no application to this case.
This does not, however, conclude the matter and we have yet to deal with the main argument that the Bill does not lay down any policy or principle for the guidance of the Government in the exercise of the wide powers vested in it by the Bill.
Reference has already been made to the long title and the preamble of the Bill.
That the policy and purpose of a given measure may be deduced from the long title and the preamble thereof has been recognised (1) ; ; ,150. 1043 in many decisions of this Court and as and by way of ' ready reference we may mention our decision in Biswambar Singh vs The State of Orissa (1) as an instances in point.
The general policy of the Bill as laid down in its title and elaborated in the preamble is " to provide for the better Organisation and development of educational institutions providing a varied and comprehensive educational service throughout the State.
" Each and every one of the clauses in the Bill has to be interpreted and read in the light of this policy.
When, therefore, any particular clause leaves any discretion to the Government to take any action it must be understood that such discretion is to be exercised for the purpose of advancing and in aid of implementing and not impeding this policy.
It is, therefore, not correct to say that no policy or principle has at all been laid down by the Bill to guide the exercise of the discretion left to the Government by the clauses in this Bill.
The matter does not, however, rest there.
The general policy deducible from the long title and preamble of the Bill is further reinforced by more definite.
statements of policy in different clauses thereof.
Thus the power vested in the Government under cl.
3(2) can be exercised only " for the purpose of providing facilities for general education, special education and for the training of teachers ".
It is " for the purpose of providing such facilities " that the three several powers under heads (a), (b) and (c) of that sub clause have been conferred on the Government.
The clear implication of these provisions read in the light of the policy deducible from the long title and the preamble is that in the matter of granting permission or recognition the Government must be guided by the consideration whether the giving of such permission or recognition will enure for the better Organisation and development of educational institutions in the State, whether it will facilitate the imparting of general or special education or the training of teachers and if it does then permission or recognition must be granted but it must be refused if it impedes that purpose.
It is true that the (1) ; , 855.
1044 word " may " has been used in sub el.
(3), but, according to the well known rule of construction of statutes, 'if the existence of the purpose is established and the conditions of the exercise of the discretion are fulfilled, the Government will be under an obligation to exercise its discretion in furtherance of such purpose and no question of the arbitrary exercise of discretion can arise.
[Compare Julius vs Lord Bishop of Oxford (1) ].
If in actual fact any discrimination is made by the Government then such discrimination will be in violation of the policy and principle deducible from the said Bill itself and the court will then strike down not the provisions of the Bill but the discriminatory act of the Government.
Passing on to cl. 14, we find that the power conferred thereby on the Government is to be exercised only if it appears to the Government that the manager of any aided school has neglected to perform the duties imposed on him and that the exercise of the power is necessary in public interest.
Here again the principle is indicated and no arbitrary or unguided power has been delegated to the Government.
Likewise the power, under el. 15(1) can be exercised only if the Government is satisfied that it is necessary to exercise it for " standardising general education in the State or for improving the level of literacy in any area or for more effectively managing the aided educational institutions in any area or for bringing the education of any category under their direct control " and above all the exercise of the power is necessary " in the public interest ".
Whether the purposes are good or bad is a question of State policy with the merit of which we are not concerned in the present discussion.
All that we are now endeavouring to point out is that the clause under consideration does lay down a policy for the guidance of the Government in the matter of the exercise of the very wide power conferred on it by that clause.
The exercise of the power is also controlled by the proviso that no notification under that sub clause shall be issued unless the proposal for the taking over is supported by a resolution of the Legislative Assembly a proviso (1) 1045 which clearly indicates that the power cannot be exercised by the Government at its whim or pleasure.
Skipping over a few clauses, we come to cl. 36.
The ' power given to the Government by cl. 36 to make rules is expressly stated to be exercised " for the purpose of carrying into effect the provisions of this Act ".
In other words, the rules to be framed must implement the policy and purpose laid down in its long title and the preamble and the provisions of the other clauses of the said Bill.
Further, under el. 37 the rules have to be laid for not less than 14 days before the Legislative Assembly as soon as possible after they are made and are to be subject to such modifications as the Legislative Assembly may make during the session in which they are so laid.
After the rules are laid before the Legislative Assembly they may be altered or amended and it is then that the rules, as amended become effective.
If no amendments are made the rules come into operation after the period of 14 days expires.
Even in this latter event the rules owe their efficacy to the tacit assent of the Legislative Assembly itself.
Learned counsel appearing for the State of Kerala submitted in picturesque language that here was what could be properly said to be legislation at two stages and the measure that will finally emerge consisting of the Bill and the rules with or without amendment will represent the voice of the Legislative Assembly itself and, therefore, it cannot be said that an unguided and uncontrolled power of legislation has been improperly delegated to the Government.
Whether in approving the rules laid before it the Legislative Assembly acts as the Legislature of Kerala or acts as the delegatee of the Legislature which consists of the Legislative Assembly and the Governor is, in the absence of the standing orders and rules of business of the Kerala Legislative Assembly, more than we can determine.
But all that we need say is that apart from laying down a policy for the guidance of the Government in the matter of the exercise of powers conferred on it under the different provisions of the Bill including cl. 36, the Kerala Legislature has, by cl. 15 and el. 37 provided further safeguards.
In this 1046 connection we must bear in mind what has been laid down by this Court in more decisions than one, namely, that discretionary power is not necessarily a discriminatory power and the abuse of power by the Government will not be lightly assumed.
For reasons stated above it appears to us that the charge of unconstitutionality of the several clauses which come within the two questions now under consideration founded on article 14 cannot be sustained.
The position is made even clearer whether we consider the question of the validity of el.
15(1) for, apart from the policy and principle deducible from the long title and the preamble of the Bill and from that sub clause itself, the proviso thereto clearly indicates that the Legislature has not abdicated its function and that while it has conferred on the Government a very wide power for the acquisition of categories of schools it has not only provided that such power can only be exercised for the specific purposes mentioned in the clause itself but has also kept a further and more effective control over the exercise of the power, by requiring that it is to be exercised only if a resolution is passed by the Legislative Assembly authorising the Government to do so.
The Bill, in our opinion, comes not within category (iii) mentioned in Ram Krishna Dalmia 's case (1) as contended by Shri G. section Pathak but within category (iv) and if the Government applies the provisions in violation of the policy and principle laid down in the Bill the executive action will come under category (v) but not the Bill and that action will have to be struck down.
The result, therefore, is that the charge of invalidity of the several clauses of the Bill which fall within the ambit of questions I and 3 on the ground of the infraction of article 14 must stand repelled and our answers to both the questions I and 3 must, therefore, be in the negative.
Question 2 : Articles 29 and 30 are set out in Part III of our Constitution which guarantees our fundamental rights.
They are grouped together under the sub head " Cultural and Educational Rights ".
The text and the marginal notes of both the Articles show that their purpose is to confer those fundamental (1) ; 1047 rights on certain sections of the, community which constitute minority communities.
Under cl.
(1) of article 29 any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own has the right to conserve the same.
It is obvious that a minority community can effectively conserve its language, script or culture by and through educational institutions and, therefore, the right to establish and maintain educational institutions of its choice is a necessary concomitant to the right to conserve its distinctive language, script or culture and that is what is conferred on all minorities by article 30(1) which has here in before been quoted in full.
This right, however, is subject, to el. 2 of article 29 which provides that 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.
As soon as we reach article 30 (1) learned counsel for the State of Kerala at once poses the question: what is a minority ? That is a term which is not defined in the Constitution.
It is easy to say that a minority community means a community which is numerically less than 50 per cent, but then the question is not fully answered, for part of the question has yet to be answered, namely,50 per cent.
of what ? Is it 50 percent of the entire population of India or 50 per cent.
of the population of a State forming a part of the Union ? The position taken up by the State of Kerala in its statement of case filed herein is as follows: "There is yet another aspect of the question that falls for consideration, namely as to what is a minority under article 30(1) The state contends that Christians, a certain section of whom is vociferous in its objection to the Bill on the allegation that it offends article 30(1), are not in a minority in the State.
It is no doubt true that Christians are not a mathematical majority in the whole State.
They constitute about one fourth of the population; but it does not follow therefrom that they form a minority within the meaning of article 30 (1).
133 1048 The argument that they do, if pushed to its logical conclusion, would mean that any section of the people forming under fifty per cent.
of the population should be classified as a minority and be dealt with as such.
Christians form the second largest community in Kerala State; they form, however, a majority community in certain area of the State.
Muslims form the third largest community in the State, about one seventh of the total population.
They also, however, form the majority community in certain other areas of the State.
(In , it was held that persons who are alleged to be a minority must be a minority in the particular region in which the institution involved is situated).
" The State of Kerala, therefore, contends that in order to constitute a minority which may claim the fundamental rights guaranteed to minorities by article 29 (1) and 30 (1) persons must numerically be a minority in the particular region in which the educational institution in question is or is intended to be situate.
A little reflection will at once show that this is not a satisfactory test.
Where is the line to be drawn and which is the unit which will have to be taken ? Are we to take as our unit a district, or a sub division or a taluk or a town or its suburbs or a municipality or its wards ? It is well known that in many towns persons belonging to a particular community flock together in a suburb of the town or a ward of the municipality.
Thus Anglo Indians or Christians or Muslims may congregate in one particular suburb of a town or one particular ward of a municipality and they may be in a majority there.
According to the argument of learned counsel for the State of Kerala the Anglo Indians or Christians or Muslims of that locality, taken as a unit, will not be a " minority " within the meaning of the Articles under consideration and will not, therefore, be entitled to establish and maintain educational institutions of their choice in that locality, but if some of the members belonging to the Anglo Indian or Christian community happen to reside in another suburb of the same town or another ward of the same municipality 1049 and their number be less than that of the members of other communities residing there, then those members of the Anglo Indian or Christian community will be a minority within the meaning of articles 29 and 30 and will be entitled to establish and maintain educational institutions of their choice in that locality.
Likewise the Tamilians residing in Karolbagh, if they happen to be larger in number than the members of other communities residing in Karolbagh, will not be entitled to establish and maintain a Tamilian school in Karolbagh, whereas the Tamilians residing in, say, Daryaganj where they may be le ,is numerous than the members of other communities residing in Daryaganj will be a minority or section within the meaning of articles 29 and 30.
Again Bihari labourers residing in the industrial areas in or near Calcutta where they may be the majority in that locality will not be entitled to have the minority rights and those Biharis will have no educational institution of their choice imparting education in Hindi, although they are numerically a minority if we take the entire city of Calcutta or the State of West Bengal as a unit.
Likewise Bengolis residing in a particular ward in a town in Bihar where they may form the majority will not be entitled to conserve their language, script or culture by imparting education in Bengali.
These are, no doubt, extreme illustrations, but they serve to bring out the fallacy inherent in the argument on this part of the case advanced by learned counsel for the State of Kerala.
Reference has been made to article 350 A in support of the argument that a local authority may be taken as a unit.
The illustrations given above will apply to that case also.
Further such a construction will necessitate the addition of the words " within their jurisdiction " after the words " minority groups ".
The last sentence, of that Article also appears to run counter to such argument.
We need not, however, on this occasion go further into the matter and enter upon a discussion and express a final opinion as to whether education being a State subject being item 11 of List 11 of the Seventh Schedule to the Constitution subject only to the provisions of entries 62, 63, 64 and 66 of List I and 1050 entry 25 of List III, the existence of a minority community should in all circumstances and for purposes of all laws of that State be determined on the basis of the population of the whole State or whether it should be determined on the State basis only when the validity of a law extending to the whole State is in question or whether it should be determined on the basis of the population of a particular locality when the law under attack applies only to that locality, for the Bill before us extends to the whole of the State of Kerala and consequently the minority must be determined by reference to the entire population of that State.
By this test Christians, Muslims and Anglo Indians will certainly be minorities in the State of Kerala.
It is admitted that out of the total population of 1,42,00,000 in Kerala there are only 34,00,000 Christians and 25,00,000 Muslims.
The Anglo Indians in the State of Travancore Cochin before the re Organisation of the States numbered only 11,990 according to the 1951 Census.
We may also emphasise that question 2 itself proceeds on the footing that there are minorities in Kerala who are entitled to the rights conferred by article 30 (1) and, strictly speaking, for answering question 2 we need not enquire as to what a minority community means or how it is to be ascertained.
We now pass on to the main point canvassed before us, namely, what are the scope and ambit of the right conferred by article 30 (1).
Before coming to grips with the main argument on this part of the case, we may (teal with a minor point raised by learned counsel for the State of Kerala.
He contends that there are three conditions which must be fulfilled before the protection and privileges of article 30 (1) may be claimed, namely, (1) there must be a minority community, (2) one or more of the members of that community should, after the commencement of the Constitution, seek to exercise the right to establish an educational institution of his or their choice, and (3) the educational institution must be established for the members of his or their own community.
We have already determined, according to the test referred to above, that the Anglo Indians, Christians and Muslims are minority communities in the 1051 State of Kerala.
We do not think that the protection and privilege of article 30 (1) extend only to the educational institutions established after the date our Constitution came into operation or which may hereafter be established.
On this hypothesis the educational institutions established by one or I more members of any of these communities prior to the commencement of the Constitution would not be entitled to the benefits of article 30 (1).
The fallacy of this argument becomes discernible as soon as we direct our attention to article 19(1)(g) which, clearly enough, applies alike to a business, occupation or profession already started and carried on as to those that may be started and carried on after the commencement of the Constitution.
There is no reason why the benefit of article 30(1) should be limited only to educational institutions established after the commencement of the Constitution.
The language employed in article 30(1) is wide enough to cover both pre Constitution and post Constitution institutions.
It must not be overlooked that article 30(1) gives the minorities two rights, namely, (a) to establish, and (b) to administer, educational institutions of their choice.
The second right clearly covers pre Constitution schools just as article 26 covers the right to maintain pre Constitution religious institutions.
As to the third condition mentioned above, the argument carried to its logical conclusion comes to this that if a single member of any other community is admitted into a school established for the members of a particular minority community, then the educational institution ceases to be an educational institution established by the particular minority community.
The argument is sought to be reinforced by a reference to article 29(2).
It is said that an educational institution established by a minority community which does not seek any aid from the funds of the State need not admit a single scholar belonging to a community other than that for whose benefit it was established but that as soon as such an educational institution seeks and gets aid from the State coffers article 29(2) will preclude it from denying admission to members of the other communities on grounds only of religion, race, caste, 1052 language or any of them and consequently it will cease to be an educational institution of the choice of the minority community which established it.
This argument does not appear to us to be warranted by the language of the Article itself.
There is no such limitation in article 30(1) and to accept this limitation will necessarily involve the addition of the words " for their own community " in the Article which is ordinarily not permissible according to well established rules of interpretation.
Nor is it reasonable to assume that the purpose of article 29(2) was to deprive minority educational institutions of the aid they receive from the State.
To say that an institution which receives aid on account of its being a minority educational institution must not refuse to admit any member of any other community only on the grounds therein mentioned and then to say that as soon as such institution admits such an outsider it will cease to be a minority institution is tantamount to saying that minority institutions will not, as minority institutions, be entitled to any aid.
The real import Of article 29(2) and article 30(1) seen is to us to be that they clearly contemplate a, minority institution with a sprinkling of outsiders admitted into it.
admitting a non member into it the minority institution does not shed its character and cease to be a minority institution.
Indeed the object of conservation of ' the distinct language, script and Culture of a minority may be better served by propagating the same amongst non members of the particular minority community.
In our opinion, it is not possible to read this condition into Art ' 30(1) of the Constitution.
Having disposed of the minor point, referred to above, we now take up the main argument advanced before us as to the content of article 30(1).
The first point to note is that the Article gives certain rights not only to religious minorities but also to linguistic minorities.
In the next place, the right conferred on such minorities is to establish educational institutions of their choice.
It does not say that, minorities based on religion should establish educational institutions for teaching religion only, or that linguistie minorities 1053 should have the right to establish educational institutions for teaching their language only.
What the article says and means is that the religious and the linguistic minorities should have the right to establish educational institutions of their choice.
There is no limitation placed on the subjects to be taught in such educational institutions.
As such minorities will ordinarily desire that their children should be brought up properly and efficiently and be eligible for higher university education and go out in the world fully equipped with such intellectual attainments as will make them fit for entering the public services, educa tional institutions of their choice will necessarily include institutions imparting general secular education also.
In other words, the Article leaves it to their choice to establish such educational institutions as will serve both purposes, namely, the purpose of conserving their religion, language or culture, and also the purpose of giving a thorough, good general education to their children.
The next thing to note is that the Article, in terms, gives all minorities, whether based on religion or language, two rights, namely, the right to establish and the right to ad minister educational institutions of their The key to the understanding of the true meaning and implication of the Article under consideration are the words " of their own choice ".
It is said that the dominant word is " choice " and the content of that Article is as wide as the choice of the particular minority community may make it.
The ambit of the rights conferred by Art:30(1) has, therefore, to be determined on a consideration of the matter from the points of view of the educational institutions themselves.
The educational institutions established or administered by the minorities or to be so established or administered by them in exercise of the rights conferred by that, Article, may be classified into three categories, namely, (1) those which do not seek either aid or recognition from the State, (2) those which want aid, and (3) those which want only recognition but not aid.
As regards the institutions which come within the first category, they are, by cl. 38 of the Bill, outside 1054 the purview of the Bill and, according to learned counsel for the State of Kerala, nothing can be done for or against them under the Bill.
They have their right under article 30(1) and they can, says learned counsel, exercise that right to their heart 's content unhampered by the Bill.
Learned counsel appearing for the institutions challenging the validity of the Bill, on the other hand, point to cl. 26 of the Bill to which reference has already been made.
They say that if the educational institutions, present or future, which come within the first category happen to be located within an area of compulsion they will have to close down for want of scholars, for all guardians residing within such area are, by cl. 26, enjoined, on pain of penalty provided by el. 28, to send their wards only to Government schools or private schools which, according to the definition, means aided or recognised schools.
Clause 26, it is urged, abridges and indeed takes away the fundamental right conferred on the minorities by article 30(1) and is, therefore, unconstitutional.
The educational institutions coming within the first category, not being aided or recognised are, by el. 38, prima facie outside the purview of the Bill.
None of the provisions of the Bill including those mentioned in the Question apply to them and accordingly the point sought to be raised by them, namely, the infraction of their right under article 30(1) by el.
26 of the Bill does not come within the scope of question 2 and we cannot, on the present reference, express any opinion on that point.
As regards the second category, we shall have to sub divide it into two classes, namely, (a) those which are by the Constitutional itself expressly made eligible for receiving grants, and (b) those which are not entitled to any grant by virtue of any express provision of the Constitution but, nevertheless, seek to get aid.
Anglo Indian educational institutions come within sub category (a).
An Anglo Indian is defined in article 366(2).
The Anglo Indian community is a wellknown minority community in India based on religion as well as language and has been recognised 1055 as such by this Court in The State of Bombay vs Bombay Education Society (1).
According to the figures set out in the statement of case filed by the" two Anglo Indian institutions represented before us by Shri Frank Anthony, about which figures there is no dispute, there are 268 recognised Anglo Indian schools in India out of which ten are in the State of Kerala.
Anglo Indian educational institutions established prior to 1948 used to receive grants from the Government of those days.
Article 337, presumably in view of the special circumstances concerning the Anglo Indian community and to allay their natural fears for their future well being, preserved this bounty for a period of ten years.
According to that Article all Anglo Indian educational institutions which were, receiving grants up to the financial year ending on March 31, 1948, will continue to receive the same grant subject to triennial diminution of ten per cent.
until the expiry of ten years when the grant, to the extent it is a special concession to the Anglo Indian community, should cease.
The second proviso imposes the condition that at least 40 per cent.
of the annual admissions must be made available to the members of comnunities other than the Anglo Indian community.
Likewise article 29 (2) provides, inter alia, that no citizen shall be denied admission into any educational institution receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
These are the only constitutional limitations to the right of the Anglo Indian educational institutions to receive aid.
Learned counsel appearing for two Anglo Indian schools contends that the State of Kerala is bound to implement the provisions of article 337.
lndeed it is stated in the statement of case filed by the State of Kerala that all Christian schools are aided by that State and, therefore, the Anglo Indian schools, being also Christian schools, have been so far getting from the State of Kerala the grant that they are entitled to under Art,. 337.
Their grievance is that by introducing (1) ; , 583.
134 1056 this Bill the State of Kerala is now seeking to impose, besides the constitutional limitations mentioned in the second proviso to article 337 and article 29 (2), further and more onerous conditions on this grant to the Anglo Indian educational institutions although their constitutional right to such grant still subsists.
The State of Cls.
8(3),and 9 to13 besides other clauses attracted by cl.
3(5) of the Bill curtailing and, according to them completly takeing away, their constitutional right to manageown affairs as a price for the grant to which under article 337, they are entitled unconditionally except to the extent mentioned in the second proviso to that article and in article 29 (2).
Learned counsel for the State of Kerala does not seriously dispute, as indeed he cannot fairly do, that so far as the grant under article 337 is concerned the Anglo Indian educational institutions are entitled to receive the same without any fresh strings being attached to such grant, although he faintly suggests that the grant received by the Anglo Indian educational institutions under article 337 is not strictly speaking " aid " within the meaning of that word as used in the Bill.
We are unable to accept I that part of his argument as sound.
The word " aid" has not been defined in the Bill.
Accordingly we must give this simple English word its ordinary and natural meaning.
It may, in passing, be noted that although the word " grant " is used in article 337 the word " aid " is used in article 29 (2) and article 30 (2), but there can be no question that the word " aid " in these two Articles will cover the " grant " under article 337.
Before the passing of the said Bill the Anglo Indian educational institutions were receiving the bounty formerly from the State of Madras or Travancore Cochin and after its formation from the present new State of Kerala.
In the circumstances, the amount received by the AngloIndian institutions as grant under article 337 must be construed as " aid " within the meaning of the said Bill and these Anglo Indian educational institutions in receipt of this grant payable under article 337 must accordingly be regarded as aided schools " within 1057 the meaning of the definitions in cl. 2, sub cls.
(1) and (6).
The imposition of stringent terms as fresh or additional conditions precedent to this grant to the Anglo Indian educational institutions will, therefore, infringe their rights not only under article 337 but also under article 30 (1).
If the Anglo Indian educational institutions cannot get the grant to which they are entitled except upon terms laid down by the provisions of the Bill then, if they insist on the right of administration guaranteed to them by article 30 (1) they will have to exercise their option tinder the proviso to el. 3 (4) and remain content with mere recognisation, subject to certain terms therein mentioned which may also be an irksome and intolerable encroachment on their right of administration.
But the real point is that no educational institution can in modern times, afford to subsist and efficiently function without some State aid and, therefore, to continue their institutions they will have to seek aid and will virtually have to surrender their constitutional right of administering educational institutions of their choice.
the premises, they may, in our opinion, legitimately complain that so far as the grants under article 337 are concerned, the provisions of the clauses of the I ')ill mentioned in question 2 do in substance and effect infringe their fundamental rights under article 30 (1) and are to that extent void.
It is urged by learned counsel for the State of Kerala that this Court should decline to answer this question until rules are framed but if the provisions of the Bill are obnoxious on the face of them, no rule can cure that defect.
No or do we think that there is any substance in the argument advanced by learned counsel for Kerala that this Bill has ]lot introduced anything now and the Anglo Indian schools are not being subjected to anything beyond what they have been submitting to under the Education Acts and Codes of Travancore or Cochin or Madras.
In 1945 or 1947 when those Acts and codes came into operation there were no fundamental rights and there can be no loss of fundamental right merely on the ground of non exercise of it.
There is no case of estoppel here, assuming that there can be an estoppel against the 1058 Constitution.
There can be no question, therefore, that the Anglo Indian educational institutions which are entitled to their (,rants under article 337 are being subjected to onerous conditions and the provisions of the said Bill which legitimately come within question 2 as construed by us infringe their rights not only under article 337 but also violate their rights under article 30 (1) in that they are prevented from effectively exercising those rights.
it should be borne in mind that in determining the constitutional validity of a measure or a provision therein regard must be had to the real effect and impact thereof on the fundamental right.
See the decisions of this Court in Rashid Ahmad vs Muunicipal Board Kairana 's case (1), Mohd. Yasin vs The Town Area Committee, Jalalabad 's case (2) and The State of Bombay vs Bombay Education Society 's case (3).
Learned counsel for the State of Kerala next urges that each and every one of the Anglo Indian educational institutions are getting much more than what they are entitled to under article 337 and that consequently, in so far as , these Anglo Indian educational institutions are getting more than what is due to them under article 337, they are, as regards the excess, in the same position as other Anglo Indian educational institutions started after 1948 and the educational institutions established by other minorities who have no right to aid under any express provision of the Constitution but are in receipt of aid or seek to get it.
This takes us to the consideration of the cases of the educational institutions which fall within sub category (b) mentioned above, namely, the institutions which are not entitled to any grant of aid by virtue of any express provision of the Constitution but, nevertheless, seek to get aid from the State.
We have already seen that article 337 of the Constitution makes special provision for granting aid to Anglo Indian educational institutions established prior to 1948.
There is no constitutional provision for such grant of aid to educational institutions established by (1) ; , 571.
(2) ; , 577.
(3) ; , 583.
1059 the Anglo Indian community after 1948 or to those established by other minority communities at any time.
The other minority communities or even the Anglo Indian community in respect of post 1948 educational institutions have no constitutional right, fundamental or otherwise, to receive any grant from the State.
It is, however, well known that in modern times the demands and necessities of modern educational institutions to be properly and efficiently run require considerable expense which cannot be met fully by fees collected from the scholars and private endowments which are not adequate and, therefore, no educational institution can be maintained in a state of efficiency and usefulness without substantial aid from the State.
Articles 28(3), 29(2) and 30(2) postulate educational institutions receiving aid out of State funds.
By the bill now under consideration the State of Kerala also contemplates the granting of aid to educational institutions.
The said Pill, however, imposes stringent terms as conditions precedent to the grant of aid to educational institutions.
The provisions of the Bill have already been summarised in detail in an earlier part of this opinion and need not be recapitulated.
Suffice it to say that if the said Bill becomes law then, in order to obtain aid from State funds, an educational institution will have to submit to the conditions laid down in cls.
3. 5, 6, 7, 8, 9, 10, 11, 12, 14, 15 and 20.
Clause 36 empowers the Government to make rules providing for the giving of aids to private schools.
Learned counsel appearing for the educational institutions opposing the Bill complain that those clauses virtually deprive their clients of their rights under article 30(1).
Their grievances are thus stated: The gist of the right of administration of a school is the power of appointment, control and dismissal of teachers and other staff.
But under the said Bill such power of management is practically taken away.
Thus the manager must submit annual statements (el. 5).
The fixed assets of the aided schools are frozen and cannot be dealt with except with the permission of the authorised officer (cl. 6).
No educational agency of an aided 1060 school can appoint a manager of its choice and the manager is completely under the control of the authorised officer, for he must keep accounts in the manner he is told to do and to give periodical inspection of them, and on the closure of the school the accounts must be made over to the authorised officer (el. 7).
All fees etc.
collected will have to be made over to the Government (el. 8 (3)).
Government will take up the task of paying the teachers and the non teaching staff (cl. 9).
Government will prescribe the qualification of teachers (cl. 10).
The school authorities cannot appoint a single teacher of their choice, but must appoint persons out of the panel settled by the Public Service Commission (cl. 11).
The school authorities must provide amenities to teachers and cannot dismiss, remove, reduce or even suspend a teacher without the previous sanction of the authorised officer (cl. 12).
Government may take over the management on being satisfied as to certain matters and can then acquire it outright (el. 14) and it can also acquire the aided school, against on its satisfaction is to certain matters on which it is easily possible to entertain different views (cl. 15).
Clause 20 peremptorily prevents a private school, which means an aided or recognised school, from charging any fees for tuition in the primary classes where the number of scholars are the highest, Accordingly they contend that those provisions do offend the fundamental rights conferred on them by article 30(1).
Learned counsel appearing for the State of Kerala advances the extreme contention that article 30 (1) Confers on the minorities the fundamental right to establish and administer educational institutions of their choice and nothing more.
They are free to exercise such rights as much as they like and as long as they care to do so on their own resources.
But this fundamental right goes no further and cannot possibly extend to their getting financial assistance from the coffers of the State.
If they desire or seek to obtain aid from the State they must submit to the terms on which the State offers aid to all other educational institutions established by other people just as a person 1061 will have to pay 15 naye paise if he wants to buy a stamp for an inland letter.
Learned counsel appearing for the two Anglo Indian schools as well.
as learned counsel appearing for the Jamait ul ulemia iHind, on the other hand, insist in their turn, on an equally extreme proposition, namely, that their clients ' fundamental rights under article 30 (1) are, in terms, absolute and not only can it not be taken away but cannot even be abridged to any extent.
They draw our attention first to article 19 (1) (g) which confers on the citizens the fundamental right to carry on any business and then to cl. 6 of that article which permits reasonable restrictions being imposed on that fundamental right and they contend that, as there is no such provision in article 30 (1) conferring on the State any police power authorising the imposition of social control, the fundamental rights tinder article 30 (1) must be held to be absolute and cannot be subjected to any restriction whatever.
They reinforce their arguments by relying on articles 28 (3), 29 (2) and 30 (2) which, they rightly submit, do contemplate the grant of aid to educational institutions established by minority com munities.
Learned counsel also strongly rely on articles 41 and 46 of the Constitution which, as directive principles of State policy, make it the duty of the State to aid educational institutions and to promote the educational interests of the minorities and the weaker sections of the people.
Granting of aid to educational institutions is, according to learned counsel, the normal function of the Government.
The Constitution contemplates institutions wholly maintained by the State, as also institutions receiving aid from the State.
If, therefore, the granting of aid is a governmental function, it must, they say, be discharged in a reasonable way and without infringing the fundamental rights of the minorities.
There may be no fundamental right given to any person or body administering an educational institution to get aid from the State and indeed if the State has not sufficient funds it cannot distribute any.
Nevertheless if the State does distribute aid it cannot, they contend, attach such conditions to it as will deprive the 1062 minorities of their fundamental rights under article 30(1).
Attaching stringent conditions, such as those provided by the said Bill and summarised above, is violative of the rights guaranteed to the minorities by article 30(1).
Surrender of fundamental rights cannot, they conclude, be exacted as the price of aid doled out by the State.
We are thus faced will a problem of considerable complexity apparently difficult of solution.
There is, on the one hand the minority rights under article 30(1) to establish and administer educational institutions of their choice and the duty of the Government to promote education, there is, on the other side the obligation of the State under article 45 to endeavour to introduce free and compulsory education.
We have to reconcile between these two conflicting interests arid to give effect to both if that is possible and bring about a synthesis between the two.
The directive principles cannot ignore or override the fundamental rights but must, as we have said, subserve the fundamental rights.
We have already observed that article 30(1) gives two rights to the minorities, (1) to establish and (2) to administer, educational institutions of their choice.
The right to administer cannot obviously include the right to maladminister.
The minority cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without any competent teachers, possessing any semblance of Qualification, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars.
It stands to reason, then, that the constitutional right to administer an educational institution of their choice does not necessarily militate against the claim of the State to insist that in order to In grant aid the State may prescribe reasonable regulations to ensure the excellence of the institutions to be aided.
Learned Attorney General concedes that reasonable regulations may certainly be imposed by the state as a condition for aid or even for recognition.
There is no right in any minority, other than Anglo Indians, to get aid, but, he contends, that if the State chooses to 1063 grant aid then it must not say " I have money and I shall distribute aid but I shall not give you any aid unless you surrender to me your right of administra .
" The State must not grant aid in such manner as will take away the fundamental right of the minority community under article 30(1).
Shri ( 'X. section Pathak appearing for some of the institutions opposing the Bill agrees that it is open to the State to lay down conditions for recognition, namely, that an institution must have a particular amount of funds or properties or number of students or standard of education and so forth and it is open to the State to make a law prescribing conditions for such recognition or aid provided, however, that such law is constitutional and does not infringe any fundamental right of the minorities.
Recognition and grant of aid, says Shri G. section Pathak, is the governmental function and, therefore, the State cannot impose terms as condition precedent to the grant of recognition or aid which will be violative of article 30(1).
According to the statement of case filed by the State of Kerala, every Christian school in the State is aided by the State.
Therefore, the conditions imposed by the said Bill on aided institutions established and administered by minority communities, like the Christians, including the Anglo Indian community, will lead to the closing down of all these aided schools unless they are agreeable to surrender their fundamental right of management.
No educational institutions can in actual practice be carried on without aid from the State and if they will not get it unless they surrender their rights they will, by compulsion of financial necessities, be compelled to give up their rights under article 30(1).
The legislative powers conferred on the legislatures of the States by articles 245 and 246 are subject to the other provisions of the Constitution and certainly to the provisions of Part III which confers fundamental rights which are, therefore, binding on the State legislatures.
The State legislatures cannot, it is clear, disregard or override those provisions merely by employing indirect methods of achieving exactly the 135 1064 same result.
Even the legislature cannot do indirectly what it certainly cannot do directly.
Yet that will be the effect of the application of these provisions of the Bill and according to the decisions of this Court already referred to it is the real effect to which regard is to be had in determining the constitutional validity of any measure.
Clauses 6, 7, 9, 10, 11, 12, 14, 15 and 20 relate to the management of aided schools.
Some of these provisions, e.g., 7, 10, 11(1), 12(1)(2)(3) and (5) may easily be regarded as reasonable regulations or conditions for the grant of aid.
Clauses 9, 11(2) and 12(4) are, however, objected to as going much beyond the permissible limit.
It is said that by taking over the collections of fees, etc., and by undertaking to pay the salaries of the teachers and other staff the Government is in reality confiscating the school fund and taking away the prestige of the school, for none will care for the school authority.
Likewise cl.
II takes away an obvious item of management, for the manager cannot appoint any teacher at all except out of the panel to be prepared by the Public Service Commission, which, apart from the question of its power of taking up such duties, may not be qualified at all to select teachers who will be acceptable to religious denominations and in particular sub el.
(2) of that clause is objectionable for it thrusts upon educational institutions of religious minorities teachers of Scheduled Castes who may have no knowledge of the tenets of their religion and may be otherwise weak educationally.
Power of dismissal, removal, reduction in rank or suspension is an index of the right of management and that is taken away by cl.
12(4).
These are, no doubt, serious inroads on the right of administration and appear perilously near violating that right.
But considering that those provisions are applicable to all educational institutions and that the impugned parts of cls. 9, 11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are pre pared, as at present advised, to treat these clauses 9, 11(2) and 12(4) as permissible regulations which the 1065 State may impose on the minorities as a condition for granting aid to their educational institutions.
We,, however, find it impossible to support cls.
14 and 15 of the said Bill as mere regulations.
The provisions of those clauses may be totally destructive of the rights under article 30(1).
It is true that the right to aid is not implicit in article 30(1) but the provisions of those clauses, if submitted to on account of their factual compulsion as condition of aid, may easily be violative of article 30(1) of the Constitution.
Learned counsel for the State of Kerala recognises that cls.
14 and 15 of the Bill may annihilate the minority communities ' right to manage educational institutions of their choice but submits that the validity of those clauses is not the subject matter of question 2.
But, as already explained, all newly established schools seeking aid or recognition are, by el.
3(5), made subject to all the provisions of the Act.
Therefore, in a discussion as to the constitutional validity of cl.
3(5) a discussion of the validity of the other clauses of the Bill becomes relevant, not as and by way of a separate item but in determining the validity of the provisions of el.
In our opinion, sub el. 3 of el. 8 and cls. 9, 10, 11, 12 and 13 being merely regulatory do not offend.
article 30(1), but the provisions of sub cl.
(5) of cl. 3 by making the aided educational institutions subject to cls.
14 and 15 as conditions for the.
grant of aid do offend against article 30(1) of the Constitution.
We now come to the, last category of educational institutions established and administered by minority communities which seek only recognition but not aid from the State.
The extreme arguments advanced with regard to recognition by learned counsel for the State of Kerala and learned counsel for the two Anglo Indian schools and learned counsel for the Muslim institutions proceed on the same lines as those advanced respectivly by them on the question as to granting of aid, namely, that the State of Kerala maintains that the minority communities may exercise their fundamental right under article 30(1) by establishing educational institutions of their choice wherever they like and administer the same in their own way 1066 and need not seek recognition from the Government, but that if the minority communities desire to have 'State recognition hey must submit to the terms imposed, as conditions precedent to recognition, on every educational institution.
The claim of the educational institutions of the minority communities, on the other hand, is that their fundamental right under article 30(1) is absolute and cannot be subjected to any restriction whatever.
Learned counsel for the two Anglo Indian schools appearing on this reference, relying on some decisions of the American Supreme Court, maintains that a child is not the creature of the State and the parents have the right to get their child educated in educational institutions of their choice.
Those American decisions proceed on the language of the due process clauses of the Fifth and the Fourteenth Amendments and have no application to a situation arising under our Constitution and we need not, therefore, discuss them in detail here.
Adverting to the two conflicting views propounded before us we repeat that neither of the two extreme propositions can be sustained and we have to reconcile the two, if possible.
Article 26 gives freedom to religious denominations or any section thereof, subject to public order, morality and health, to establish and maintain institutions for religious and charitable purposes.
Article 29(1) gives protection to any section of citizens residing in the territory of India having a distinct language, script or culture of its own the right to conserve the same.
As we have already stated, the distinct language, script or culture of a minority community can best be conserved by and through educational institu tions, for it is by education that their culture can be inculcated into the impressionable minds of the children of their community.
It is through educational institutions that the language and script of the minority community can be preserved, improved and strengthened.
It is, therefore, that article 3O(1) confers on all minorities, whether based on religion or language, the right to establish and administer educational institutions of their choice.
The minorities, quite understandably, regard it as essential that the education 1067 of their children should be in accordance with the teachings of their religion and they hold, quite honestly, that such an education cannot be obtained in ordinary schools designed for all the members of the public but can only be secured in schools conducted under the influence and guidance of people well versed in the tenets of their religion and in the traditions of their culture.
The minorities evidently desire that education should be imparted to the children of their community in an atmosphere congenial to the growth of their culture.
Our Constitution makers recognised the validity of their claim and to allay their fears conferred on them the fundamental rights referred to above.
But the conservation of the distinct language, script or culture is not the only object of choice of the minority communities.
They also desire that scholars of their educational institutions should go out in the world well and sufficiently equipped with the qualifications necessary for a useful career in life.
But according to the Education Code now in operation to which it is permissible to refer for ascertaining the effect of the impunged provision on existing state of affairs, the scholars of unrecognised schools are not permitted to avail themselves of the opportunities for higher education in the University and are not eligible for entering the public services.
Without recognition, therefore, the educational institutions established or to be established by the minority communities cannot fulfil the real objects of their choice and the rights under article 30(1) cannot be effectively exercised.
The right to establish educational institutions of their choice must, therefore, mean the right to establish real institutions which will effectively serve the needs of their community and the scholars who resort to their educational institutions.
There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to the educational institutions except upon terms tantamount to the surrender of their constitutional right of administration of the educational institutions of their choice is in truth and in effect to deprive them of their rights under article 30(1).
We repeat that the legislative power is subject to the 1068 fundamental rights and the legislature cannot indirectly take away or abridge the fundamental rights which it could not do directly and yet that will be the result if the said Bill containing any offending clause becomes law.
According to the decisions of this Court referred to above, in judging the validity of any law regard must be had to its real intendment and effect on the rights of the aggrieved parties, rather than to its form.
According to the Education Codes certain conditions are prescribed whether as legislative or as executive measures we do not stop to enquire as conditions for the grant of recognition and it is said, as it was said during the discussion on the question of aid, that the said Bill imposes no more burden than what these minority educational institutions along with those of other communities are already subjected to.
As we have observed there can be no question of the loss of a fundamental right merely by the non exercise of it.
There is no case here of any estoppel, assuming that there can be any estoppel against the Constitution.
Therefore, the impugned provisions of the said Bill must be considered on its merits.
By cl. 19 the following clauses, namely, 7 (except sub cls.
I and 3 which apply only to aided schools), 10 and 20 were made applicable to recognised schools.
We are prepared to accept the provisions of sub cls. 2, 4 to 9 of cl. 7 and the provisions of cl. 10 as permissible regulations but it is difficult to treat el. 20 as merely regulatory.
That clause peremptorily requires that no fees should be charged for tuition in the primary classes.
There is no dispute that the number of pupils in the primary classes is more than that in the other classes.
The 1955 1956 figures of school going children, as to which there is no dispute, show that of the age group) of 6 to II cent per cent.
of boys attend classes, while 91 per cent.
of girls of that age group do the same.
There is a drop in attendance when we come to age group 11 to 14.
In that age group 36.2 per cent.
of boys and 29 per cent.
of girls go to school.
It is clear, therefore, that although the rate of fees charged in primary classes is lower than those charged in higher classes, the total amount collected from scholars 1069 attending primary classes is quite considerable and forms an appreciable part of the total income of the school.
If this Bill becomes law, all these schools will have to forego this fruitful source of income.
There is, however, no provision for counterbalancing the loss of fees which will be brought about by el. 20 when it comes into force.
There is no provision, such as there is in el. 9 which applies to aided schools only, that the State should make good that loss.
Therefore, the ,imposition of such restriction against the collection of fees from any pupil in the primary classes as a condition for recognition will in effect make it impos sible for an educational institution established by a minority community being carried on.
It is true that el. 36(2)(c) empowers the Government to make rules providing for the grant of recognition to private schools and we are asked to suspend our opinion until the said Bill comes into force and rules are actually made.
But no rule to be framed under el. 36(2)(c) can nullify the constitutional infirmity of cl.
3(5) read with cl. 20 which is calculated to infringe the fundamental rights of minority communities in respect of recognised schools to be established after the commencement of the said Bill.
Learned counsel for the State of Kerala referred us to the directive principles contained in article 45 which requires the State to endeavour to provide, within a period of ten years from the commencement of the Constitution, for free and compulsory education for all children until they complete the age of fourteen years and with considerable warmth of feeling and indignation maintained that no minorities should be permitted to stand in the way of the implementation of the sacred duty cast upon the State of giving free and compulsory primary education to the children of the country so as to bring them up properly and to make them fit for discharging the duties and responsibilities of good citizens.
To pamper to the selfish claims of these minorities is, according to ].earned counsel, to set back the hands of the clock of progress.
Should these minorities, asks learned counsel, be permitted to perpetuate the sectarian fragmentation of the people 1070 and to keep them perpetually segregated in separate and isolated cultural enclaves and thereby retard the unity of the nation ? Learned counsel for the minority institutions were equally cloquent as to the sacred.
obligation of the State towards the minority communities.
It is not for this Court to question the wisdom of the supreme, law of the land.
We the people of India have given unto ourselves the Constitution which is not for any particular community or section but for all.
Its provisions are intended to protect all, minority as well as the majority communities.
There can be no manner of doubt that our Constitution has guaranteed certain cherished rights of the minorities concerning their language, culture and religion.
These concessions must have been made to them for good and valid reasons.
Article 45, no doubt, requires the State to provide for free and compulsory education for all children, but there is nothing to prevent the State from discharging that solemn obligation through Government and aided schools and article 45 does not require that obligation to be discharged at the expense of the minority communities.
So long as the Constitution stands as it is and is not altered, it is, we conceive, the duty of this Court to uphold the fundamental rights and thereby honour our sacred obligation to the minority communities who are of our own.
Throughout the ages endless inundations of men of diverse creeds, cultures and races Aryans and non Aryans, Dravidians and Chinese, Scythians, Huns, Pathans and Mughalshave come to this ancient land from distant regions and climes.
India has welcomed them all.
They have met and gathered.
given and taken and got mingled, merged and lost in one body India 's tradition has thus been epitomised in the following noble lines: " None shall be turned away From the shore of this vast sea of humanity That is India ".
Indeed India has sent out to the world her message of goodwill enshrined and proclaimed in our National Anthem: Poems by Rabindranath Tagore.
1071 Day and night ,the voice goes out from land to land, calling Hindus, Buddhists, Sikhs and Jains round thy throne and Parsees, Mussalmans and Christians.
Offerings are brought to thy shrine by the East and the West to be woven in a garland of love.
Thou bringest the hearts of all peoples into the harmony of one life, Thou Dispenser of India 's destiny, Victory, Victory, Victory to thee.
"* It is thus that the genius of India has been able to find unity in diversity by assimilating the best of all creeds and cultures.
Our Constitution accordingly recognises our sacred obligations to the minorities.
Looking at the rights guaranteed to the minorities by our Constitution from the angle of vision indicated above, we are of opinion that el. 7 (except sub cls.
I and 3 which apply only to aided schools) and cl. 10 may well be regarded as permissible regulation which the State is entitled to impose as a condition for according its recognition to any educational institution but that el. 20 which has been extended by el. 3 (5) to newly established recognised schools, in so far as it affects educational institutions established and administered by minority communities, is violative of article 30 (1).
Question 4 : This question raises the constitutional validity of cl. 33 of the said Bill.
That clause, which has hereinbefore been set out in full, provides that notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in force no Court shall grant any temporary injunction or make any interim order restraining any proceeding which is being or about to be taken under the provisions of the Bill when it becomes an Act.
Article 226 of the Constitution confers extensive jurisdiction and power on the High Courts in the States.
This jurisdiction and power extend throughout the territories in relation to which the High Court exercises *Rabindranath Tagore.
136 1072 jurisdiction.
It can issue to any person or authority, including in appropriate cases any Government, within those territories, directions, orders or writs of the nature mentioned therein for the enforcement of the fundamental rights or for any other purpose.
No enactment of a State Legislature can, as long as that Article stands, take away or abridge the jurisdiction and power conferred on the High Court by that Article.
The question is whether cl. 33 does so.
The doubts which have arisen with regard to cl. 33 are thus formulated in the order of reference : " AND WHEREAS clause 33 of the said Bill provides that, notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in force, no courts can grant any temporary injunction or make any interim order restraining any proceedings which is being or about to be taken under the Act; AND WHEREAS a doubt has arisen whether the provisions of the said clause 33, in so far as they relate to the jurisdiction of the High Courts, would offend Article 226 of the Constitution, The State of Kerala in their statement of case disowns in the following words all intentions in that behalf : " 52.
Kerala State asks this Honourable Court to answer the fourth question in the negative, on the ground that the power given to High Courts by article 226remains unaffected by the said cl. 33.
Kerala State contends that the argument that cl.33 affects article 226 is without foundation.
The Constitution is the paramount law of the land, and nothing short of a constitutional amendment as provided for under the Constitution can affect any of the provisions of the Constitution, including article 226.
The power conferred upon High Courts under article 226 of the Constitution is an Over riding power entitling them, under certain conditions and circumstances, to issue writs, orders and directions to subordinate courts, tribunals and authorities notwithstanding any rule or law to the contrary Learned counsel for the State of Kerala submits that el.
33 must be read subject to articles 226 and 32 of the 1073 Constitution.
He relies on the well known principle of construction that if a provision in a statute is capable of two interpretations then that interpretation should be adopted which will make the provision valid rather than the one which will make it invalid.
He relies on the words " other law for the time being in force " as positively indicating that the clause has not the constitution in contemplation, for it will be inapt to speak of the Constitution as a " law for the time being in force ".
He relies on the meaning of the word "Law " appearing in articles 2, 4, 32 (3) and 367(1) of the Constitution where it must mean law enacted by a legislature.
He also relies on the definition of " Indian Law " in section 3(29) of the General Clauses Act and submits that the word " Law " in cl. 33 must mean a law of the same kind as the Civil Procedure Code of 1908, that is to say, a law made by an appropriate Legislature in exercise of its legislative function and cannot refer to the Constitution.
We find ourselves in agreement with this contention of learned counsel for the State of Kerala.
We are not aware of any difficulty and none has been shown to us in construing cl.
33 as a provision subject to the overriding provisions of article 226 of the Constitution and our answer to question No. 4 must be in the negative.
In accordance with the foregoing opinion we report on the questions as follows: Question No. 1 : No. QuestionNo.
2: (i) Yes, so far as Anglo Indian educational institutions entitled to grant under article 337 are concerned.
(ii) As regards other minorities not entitled to grant as of right under any express provision of the Constitution, but are in receipt of aid or desire such aid and also as regards AngloIndian educational institutions in so far as they are receiving aid in excess of what are due to them under article 337, clauses 8(3), and 9 to 13 do not offend article 30(1) but clause 3(5) in so far as it makes such educational institutions subject to clauses 14 and 15 do offend article 30(1).
(iii) Clause 7 (except sub cls.
(1) and (3) which applies only to aided schools), cl. 10 in 1074 so far as they apply to recognised schools to be established after the said Bill comes into force do not offend article 30(1) but cl.
3(5) in so far as it makes the new schools established after the commencement of the Bill subject to el. 20 does offend article 30(1).
Question No. 3: No. Question No. 4: No ; clause 33 is subject to article 226 of the Constitution.
VENKATARAMA AIYAR J.
I agree that the answer to Questions Nos 1, 3 and 4 should be as stated in the judgment of My Lord, the Chief Justice.
But as regards Question No. 2, 1 am unable to concur in the view expressed therein that Cl.
(20) of the Bill is, in its application to educational institutions of minorities, religious or linguistic, repugnant to article 30(1) of the Constitution , and is, in consequence, to that extent void.
Clause (20) provides that: " No fee shall be payable by any pupil for any tuition in the primary classes in any Government or private school.
" Now, the question is whether this Clause is violative of the right which article 30(1) confers on all minorities based on religion or language, to establish and administer educational institutions of their choice.
Ex facie, Cl.
(20) does not prohibit the establishment or administration of such institutions by the minorities; it only provides that in private schools no fee shall be payable by students in the primary classes.
On the terms of this Clause, therefore, it is difficult to see how it offends article 30(1).
But it is contended by learned counsel who appeared for the minorities that in practice no school could be run unless fees are collected from the students, that therefore Cl.
(20) must, if operative, result in the extinction of the educational institutions of minorities, and that was a direct invasion of their right to establish and maintain those institutions.
It is no doubt the law that in deciding on the constitutionality of an enactment, regard must be had not merely to its language but also to its effect on the rights of the parties, not merely to what it says but to what it does.
Even so, it is difficult to see how 1075 Cl.
(20) can be said to infringe article 30(1).
It applies only to Government and private schools, and a private school is defined in Cl.
2(6) as " meaning an aided or recognised school ".
Clause (38) provides that : " Nothing in this Act shall apply to any school which is not a Government or a private school.
" The result is that there is no prohibition against minorities, religious or linguistic, establishing their own educational institutions and charging fees, so long as they do not seek aid or recognition from the State.
It is only when they make a demand on the State for aid or recognition that the provisions of the Bill will become applicable to them.
But it is argued that the right of the minorities to establish their own educational institutions will be Tendered illusory, if the students who pass out of them cannot sit for public examinations held by the State or be eligible for recruitment to State services, and that, it is said, is the effect of the non recognition of the institutions.
It is accordingly contended that for the effective exercise of the rights under article 30(1), it is necessary to imply therein a right in the minorities to have those institutions recognised by the State.
That is the crucial question that has to be determined.
If there is no right in the minorities to have their institutions recognised by the State, then the question whether Cl.
(20) is ail invasion of that right would not arise for decision.
It is only if we hold that such right is to be implied in article 30(1) that the further question will have to be considered whether Cl.
(20) infringes that right.
Now, whether minorities, religious or linguistic, have a right to get recognition for their institutions under article 30(1) must depend on the interpretation to be put on that Article.
There is nothing in it about recognition by the State of ' educational institutions established by minorities, and if we are to accept the contention of learned counsel appearing for them, we must read into the statute words such as " and it shall be the duty of the State to recognise such institutions.
" It is a rule of construction well established that words are not to be 1076 added to a statute unless they are required to give effect to its intention otherwise manifest therein, and that rule must apply with all the greater force here, seeing that what we are interpreting is a Constitution.
Now, a reference to the relevant provisions of the Constitution shows that such a right is not implicit in article 30(1).
Article 28(1) provides that no religious instruction shall be provided in any educational institution maintained wholly out of State funds.
Article 28(3) enacts that no person attending any educational institution recognised by the State or receiving aid out of State funds shall be required to take part in religious instruction.
Under article 29(2), no person is to 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.
In article 30(2), there is express provision that in granting aid no discrimination should be made against any educational institution on the ground that it is under the management of a minority based on religion or language.
It is clear from the above catena of provisions that the Constitution makes a clear distinction between State maintained, State aided and State recognised educational institutions, and provides for different rights and obligations in relation to them.
If it intended that the minorities mentioned in article 30(1) should have a fundamental right in the matter of the recognition of their educational institutions by the State, nothing would have been easier than to have said so.
On the other hand, there is good reason to infer that it has deliberately abstained from imposing on the State such an obligation.
The educational institutions protected by article 30(1) might impart purely religious instruction.
Indeed, it seems likely that it is such institutions that are primarily intended to be protected by article 30(1).
Now, to compel the State to recognise those institutions would conflict with the fundamental concept on which the Constitution is framed that the State should be secular in character.
If institutions which give only religious education can have no right to compel recognition by the State 1077 under article 30(1), how could educational institutions established by minorities and imparting secular education be held to possess that right? The contents of article 30(1) must be the same as regards all institutions falling within its ambit.
Construing, therefore, Art.30(1) on its language, it is difficult to support the conclusion that it implies any right in the minorities to have their educational institutions recognised by the State.
The matter does not rest there.
There is in the Constitution a provision which seems clearly to negative the right, which is claimed on behalf of the minorities.
Article 45 provides that: " The State shall endeavour to provide, within.
a period of ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years.
" It is precisely this obligation laid on the State by the Constitution that is sought to be carried out in cl.
(20) of the Bill.
Now, it should be clear that if the right of the minorities to establish and maintain educational institutions under article 30(1) carries with it an implied right to be recognised by the State, then no law of the State can compel them to admit students free and therefore article 45 can never become operative, since what it provides is free education for all children and not merely for children other than those who attend institutions falling within article 30(1).
It is contended that the directive principles laid down in Part IV cannot override the fundamental rights guaranteed by the Constitution, and that article 45 cannot be applied so as to defeat the rights conferred on minorities under article 30(1).
This is quite correct.
But the question here is, not whether a directive principle can prevail over a fundamental right, but whether there is a fundamental right in the minorities to have their educational institutions recognised by the State, and when there is nothing express about it in article 30(1) and it is only by implication that such a right is sought to be raised, it is pertinent to ask, can we by implication infer a right which is inconsistent 1078 with the express provisions of the Constitution? Considering the question, therefore, both on the language of article 30(1) and on the principle laid down in article 45, 1 find myself unable to accept the contention that the right of the minorities is not merely to establish educational institutions of their choice but to have them recognised by the State.
That must be sufficient to conclude this question.
But then it was argued that the policy behind article 30(1) was to enable minorities to establish and maintain their own institutions, and that that policy would be defeated if the State is not laid under an obligation to accord recognition to them.
Let us assume that the question of policy can be gone into, apart from the language of the enactment.
But what is the policy behind article 30(1) ? As I conceive it, it is that it should not be in the power of the majority in a State to destroy or to impair the rights of the minorities, religious or linguistic.
That is a policy which permeates all modern Constitutions, and its purpose is to encourage individuals to preserve and develop their own distinct culture.
It is well known that during the Middle Ages the accepted notion was that Sovereigns were entitled to impose their own religion on their subjects, and those who did not conform to it could be dealt with as traitors.
It was this notion that was responsible during the 16th and 17th Centuries for numerous wars between nations and for civil wars in the Continent of Europe, and it was only latterly that it came to be recognised that freedom of religion is not incompatible with good citizenship and loyalty to the State, and that all progressive societies must respect the religious beliefs of their minorities.
It is this concept that is embodied in articles 25, 26, 29 and 30.
Article 25 guarantees to persons the right to freely profess, practice and propagate religion.
Article 26 recognises the right of religious denominations to establish and maintain religious and charitable institutions.
Article 29(1) protects the rights of sections of citizens to have their own distinct language, script or culture.
Article 30(1) belongs to the same category as articles 25, 26 and 29, 1079 and confers on minorities, religious or linguistic, the right to establish and maintain their own educational institutions without any interference or hindrance from the State.
In other words, the minorities should have the right to live, and should be allowed by the State to live, their own cultural life as regards religion or language.
That is the true scope of the right conferred under article 30(1), and the obligation of the State in relation thereto is purely negative.
It cannot prohibit the establishment of such institutions, and it should not interfere with the administration of such institutions by the minorities.
That right is not, as I have already pointed out, infringed by Cl.
The right which the minorities now claim is something more.
They want not merely freedom to manage their own affairs, but they demand that the State should actively intervene and give to their educational institutions the imprimatur of State recognition.
That, in my opinion, is not within article 30(1).
The true intention of that Article is to equip minorities with a shield whereby they could defend themselves against attacks by majorities, religious or linguistic, and not to arm them with a sword whereby they could compel the majorities to grant concessions.
It should be noted in this connection that the Constitution has laid on the State various obligations in relation to the minorities apart from what is involved in article 30(1).
Thus, article 30(2) provides that a State shall not, when it chooses to grant aid to educational institutions, discriminate against institutions of minorities based on language or religion.
Likewise, if the State frames regulations for recognition of educational institutions, it has to treat all of them alike, without discriminating against any institution on the ground of language or religion.
The result of the constitutional provisions bearing on the question may thus be summed up: (1)The State is under a positive obligation to give equal treatment in the matter of aid or recognition to all educational institutions, including those of the minorities, religious or linguistic.
137 1080 (2)The State is under a negative obligation as regards those institutions, not to prohibit their establishment or to interfere with their administration.
Clause 20 of the Bill violates neither of these two obligations.
On the other hand, it is the contention of the minorities that must, if accepted, result in discrimination by the State.
While recognised institutions of the majority communities will be subject to el.
(20), similar institutions of minority communities falling within article 30(1) will not be subject to it.
The form cannot collect fees, while the latter can.
This surely is discrimination.
It may be stated that learned counsel for the minorities, when pressed with the question that on their contention article 45 must become a dead letter, answered that the situation could be met by the State paying compensation to the minority institutions to make up for the loss of fees.
That serves clearly to reveal that what the minorities fight for is what has not been granted to them under article 30(2) of the Constitution, viz., aid to them on the ground of religion or language.
In my opinion, there is no justification for putting on article 30(1) a construction which would put the minorities in a more favoured position than the majority communities.
I have so far discussed the scope of article 30(1) on its language and on the principle underlying it.
Coming next to the authorities, cited before us, the observations in City of Winnipeg vs Barrett: City of Winnipeg vs Logan (1) would appear to support the contention of the State of Kerala that Cl.
(20) does not offend article 30(1).
That was a decision on section 22 of the Manitoba Act, 1870, which is as follows: " In and for the province, the said legislature may exclusively make laws in relation to education, subject and according to the following provisions: (1)Nothing in any such law shall prejudicially affect any right or privilege with respect to denominational schools which any class of persons have by law or practice in the province at the Union.
" Now, the facts are that there were in Manitoba deno minational schools run by Roman Catholics which (1) 457 1081 were maintained with fees paid by students and donation,,; from the Church.
In 1890, the Provincial Legislature passed the Public Schools Act, and it enacted that all Protestant and Roman Catholic school districts should be subject to the provisions of this Act, and that all public schools should be free schools.
A portion of the legislative grant for education was to be allotted to public schools, and it was provided that any school not conducted according to all the provisions of the Act or the regulations of the Department of Education should not be deemed to be a public school within the meaning of the Act and was not to be entitled to participate in the grant.
The validity of these provisions was challenged by the Roman Catholic institutions on the ground that they contravened section 22 of the Manitoba Act, and infringed the rights and privileges guaranteed therein.
The Supreme Court of Canada upheld this contention; but this judgment was reversed by the Privy Council, and it was held that the provisions of the Act did not offend section 22 of the Manitoba Act.
Lord Macnagliten delivering the judgment of the Board observed: " Notwithstanding the Public Schools Act, 1890, Roman Catholics and members of every other religious body in Manitoba are free to establish schools throughout the province ; they are free to maintain their schools by school fees or voluntary subscriptions; they are free to conduct their schools according to their own religious tenets without molestation or interference ".
In the result, it was held that the Act did not infringe the rights of the denominational institutions under section 22.
These observations appear to be very apposite to the present contention.
The position occupied by the minority institutions under article 30(1) is not dissimilar to that of the Roman Catholic schools of Manitoba under section 22 of the Act of 1870, and the position created by Cl.
(20) is precisely that which the 1890 Act created in that Province.
It remains to notice the contention advanced by Mr. Pritt that the basis on which the arguments of the counsel for the minorities proceeded that students 1082 who pass out of unrecognised institutions were at a ,disadvantage in the matter of eligibility to sit at public examinations or to be admitted in the services to the State, was itself without foundation, and that even if there was any substantial discrimination in treatment between students who pass out of unrecognised schools and those who pass out of Government or recognised schools, that was the result of provisions of the Education Codes in force in the State, that it might be that those provisions are bad as infringing article 30(1) of the Constitution, but that did not affect the validity of cl.
(20) as that was inapplicable to unrecognised institutions by virtue of cl.
(38), and that, in consequence, there was nothing in the Bill which could be said to offend article 30(1).
The rules of the Education Code are not really before us, and they are not the subject matter of the present reference.
In my view, there is much to be said in favour of the contention that if article 30(1) is at all infringed, it is by the rules of the Education Code and not by el.
But it is unnecessary to pursue this aspect further, as I consider that even otherwise, the vires of Cl.
(20) is not open to question.
In my view, that Clause does not offend article 30(1) and is intra vires.
I agree that Cls.
(14) and (15) must be held to be bad, and the ground of my decision is this: It may be taken and indeed it is not disputed that if the State grants aid to an educational institution, it must have the power to see that the institution is properly and efficiently run, that the education imparted therein is of the right standard, that the teachers possess the requisite qualifications, that the funds are duly applied for the purpose of the institution and the like.
In other words, the State must have large powers of regulation and of control over State aided educational institutions.
These powers must be liberally construed, and the decision of the Legislature as to what they should be is not to be lightly interfered with, as it is presumed to know best the needs of the State, the nature and extent of the evils rampant therein and the steps that should be taken to remedy them.
But the power to regulate does not, in general, comprehend 1083 the power to prohibit, and the right to control the affairs of an institution cannot be exercised so as to extinguish it.
Now, Cls.
(14) and (15) operate to put an end to the right of private agencies to establish and maintain educational institutions and cannot be upheld as within the power of the State to regulate or control.
The State is undoubtedly free to stop aid or recognition to a school if it is mismanaged.
It can, even as an interim measure, arrange in the interests of the students to run that school, pending its making other arrangements to provide other educational facilities.
It can also resume properties which had been acquired by the institutions with the aid.
of State grant.
But it cannot itself compulsorily take over the school and run it as its own, either on the terms set out in Cl.
(14) or Cl.
That is not a power which springs directly from the grant of aid.
To aid is not to destroy.
Those clauses would, in my opinion, infringe the right to establish and maintain institutions, whether such right is to be founded on article 19(1)(g) or article 30(1).
I should add that in Question No. 2, the question of the validity of Cl.
(20) or Cls.
(14) and (15) is not expressly referred for our opinion.
But it is said that the reference to Cl.
3(5) attracts all the provisions of the Bill, because the establishment of new institutions or schools is under that Clause subject to the provisions of the Bill and the rules made thereunder.
I have grave doubts whether on the terms of the reference, we are called upon to express our opinion on the validity of all the provisions of the Bill.
The reference is not generally on the vires of the provisions of the Bill.
It is limited to the validity of specified provisions, Cls.
3(5), 8(3) and 9 to 13.
There has been no satisfactory answer to the question as to why if it was intended that we should pronounce on the validity of all the provisions of the Bill, Cls.
8(3) and (9) to (13) should have been specifically mentioned.
Moreover, the reference is preceded by detailed recitals as to the doubts which had been raised in the mind of the President as to the validity of certain provisions, and there is no hint therein that there was any doubt 138 1084 concerning the vires of provisions other than those expressly mentioned.
If the maxim "Expressum facit cessare tacitum " can properly be invoked in the construction of instruments, it must a fortiori be so, in interpreting a document drawn up by the Union Government with great care and deliberation.
And having regard to the nature of the advisory jurisdiction under article 143, the reference should be construed narrowly rather than broadly.
But this discussion is academic, as there have been full arguments on the validity of all the provisions, and we are expressing our opinion thereon.
In the result, my answer to Question No. 2 is that, excepting Cls.
(14) and (15), the other provisions of the Bill do not offend article 30(1) of the Constitution.
As regards schools of the Anglo Indian Communities, article 337 provides for aid being given to them on the conditions and to the extent specified therein.
That is outside article 30(1) and independent of it, and I agree with My Lord, the Chief Justice, that the provisions of the Bill are, to the extent they affect or interfere with the rights conferred by that Article, bad.
Reference answered accordingly.
[/INST]The appellant was convicted under section 302 read with section 201 IPC for having committed the murder of his father and son.
It was alleged, as motive for offence, that the appellant used to quarrel with his father as the latter wanted to transfer his land in the name of his grandson, who used to live with him.
PW. 2 had deposed that a day prior to Amawasya of Chet 1985 at about 5 p.m. he had seen the two deceased persons at the Gurdwara when appellant went there and told them that he had arranged for their visit to Amritsar, through the car seva truck coming that evening, to take the holy bath.
He had met the appellant that very night at about 10 p.m.
On his way to the fields and enquired of him why he too did not go to Amritsar.
And, that when he did not see the deceased for sometime he felt suspicious and lodged a report with the police on 8th August, 1985, which became the FIR.
On 13th August, 1985 the appellant is alleged to have made an extrajudicial confession to PW. 3, his sister 's husband, who is said to have produced him before the police.
On 15th August, 1985 a memorandum under section 27 of the Evidence Act was recorded by the investigating officer at the instance of the appellant and later dead bodies were recovered from field and identified.
The belongings of the deceased were recovered from the Kotha in the fields, where the deceased used to reside, at the instance of the appellant.
Based on this evidence the appellant was convicted and sentenced to death by the Sessions Court.
That order was upheld by the High Court.
614 Allowing the appeal by special leave, ^ HELD: The charge against the appellant cannot be said to have been proved beyond doubt.
His conviction, therefore, cannot be sustained.
[620] Extra judicial confession is a very weak piece of evidence and is hardly of any consequence.
3 says that the appellant told him that as the police was after him he had come and confessed the fact so that he might not be unnecessarily harassed.
There is nothing to indicate that this witness was a person having influence with the police or a person or some status to protect the appellant from harassment.
There is no other corroborative evidence about the extra judicial confession.
[618D E] As regards the motive, the will was executed on 31st December, 1984 and it is a figment of imagination that the murder was committed apprehending that the will was likely to be changed.
There is also no evidence to indicate that appellant was not having good relations with his father or that there was ever any trouble between father and the son.
[618F G] The evidence as to last seen also cannot be considered as a piece of circumstantial evidence against the appellant.
The case of the appellant was that his brother in law, Manjit Singh, had taken the deceased to his place on the pretext that appellant 's sister was not well.
There is no evidence led by the prosecution to negative this stand.
May be, PW. 2 saw them with the appellant at the Gurdwara on the Amawasaya day in Chet but it is significant that no other person connected with the deceased has been produced to suggest that he was not seen there after.
[619B C] As regards the recovery of dead bodies, the investigation officer himself admitted that after recording the statement of PW. 3 he knew that the bodies were buried in the field but he felt that information was not sufficient.
The said field is an open place surrounded by other fields.
It cannot be said that any one else could not have known about the bodies being buried there.
Since exclusive knowledge to the appellant cannot be attributed, the evidence under section 27 of the Evidence Act also cannot be said to be a circumstance against the appellant.
[619E G] According to the medical opinion, bodies were recovered about three months after the death.
The bodies were found disintegrated.
It was difficult to identify.
The disintegration had gone to such an extent 615 that the bodies could not be removed and sent for postmortem and therefore medical expert was called to the spot to perform the postmortem.
The prosecution did not examine any one of the relatives or the daughter of deceased or his son in law to identify the dead bodies although it has appeared in evidence that during the trial the said son in law was present in the Court.
[617E F] As regards recovery made from the Kotha where the deceased used to reside, there is nothing significant.
Their belonging were found to be there and on that basis no inference could be drawn against the appellant.
[61G H]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 73 of 1961.
Appeal from the judgment and order dated January 23, 1961, of the Bombay High Court, in Appeal No. 5 of 1960.
C. K. Daphtary, Solicitor General of India, Purshottam Tricumdas, F. section Nariman, Suresh D. Parekh and I. N. Shroff, for the appellants.
M. K. Nambiar, K. section Cooper, Anil Dewan, RaMesh A. Shroff, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondents.
February 27.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal (with certificate) by Messrs. Dhanrajamal Gobindram against a judgment of the Divisional Bench of the High Court of Bombay, by which a petition under section 20 of the Indian was held to be maintainable and the decision of the learned Judge (Original Side) who held otherwise, was reversed.
The respondents are Messrs. Shamji Kalidas & Co. (a registered firm), who were the petitioners in the High Court.
The facts of the case are as follows: On October 24, 1957, Messrs. Dhanrajamal Gobindram (referred to as buyers, hereafter) entered into an agreement with Messrs. Shamji Kalidas & Co. (referred to as sellers, hereafter), for purchase of 500 bales of African raw cotton.
The contract was in the form of a letter 1023 written by the sellers and confirmed by the buyers.
The material portions of the letter, which bears No. SK/Bom/13/2014 and was stamped as an agreement, ' are as follows: "We confirm having sold to you African raw cotton on the following terms and conditions subject to the usual Force Majeure Clause: Description: ARBP 52 F. A. Q. Crop/58. Quality : 500 (Five Hundred) bales.
Price : at Rs. 1,401 nett per candy CIF Bombay.
Payment : Against shipping documents in Bombay.
Packing : 420 lbs.
approximately per bale.
Shipment : February/March 1958.
Remarks: The terms and conditions on the reverse form part of the contract.
This contract is subject to the Bye laws of East India Cotton Association, Ltd., Bombay, other than the bye law 35 for arbitration on Quality in case of East African cotton.
Terms and Conditions.
The shipment is subject to any cause beyond seller 's or seller 's shipper 's control and is also subject to availability of freight.
This contract is subject to the jurisdiction of the High Court of Bombay.
It will be the duty of the buyers to obtain the import licence and to communicate the number thereof to the sellers immediately on the same being obtained but in any event, not later than 20th February, 1958, and in the event of their failure to do so for any reasons whatsoever including the reason that the Government of India may not allow the imports of the contracted goods, the sellers shall be entitled at their discretion either to carry over the goods, in which event the buyers shall pay to the seller all carry over charges in addition to the contracted price or to call upon the buyers to pay for the contracted goods and take immediate delivery thereof in.
British East Africa and upon 1024 the buyers failing to do so, to sell the contracted goods at Kampala or Mombasa at the rates prevalent there in convenient lots and as and when it may be practicable to do so at the risk and account of the buyers and to claim from them any deficit that arise between the contracted price and such resale price and also all expense incidental thereto.
Even if the Government of India may announce the import policy of the contracted goods in such manner that only the consumers would be entitled to obtain the licences, it will be the duty of the buyers to see that necessary import licences for the contracted goods are obtained in the consumers ' name or in the joint names of themselves and those of the consumers the intention being that in all eventualities it is the duty of the buyers to obtain licences under any policy that may be followed by the Government of India for the import of the contracted goods and to communicate the number thereof to the sellers within the time as specified hereinabove and on the buyer 's failure to do so all the eventualities contemplated under clause 6 shall operate.
" By a letter dated November 30, 1957, the contract was later amended by the parties as follows : " With reference to the above mentioned contracts we hereby confirm that, if necessary, we shall carry over the contracted goods for two months, namely, March and April and you will pay as the carry over charges for the same.
The interest payable under such carry over charges will be at the rate prevalent in Mombasa.
The other terms and conditions remain unaltered. " The contract was not performed.
The sellers wrote as many as five letters between March 1, 1958, and May 26, 1958, before they received a reply from the buyers dated June 3, 1958.
By that time, the sellers had carried forward the contract, and also invoked their right of resale after giving notice, and claimed Rs. 34,103.
15 nP. for which a debit note had been issued.
This note was returned by the buyers with a letter of June 3, 1958, stating that the contract was 1025 void and/or illegal", that they were not obliged to perform it, that there was no right of any sale on their., account and/or on their behalf, and that the alleged" sale was not binding upon them.
[exhibit " D " (Colly) No. 6.] The sellers then invoked the arbitration clause of the agreement and Bye law 38 A of the Bye laws of the East India Cotton Association, Ltd., Bombay, and moved the Bombay High Court, on the Original Side, under section 20 of the Indian , requesting that the agreement be filed in Court and the dispute referred to arbitration.
The buyers appeared, and resisted the petition on grounds which they set forth in affidavits filed from time to time.
By their first affidavit dated July 31, 1958, the buyers contended that cls.
6 and 7, quoted above, were unlawful, as the liability created under them amounted to a contravention " of the import policy of Government of India " and the Foreign Exchange Regulation Act, 1947, and the Rules made thereunder.
They contended that, in view of the invalidity of the contract as a whole, the arbitration clause in the agreement was not binding, and that the agreement could not be filed.
In the second affidavit which was filed on February 4, 1959, they added the reason that the words " subject to the usual Force Majeure Clause " were vague and uncertain, and made the contract ' void ab initio, as there was no consensus ad item between the parties.
They contended that the con.
tract being void, the arbitration clause was also void.
By yet another affidavit filed on February 27, 1959, they averred that the letter dated November 30, 1957, was void, being in contravention of the Import Trade Control Act and the Foreign Exchange Regulation Act and the Rules made under the two Acts, inasmuch as the consideration was one forbidden by law and was likely to defeat the provisions of law.
They also stated that the words " if necessary " in that letter rendered the contract void ab initio for vagueness and uncertainty.
The case was heard by K. T. Desai, J. (as he then war,).
On March 3, 1959, the learned Judge dismissed 1026 the petition as not maintainable on the ground that ,the dispute was about the legality or validity of the contract including the agreement about arbitration, and that such a dispute could only be considered under sections 32 and 33 of the by the Court and not by the arbitrator in a reference under section 20 of the Act.
He declined to consider the question under the former sections, because the petition had not asked for that relief, observing that if by a proper petition the question were raised, it would be decided.
Against the order of the learned Judge (0. section), an appeal was filed by the sellers.
This appeal was heard by Chainani, C. J. and section T. Desai, J. on April 28, 1959.
The learned Judges held that a claim was made by the sellers and was denied by the buyers; that there was thus a dispute arising out of or in relation to a contract as contemplated by Bye law 38 A; that in showing cause against the petition under section 20, the buyers had averred that the contract was illegal and void; and that such a question could be decided by the Court before making the reference.
The learned Judges pointed out that a petition under sections 32 and 33 of the Indian questioning the existence or validity of an arbitration agreement was not to be expected from one making a claim under a contract, that the plea was always likely to be raised by one resisting the petition, and that when such a plea was raised, the Court must decide it, even though the proceedings be under section 20 of the Act for making a reference.
The case was, therefore, remanded with the following direction: " As the respondents have challenged the validity of this agreement, the Court will have to decide this question before passing further orders in the matter.
Accordingly we set aside the order passed by Mr. Justice K. T. Desai, dismissing the petition filed by the petitioners, and remand the matter to the trial court for deciding the objections, raised by the respondent under sub section (3) of section 20 of the Act, to the arbitration agreement being filed in Court, and then disposing of the matter in accordance with law." 1027 When the case went back for retrial, the buyers filed their fourth affidavit on November 16, 1959.
They stated in that affidavit that Bye law 38 A was a statutory Bye law of the East India Cotton Association, Ltd., Bombay, a recognised Institution under the Forward Contracts Regulation Act, No. 74 of 1952, and that section 46 of the was ap plicable.
They contended that inasmuch as the Bye laws of the Association prescribed a different machinery inconsistent with and repugnant to section 20 of the , the latter section was inapplicable, and that the petition was incompetent.
By his order dated November 26 and 27,1959, K. T. Desai, J. hold that the petition did not disclose sufficient materials, and that the sellers were not entitled to have the agreement of reference filed, or to have an order of reference made.
Though be held that the Bye laws of the East India Cotton Association, Ltd. were statutory, and that sections 46 and 47 of the applied, he was of opinion that section 20 could not be invoked, because no action under sub section
(4) of a. 20 could be taken.
The reason given by the learned Judge was that under that sub section the Court had to appoint an arbitrator, if the parties failed to agree, and that sub section was not applicable, because the machinery of Bye law 38 A left no power of action to the Court.
He also felt that there was no averment in the petition that the parties had not agreed.
On the rest of the points raised by the buyers in their affidavits, the learned Judge held against them.
He held that, in view of sections 21(2) and 21(3) of the Foreign Exchange Regulation Act, there was no infringement of that Act by the agreement entered into, though he expressed a doubt if the words " legal proceedings " in section 21(3) were wide enough to include an arbitration.
He also held that cl. 7 of the conditions under which the contract was to be performed was, at least in part and under certain circumstances, not a contravention of the Import and Export Control Act, 1947, or the Import Trade Control Order issued Under sections 3 and 4 A of that Act, and thus not wholly void.
He held lastly that the contract was not void for vagueness or 1028 uncertainty either on account of the reference to " the usual Force Majeure Clause ", or because of the words if necessary " in the letter of November 30, 1957.
The sellers appealed against the dismissal of the petition, and the buyers cross objected against the adverse findings and the disallowance of costs.
The appeal was heard by Tarkunde and Chitale, JJ., and by separate but concurring judgments, the appeal was allowed and the cross objection dismissed, and the buyers were ordered to pay costs throughout.
The Divisional Bench agreed with K. T. Desai, J. on all the points decided by him against the buyers.
They left open the question whether " legal proceedings " in section 21(3) of the Foreign Exchange Regulation Act were wide enough to include an arbitration for the decision of the arbitrators to be appointed, and addressing themselves to the question raised about section 20, held that the petition was maintainable.
They were of opinion that the Court could order the arbitration agreement to be filed and also to refer the dispute to arbitrators to be chosen in accordance with Bye law 38 A, though they felt that if the latter action could not be taken, at least the first could be, because the procedural part could not destroy the power conferred to file the agreement.
In this appeal, all the arguments which had failed before the High Court were urged before us.
Shortly stated, they are: that the contract was void (a) for illegality and (b) for uncertainty and vagueness on two grounds; that the petition under section 20 of the Indian was incompetent, as that section was inapplicable; and that the law governing the parties was not the Indian law but the law of British East Africa.
We shall now deal with these contentions.
The first contention is that cl. 7 of the agreement involves a breach of the Foreign Exchange Regulation Act.
Reliance is placed upon section 5 of the Act, which reads as follows: " (5) Restrictions on payment8. (1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this subsection which may be granted conditionally or 1029 unconditionally by the Reserve Bank, no person in, or resident in, British India shall (e) make any payment to or for the credit of any person as consideration for or in association with(1) the receipt by any person of a payment or the acquisition by any person of property outside India; (ii) the creation or transfer in favour of any person of a right whether actual or contingent to receive a payment or acquire property outside India: " It is contended that the agreement envisaged (a) payments for goods in Africa against shipping documents, (b) payment in Africa of carrying over charges, and (c) in the event of resale, payment of deficit also in Africa.
It is also contended that the two clauses (6 and 7) contemplate acquisition of property in Africa.
The clauses, it is submitted, also involved acquisition of foreign exchange, if the goods were resold in Africa and credit for the price was given to the buyers.
This, it is argued, was a breach of section 5, unless there was a general or special exemption granted by the Reserve Bank in connection with this contract, and that no such exemption was in existence when the contract was made.
In this connection, section 21 of the Foreign Exchange Regulation Act may be read.
It provides: " 21.
Contracts in evasion of this Act. (1) No person shall enter into any contract or agreement which would directly or indirectly evade or avoid in any way the operation of any provision of this Act or of any rule, direction or order made thereunder.
(2) Any provision of, or having effect under, this Act that a thing shall not be done without the permission of the Central Government or the Reserve Bank, shall not render invalid any agreement by any person to do that thing, if it is a term of the agreement that thing shall not be done unless permission is granted by the Central Government or the Reserve Bank, as the case may be; and it shall be an implied term of every contract governed 1030 by the law of any part of British India that anything agreed to be done by any term of that contract which is prohibited to be done by or under any of the provisions of this Act except.
with the permission of the Central Government or the Reserve Bank, shall not be done unless such permission is granted.
(3) Neither the provisions of this Act nor any term (whether expressed or implied) contained in any contract that anything for which the permission of the Central Government or the Reserve Bank is required by the said provisions shall not be done without that permission, shall prevent legal proceedings being brought in British India to recover any sum which, apart from the said provisions and any such term, would be due, whether as a debt, damages or otherwise, but (a) the said provisions shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums; and (b) no steps shall be taken for the purpose of enforcing any judgment or order for the payment of any sum to which the said provisions apply except as respects so much thereof as the Central Government or the Reserve Bank, as the case May be, may permit to be paid; and (c) for the purpose of considering whether or not to grant such permission, the Central Government or the Reserve Bank, as the case may be, may require the person entitled to the benefit of the judgment or order and the debtor under the judgment or order, to produce such documents and to give such information as may be specified in the requirement.
" No doubt, sub section (1) prohibits contracts in contravention or evasion, directly or indirectly, of the Foreign Exchange Regulation Act, and if there was nothing more, then the argument would be understandable.
But, sub section
(2) provides that the condition that a thing shall not be done without the permission of the Reserve Bank shall not render an agreement 1031 invalid, if it is a term of the agreement that the thing shall not be done unless permission is granted by the Central Government or the Reserve Bank and further that it shall be an implied term of every contract governed by the law of any part of India that anything agreed to be done by any term of that contract, which cannot be done except with the permission of the Reserve Bank, shall not be done, unless permission is granted.
Sub section (3) allows legal proceedings to be brought to recover sum due as a debt, damages or otherwise, but no steps shall be taken to enforce the judgment, etc., except to the extent permitted by the Reserve Bank.
The effect of these provisions is to prevent the very thing which is claimed here, namely, that the Foreign Exchange Regulation Act arms persons against performance of their contracts by setting up the shield of illegality.
An implied term is engrafted upon the contract of parties by the second part of sub section
(2), and by sub section
(3), the responsibility of obtaining the permission of the Reserve Bank before enforcing judgment, decree or order of Court, is transferred to the decree holder.
The section is perfectly plain, though perhaps it might have been worded better for which a model existed in England.
It is contended that section 21 uses the word " permission ", while section 5 speaks of an exemption, and that sections 21(2) and 21(3) do not cover the prohibition in a. 5.
The Foreign Exchange Regulation Act, no doubt, uses diverse words like, " authorise ", " exempt " and " permission " in different parts.
The word " exempt " shows that a person is put beyond the application of law, while " permission " shows that he is granted leave to act in a particular way.
But the word SC permission " is a word of wide import.
" Permission " in this section means only leave to do some act which but for the leave would be illegal.
In this sense, exemption is just one way of giving leave.
If one went only by the word and searched for those sections where the word " permission " is expressly used, sections 21(2) and (3) are likely to prove a dead letter.
This could not have been intended, and the very 1032 elaborate provisions in those sub sections show that those matters were contemplated which are the subject of prohibition in section 5.
In our opinion, the argument is without foundation.
The contention, that on resale the price would have accrued to the buyers in the first instance, as the sellers would be acting as the agents of the buyers, is also incorrect.
It has been rightly pointed out by K. T. Desai, J. that the right of resale given by sections 54(2) and (4) of the Indian Sale of Goods Act is exercised by the seller for himself and not as an agent of the buyer, when the latter is given a notice of sale.
This is indeed clear from the fact that the buyer is not entitled to the profit on resale in that contingency, though liable for damages.
The position is different when no notice is so sent.
Then the profits go to the buyer.
Perhaps, in that event it may be possible to say that the seller acted as an agent.
But, in the case of resale with prior notice, there is no payment to the buyer and no contravention of the Foreign Exchange Regulation Act.
The contention that the contract involved an actual or, at least, a contingent right to or acquisition of property abroad is not correct.
Even if it were so, the contract is saved by section 21, as already explained.
In our opinion, the contract was not void for illegality.
The agreement is said to be void because of vagueness and uncertainty arising from the use of the phrase " subject to the usual force majeure clause ".
The argument is that there was no consensus ad idem, and that the parties had not specified which force majeure clause they had in mind.
We were taken through the Encyclopaedia of Forms and Precedents and shown a number of force majeure clauses, which were different.
We were also taken through a number of rulings, in which the expression force majeure " had been expounded, to show that, there is no consistent or definite meaning.
The contention thus is that there being no consensus ad idem, the contract must fail for vagueness or uncertainty.
The argument, on the other side, is that this may be regarded as a surplusage, and, if meaningless, ignored.
It is 1033 contended by the respondents that the addition of the word " usual" shows that there was some clause which used to be included in such agreements.
The ' respondents also refer to section 29 of the Indian Contract Act, which provides: "Agreements, the meaning of which is not certain, or capable of being made certain, are void, " and emphasise the words " capable of being made certain ", and contend that the clause was capable of being made certain, and ex facie, the agreement was not void.
McCardie J. in Lebeaupin vs Crispin (1) has given an account of what is meant by "force majeure " with reference to its history.
The expression "force majeure " is not a mere French version of the Latin expression" Vis major ".
It is undoubtedly a term of wider import.
Difficulties have arisen in the past as to what could legitimately be included in "force majeure ".
Judges have agreed that strikes, break down of machinery, which, though normally not included in" Vis Major" are included in "force majeure ".
An analysis of rulings on the subject into which it is not necessary in this case to go, shows that where reference is made to "force majeure ", the intention is to save the performing party from the consequences of anything over which he has no control.
This is the widest meaning that can be given to " force majeure ", and even if this be the meaning, it is obvious that the condition about "force majeure, " in the agreement was not vague.
The use of the word " usual " makes all the difference, and the meaning of the condition may be made certain by evidence about a force majeure clause, which was in contemplation of parties.
Learned counsel for the appellants relies strongly on a, decision of McNair, J. in British Industries vs Patley Pressings(2).
There, the expression used was "subject to force majeure conditions ".
The learned Judge held that by conditions " was meant.
clauses and not contingencies or circumstances, and that there being a variety of force majeure clauses in the trade, there (1) (2) 1034 was no concluded agreement.
The: case is distinguish.
able, because the reference to force majeure clauses was left at large.
The addition of the word " usual " makes it clear that here some specific clause was in the minds of the parties.
Learned counsel also relies upon a decision of the House of Lords in Scammell (G.) and Nephew Ltd. vs Ouston (H.C. and J.G.) (1), where the reference to " on hire purchase terms" was held to be too vague to constitute a concluded contract.
It will appear from the decision of the House of Lords that the clause was held to be vague, because no precise meaning could be attributed to it, there being a variety of hire purchase clauses.
The use of the word "usual" here, enables evidence to be led to make certain which clause was, in fact, meant.
The case of the House of, Lords does not, therefore, apply.
Both the cases to which we have referred were decided after parties had entered on evidence, which is not the case here.
Our case is more analogous to the decision referred to in Bishop & Baxter Ld.
vs Anglo Estern Trading & Industrial Co. Ld.
(2), namely, Shamrock section section Co. vs, Storey (3).
In speaking of the condition there, Lord Goddard observed as follows: " Abbreviated references in a commercial instrument are, in spite of brevity, often self explanatory or susceptible of definite application in the light of the circumstances, as, for instance, where the reference is to a term, clause, or document of a wellknown import like c.i.f. or which prevails in common use in a particular place of performance as may be indicated by the addition of the epithet 'usual ' : see Shamrock section section Co. vs Storey (a), where 'usual colliery guarantee ' was referred to in a charter party in order to define loading obligations.
" The addition of the word " usual " refers to something which is invariably to be found in contracts of a particular type.
Commercial documents are sometimes expressed in language which does not, on its face, bear a clear meaning.
The effort of Courts is to give a meaning, if possible.
This was laid down by the (1) (2) (3) , 1035 House of Lords in Hillas & CO.
vs Arcos Ltd. 1, and the observations of Lord Wright have become classic, and have been quoted with approval both by the Judicial Committee and the House of Lords ever since.
The latest case of the House of Lords is Adamastos Shipping Co. Ltd. vs Anglo Saxon Petroleum Co. Ltd.(2).
There, the clause was " This bill of lading ", whereas the document to which it referred was a charter party.
Viscount Simonds summarised all the rules applicable to construction of commercial documents, and laid down that effort should always be made to construe commercial agreements broadly and one must not be astute to find defects in them, or reject them as meaningless.
Applying these tests to the present case and in the light of the provisions of section 29 of the Indian Contract Act, it is clear that the clause impugned is capable of being made certain and definite by proof that between the parties or in the trade or in dealings with parties in British East Africa, there was invariably included a force majeure clause of a particular kind.
In 'our opinion, the contract was not void for vagueness or uncertainty by reason of the reference in the terms stated, to the force majeure clause.
Mr. Daphtary posed the question as to on whom was the burden of proving the usual force majeure clause.
In our opinion if the agreement is not void for uncertainty, that question would be a matter for the decision of the arbitrators.
It is too early to say by what evidence and by whom the usual force, majeure clause must be established.
The next ground on which it is said that the agreement was void for uncertainty has reference to the employment of the words " if necessary " in the letter of November, 30, 1957.
The effect of that letter is to make an alteration in cl. 6 of the agreement, which has been quoted already.
Under that clause, the buyers were to obtain the import licence and to communicate the number thereof to the sellers not later than February 20, 1958, and in the event of their failure to do so for any reason whatsoever, the sellers (1) ; (2) , 153.
132 1036 were entitled "at their discretion " either to carry over the goods or to ask the buyers to pay for the contracted goods and take delivery in British East Africa.
By that letter, the sellers confirmed that " if necessary " they would carry over the contracted goods for two months, namely, March and April, subject to payment of charges.
It is contended that the words " if necessary " are entirely vague and do not show, necessary for whom, when and why.
In our opinion, this argument has no force whatever.
Under cl. 6, the sellers had an absolute discretion either to carry over the goods or to insist on delivery being taken.
By this letter, they have said that, if necessary, that is to say.
if the buyers find it difficult to supply the number of the import licence, the contract would be carried over to March and April.
By this amendment, the sellers surrendered to a certain extent their absolute discretion.
The clause means that the contract was not extended to March and April, but that the sellers would extend it to that period,.
if occasion demanded.
Since both the parties agreed to this letter and the buyers confirmed it, it cannot be said that there was no consensus ad idem, or that the whole agreement is void for uncertainty.
We shall now consider the next argument, which was very earnestly urged, before us.
It is that section 20 of the cannot be made applicable to this case at all.
We have already quoted extracts from the agreement which include the clause by which the Bye laws of the East India Cotton Association Ltd., Bombay, were applied to this contract, except Bye law 35,which deals with arbitration on quality in case of East African cotton.
Bye law 1(B) relates to East African cotton, and it says that Bye laws 1 to 46 inclusive (with certain exceptions) shall apply to contracts in respect of East African cotton.
It was conceded before the High Court and also before us that the Bye laws are statutory.
The buyers were members of the Association but not the sellers; but the Bye laws on arbitration, with which we are concerned, include arbitrations between a member and a 1037 non member.
We are concerned directly with Bye law 38 A. Bye law 38 A in its opening portion, reads: All unpaid claims, whether admitted or not, and all disputes (other than those relating to quality) arising out of or in relation to contracts (whether forward or ready and whether between members or between a, member and a non member) made subject to these Bye laws shall be referred to the arbitration of two disinterested persons one to be chosen by each party.
The arbitrators shall have power to appoint an umpire and shall do so if and when they differ as to their award.
" Then follow certain provisions, which were stressed but which need not be quoted in extension Shortly stated, they are that the arbitrators must make their award in 15 days, unless time be extended by the Chairman.
The umpire is to be appointed within 15 days or such extended period as may be fixed by the Chairman and the umpire is to make his award within 10 days, unless time be extended by the Chairman.
In case of disagreement or failure of a party to appoint an arbitrator, the Chairman may appoint an arbitrator, and similarly the Chairman is to appoint the umpire and he may even appoint himself.
Other powers are conferred on the Chairman, who is the Chairman of the Board of Directors of the East India Cotton Association Ltd. The contention is that arbitrations under the , like those under Sch.
11 of the Code of Civil Procedure, are of three kinds described by Lord Macnaghten in Ghulam Jilani vs Muhammad Hassan (1), and that this belongs to the second category there described, in which " all further proceedings are under the supervision of the Court ".
It is argued that by the application of the Bye laws, the Court is left no powers under section 20 which is being invoked, and that section 20 cannot thus apply.
Section 20 of the , in so far as it is material to this point, is as follows: " 20.
Application to file in Court arbitration agreement. (1) Where any persons have entered into an (1) (1901) L.R. 29 I.A. 51, 56, 57.
1038 arbitration agreement before the, institution of any suit with respect to the subject matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court.
(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.
(4) Where no sufficient cause is shown, the Court shall order the agreement to be filed and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court.
(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.
" The sellers rely upon cl.
(5), which enjoins the application of the provisions of the , so far as they can be made applicable.
Reference is then made to provisions of Chap.
II and the Schedule of the Act laying down the powers of the Court, and they are contrasted with the provisions of the Bye. laws to show that if the latter prevail, no residuum of power is left to the Court, and that after filing the agreement, the Court must abdicate in favour of the Chairman and the Act, in terms, ceases to apply.
Reference is also made to section 47 of the , which provides: "Subject to the provisions of section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder " ' (Proviso omitted) 1039 The opening words of section 47 takes us to a. 46, which may be read at this stage.
It provides: "The provisions of this Act, except subsection (1) of section 6 and sections 7, 12, 36 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as this Act is inconsistent with that other enactment or with any rules made thereunder." Section 46 makes the provisions of any other enactment or any rules made thereunder to prevail over the , if inconsistent with the latter.
In view of these several provisions, it is clear that the applies to all arbitrations and Chap.
III makes it applicable also to arbitrations, in which the arbitration agreement is asked to be filed in Court under section 20, subject, however, to this that the provisions of any other enactment or rules made thereunder, if inconsistent with the , are to prevail.
Learned counsel for the buyers contends that nothing is saved of the Act.
This is not correct.
To begin with, questions as to the existence or validity of the agreement are saved from decisions by arbitrators or umpires, however appointed.
Since such a plea can only be raised in bar of an application by persons seeking a reference to arbitration, at least that portion of the Act still applies, and that power can only be exercised by the Court.
Other provisions of Chap.
II, like sections 15 and 16, still remain applicable.
We need not give a list of all the provisions which may be saved, because that will involve an examination side by side, of the sections of the Act and the provisions of the Bye laws.
So long as something is saved, it cannot be said that the Court after receiving the agreement and ordering that it be filed, becomes completely functus officio.
But the crux of the argument is that the provisions of tub.a.
(4) of section 20 read with sub s.(1), ibid., cannot apply, and the Court, after filing the agreement, will have 1040 to do nothing more with it, and this shows that section 20 is not applicable.
This argument overlooks the fact that this is a statutory arbitration governed by its own rules, and that the powers and duties of the Court in sub section
(4) of section 20 are of two distinct kinds.
The first is the judicial function to consider whether the arbitration agreement should be filed in Court or not.
That may involve dealing with objections to the existence and validity of the agreement itself.
Once that is done, and the Court has decided that the agreement must be filed, the first part of its powers and duties is over.
It is significant that an appeal under section 39 lies only against the decision on this part of sub section
Then follows a ministerial act of reference to arbitrator or arbitrators appointed by the parties.
That also was perfectly possible in this case, if the parties appointed the arbitrator or arbitrators.
If the parties do not agree, the Court may be required to make a decision as to who should be selected as an arbitrator, and that may be a function either judicial, or procedural, or even ministerial; but it is unnecessary to decide which it is.
In the present case, the parties by their agreement have placed the power of selecting an arbitrator or arbitrators (in which we include also the umpire) in the hands of the Chairman of the Board of Directors of the East India Cotton Association, Ltd., and the Court can certainly perform the ministerial act of sending the agreement to him to be dealt with by him.
Once the agreement filed in Court is sent to the Chairman, the Bye laws lay down the procedure for the Chairman and the appointed arbitrator or arbitrators to follow, and that procedure, if inconsistent with the , prevails.
In our opinion, there is no impediment to action being taken under section 20(4) of the .
We may dispose of here a supplementary argument that the dispute till now is about the legal existence of the agreement including the arbitration clause, and that this is not a dispute arising out of, or in relation to a cotton transaction.
Reference was made to certain observations in Heyman vs Darwins Ltd.(1).
In (1) 1041 our opinion, the words of the Bye law "arising out 'of or in relation to contracts" are sufficiently wide to comprehend matters, which can legitimately arise under section 20.
The argument is that, when a, party questions the very existence of a contract, no dispute can be said to arise out of it.
We think that this is not correct, and even if it were, the further words " in relation to " are sufficiently wide to comprehend even such a case.
In our opinion, this argument must also fail.
It was contended lastly that the law applicable to the case is the lex loci solutionis, that is to say, the law of British East Africa.
Reference was made to a passage from Pollock and Mulla 's Contract Act, Eighth Edn., p. 11, where it is observed as follows: " In ordinary circumstances the proper law of a contract (to use Mr. Dicey 's convenient expression) will be the law of the country where it is made.
But where a contract is made in one country and to be performed wholly or in part in another ', the proper law may be presumed to be the law, of the country where it is to be performed." (Auckland Corporation vs Alliance Assurance Co.) (1) The learned authors observe, on the same page further : "But these rules are only in the nature of presumptions, and subject to the intention of the parties, whether expressly declared or inferred from the terms and nature of the contract and the circumstances of the case.
" Reliance was also placed on Chitty 's Law of Contract and Rule 148, sub r.
(3), Second Presumption, in Dicey 's Conflict of Laws, Seventh Edn., p. 738, on which the statement of the law in Pollock and Mulla is based.
Whether the proper law is the lex loci contracts or lex loci solutionis is a matter of presumption; but there are accepted rules for determining which of them is applicable.
Where the parties have expressed themselves, the intention so expressed overrides any presumption.
Where there is no expressed intention, (1) ; 1042 then the rule to apply is to infer the intention from the terms and nature of the contract and from the general circumstances of the case.
In the present case, two such circumstances are decisive.
The first is that the parties have agreed that in case of dispute the Bombay High Court would have jurisdiction, and an old legal proverb says, " Qui elicit judicem eligit jus" If Courts of a particular country are chosen, it is expected, unless there be either expressed intention or evidence, that they would apply their own law to the case.
See N. V. Kwick Who Tang vs James Finlay & Co. (1).
The second circumstance is that the arbitration clause indicated an arbitration in India.
of such arbitration clauses in agreements, it has been said on more than one occasion that they lead to an inference that the parties have adopted the law of the country in which arbitration is to be made.
See Hamlyn & Co. vs Tallisker Distillery (2), and Spurrier vs La Cloche (3).
This inference, it was said in the last case, can be drawn even in a case where the arbitration clause is void according to the law of the country where the contract is made and to be performed.
In our opinion, in this case, the circumstances clearly establish that the proper law to be applied is the Indian Law.
In the result, the appeal fails, and is dismissed with costs.
Appeal dismissed.
[/INST]A terminal tax on goods imported by road or rail was imposed by the Amravati Municipality by virtue of a notification dated August 10, 1916.
This notification exempted silver, bullion and coins from the operation of this tax.
When terminal taxes on goods imported by rail were assigned exclusively to the Federal Centre under the Government of India Act, 1935, the municipality was authorised by section 143 to continue to levy the terminal taxes which were actually levied before the enforcement of the Act.
Likewise, the terminal taxes imposed by the pre Constitution notification were allowed to be levied and collected even after the Constitution came into force by virtue of article 277 of the Constitution.
In 1960, the Municipality levied terminal taxes on three new items, viz., silver and silver jewellery, gold and gold jewellery and precious stones.
In a writ petition filed under article 226 of the Constitution, the validity of the newly imposed terminal tax was challenged by the respondent who was carrying on business, within the limits of the Municipality, in gold, silver and precious stones on the ground of legislative incompetence.
The writ petition was granted by the High Court and the appellant came to this court after obtaining a certificate of fitness from the High Court.
Dismissing the appeal: Held: The newly imposed terminal taxes on silver and silver jewellery, gold and gold jewellery and precious stones had never been imposed by the Municipality and hence it could not be said that those were "being lawfully levied" by the Municipality and "applied to the same purposes" before the commencement of the Constitution as required by article 277 of the Constitution.
article 277 was not intended to confer an unlimited legislative power to impose what in effect were new taxes, though of the same type or nature as existed before the Constitution.
Rama Krishna Ramanath vs The Janpad Sabha, Gondia, [1962] Supp. 3 S.C.R. 70 and Chuttilal vs Bagmal and Balwantrai, I.L.R. [1956] M.B. 339.
referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 1689 Of 1974 From the Judgment and Order dated 31st August, 1972 of the Madras High Court in Appeal No. 357 of 1965.
B.B. Ahuja and Ms. A. Subhashini for the Appellant.
A.T.M. Sampath and P.N. Ramalingam for the Respondents.
The Judgment of the Court was delivered by 177 PATHAK, J.
This appeal by special leave arises out of a suit instituted by the appellant for a declaration that a sale deed of immoveable properties and the transfer of moveables belonging to the respondent limited company in favour of the respondent firm are invalid, inoperative and not binding on the appellant and other creditors of the respondent limited company.
A suit was instituted by the Union of India, the appellant before us, alleging that the Krishna Oil Mills and Industries Ltd., a public limited company registered under the Indian Companies Act, 1913 was carrying on business in the manufacture and sale of tin cans and aerated water.
It entered into a partnership in September 1952 with Rajeswari and Co., which was carrying on business in the pressing of cotton bales.
Under the partnership agreement Rajeswari & Co. was to install a cotton baling press in the buildings of the Company and the business would be carried on under the name Rajapalayam Cotton Pressing Factory, with the profits being divided between the Company and Rajeswari & Co. in the ratio of 7 to 9 respectively.
This was replaced by another agreement in 1954, but the business was carried on in the same name and the profits divided in the same shares.
It was alleged that the Company incurred losses in its own business year after year and from 1954 the only income derived by it flowed from the shares held by it in the partnership business.
It was alleged that the Company had in fact ceased to carry on its own business, but in computing the income of the Company from the assessment year 1956 57 to the assessment year 1959 60 the losses suffered during the previous years from the Company 's own business were allowed to be carried forward and set off against its share of income from the partnership Firm.
Subsequently the Income tax authorities decided to reopen the assessment proceedings under section 34 of the Indian Income tax Act, 1922 and, it is said, this was communicated to the Company.
The processing of the case took time and the notices under section 34 were issued for the different assessment years on March 6, 1961 and March 7, 1961.
It was alleged that meanwhile, the Company, having come to know of the proposed re opening of its income tax assessments, began to dispose of its moveable and immoveable assets with a view to defeat the claim of the Union of India and to place the properties beyond the reach of the creditors of the company.
The assets of the company were transferred in favour of Rajeswari & Co. and the sale proceeds were employed for paying off the debts due to various creditors who, it is said, included also the close relations and friends of the Directors of the Company.
In the result, there was nothing left for paying off the tax arrears of the Company.
178 The suit was resisted by the Company, which in its written statement, admitted that it was working at a loss for some years and was obliged to replace its original business of seed crushing and oil extraction by a more modest business activity, and in its circumstances it entered into a partnership with Rajeswari & Co. for carrying on the business of pressing cotton bales.
It denied that when disposing of its assets it was aware of the intention of the income tax authorities to reopen its assessments.
It pleaded that because of action threatened by the Registrar of Joint Stock Companies in 1959 it was compelled to consider its position and to decide in a General Body meeting in June 1960 to dispose of the assets of the company.
It was also stated that the partnership agreement of 1954 between the Company and Rajeswari & Co. stipulated that Rajeswari & Co., should have first preference if the Company proposed to sell its assets.
The right of pre emption was pressed by Rajeswari & Co. and, therefore, a resolution was passed in February 1961 at another Extraordinary Meeting of the Company to sell the lands and buildings at a valuation to be fixed by expert opinion.
It was asserted that the assets were sold to Rajeswari & Co. and the sale proceeds were distributed to the creditors so that all the creditors were paid off.
Rajeswari & Co. also filed a written statement in opposition to the suit and besides asserting that it had installed cotton bale presses in the buildings of the Company pursuant to the partnership agreement between them it denied any fraudulent intent in purchasing the assets of the Company.
It asserted that it acted in good faith and paid value for the properties.
The trial court decreed the suit on Appril 27, 1965.
Rejeswari & Co. appealed to the High Court of Madras, and the High Court allowed the appeal, set aside the trial court decree and dismissed the suit.
The High Court held in substance that the Union of India had failed to satisfy the provisions of section 53 of the inasmuch as the evidence showed that the Company had utilised the sale proceeds arising upon the transfer of its assets in paying off all its other creditors, and that even if the Company had done so in order to avoid payment of its income tax dues no relief could be granted to the Union of India.
In this appeal it is urged for the Union of India that the transfer of assets was effected in favour of a person who was not a creditor, that the assets had been under valued and that there was evidence to show 179 that the benefit of the sale proceeds was enjoyed by the Directors of the Company who were also partners of Rajeswari & Co. Section 53 of the provides that every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
A long line of cases has held that the preference by a debtor of one creditor over the others is not ipso facto deemed fraudulent, and reference may be made to Musahar Sahu and Another vs Hakim Lal and Another, L.R. 43 Indian Appeals 104 where the Judicial Committee of the Privy Council quoted Palles C.B., who said in In re Moroney , 62: "The right of the creditors, taken as a whole, is that all the property of the debtor should be applied in payment of demands of them or some of them, without any portion of it being parted with without consideration or reserved or retained by the debtor to their prejudice.
Now it follows from this that security given by a debtor to one creditor upon a portion of or upon all his property (although the effect of it, or even the interest of the debtor in making it, may be to defeat an expected execution of another creditor) is not a fraud within the statute; because notwithstanding such an act, the entire property remains available for the creditors or some or one of them, and as the statute gives no right to rateable distribution, the right of the creditors by such act is not invaded or affected.
" The Judicial Committee explained that "the transfer which defeats or delays creditors is not an instrument which prefers one creditor to another; but an instrument which removes property from the creditors to the benefit of the debtor.
The debtor must not retain a benefit for himself.
He may pay one creditor and leave another unpaid: Middleton vs Pollock. , 108.
So soon as it is found that the transfer here impeached was made for adequate consideration in satisfaction of genuine debts, and without reservation of any benefit to the debtor, it follows that no ground for impeaching it lies in the fact that the plaintiff who also was a creditor was a loser by payment being made to this preferred creditor there being in the case no question of bankruptcy.
" This proposition of law was re affirmed by the Judicial Committee subsequently in MA PWA MAY and another vs S.R.M.M.A Chettyar Firm, 56 Indian Appeals 379.
180 It seems clear that it is open to a debtor to prefer one or more creditors over the others in the payment of his debts, and so long as he retains no benefit in the property the mere circumstance that some creditors stand paid while others remain unpaid does not attract the provisions of section 53 of the .
It is not disputed that the debts satisfied by payment of the sale proceeds are genuine.
A faint attempt was made to show that some of the debts discharged were owed to persons who were also Directors of the Company.
There is no findings by the High Court in support of that contention.
It was also urged that the consideration which passed for the sale of the assets was inadequate and that the assets had been undervalued.
Here again there is no finding to support the submission.
The questions raised are questions of fact, and this Court will not permit such questions to be raised unless there is material evidence which has been ignored by the High Court or the finding reached by the Court is perverse.
A point was sought to be made by learned counsel for the appellant that the transfer of the assets was effected in favour of Rajeswari & Co. which was not one of the creditors.
It has been found by the High Court that the sale was effected for the purpose of discharging the debts payable by the Company.
Once it is also found that the consideration was not inadequate it is immaterial, as the High Court has observed, that the transfer was effected in favour of a person who was not a creditor.
It has been clearly found that the sale proceeds were employed for paying off the creditors of the Company.
It appears that in consequence of the impugned transfer effected by the Company the appellant has been unable to recover a sum of Rs.28,240 assessed as income tax in October 1961.
It rested its suit on section 53 of the .
Having regard to the findings rendered by the High Court on the consideration of material on the record and upon an interpretation of section 53 which that provision has uniformly received this appeal cannot be sustained.
The appeal fails and is dismissed with costs.
P.S.S. Appeal dismissed.
[/INST]A public limited company, working at a loss, having come to know of the proposal of the Department to reopen its income tax assessments for the previous years, disposed of its assets to the respondent firm, with which it had a partnership business, and employed the proceeds in paying off the debts due to various creditors, with the result that nothing was left for paying off the tax arrears of the company.
A suit under section 53 of the was instituted by the Union of India appellant for a declaration that the sale deed in favour of the respondent firm was invalid, inoperative and not binding on the appellant and other creditors of the transferor company and alleging fraudulent intent to defeat legitimate claims, which was decreed by the trial court.
The High Court, however, allowed the appeal holding that the appellant had failed to satisfy the provisions of section 53 inasmuch as the evidence showed that the company had utilised the proceeds arising upon the transfer of its assets in paying off all its other creditors, and that even if the company had done so in order to avoid payment of its income tax dues no relief could be granted to the appellant.
In this appeal by special leave it was urged for the appellant that the transfer was effected in favour of a person who was not a creditor, that the assets had been undervalued and that there was evidence to show that the benefit of the sale proceeds was enjoyed by the directors 176 of the company, who were also partners of the respondent firm.
Dismissing the appeal, the court, ^ HELD: It is open to a debtor to prefer one or more creditors over the others in the payment of his debts, and so long as he retains no benefit in the property the mere circumstance that some creditors stand paid while others remain unpaid, does not attract the provision of section 53 of the .
[180A B] Musahar Sahu and Another vs Hakim Lal and another, L.R. 43 Indian Appeals 104, In re Moroney, , 62, Middleton vs Pollock, , 108 and MA PWA MAY and another vs S.R.M.M.A. Chettyar Firm, 56 Indian Appeals 379, referred to.
In the instant case, there was no finding by the High Court in support of the contention that some of the debts discharged were owed to persons who were also directors of the company or that the consideration which passed for the sale of the assets was inadequate and that the assets had been undervalued.
This Court will not permit such questions of fact to be raised unless there is material evidence which has been ignored by the High Court or the finding reached by the Court is perverse.
[180B C] It has been found by the High Court that the sale was effected for the purpose of discharging genuine debts payable by the company and that the sale proceeds were really employed for paying off the creditors of the company.
Once it was also found that the consideration was not inadequate, it was immaterial that the transfer was effected in favour of a person who was not a creditor.
[180D E]
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<s>[INST] Summarize the judgementon (Civil) No. 491 of 1991.
(Under Article 32 of the Constitution of India) WITH TRANSFER PETITION (CIVIL) No, 278 of 1991.
(Under Article 139 A(i) of the Constitution of India) WITH WRIT PETITION (CIVIL) Nos.
541,542 & 560/91 G. Ramaswamy, Attorney General, Altar Ahmad, Addl.
Solicitor General, Shanti Bhushan, Ram Jethmalani, P.P. Rao, Kapil Sibal, P.R.Krishnan, Ms. Indira Jaisingh, Ashok Desai, Hardev Singh, P.S. Poti, Danial Latifi, Rajinder Sachhar, M.K. Ramamurthy, R.K. Garg, S.K. Dholakia, Santosh Hegde, V.N. Ganpule, Tapas Ray, N.B. Shetye, Jayant Bhushan, Mohan Rao, Prashant Bhushan, Ms. Kamini Jaiswal, A.K. Srivastava, Manoj Wad, Ms. Rashmi Kathpalia, Ms. Nina Dikshit, E.M.S. Anam, Rajiv K. Garg, N.D. Garg, G.D. Sharma, Sudhir Walia, A.M. Khanwilkar, Mrs. Anil Katiyar, Ms. A. Subhashini, R.S. Suri, M. Veerappa, K.R. Nambiar, Harish Uppal (appeared in person) and P.H. Parekh for the appearing parties.
The Judgment of the Court was delivered by B.C. RAY, J.
These writ petitions raise certain consti tutional issues of quite some importance bearing on the construction of Articles 121 and 124 of the Constitution of India and of the "The Judges 25 (Inquiry) Act, 1968" even as they in the context in which they are brought, are somewhat unfortunate.
Notice was given by 108 members of the 9th Lok Sabha, the term of which came to an end upon its dissolution, of a Motion for presenting an Address to the President for the removal of Mr. Justice V.Ramaswami of this Court.
On 12th March, 1991, the motion was admitted by the then Speaker of the Lok Sabha who also proceeded to constitute a Committee consisting of Mr. Justice P.B. Sawant, a sitting Judge of this Court, Mr. Justice P.D. Desai, Chief Justice of the High Court of Bombay, and Mr. Justice O. Chinappa Reddy, a distinguished jurist in terms of Section 3(2) of The .
The occasion for such controversy as is raised in these proceedings is the refusal of the Union Government to act in aid of the decision of the Speaker and to decline to notify that the services of the two sitting Judges on the Committee would be treated as "actual service" within the meaning of Para 11(b) (i) of of the II Schedule to the Constitu tion.
It is said that without such a notification the two sitting Judges cannot take time off from theft court work.
The Union Government seeks to justify its stand on its understanding that both the motion given notice of by the 108 Members of the Lok Sabha for presenting an Address to the President for the removal of the Judge concerned as well as the decision of the Speaker of the 9th Lok Sabha to admit the motion and constitute a Committee under the provisions of the have lapsed with the dissolution of the 9th Lok Sabha.
Constitutional issues of some importance, therefore, arise as to the constitutional and the legal position and status of a Motion for the removal of a Judge under a law made pursuant to Article 124(5) of the Constitution and as to whether the Doctrine of Lapse would apply to such a Motion upon the dissolution of the Lok Sabha and whether, in view of the contention that such motions for removal, im peachment etc.
of holders of high constitutional offices are in their very nature politically introduced, debated and decided in the Houses of Parliament and not elsewhere, the matters arising out of or relating to a Motion for removal of a Judge in either House of the Parliament are at all justiciable before courts of law.
It is also urged that even if these issues have some degree of adjudicative disposition and involve some justiciable areas, the Court should decline to exercise jurisdiction as its decision and its writ might become infructous in view of the fact that in the ultimate analysis, the final arbiter whether at all any Address is to be presented rests exclusively with the Houses of Parliament and which, are wholly outside the purview of the Courts.
The foregoing serves to indicate broadly the com plexities of the constitutional issues on which the Court is invited to pronounce and, as in all constitutional litiga tion, the views inevitably tend to reflect a range of policy options in constitutional adjudications and, in some meas ure, value judgments.
Writ Petition No. 491 of 1991 is by a body called the "SubCommittee on Judicial Accountability" represented by its convener, Sri Hardev Singh, a Senior Advocate of this Court.
Petitioner body claims to be a Sub Committee consti tuted by an "All India Convention on Judicial Accountabili ty" "to carry forward the task of implementing the resolu tions of the conventions".
Writ Petition No. 541 of 1991 is by the Supreme Court Bar Association represented by its Honorary Secretary.
The Bar Association seeks to prosecute this petition "in the larger public interest and in particu lar in the interests of litigant public".
The two prayers common to both the petitions are, first, that the Union of India be directed to take immediate steps to enable the Inquiry Committee to discharge its functions under the "The " and, secondly, that during the pendency of the proceedings before the Committee the learned Judge should be restrained from performing judicial func tions and from exercising Judicial powers.
Writ Petition No. 542 is by a certain Harish Uppal.
This writ petition is more in the nature of a counter to the second prayer in the WP No. 541/1991 and WP No. 491/1991.
Petitioner, Sri Harish Uppal says that till the Inquiry Committee actually finds the learned Judge guilty of the charges there should be no interdict of his judicial func tions and that if such a finding is recorded then thereafter till such time as the Motion for the presentation of the Address for the removal of the Judge disposed of by the Houses of Parliament which petitioner says should not be delayed beyond 180 days the President may ask the Judge concerned to recuse from judical functions.
In Writ Petition No. 560/1991 brought by Shyam Ratan Khandelwal, a practising Advocate, the constitutional valid ity of the is challenged as ultra vires Articles 100, 105, 118, 121 and 124(5) of the Consti tution of India.
It also seeks a declaration that the Motion presented by 108 Members of Parliament for the removal of the Judge has lapsed with the dissolution of the 9th Lok Sabha.
It also seeks quashing of the decision of the Speaker admitting the Motion on the ground that an opportunity of being heard had been denied to the Judge before the Speaker admitted the Motion and proceeded to constitute a Committee.
On the question of the validity of The , 27 1968 the petitioner contends that the law properly construed vests the powers of admitting a Motion and of constituting a Committee under Section 3 in the Speaker in his capacity as Speaker of the House and subject to the well known and well settled principles of law.
procedure and conventions of the Houses of Parliament and the statute does not depart from these principles.
On the contrary, the statute admits of a construction which accords with the powers and privileges of the House and that the Motion even at that stage of admis sion would require to be debated by the House.
It is urged that if that be ' the construction, which the language of the statute admits then there should be no vice of unconstitu tionality in it.
But if the statute is construed to vest such power exclusively in the Speaker, to the exclusion of the House, the statute, on such constitution would be uncon stitutional as violative of Articles 100 (1), 105,118 and 121 of the Constitution.
Transfer Petition No. 268/1991 is for the withdrawal by this Court to itself from the High Court of Delhi, the Writ Petition (Civil) No. 1061/1991 in the Delhi High Court where reliefs similar to those prayed for by Sri Khandelwal in WP (Civil) No. 560/1991 are sought.
The prayer for trans fer has not yet been granted; only the further proceedings in the High Court are stayed.
But full dress arguments in all these matters have been heard.
It is appropriate that this writ petition should also be formally withdrawn and finally disposed of along with the present batch of cases.
All that is necessary is to make a formal order withdrawing WP (Civil) No. 1061/1991 from the Delhi High Court, which we hereby do.
Certain allegations of financial improprieties and irregularities were made against Justice V. Ramaswami, when he was the Chief Justice of the High Court of Punjab & Haryana.
There were certain audit reports concerning certain items of purchases and other expenditure.
The then Chief Justice of India, Justice Sabyasachi Mukharji, took note of the reports in this behalf and of representations submitted to him in this behalf and advised Justice Ramaswami to abstain from discharging judicial functions until those allegations were cleared.
Thereafter, a Committee of three Judges was constituted by the then Chief Justice of India, to look into the matter and to advise him whether on the facts Justice Ramaswami might be embarrassed in discharging judicial functions as a Judge of this Court.
The Committee tendered its advice to the Chief Justice.
It noted that Justice Ramaswami had declined to acknowledge the jurisdic tion of any Committee to sit in judgment over his conduct.
The Committee, accordingly, abstained from an inquiry on the charges but.
on an evaluation of the matter before it, expressed the view that as long as the charges of 28 improper conduct involving moral turpitude were not estab lished in the various enquiries then pending the operation of the constitutional warrant appointing him a Judge of the Court could not be interdicted.
Thereafter, in February, 1991, 108 Members of the Lok Sabha presented a Motion to the Speaker of the 9th Lok Sabha for Address to the President for the removal of the learned Judge under Article 124(4) of the Constitution read with the provisions of the .
On 12.3.1991 the Speaker of the Lok Sabha in purported exercise of his powers under Section 3 of the said Act, admitted the Motion and constituted a Committee as aforesaid to investigate the grounds on which the removal was prayed for.
Soon after the decision of the Speaker to admit the Motion and constitute a Committee to investigate the charges was made, the term of the Ninth Lok Sabha came to premature end upon its dissolution.
The petitioners question the legality of the Speaker 's order and assert that, at all events, the Motion had lapsed with the dissolution of the House.
This contention is supported by the Union of India.
They say that the effect of dissolution of the Ninth Lok Sabha is to "pass a sponge across the Parliamentary slate" and all pending motions lapse.
The motion for removal, it is urged, is no exception.
'We have heard Sri Shanti Bhushan, Sri Ram Jethmala ni, Sri P.P. Rao, Sri R.K. Garg and Ms. Indira Jaising learned senior counsel in support of the prayers in writ petitions Nos. 491 and 541 of 1991 filed by the Sub Commit tee on Judicial Accountability and the Supreme Court Bar Association respectively; Sri G. Ramaswamy, learned Attorney General for the Union of India; Sri Kapil Sibal for the petitioners in writ petition No. 560/91 and transfer peti tion No. 278/91.
Sri Harish Uppal, petitioner in person in writ petition No. 542/91 has filed his written submissions.
The arguments of the case covered a wide constitutional scheme relating to the removal of members of the superior judiciary in India and tO the problems of justiciability of disputes arising therefrom.
We shall refer to the arguments when we assess the merits of these contentions.
The contentions urged at the hearing in support of the petitions which seek enforcement of Speaker 's decision as well as those urged in support of the petitions which say that the Motion has lapsed can be summaried thus: 29 Contention A: The motion for removal of the Judge moved by 108 Members of Parliament as well as the purported decision of the Speaker to admit that motion and to constitute a committee to investigate into the grounds on which removal is sought have lapsed upon the dissolution of the 9th Lok Sabha.
The general rule is that no House of Parliament can seek to bind its successor.
All pending business at the time of dissolution of House lapses.
A motion for removal of a judge is just another motion and perishes with the expiry of the term or the earlier dissolution of the House.
The question whether the motion for the remov al of the judge has lapsed or not is a matter pertaining to the conduct of the business of the House of which the House is the sole and exclusive judge.
No aspect of the matter is justiciable before Court.
Contention B: The constitutional process of removal of a Judge, both in its substantive and procedural aspects, is a political process within the exclusive domain of the Houses of Parliament.
The conduct of the Speaker in regulating the procedure and business of the House shall not be subject to the jurisdiction of any Court.
The Speaker of the Lok Sabha in the exercise of his powers under the , 1%8, acts in an area outside the courts ' jurisdiction.
There is nothing in the which detracts from this doctrine of lapse.
On the contrary, the provi sions of the 'Act ' are consistent with this Constitutional position.
Contention C: Article 124(5) pursuant to which the , is a mere enabling provi sion.
Prior 'proof of misconduct is not a condition precedent before the bar under Article 121 against the discussion of the conduct of the Judge is lifted.
Contention D: The action of the Speaker in admitting the notice of motion without reference to the House and constituting a committee for inves tigation without the support of the decision of the 30 House is ultra vires Articles 100(1), 105, 121 and the rules made under Article 118 of the Constitution.
The provisions of the ; 1968 can be read consistently with the Consti tutional Scheme under the aforesaid Articles.
But if the provisions of the Act are so con strued as to enable the Speaker to exercise and perform those powers and functions without reference to and independently of the House, then the provisions of the Act would be uncon stitutional.
Contention E.
The decision of the Speaker to admit the motion and to constitute a committee for investigation is void for failure to comply with the rules of natural justice as no oppor tunity, admittedly, was afforded to the Judge of being heard before the decision was taken.
Contention F. ' The process of removal by means of a motion for address to the President is a political remedy.
But the fundamental right to move the Supreme Court for enforcement of fundamental rights take within its sweep the right to access to a court comprising of Judges of sterling and unsullied reputation and integri ty which is enforceable.
This judicial remedy is independent of the constitutional remedy and that the court has jurisdiction to decide as to its own proper constitution.
In exercise of this jurisdiction it should examine the grounds of the alleged misbehaviour and re strain the Judge from judicial functioning.
Contention G. ' The Speaker 's decision is vitiated by mala fides and oblique and collateral motives.
Contention H. ' The Supreme Court Bar Association and the Sub Committee on Judicial Accountability the petitioners in Writ Petition No. 491 of 1991 and Writ Petition No. 541 of 1991, respective ly, do not have the requisite standing to sue and the writ petitions are, accordingly, not maintainable at their instance.
31 Contention L ' At all events, even if the Speaker is held to be a statutory authority acting under the Statute and not as part of the proceedings or business of the Lok Sabha and is amenable to the jurisdiction of the Court, any judgment rendered and writ issued by this Court have the prospect of being infructuous in view of the undisputed constitutional position that, in the ultimate analysis, the decision to adopt or turn down the motion is exclusively within the power of the House and the Court would have no jurisdiction over that area.
The Court would, therefore, decline to exercise its jurisdiction on grounds of infructuousness.
Before we discuss the merits of the arguments it is necessary to take a conspectus of the constitutional provi sions concerning the judiciary and its.independence.
hi interpreting the constitutional provisions in this area the court should adopt a construction which strengthens the foundational features and the basic structure of the Consti tution.
Rule of law is a basic feature of the Constitution which permeates the whole of the Constitutional fabric and is an integral part of the constitutional structure.
Inde pendence of the judiciary is an essential attribute of Rule of law.
Articles 124(2) and 217(1) require, in the matter of appointments of Judges, consultation with the Chief Jus tices.
These provisions also ensure fixity of tenure of office of the Judge.
The Constitution protects the salaries of Judges.
Article 121 provides that no discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the dis charge of his duties except upon a motion for presenting an address to the President praying for the removal of the Judge as hereinafter provided.
Articles 124(4) and 124(5) afford protection against premature determination of the tenure.
Article i 24(4) says "a Judge of the Supreme Court shall not be removed from his office except" etc.
The grounds for removal are again limited to proved misbehaviour and incapacity.
It is upon a purposive and harmonious con struction and exposition of these provisions that the issues raised in these petitions are to be resolved.
In construing the Constitutional provisions the law and procedure for removal of Judges in other countries afford a background and a comparative view.
The solution must, of course, be found within our own Constitutional Scheme.
But a comparative idea affords a proper perspective for the understanding and interpretation of the Constitu tional Scheme.
32 10.
In England a Judge of the superior courts can be removed only on presentation of an address by both the Houses of Parliament to the Crown.
Proceedings may be initi ated by a petition to either House of Parliament for an address to the Crown or by a resolution for an address to the Crown to appoint a committee of inquiry into the conduct of the person designated, though preferably they should be commenced in the House of Commons.
Sometimes [as in Barring tons Case (1830)], a Commission of Inquiry is appointed and the matter is considered in the light of the report of the said Commission.
The motion for removal is considered by the entire House.
In case any enquiry is to be conducted into the allegations, it is either referred to a Select Committee of the House or to the Committee of the whole House Opportu nity is given to the Judge whose conduct is impugned to make defence on public inquiry.
The report of the Committee and its recommendation are placed before the House where the matter is debated.(See: Halsbury 's Laws of England, 4th Ed.
p. 1108).
This process has been subjected to following criticism (i) legislative removal is coloured by political partisanship inasmuch as the initia tion of the process as well as the ultimate result may be dictated by political considera tions and process of fact finding and deliber ations also suffer from party spirit.
(ii) the government has considerable control not only on the ultimate result of the pro ceedings but also on parliamentary time which enables them to prevent motions for an address from being adopted if it suits them.
(iii) the legislative procedure is not adequate for adjudicative fact finding; and (iv) since Parliament is the master of its own procedure, the procedures and rules of evidence appropriate to judicial proceedings which would seem to be required in a case of judicial removal are unlikely to be allowed in Parliament.
(See: Shetreet Judges on Trial (1976) p. 405 407) 12.
The Justice Sub Committee on the Judiciary consid ered the question whether the existing process for removal by address of the Houses should be substituted for or sup plemented by a new mechanism designed to meet changing needs and conditions.
The Sub Committee, in its 1972 Report, answered the said question in the affirmative and has pro posed a new procedure for removal of judges.
The Sub Commit tee has recommended the establishment of an adhoc judicial commission to be ap 33 pointed by the Lord Chancellor, if he decides that the question of removing a judge is to be investigated.
The Commission should include a majority of, and in any event not less than three, persons who hold or have held high judicial office.
Members of Parliament or persons who hold or have held any political appointment would be excluded.
Upon completing its inquiry the ad hoc Commission shall report the facts and recommend whether the question of removal of a judge should be referred to the Judicial Com mittee of the Privy Council.
If the Commission so recommend ed, the Privy Council would consider the matter and if it concluded that the judge should be removed, it would so advise Her Majesty.
[see: Shetreet 'Judges on Trial ', (1976); pp.
404 405].
Dr. Shetreet has suggested a via media and has favoured the establishment of a Judicial Commission for removal (but not for discipline short of removal) along the lines sug gested by the Sub Committee but has expressed the view that the existing process of address should also be preserved.
[See: Shetreet 'Judges an Trial ', (1976); p. 409].
Similar view has been expressed by Margaret Brazier.
(See: Rodney Brazier 'Constitutional Texts ' (1990) pp.606 607).
In Canada, under section 99(1) of the Constitution Act of 1867, the judges of the superior courts hold office during good behaviour, and are removable by the Governor General on address of the Senate and House of Commons.
On petition for removal submitted in 1868 and 1874 the matter was referred to a Select Committee of the House.
In a third case in 1874 the judge died before any action could be taken on motion for appointment of a Select Committee.
Recently in 1966 67, a motion for removal of Mr. Justice Leo Landreville of the Supreme Court of Ontario was moved and in that con nection a Royal Commission consisting of Mr. Justice Ivan C. Rand, a retired judge of the Supreme Court of Canada was appointed under the Inquiries Act R. section C. 1952 C. 154 to conduct an enquiry.
After considering the report of the said Commission, a Joint Committee of the Houses recommended removal but the judge resigned while Parliament was prepar ing for his removal by joint address.
Thereafter, Judges Act was enacted in 1971 whereby Canadian Judicial Council has been created.
The functions of the said Council as set out in section 39(2) include making the enquiries and the investiga tion of complaints or allegations described in section 40.
Sec tion 40 provides that the council may conduct an enquiry to determine whether a judge of superior, district or county court should be removed from office and it may recommend to the Minister of Justice of Canada that a Judge should be removed from office.
The grounds on which such a recommenda tion can be made are set out in section 41(2) of the Act and they are: (a) age or infirmity, Co) having been 34 guilty of misconduct, (c) having failed in the due execution of his office, or (d) having been placed, by his conduct or otherwise, in a position incompatible with the due execution of his office.
(Gall 'The Canadian Legal System ' ( 1983 ); pp. 184 186).
In 1 '982 the matter of Mr. Justice Thomas Berger, a Judge of the Supreme Court of British Columbia, was investi gated by the Canadian Judicial Council prompted by certain remarks made by the judge.
The Council concluded that the public expression of political views in the nature of those made by Mr. Justice Berger constituted an "indiscretion", but that they were not a basis for a recommendation that he be removed from office and on the basis of the said recom mendation, no further action was taken though Mr. Justice Berger tendered his resignation as a judge a few months later.
(See: Gall. ' The Canadian Legal System, (1983) p. 189) 14.
Under section 72(ii) of the Commonwealth of Austra lia Constitution Act, 1900, the justices of the High Court and of the other courts created by the Parliament cannot be removed except by the GovernorGeneral in Council, on an address from both Houses of the Parliament in the same session praying for such removal on the ground of proved misbehavior or incapacity.
Similar provisions are contained in the Constitutions of the States with regard to removal of Judges of State Courts.
Proceedings were initiated for removal of Mr. Justice Murphy of the High Court of Australia in 1984 under section 72(ii) of the Commonwealth of Australia Constitution Act.
In connection with those proceedings at first a select Commit tee of the Senate was appointed to enquire and report into the matter.
It consisted of six senators drawn from three political parties.
The Committee by majority decision (3: 2, one undecided) found no conduct amounting to misbehaviour under section 72(ii).
In view of the split vote a second Committee of four senators from the same three political parties was established and it was assisted by two retired judges one from the Supreme Court of Western Australia and the other from Supreme Court of the Australian Capital Territory and the said Committee recorded its finding but the judge did not appear before either of the committees.
The judge was also prosecuted before the Central Criminal Court of New South Wales and was found guilty of an attempt to pervert the course of justice but the said verdict was set aside by the Court of Criminal Appeal.
Fresh trial was held where under the judge was found not guilty.
Thereafter, an ad hoc legislation, namely, Parliamentary Commission of Inquiry Act, 1986 was enacted by the Commonwealth Parliament and a Commission consisting of three retired judges respec tively of Supreme Court of Victoria, Supreme Court of Aus tralia Capital Territory 35 and the Federal Court and Supreme Court of South Australia was constituted to investigate into the allegations of misbehaviour.
Before the said commission could give its report, the judge became gravely ill and the Act was re pealed [Lane 's Commentary on the Australian Constitution, (1986) p. 373].
In one other case, proceedings for removal were initiated against Mr. Justice Vasta of the Supreme Court of Queensland and for that purpose, the Queensland Legislature enacted the Parliamentary (Judges) Commission of Inquiry Act, 1988 whereby a commission comprised of three retired judges respectively of the High Court of Australia, Supreme Court of Victoria and the Supreme Court of New South Wales was constituted.
In Australia, there has been criticism of the exist ing procedure with regard to removal of judges both by judges as well as by lawyers.
Mr. Justice L.J. King, Chief Justice of the Supreme Court of South Australia, has ob served: "The concept of removal by an address of both Houses of Parliament is itself the subject of a good deal of criticism.
Curiously, common criticism which are made are contradictory.
One criticism is that the necessity for the involvement of the legislature ensures that the procedure will not be used and that the judges therefore have a practical immunity from removal.
Removal by this means is cer tainly extremely tare.
That may be, however, because in the countries in which this proce dure prevails, conditions are such that a judge who commits a serious act of judicial misconduct would certainly resign.
That con sideration, together with the fact that stand ards of judicial conduct are generally very high in those countries, renders removal by the legislature a rarity.
The opposite criti cism, however, is that there is no established procedure for the trial of a judge whose removal by the legislature is sought.
It is assumed that the legislature would itself institute some form of inquiry at which the judge would be able to defend himself against the accusations, but that would be a matter for the legislature in each case.
There are some who fear that a parliamentary majority, encouraged by inflamed public feeling about an unpopular judicial decision, might some day act to remove a judge, without due process.
It is at least questionable whether the system of removal by an address of both Houses of Parliament accords to a judge the 30 degree of security which is required by the concept of judicial independence.
[ 'Minimum Standards of Judicial Independence ' 1984 (58) ALl 340, at p. 345] Similarly, Mr. Justice M.H. Mclelland of the Supreme Court, of New South Wales has expressed the view: "In lieu of measures of the kinds already discussed, some permanent, and preferably Australia wide, machinery should be provided by legislation for the purpose of establishing an effective procedure for the determination by a judicial tribunal of the existence of misbehaviour or incapacity which could warrant a judge 's removal from office.
The design of that ma chinery should be such as to produce as little damage to judicial independence, public confi dence in the judicial system, and the authori ty of the courts, as is consistent with its effective operation.
It should also be such as to ensure to a judge both procedural fairness and protection from public vilification or embarrassment pending the making of the deter mination".
(Disciplining Australian Judges, at p. 401) Mr. Justice Mclelland has also suggested that the tribu nal should be subject to the supervisory jurisdiction of, and an appeal should lie from the tribunal to, the High Court of Australia.
In this context, he has stated: "Furthermore, the protection of judicial tenure and independence which the Act of Settlement provisions were intended to effect, has in the intervening period lost a great deal of its strength.
In 1701, the Crown, the House of Lords and the House of Commons were three powerful but relatively independent entities.
It was necessary for a judge to incur the displeasure of all three concurrent ly to be at risk of removal under the parlia mentary address procedure.
The subsequent development of the party system and cabinet government (especially with modern ideas of strict party discipline) has radically altered the position.
In modern times, the executive government and the lower house (and frequently the upper house, where there is one) are effectively under the control of a single individual or cohesive group, so that now a judge may be at risk of removal under the parliamentary address procedure if 37 he or she were to incur the sole displeasure of that individual or group." (Disciplining Australian Judges, 8 8 at p. 402 3) Sir Maurice Byers, former Solicitor General of the Commonwealth has also spoken in the same vein: "A federal system involves a tension between the High Court and the Parliament and the executive.
Recent years have seen this in crease because interpretations of the Consti tution have become party dogma.
The Court 's constitutional decisions are seen by many of the uninformed and quite a few of the informed as bearing upon party political questions.
When, as in the case of Mr. Justice Murphy and to a much less degree Sir Garfield Barwick, a former political figure, hands down a judgment he attracts the animus and often the abuse of some in Parliament.
Section 72 of the Consti tution leaves him exposed to the attack of his opponents and the often doubtful support of his former friends.
Whether Parliament may itself decide the judicial question of his fitness for office or "proved misbehaviour or incapacity" is at the least doubtful.
But the Court should not be exposed to this hazard, A Commission of Judges whose membership rotates is called for." (From the other side of the Bar Table: An Advocates ' view of the Judici ary; , at p. 185).
A Constitutional Commission was set up in Australia for suggesting reforms in the Commonwealth Constitution.
The said Commission has recommended that provision should be made by amendment to the Commonwealth Constitution for (a) extending the security of tenure provided by section 72 to all judges in Australia, and (b) establishing a national judicial tribunal to determine whether facts found by that tribunal are capable of amounting to misbehaviour or inca pacity warranting removal of a judge from office.
(Mclelland 'Disciplining Australian Judges ', , at p. 403) 17.
In the United States, the removal of a judge of the U.S. Supreme or a Federal judge is governed by the provisions of the U.S. Constitution wherein Article 11(4) provides for the removal from office of the President, Vice President and all civil officers of the United States on impeachment for, and conviction of, treason, bribery or other high crimes 38 and misdemeanours.
Impeachment may be voted by a simple majority of the members of the House of Representatives, there being a quorum on the floor and trial is then held in the Senate, which may convict by a vote of two thirds of the members of the Senate present and voting, there being a quorum.
With regard to state judiciary, the process of removal is governed by the State Constitutions.
Majority of the States follow the federal pattern an4 provide for im peachment as the normal process of removal of appointed judges.
In some States, provision is made for removal by an address of the Governor to both Houses of legislature or by a joint resolution of the legislature.
In some States, the removal power is vested in the State Supreme Courts while in some states, special courts are provided to hear removal charges.
In the State of New York, the Court is known as the Court on the judiciary.
(See Henry J. Abraham: The Judicial Process, 3rd Ed. p.45).
For judicial administration at the national level, there is Judicial Conference of the United States which consists of the Chief Justices of the United States, the chief judges of each of the eleven numbered circuits and of the District of Columbia and federal circuits but also, since 1957, a district judge representative from each circuit with the exception of the federal circuit, which lacks a trial court tier.
By an Act of the Congress passed in 1932 (incorporated in Title 28 of the U.S. Code) the Judicial Conference is charged with the duty to make a comprehensive survey of the condition of business in the courts; to prepare plans for assignment of judge, ' to or from circuits or districts where necessary; and to submit suggestions and recommendations to the various courts to promote uniformity of management procedures and the expeditious conduct of court business.
The work of the Judicial Conference is performed in special committees which include the special committee on judicial ethics.
Another Act of Congress passed in 1939 makes provi sion for a judicial council for each circuit composed of circuit judges of the circuit who is empowered to make all necessary orders for the effective and expeditious adminis tration of the business of the courts within its circuit.
The mandate of the Judicial Councils embraces the business of the judiciary in its institutional sense (administration of justice), such as avoiding of loss of public esteem and confidence in respect to the court system, from the actions of a judge or other person attached to the courts.
The Judicial Councils have exercised the power of review of allegations of misconduct on the part of court personnel, officers and judges.
In view of the increased number of judges, who can be removed only by the process of impeach ment, Congress has enacted the Judicial Councils Reform and Judicial Conduct and Disability Act of 1980 whereby the Judicial Councils have been explicitly empowered to receive complaints about judicial 39 conduct opaquely described as "prejudicial to the effective and expeditious administration of the business of the courts, or alleging that such a Judge or magistrate is unable to discharge all the duties of office by reason of mental or physical disability.
" It prescribes an elaborate judicilised procedure for processing such complaints within the administrative system of the councils and the Judicial Conference.
Should a Council determine that the conduct constitutes grounds for impeachment the case may be certi fied to the Judicial Conference of the United States which may take appropriate action and if impeachment is deemed warranted, the Conference is empowered to transmit the record and its determination to the House of Representa tives.
In so far as the States are concerned, all the fifty States have central Institutions for disciplining their judges and in each a variously constituted commission is organised in either a single tier or in many tiers depending on the perceived desirability of separating fact finding from judgment recommendation tasks.
Commission recommenda tions are transmitted to the State Supreme Court for its authoritative imprimatur, except in states where they are received by legislatures that retain judicial removal power.
(See Robert J.Janosik Encyclopaedia of the American Judicial System, Vol.
II pp.575 to 578).
This study of the practice prevailing in the above mentioned countries reveals that in Canada, Australia and the United States, the process of removal of a judge incor porates an investigation and inquiry into the allegations of misconduct or incapacity against a judge by a judicial agency before the institution of the formal process of removal in the legislature.
England is the only exception where the entire process is in Parliament but there also views are being expressed that it should be replaced by a judicial process of investigation by a judicial tribunal before the matter is taken up by the Houses of Parliament.
This is also the trend of the recommendations in the resolu tions adopted by the United Nations General Assembly and international conferences of organisations of lawyers.
International Bar Association at its 19th Biennial Conference held at New Delhi in October 1982 adopted Minimum Standards of Judicial Independence.
Paras 27 to 32 relating to 'Judicial Removal and Discipline ' are as under: "27.The proceedings for discipline and removal of judges should ensure fairness to the judge, and adequate opportunity for hearing.
40 28.
The procedure for discipline should be held in camera.
The judge may however request that the heating be held in public, subject to final and reasoned disposition of this request by the Disciplinary Tribunal.
Judgments in disciplinary proceedings whether held in camera or in public, may be published.
(a) The grounds for removal of judges should be fixed by law and shall be clearly defined.
(b) All disciplinary action shall be based upon standards of judicial conduct promulgated by law or in established rules of court.
A judge shall not be subject to removal unless, by of a criminal act or through gross or repeated neglect or physical or mental incapacity, he has shown himself manifestly unfit to hold the position of judge.
In systems where the power to discipline and remove judges is vested in an institution other than the Legislature, the tribunal for discipline and removal of judges shall be permanent and be composed predominantly of members of the Judiciary.
The head of the court may legitimately have supervisory powers to control judges on administrative matters.
The First World Conference on the Independence of Justice held at Montreal on June 10, 1983 adopted a UniVer sal Declaration on the Independence of Justice.
It relates to international judges as well as national judges.
The following paragraphs deal with 'Discipline and Removal ' in relation to national judges: "2.32 A complaint against a judge shall be processed expeditiously and fairly under an appropriate practice, and the judge shall have the opportunity to comment on the complaint at its initial stage.
The examination of the complaint at its initial stage shall be kept confidential, unless otherwise requested by the judge.
2.33 (a) The proceedings for judicial removal or discipline, when such are initiated, shall be held before a court or a board predominant ly composed of members of the judiciary and selected by the judiciary.
(b) However, the power of removal may be vested in the Legislature by impeachment or joint address, preferably upon a recommenda tion of a court or board as referred to in 2.33(a).
41 [Explanatory Note: In countries where the legal profession plays an indispensable role in maintaining the rule of law and judicial independence, it is recommended that members of the legal profession participate in the selection of the members of the court or board, and be included as members thereof.
] 2.34 All disciplinary action shall be based upon established standards of judicial con duct.
2.35 The proceedings for discipline of judges shall ensure fairness to the judge and the opportunity of a full hearing.
2.36 With the exception of proceedings before the Legislature, the proceedings for disci pline and removal shall be held in camera.
The judge may, however, request that the hearing be held in public, subject to a final and reasoned disposition of this request by the Disciplinary Tribunal.
Judgments in discipli nary proceedings, whether held in camera or in public, may be published.
2.37 With the exception of proceedings before the Legislature or in connection with them, the decision of a Disciplinary Tribunal shall be subject to appeal to a court.
2.38 A judge shall not be subject to removal except on proved grounds of incapacity or misbehaviour, rendering him unfit to continue in office.
2.39 In the event that a court is abolished judges serving in this court shall not be affected, except for their transfer to another court of the same status.
The Seventh United Nations Congress on the Preven tion of Crime and the Treatment of Offenders held at Milan from August 26 to September 6, 1985 adopted the Basic Prin ciples on the Independence of the Judiciary.
Paragraphs 17 to 20 dealing with 'Discipline, Suspension and Removal ' are as under: "17.A charge or complaint made against a judge in his/her judicial and professional capacity shall be processed expeditiously and fairly under an appropriate procedure, The judge shall have the right to a fair heating.
The examination of the matter at its initial stage shall be kept confidential, unless otherwise requested by the judge.
Judges shall be subject to suspension or removal only for reasons of incapacity or behaviour that renders them unfit to 42 discharge their duties.
All disciplinary, suspension or removal proceedings shall be determined in accordance with established standards of judicial con duct.
Decisions in disciplinary, suspension or removal proceedings should be subject to an independent review.
This principle may not apply to the decisions of the highest court and those of the legislature in impeachment or similar proceedings.
" The Congress Documents were endorsed by the U.N. General Assembly in its Resolution 40/32 on November 9, 1985 and Resolution 40/ 146 on December 13, 1985.
Resolution 40/146 dated December 13, 1985 of the General Assembly specifically welcomed the Basic Principles on the Independence of the Judiciary and invited Government "to respect them and to take them into account within the framework of their nation al legislation and practice" (para 2).
Unlike the judges of the Superior courts in England, the judges in the colonies did not enjoy the security of tenure as guaranteed under the Act of Settlement, 1700 and they held office at the pleasure of the Crown.
(See: Terrell vs Secretary of State for the Colonies and Another, 1953(2), 482).
The position was not different in India till the enactment of Government of India Act, 1935.
In Clause (b) of the proviso to sub Section 2 of Section 200 of the said Act which related to judges of the Federal Court, it was pre scribed that "a judge may be removed from his office by order of the Governor General on the ground of misbehaviour or of infirmity of body or mind, if the Judicial Committee of the Privy Council, on reference being made to them, report that the judge ought on any such ground to be re moved".
Similar provisions were made with regard to judges of the High Court in Section 220.
It would thus appear that prior to the coming into force of the Constitution of India, it was necessary to have a determination by a judicial body about the alleged grounds of misbehaviour or infirmity of mind and body before a judge of the Federal Court or High Court could be removed.
Does the Constitution seek to alter this position in a way, as to exclude investigation and proof of misbehaviour or incapacity by a judicial body and to rest the power of removal including the investigation and proof of misbehaviour or incapacity in Parliament alone.
Basically, the process of removal or impeachment of a judge is a political process.
A learned author in "The Impeachment of the Federal 43 Judiciary: ' [Wrisley Brown Harward Law Review 1912 1913 684 at page 698) says: ".
Thus an impeachment in this country, though judicial in external form and ceremony.
is political in spirit.
It is directed against a political offence.
It culminates in a polit ical judgment.
It imposes a political forfei ture.
In every sense, say that of administra tion, it is a political remedy, for the sup pression of a political evil, with wholly political consequences.
This results in no confusion of the political and the judicial powers.
The line of demarca tion is clearly discernible even through the labyrinth of formal non essentials under which ingenious counsel in various cases have sought to bury it.
The judgment of the High Court of Parliament upon conviction of an impeachment automatically works a forfeiture of political capacity; but this is simply an effect of the judgment, which is to be distinguished from the judgment itself. " Mauro Cappelletti in 'The Judicial Process in Comparative Perspective '[Clarendon Press Oxford 1989 at page 731 says: "Two main features of this accountability type can be identified; first, the fact that ac count has to be given to 'political ' bodies, ultimately to the legislative and/or the executive branches by means of essentially 'po litical ', non judicial processes; second, and perhaps even more characteristically, the fact that account has to be given not, or not primarily, for 'legal ' violations, but rather for behaviour (and this might include private, out of office behaviour) which is evaluated on the basis of 'political ' criteria.
Perhaps the best illustration of political accountability can be found in the systems of the common law tradition.
In England, judges (like any other officials) can be impeached 'before the House of Lords, at the suit of the House of Commons ', although this practice has fallen into desuetude; moreover, higher court judges can be 'removed from office by the Crown on an address presented to Her Majesty by both Houses of Parliament '.
The idea behind this 'address ' procedure is that judges are appointed 'during good behaviour ', hence, they can be removed upon breach of the condition.
Misbehaviour includes such situations as 'the case of conviction upon an indictment for any infamous offence of such a nature as to render the 44 person unfit to exercise the office ', but also 'improper exercise of the functions appertain ing to the office, or non attendance, or neglect of or refusal to perform the duties of the office '.
Of course the decision of the Houses and the Crown can only be an essential ly political one, not a purely juridical decision, even though we are informed that the removal procedure is subject to some extent 'to the rules of natural justice '. " 24.
But the Constitutional scheme in India seeks to achieve a judicious blend of the political and judicial processes for the removal of Judges.
Though it appears at the first sight that the.proceedings of the Constituent Assembly relating to the adoption of.
clauses, (4) and (5) of Article 124 seem to point to the contrary and evince 'an intention to exclude determination by a judicial process of the correctness of the allegations of misbehaviour or inca pacity on a more careful examination this is not the correct conclusion.
In the submissions of the learned counsel who contend against the manifestation of an intention to bring in a judicial element, reliance has been placed on the proceedings of the Constituent Assembly dated July 29, 1947 relating to adoption of Clause 18 of the report of the Union Constitution Committee relating to the Supreme Court.
Shri Alladi Krishnaswami Ayyar had moved the said clause subject to modifications and conditions in the said clause which related to appointment and removal of judges of Supreme Court.
It was provided that "a judge of the Supreme Court of India shall not be removed from his office except by the President on an address from both the Houses of Parliament of the Union in the same session for such removal on the ground of proved misbehaviour or incapacity.
Further provi sion may be made by Federal law for the procedure to be adopted in this behalf '.
Shri K. Santhanam had moved an amendment in the said Clause relating to removal of judges and he wanted the last sentence about further provision being made by Federal law for the procedure to be adopted in that behalf, to be omitted.
Shri M.Ananthasayanam Ayyanagar proposed amendments suggesting two alternative clauses in the place of the Clause with regard to removal of the judges.
In one clause, it was suggested that "a judge may be removed from office on the ground of misbehaviour or infirm ity of mind or body by an address presented in this behalf by both the Houses of the legislature to the President provided that a committee consisting of not less than 7 High Court Chief Justices chosen by the President, investigates and reports that the judge on any such ground be removed".
The other alternative clause suggested by Shri M.Anantha sayanam Ayyangar was that "a judge of the Supreme Court may be removed from office by the President on the ground of misbehaviour or of infirmity of mind or body, if on refer ence being made to it (Supreme Court) by the President, a special 45 tribunal appointed by him for the purpose from amongst judges or exjudges of the High Courts or the Supreme Court, report that the" 'judge ought on any such grounds to be removed.
" The Constituent Assembly adopted clause 18 with the amendments as proposed by Shri Alladi Krishnaswami Ayyar and rejected the amendments suggested by Shri M. Anantha sayanam Ayyangar.
Shri Santhanam did not press his amendment and it was withdrawn.
There is no doubt that in the amend ments which were suggested by Shri M.Ananthasayanam Ayyan gar, it was provided that there should be investigation into the allegations of misbehaviour or infirmity by a committee consisting of Chief Justices of the High Courts or the special tribunal consisting of judges or ex judges of the High Court or the Supreme Court, but the rejection of the said amendments moved by Shri Ayyangar does not mean that the Constituent Assembly was not in favour of determination about the correctness of such allegations by judicial body because Shri Alladi Krishnaswami Ayyar, while moving Clause 18 had emphasised the word 'proved misbehaviour ' and had stated: "While the ultimate power may rest with the two Houses, the Clause provides that the charges must be proved.
How exactly to prove the charges will be provided for in the Feder al law.
We need not be more meticulous or more elaborate, than the people who have tried a similar case in other jurisdictions.
I chal lenge my friend to say whether there is any detailed provision for the removal of judges more than that in any other Constitution in the world.
The general principle is laid down in the Constitution and later on the Federal law will provide for adequate machinery and that is the import of the clause". .
There is sufficient safeguard in the reference "proved misbehaviour" and we might make elabo rate and adequate provision for the way in which ',he guilt could be brought home to a particular judge in any Federal law that may be passed but that is a different matter". "But I do not think that in a Constitution it is necessary to provide de tailed machinery as to the impeachment, the charges to be framed against a particular judge.
To make a detailed machinery for all these could be a novel procedure to be adopted in any Constitution".
(Constituent Assembly Debates, vols.
I to VI at pp.
899 900) 25.
Reference was also made to the debates of the Con stituent Assembly dated May 24, 1949 on Article 103 of the Draft Constitution.
Shri Tajamul Hnsain moved an amendment in Clause (4) of Article 103 which related to the removal of a judge of Supreme Court and suggested an amendment in the said clause so as to provide that "a judge of the Supreme 46 Court shall not be removed from his office except by an order of the President passed, after a Committee consisting of all the judges of the Supreme Court had investigated the charge and reported on it to the President and etc.
" The said amendment was negatived by the Constituent Assembly.
(Constituent Assembly Debates, vol.
VIII at pp.
243 and 262).
The said amendment was similar to those moved by Shri M. Ananthasayanam Ayyangar at the stage of adoption of Clause 18 of the report of the Union Constitution Committee noticed earlier.
The reasons which were given by Shri Alladi Krishnaswami Ayyar for opposing the said amendments would apply to this amendment also.
The proceedings in the Constituent Assembly, there fore, do not give an indication that in adopting Clauses (4) and (5) of Article 124 of the Constitution, the intention of the Costituent Assembly was to exclude_ investigation and proof of misbehavior or incapacity of the judge sought to be removed, by a judicial body.
Having regard to the views expressed by Shri Alladi Krishnaswami Ayyar, who was a member of the Drafting Committee, while opposing the amend ments proposed by Shri M.Ananthasayanam Ayyangar, it is possible to infer that the intention of the Constituent Assembly was that the provision with regard to the machinery for such investigation and proof was a matter which need not be contained in the Constitution and it is a matter for which provision could be made by Parliament by law.
This is some of the historical material and back ground on the topic.
We may now proceed to consider the merits of the contentions.
RE: CONTENTION A: 28.
This contention has two aspects: whether a motion for removal of a Judge lapses upon the dissolution of the House of Parliament and secondly, the question whether it so lapses or not is a matter within the exclusive domain and decision of that House itself.
On the first aspect, the contention of the learned Attorney General and Shri Kapil Sibal, learned Senior Counsel, are similar.
On the second aspect, the learned Attorney General would say that the question whether a motion lapsed or not is to be decided on the basis of the provisions of law guiding the matter and the House itself is not its final arbiter.
Learned Attorney General would say that the Court alone has jurisdiction to examine and pronounce on the law of the matter.
On the question of lapse reliance was placed on the classic treatise of Erskine May 's "The Law, Privileges, Proceedings and Usage 47 of Parliament" [Twenty first Edition, London Butterworths 1989].
A motion is described as a "proposal made for the purpose of illustrating the decision of the House".
Accord ing to Erskine May, certain matters may be raised by only a substantive motion.
He says: "Certain matters cannot be debated, except on a substantive motion which allows a distinct decision of the House.
Amongst these are the conduct of the sovereign, the heir to the throne or other members of the Royal Family, a Governor General of an independent territory, the Lord Chancellor, the Speaker, the Chairman of Ways and Means, Members of either House of Parliament and judges of the superior courts of the United Kingdom, including persons holding the position of a judge, such as a judge in a court of bankruptcy and a county court, or a recorder. " 30. 'Sri Sibal placed strong reliance on the following statements in M.N.Kaul and S.L.Shakdher in "Practice and Procedure of Parliament" as to the effects of the dissolu tion of the House: "Dissolution, as already stated, marks the end of the life of a House and is followed by the constitution of a new House.
Once the House has been dissolved, the dissolution is irrevo cable.
There is no power vested in the Presi dent to cancel his order of dissolution and revive the previous House.
The consequences of a dissolution are absolute and irrevocable.
In Lok Sabha, which alone is subject to dissolu tion under the Constitution, dissolution "passes a sponge over the parliamentary slate".
All business pending before it or any of its committees lapses on dissolution.
No part of the records of the dissolved House can be carried over and transcribed into the records or registers of the new House.
In short, the dissolution draws the final curtain upon the existing House".
Adverting to the effect of dissolution on other business such as motions, resolutions etc.
, the learned authors say: "All other business pending in Lok Sabha, e.g., motions, resolutions, amendments supple mentary demands for grants etc., at whatever stage, lapses upon dissolution, as also the petitions presented to the House which stand referred to the Committee on Petitions." Learned Attorney General urged that a combined reading of Articles 107, 108 and 109 leads irresistibly to the conclusion that upon dissolution 48 of the House, all bills will lapse subject only to the exception stipulated in Article 108.
It is further urged that on first principle also it requires to be accepted that no motion should survive upon the dissolution of the House unless stipulated otherwise under the Rules of Procedure and conduct of business.
The doctrine of lapse, it is urged, is a necessary concomitant of the idea that each newly consti tuted House is a separate entity having a life of its own unless the business of the previous House is carried over by the force of statute or rules of procedure.
Both the learned Attorney General and Shri Kapil Sibal took us through the Rules of Procedure and Conduct of Business in Lok Sabha made under Article 118 of the Constitution to show that invaria bly all pending business come to an end with the expiry of the term of the House or upon its earlier dissolution.
Shri Ram Jethmalani for the petitioner sub committee referred to the conventions of the British Parliament and urged that pending business lapses on prorogation and as a general practice the House is usually prorogued before it is dissolved.
Learned counsel said that impeachment motions are sui generous in their nature and that they do not lapse.
It is.
however, necessary to distinguish the Indian Parliamen tary experience under a written Constitution from the Brit ish conventions.
Indeed, referring to the doctrine of lapse this Court in Purushothaman Nambudiri vs The State of Kerala [1962] Suppl.
1 SCR 753 Gajendragadkar J said: ".
In support of this argument it is urged that wherever the English parliamentary form of Government prevails the words "prorogation" and "dissolution" have acquired the status of terms of art and their significance and conse quence are well settled.
The argument is that if there is no provision to the contrary in our Constitution the English convention with regard to the consequence of dissolution should be held to follow even in India.
There is no doubt that, in English, in addition to bringing a session of Parliament to a close prorogation puts an end to all business which is pending consideration before either House at the time of such prorogation; as a result any proceedings either in the House or in any Committee of the house lapse with the session Dissolution of Parliament is invariably pre ceded by.
prorogation, and what is true about the result of prorogation" is, it is said, a fortiori true about the result of dissolution.
Dissolution of Parliament is sometimes de scribed as "a civil death of Parliament".
Ilbert, in his work on 'Parliament ' has ob served that "prorogation means the end of a session (not of a Parliament)"; and adds that "like dissolution, it kills all bills which have not yet passed".
He also describes disso lution as an "end of a Parliament (not merely of 49 a session) by royal proclamation", and ob serves that "it wipes the slate clean of all uncompleted bills or other proceedings". "[p.759 & 760].
After referring to the position in England that the dissolution of the House of Parliament brought to a close and in that sense killed all business of the House at the time of dissolution, the learned Judge said: " . .
Therefore, it seems to us that the effect of cl.
(5) is to provide for all cases where the principle of lapse on dissolution should apply.
If that be so, a Bill pending assent of the Governor or President is outside cl.
(5) and cannot be said to lapse on the dissolution of the Assembly." [p. 768] " . .
In the absence of cl. (5) it would have followed that all pending business, on the analogy of the English convention, would lapse on the dissolution of the Legisla tive Assembly.
It is true that the question raised before us by the present petition under Pal.
196 is not free from difficulty but, on the whole, we are inclined to take the view that the effect of cl.
(5) is that all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Legislative Assem bly.
In that sense we read cl.
(5) as dealing exhaustively with Bills which would lapse on the dissolution of the Assembly.
If that be the true position then the argument that the Bill which was pending assent of the President lapsed on the dissolution of the Legislative Assembly cannot be upheld." [P. 769] 31.
It is true that Purushothaman Nambudiri case dealt with a legislative measure and not a pending business in the nature of motion.
But, we are persuaded to the view that neither the doctrine that dissolution of a House "passes a sponge over parliamentary slate" nor the specific provisions contained in any rule or rules flamed under Article 118 of the Constitution determine the effect of dissolution on the motion for removal of a judge under Article 124.
the reason is that Article 124(5) and the law made thereunder exclude the operation of Article 118 in this area.
Section 3 of the Act provides: "3(1) If notice is given of a motion for presenting an address to the President praying for the removal of a Judge signed, (a) in the case of a notice given in the House of the People, by not less than one hundred members of that House; 50 (b) in the case of a notice given in the Council of States, by not less than fifty members of that Council; then, the Speaker or, as the case may be, the Chairman may, after consulting such persons, if any, as he thinks fit and after considering such materials, if any, as may be available to him, either admit the motion or refuse to admit the same.
(2) If the motion referred to in sub section (1) is admitted, the Speaker or, as the case may be, the Chairman shall keep the motion pending and constitute, as soon as may be, for the purpose of making an investigation into the grounds on which the removal of a Judge is prayed for, a Committee consisting of three members of whom (a) One shall be chosen from among the Chief Justices and other Judges of the Supreme Court; Co) one shall be chosen from among the Chief Justices of the High Courts; and (c) one shall be a person who is, in the opinion of the Speaker or, as the case may be, the Chairman, a distinguished jurist; Proviso &) Omitted Sub sections) as (3) to (9)) unnecessary here.
Section 6.(2) provides: "(2) If the report of the Committee contains a finding that the Judge is guilty of any misbe haviour or suffers from any incapacity, then, the motion referred to in sub section (1) of section 3 shall, together with the report of the Committee, be taken up for consideration by the House or the Houses of Parliament in which it is pending.
" The effect of these provisions is that the motion shall be kept pending till the committee submits its report and if the committee finds the Judge guilty, the motion shall be taken up for consideration.
Only one motion is envisaged which will remain pending.
No words of limitation that the motion shall be kept pending subject to usual effect of dissolution of the House can or should be imported.
The reason is that a law made by the Parliament and binding on the House can provide against the doctrine of lapse.
The law envisaged in article 124(5) is Parliamentary law which is of higher quality and efficacy than rules made by the House for itself under Article 118.
Such a law can, and under the present statute does 51 provide against the doctrine of lapse.
Further, article 118 expressly states that each House of Parliament may make rules "for regulating, subject to the provisions of this Constitution".
In State of Punjab vs Sat Pal Dang & Ors. ; this Court held that the law for purposes of Article 209 (analogues to Article 119) could even take the form of an Ordinance promulgated by the Governor of a State under Article 213 and that wherever there is repugnance between the Rules of Procedure framed under Article 208 (Article 118 in the ease of Parliament), the law made under Article 209 shall prevail.
In the constitutional area of removal of a Judge, the law made under Article 124(5) must be held to go a little further and to exclude the operation of the Rules under Article 118.
Indeed, no question of repugnance could arise to the extent the field is covered by the law under Article 124(5).
Such a view would indeed obviate some anomalies which might otherwise arise.
Rajya Sabha is not dissolved and a motion for presentation of address for the removal of the Judge can never lapse there.
Section 3 applies to both the Houses of Parliament.
The words "shall keep the motion pending" cannot have two different meanings in the two different contexts.
It can only mean that the consideration of the motion shall be deferred till the report of the committee implying that till the happening of that event the motion will not lapse.
We are of the view that the argument that such a motion lapses with the dissolution of the House of Parliament is not tenable.
The second limb of Contention A is that the question whether a motion has lapsed or not is a matter pertaining to the conduct of the business of the House of which the House is the sole and exclusive master.
No aspect of the matter, it is contended, is justificiable before a Court.
Houses of Parliament, it is claimed, are privileged to be the exclu sive arbiters of the legality of their proceedings.
Strong reliance has been placed on the decision in oft quoted decision in Bradlaugh vs Gosserr, There the exclusiveness of parliamentary jurisdiction on a matter related to the sphere where Parliament, and not the Court, had exclusive jurisdiction even if the matters were covered by a statute.
But where, as in this country and unlike in England, there is a written constitution which constitutes the funda mental and in that sense a "higher law" and acts as a limi tation upon the Legislature and other organs of the State as grantees under the Constitution, the usual incidents of parliamentary sovereignty do not obtain and the concept is one of 'limited Government '.
Judicial review is, indeed, an incident of and flows 52 from this concept of the fundamental and the higher law being the touchstone of the limits of the powers of the various organs of the State which derive power and, authori ty under Constitution and that the judicial wing is the interpreter of the Constitution and, therefore, of the limits of authority of the different organs of the State.
It is to be noted that the British Parliament with the Crown is Supreme and its powers are unlimited and courts have no power of judicial review of legislation.
This doctrine is in one sense the doctrine of ultra vires in the constitutional law.
In a federal set up the judiciary becomes the guardian of the Constitution.
Indeed, in A.K. Gopalan vs The State of Madras, ; Arti cle 13 itself was held to be ex abundante cautela and that even in its absence if any of the fundamental rights were infringed by any legislative enactment, the court had always power to declare the enactment invalid.
The interpretation of the Constitution as a legal instrument and its obligation is the function of the Courts.
"It is emphatically the province and duty of the judicial department to say what the law is".
In Re: Special Reference Case; , Gajendragadkar, CJ said: ". .though our Legislatures have plenary powers, they function within the limits pre scribed by the material and relevant provi sions of the Constitution.
In a democratic country governed by a written Constitution, it is the Constitution which is supreme and sovereig. . " But it is the duty of this Court to interpret the Con stitution for the meaning of which this Court is final arbiter.
Shri Kapil Sibal referred us to the following obser vations of Stephen J. in Bradlaugh vs Gosserr, supra: ".
It seems to follow that the House of Commons has the exclusive power of interpret ing the statute, so far as the regulation of its own proceedings within its own walls is concerned; and that even if that interpreta tion should be erroneous, this court has no power to interfere with it directly or indi rectly. " [p. 280 & 281] ".
The House of Commons is not a Court of Justice; but the effect of its privilege to regulate its own internal concerns practically invest it with the judicial character when it has to apply to particular cases the provi sions of Acts of Parliament.
53 We must presume that it discharges this func tion properly and with due regard to the laws, in the making of which it has so great a share.
If its determination is not in accord ance with law, this resembles the case of an error by a judge whose decision is not subject to appeal.
There is nothing startling in the recognition of the fact that such an error is possible.
If, for instance, a jury in a crimi nal case gives a perverse verdict, the law has provided no remedy.
The maxim that there is no wrong without a remedy does not mean, as it is sometimes supposed, that there is legal remedy for every moral or political wrong. . " [p. 285] The rule in Bradlaugh vs Gossett, supra, was held not applicable to proceedings of colonial legislature governed by the written constitutions Barton vs Taylor, and Redillusion (Hong Kong) Ltd. vs Attorney General of Hong Kong, ; The principles in Bradlaugh is.
that even a statutory right if it related to the sphere where Parliament and not the courts had exclusive jurisdiction would be a matter of the Parliament 's own concern.
But the principle cannot be extended where the matter is not merely one of procedure but of substantive law concerning matters beyond the Parliamen tary procedure.
Even in matters of procedure the constitu tional provisions are binding as the legislations are en forceable.
Of the interpretation of the Constitution and as to what law is the Courts have the constitutional duty to say what the law is.
The question whether the motion has lapsed is a matter to be pronounced upon the basis of the provisions of the Constitution and the relevant laws.
In deed, the learned Attorney General submitted that the ques tion whether as an interpretation of the constitutional processes and laws, such a motion lapses or not is exclu sively for the courts to decide.
The interpretation of the laws is the domain of the courts and on such interpretation of the constitutional provisions as well as the , it requires to be held that under the law such a motion does not lapse and the Courts retain jurisdiction to so declare.
Contention A is answered accordingly.
RE: CONTENTIONS (B), (C) AND (D): 34.
These contentions have common and over lapping areas and admit of being deal with and disposed of together.
On tile interpretative criteria apposite to the true meaning and scope of Articles 121, 124(4) and 124(5), indeed, three constructional options become avail able: 54 First: The entire power for taking all steps for the removal of a Judge, culminating in the presentation of an address by different Houses of Parliament to the Presi dent, is committed to the two Houses of Par liament alone and no initiation of any investigation is possible without the initiative being taken by the Houses them selves.
No law made by Parliament under Article 124(5) could take away this power.
The bar of Article 121 is lifted the moment any Member of Parliament gives notice of motion for the removal of a Judge and the entire allegations levelled by him would be open for discussion in the House itself.
It will be for the majority of the Members of the House t decide if and how they would like to have the allegations investigated.
Any abridging this power is bad.
Second: Since a motion for presenting an address to the President referred to in Arti cles 121 and 124 (4) has to be on ground of "proved" misbehaviour and incapacity, no such motion can be made until the allegations relating to misbehaviour or incapacity have first been found to be proved in some forum outside either Houses of Parliament Law under Article 124(5) is mandatory and until the Parliament enacts a law and makes provision for an investigation into the alleged misbeha viour or incapacity and regulates the proce dure therefor, no motion for removal of a Judge would be permissible under Article 124(4) and the House of Parliament would not be brought into the picture till some authori ty outside the two Houses of Parliament has recorded a finding of misbehaviour or incapac ity.
The emphasis is on the expression 'proved '.
Third: That Article 124(5) is only an enabling provision and in the absence of any enactment by the Parliament under that provi sion it would be open to either House to entertain a motion for the removal of a Judge.
However, it is open to the Parliament under Article 124(5) to enact a law to regulate the entire procedure starting with the investiga tion of the allegations against the Judge concerned and ending with the presentation of the address by the two Houses of Parliament.
It would be open to the Parliament to desig nate any authority of its choice for investi gating the allegations and also to regulate the 55 procedure for the consideration of the matter in either House.
As soon as a law has been enacted all its provisions would be binding on both Houses of Parliament and would even override any Rules flamed by the two Houses under Article 118 of the Constitution.
It will not be permissible for either House to act contrary to the provi sions of such Act.
The question as to when and in what circumstances motion would be allowed to be moved in either House of Parliament to lift the ban against the discussion of conduct of a Judge under Article 121 would be accord ing to such Act of Parliament.
In regard to the first and the second alternative propo sitions, the deliberations of the Joint Select Committee would indicate a sharp divide amongst the eminent men who gave evidence.
Particularly striking is the sharp contrast between the opinions of Mr. K.K. Shah and Mr. M.C. Setalvad.
The first view would tend to leave the matter entirely with the House, which can adopt any procedure even differing from case to case.
The matter would be entirely beyond judicial review.
Then there is the inevitable ' element of political overtone and of contemporary political exacerbations arising from inconvenient judicial pronouncements thus endangering judicial independence.
The third view would suffer from the same infirmities except that Parliament might itself choose to discipline and limit its own powers by enacting a law on the subject.
The law enacted under Article 124(5) might be a greatly civi lized piece of legislation deferring to values of judicial independence.
But then the Parliament would be free to repeal that law and revert hack to the position reflected in the first view.
The third view can always acquire back the full dimensions of the first position at the choice of the Parliament.
The second view has its own commendable features.
It enables the various provisions to be read harmoniously and, together, consistently with the cherished values of judicial independence.
It also accords due recognition to the word "proved" in Article 124(4).
This view would also ensure uniformity of procedure in both Houses of Parliament and serve to eliminate arbitrariness in the proceedings for removal of a Judge.
It would avoid duplication of the inves tigation and inquiry in the two Houses.
Let us elaborate on this.
56 36.
Article 121 ,and the material parts of Article 124 read as under: "121.
Restriction on discussion in Parlia ment.
No discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties except upon a motion for presenting an address to the Presi dent praying for the removal of the Judge as hereinafter provided.
Establishment and constitution of Supreme Court.
(1). . . . . . (2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty five years: Provided that in the case of appointment of a Judge other than the Chief Justice of India shall always be consulted: Provided further that (a) a Judge may, by writing under his hand addressed to the President, resign his office; (b) a Judge may be removed from his office in the manner provided in clause (4).
(4) A Judge of the Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of not less than two thirds of the members of that House present and voting has been pre sented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.
(5) Parliament may by law regulate the proce dure for the presentation of an address and for the investigation and proof of the misbe haviour or incapacity of a Judge under clause (4).
" Article 121 suggests that the bar on discussion in Parliament with respect to the conduct of any Judge is lifted 'upon a motion for presenting an address to the President praying for the removal of a Judge as hereinaf 57 provided '.
The word 'motion ' and 'as hereinafter provid ed ' are obvious references to the motion for the purpose of clause (4) of Article 124 which in turn, imports the concept of "proved" misbehaviour or incapacity.
What lifts the bar under Article 121 is the 'proved ' misbehaviour or incapaci ty.
Then arises the question as to how the investigation and proof of misbehaviour or incapacity preceding the stage of motion for removal on the ground of "proved" misbehaviour or incapacity under Article 124(4) is to be carried on.
Clause (5) of Article 124 provides for enactment of a law for this purpose.
The seminal question is whether clause (5) is merely an enabling provision particularly in view of the use of the word 'may ' therein, or it incorporates a condition precedent on the power of removal of the parliament.
In other words, can the function of removal under Article 124(4) be per formed without the aid of a law enacted under clause (5)?If it can be, then the power for investigation and proof of misbehaviour or incapacity of a Judge must be found in clause (4) itself and the scope of clause (5) limited only to enactment of a law for this limited purpose if the Par liament so desires and not otherwise.
The other view is that clause (5) contains a constitutional limitation on the power of removal contained in clause (4) so that it can be exer cised only on misbehaviour or incapacity "proved" in accord ance with the law enacted under clause (5).
In such situa tion, the power of the Parliament would become available only for enacting the law under clause (5) and if misbeha viour or incapacity is "proved" in accordance with such law.
The motion which lifts the bar contained in Article 121 is really a motion for such removal under clause (4) of Article 124 moved in the House after the alleged misbehavior or incapacity has been proved in accordance with the law enact ed by the Parliament under clause (5) of Article 124.
In this connection, the parliamentary procedure commences only after proof of misbehaviour or incapacity in accordance with the law enacted under clause (5), the machinery for investi gation and finding of proof of the misbehaviour or incapaci ty being statutory.
governed entirely by provisions of the law enacted under clause (5).
This also harmonises Article 121.
The position would be that an allegation of misbeha viour or incapacity of a Judge has to be made, investigated and found proved in accordance with the law enacted by the Parliament under Article 124(5) without the Parliament being involved upto that stage; on the misbehaviour or incapacity of a Judge being found proved in the manner provided by that law, a motion for presenting an address to the President for removal of the Judge on that ground would be moved in each House under Article 124(4); on the motion being so moved after the proof of misbehaviour or incapacity and it being for presenting an address to the President praying for removal of the Judge, the bar.
on 58 discussion contained in Article 121 is lifted and discussion can take place in the Parliament with respect to the conduct of the Judge; and the further consequence would ensue de pending on the outcome of the motion in a House of Parlia ment.
If, however, the finding reached by the machinery provided in the enacted law is that the allegation is not proved, the matter ends and there is no occasion to move the motion in accordance with Article 124(4).
If it be accepted that clause (4) of Article 124 by contains the complete power of removal and the enactment of a law under clause (5) is merely enabling and not a consti tutional limitation on the exercise of the power of removal under clause (4), then some other questions arise for con sideration.
If clause (5) is merely an enabling provision, then it cannot abridge the scope of the power in clause (4) and, therefore, the power of a House of Parliament under clause (4) cannot be curtailed by a mere enabling law enact ed under clause (5) which can be made only for the purpose of aiding or facilitating exercise of the function under clause (4).
In that situation, enactment of the enabling law under clause (5) would not take the sphere covered by the law outside the ambit of Parliament 's power under clause (4).
The argument that without enactment of the law under clause (5), the entire process from the time of initiation till presentation of the address to the President, including investigation and proof of the misbehaviour or incapacity, is within the sphere of Parliament, but on enactment of a law under clause (5) that area is carved out of the Parlia ment 's sphere and assumes statutory character appears tenu ous.
If the argument were correct, then clause (5), would merely contemplate a self abnegation.
The other view is that clause (4) of Article 124 gives power to the Parliament to act for removal of the Judge on the ground of proved misbehaviour or incapacity in the manner prescribed if the matter is brought before it at this stage; and for reaching that stage the Parliament is required to enact a law under clause (5) regulating the procedure for that purpose.
This means that making of the allegation, initiation of the proceedings, investigation and proof of the misbehaviour or incapacity of a Judge are governed entirely by the law enacted by the Parliament under clause (5) and when that stage is reached, the Parliament comes into the picture and the motion for removal of the Judge on the ground of proved misbehaviour or incapacity is moved for presentation of the address to the President in the manner prescribed.
The matter not being before the Parliament prior to this stage is also indicated by Article 121 which lifts the bar on discussion in Parliament only upon a motion for presenting an address to the President as provided later in Article 124(4).
The bar in 59 Article 121 applies to discussion in Parliament but investi gation and proof of misconduct or incapacity cannot exclude such discussion.
This indicates that the machinery for investigation and proof must necessarily be outside Parlia ment and not within it.
In other words, proof which involves a discussion of the conduct of the Judge must be by a body which is outside the limitation of Article 121.
The word 'proved ' also denotes proof in the manner understood in our legal system i.e. as a result of a judicial process.
The policy appears to be that the entire stage upto proof of misbehaviour or incapacity, beginning with the initiation of investigation on the allegation being made, is governed by the law enacted under Article 124(5) and in view of the restriction provided in Article 121, that machinery has to be outside the Parliament and not within it.
If this be so, it is a clear pointer that the Parliament neither has any role to play till misconduct or incapacity is round proved nor has it any control over the machinery provided in the law enacted under Article 124(5).
The Parliament comes in the picture only when a finding is reached by that machinery that the alleged misbehaviour or incapacity has been proved.
The enacted under Article 124(5) itself indicates that the Parliament so understood the integrated scheme of Articles 121, 124(4) and 124(5).
The general scheme of the Act conforms to this view.
Some ex pressions used in the Act, particularly sections 3 and 6 to suggest that the motion is initiated in the House or is kept pending in the House during investigation can be reconciled, if this Constitutional Scheme is accepted.
Those expressions appear to have been used since the authority tO entertain the complaint is 'Speaker/Chairman ', the complaint is de scribed as 'motion ' and the complaint can be made only by the specified number of Members of Parliament.
In substance it only means that the specified number of M.Ps.
alone can make such a complaint; the complaint must be made to the 'Speaker/Chairman '; on receiving such a complaint if the Speaker/Chairman form the opinion that there is a prima facie case for investigation, he will constitute the judi cial committee as prescribed; and if the finding reached is 'guilty ' then the Speaker/Chairman commences the parliamen tary process in accordance with Article 124(4) for removal of the Judge and the bar in Article 121 is lifted.
If this be the correct position, then the validity of law enacted by the Parliament trader clause (5) of Arti cle 124 and the stage upto conclusion of the inquiry in accordance with that law being governed entirely by statute would be open to judicial review as the parliamentary proc ess under Article 124(4) commences only after a finding is recorded that the alleged misbehaviour or incapacity is proved in the inquiry conducted in accordance with the law enacted under clause (5).
For this reason the argument based on exclusivity of Parliament 's jurisdiction over 60 the process and progress of inquiry under the Judges (in quiry) Act, 1968 and consequently exclusion of this Court 's jurisdiction in the matter at this stage does not arise.
For the same reason, the question of applying the doctrine of lapse to the motion made to the Speaker giving rise to the constitution of the Inquiry Committee under the Act, also does not arise and there can be no occasion for the House to say so at any time.
If the House is, therefore, not required to consider this question since the parliamentary process can commence only after a finding of guilt being proved, the further question of a futile writ also does not arise.
The argument that the House can decide even after a finding of guilt that it would not proceed to vote for removal of the Judge is not germane to the issue since that is permissible in the Constitutional Scheme itself under Article 124(4) irrespective of the fact whether Article 124(5) is a mere enabling provision or a constitutional limitation on the exercise of power under Article 124(4).
It is not the law enacted under Article 124(5) which abridges or curtails the parliamentary process or exclusive ly of its jurisdiction but the Constitutional Scheme itself which by enacting clauses (4) and (5) simultaneously indi cated that the stage of clause (4) is reached and the proc ess thereunder commences only when the alleged misbehaviour or incapacity is proved in accordance with the law enacted under clause (5).
It is only then that the need for discussing a Judge 's conduct in the Parliament arises and, therefore, the bar under Article 121 is lifted.
in short, the point of time when the matter comes first before the Parliament in the Constitutional Scheme, Article 121 provides that the bar is lifted.
The other view creates difficulties by restricting discussion in Parliament on a motion which would be before it.
The suggestion to develop a convention to avoid discus sion at that stage or to prevent it by any other device adopted by the Speaker after admitting the motion, does not appear to be a satisfactory solution or explanation.
That this obvious situation could have been left unprovided for and the field left to a convention to be developed later, while enacting these provisions with extreme care and cau tion in a written Constitution, is extremely unlikely.
This indicates that this area is not left uncovered which too is a pointer that the stage at which the bar in Article 121 is lifted, is the starting point of the parliamentary process i.e. when the misbehaviour or incapacity is proved; the stage from the initiation of the process by ' making the allegation, its mode, investigation and proof are covered by the law enacted under clause (5); in case the allegation is not proved, the condition precedent to invoke the Parlia ment 's jurisdiction under clause (4), does not exist, which is the reason for section 6 of 1968 Act saying so; and in case it is proved, the 61 process under clause (4) commences, culminating in the result provided in it.
In Part V of the Constitution relating to 'The Union ', Article 124 is in 'Chapter IV The Union Judiciary ' while Articles 118 and 119 relating to Parliament 's power to make rules or enact a law to regulate its procedure and the conduct of its business are in 'Chapter II Parliament ' under the heading 'Procedure Generally ' wherein Article 121 also finds place.
The context and setting in which clause (5) appears along with clause (4) in Article 124 indicate its nature connected with clause (4) relating to curtailment of a Judge 's tenure, clause (4) providing the manner of removal and clause (5) the pre requisite for removal distin guished from Articles 118, 119 and 121, all of which relate to procedure and conduct of business in Parliament.
Article 124(5) does not, therefore, operate in the same field as Article 118 relating to procedure and conduct of business in Parliament.
Accordingly, the scheme is that the entire process of removal is in two parts the first parts under clause (5) from initiation to investigation and proof of misbehaviour or incapacity is covered by an enacted law, Parliament 's role being only legislative as in all the laws enacted by it; and the second part only after proof under clause (4) is in Parliament, that process commencing only on proof in accordance with the law enacted under clause (5) Thus the first part is entirely statutory while the second part alone is the parliamentary process.
The Constitution intended a clear provision for the first part covered fully by enacted law, the validity of which and the process thereunder being subject to judicial review independent of any political colour and after proof it was intended to be a parliamentary process.
It is this synthesis made in our Constitutional Scheme for removal of a Judge.
If the motion for presenting an address for removal is envisaged by Articles 121 and 124(4) 'on ground of proved misbehaviour or incapacity ' it presupposes that misbehaviour or incapacity has been proved earlier.
This is more so on account of the expression 'investigation and proof used in clause (5) with specific reference to clause (4).
This indicates that 'investigation and proof ' of misbehaviour or incapacity is not within clause (4) but within clause (5).
Use of the expression 'same session ' in clause (4) without any reference to session in clause (5) also indicates that session of House has no significance for clause (5) i.e., 'investigation and proof ' which is to be entirely governed by the enacted law and not the parliamentary practice which may be altered by each Lok Sabha.
62 45.The significance of the word 'proved ' before the expression 'misbehaviour or incapacity ' in clause (4) of Article 124 is also indicated when the provision is compared with Article 317 providing for removal of a member of the Public Service Commission.
The expression in clause (1) of Article 317 used for describing the ground of removal is 'the ground of behaviour ' while in clause (4) of Article 124, it is, 'the ground of proved misbehaviour or incapaci ty '.
The procedure for removal of a member of the Public Service Commission is also prescribed in clause (1) which provides for an inquiry by the Supreme Court on a reference made for this purpose.
In the case of a Judge, the procedure for investigation and proof is to be in accordance with the law enacted by the Parliament under clause (5) of Article 124.
In view of the fact that the adjudication of the ground of misbehaviour under Article 317 (1) is to be by the Su preme Court, in the case of a Judge who is a higher consti tutional functionary, the requirement of judicial determina tion of the ground is re inforced by the addition of the word 'proved ' in Article 124(4) and the requirement of law for this purpose under Article 124(5).
Use of the word 'may ' in clause (5) indicates that for the 'procedure for presentation of address ' it is an enabling provision and in the absence of the law the general procedure or that resolved by the House may apply but the 'investigation and proof ' is to be governed by the enacted law.
The word 'may ' in clause (5) is no impediment to this view.
On the other hand, if the word 'shall ' was used in place of 'may ' in clause (5) it would have indicated that it was incumbent on the Parliament to regulate even the proce dure for presentation of an address by enacting such a law leaving it no option even in the matter of its procedure after the misbehaviour or incapacity had been investigated and found true. 'Sometimes, the legislature uses the word "may" out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed. ' (See: State of Uttar Pradesh vs Joginder Singh; , at 202.
Indeed, when a provision is intended to effectuate a right here it is to effectuate a constituational protection to the Judges under Article 124 (4) even a provision as in Article 124 (5) which may otherwise seem merely enabling, becomes mandatory.
The exercise of the powers is rendered obligatory.
In Fred eric Guilder julius vs The Right Rev.
The Lord Bishop of Oxford; the Rev. Thomas Tellsson Carter, [1879 80] 5 A.C. 214 at p. 24zt, Lord Blackburn said: ,.The enabling words are construed as compulsory whenever the object of the power is to effectuate a legal right. " 63 In Punjab Sikh Regular Motor Service, Moudhapura vs The Regional Transport ,Authority, Raipur & Anr, ; , this Court referring to the word 'may ' in Rule 63 (a) in Central Provinces and Berar Motor Vehicles Rules, 1940, observed: ".
On behalf of the appellant attention was drawn to the expression 'may ' in Rule 63.
But in the context and the language of the rule the word 'may ' though permissive in form, must be held to be obligatory.
Under Rule 63 the power to grant renewal of the counter signa ture on the permit in the present case is conferred on the Regional Transport Authority, Bilaspur.
The exercise of such power of renew al depends not upon the discretion of the authority but upon the proof of the particular cases out of which such power arises. 'Ena bling words are construed as compulsory when ever the object of the power is to effectuate a legal right '.
(See: Julius vs Bishop of Oxford, 5 A.C. 214, 244). " If the word 'may ' in Article124 (5) is given any other meaning that sub Article would render itself, to be treated by the Parliament, as superfluous, redundant and otiose.
The power to prescribe a procedure for the exercise of power under Article 124 (4) could otherwise also be available to the House.
The law envisaged under Article 124(5) is not such a law; but one which would effectuate the constitution al policy and philosophy of the machinery for removal of Judges.
The use of the word 'may ' does not, therefore, neces sarily indicate that the whole of clause (5) is an enabling provision leaving it to the Parliament to decide whether to enact a law even for the investigation and proof of the misbehaviour or incapacity or not.
The mere fact that clause (5) does not form a part of clause (4) itself, as appears to have been considered at one stage when the constitution was being drafted, does not reduce the significance or content of clause (5).
It is likely that the framers of the Constitution thought of clearly demarcating the boundaries and, therefore, indicated that upto the stage of proof of misbehaviour of incapacity the field is covered by a law enacted by the Parliament, the first pan being covered by clause (5) and the latter by clause (4) with the only difference that the Parliament was given the option to regulate even the procedure for the presentation of an address after the misbehaviour or inca pacity had been proved by enacting a law for the purpose to make it more definite and consistent.
64 48.
Similarly, use of word 'motion ' to indicate the process of investigation and proof in the because the allegations have to be presented to the 'Speaker ' does not make it 'motion in the House ' not withstanding use of that expression in Section 6.
Otherwise, section 6 would not say that no further step is to be taken in case of a finding of 'not guilty '.
It only means that when the allegation is not proved, the Speaker need not commence the process under clause (4) which is started only in case it is proved.
The Speaker is, therefore, a statutory authority under the Act chosen because the further process is parliamentary and the authority to make such a complaint is given to Members of Parliament.
Moreover, to the enact ment under Article 124(5) cannot be a safe guide to deter mine the scope of Article 124(5).
If this construction of the inter connection amongst Articles 118,121, 124 (4) and 124 (5) is the proper one to be placed on them, as indeed we so do, the provisions of the do not foul with the Constitutional Scheme.
On scope of the law under Article 124(5), the idea of regulating procedure for (i) Presentation of the address; (ii) Investigation and proof of misbehaviour or incapacity admit of two possible options of interpretation.
The idea of "Presentation of the address" may be confined to the actual presentation of address by both Houses of the Parliament; or may be held to cover the entire process from initiation by the motion in the House till the final act of delivery of the address.
If the first view is correct the law under Article 124(5) would apply at the stage of investigation and proof of misbehaviour or incapacity and at the final stage of presentation of address after the motion is adopted by both the Houses.
The motion and its consideration and adop tion by the House would be outside the ambit of such law and it would be regulated by the rule of procedure made under Article I 18.
This view is too narrow.
By bringing in the rules of procedure of the House made under Article 118 it introduces an element of uncertainty and might affect inde pendence of the judiciary.
Second view is to be preferred.
It enables the entire process of removal being regulated by a law of Par liament ensures uniformity and reduces chances of arbi trariness.
Article I 18 is a general provision conferring on each House of Parliament the power to make its own rules of procedure.
These rules are not binding on the House and can be altered by the House at any time.
A breach of such rules amounts to an irregularity and is not subject to judicial review in view of Article 122.
Article 124(5) is in the nature of a special provi sion intended to regulate the procedure for removal of a Judge under Article 124(4) which 65 iS not a part of the normal business of the House but is in the nature of special business.
It covers the entire field relating to removal of a Judge.
Rules made under Article 118 have no application in this field.
Article 124(5) has no comparison with Article 119.
Articles 118 and 119 operate in the same field viz. normal business of the House.
It was, therefore, necessary to specifically prescribe that the law made under Article 119 shall prevail over the rules of procedure made under Article 118.
Since Article 118 and 124(5) operate in different fields a provision like that contained in Article 119 was not necessary and even in the absence of such a provision, a law made under Article 124 (5) will override the rules made under Article 118 and shall be binding on both the Houses of Parliament.
A violation of such a law would constitute illegality and could not be immune from judical scrutiny under Article 122(1).
Indeed, the Act reflectS the constitutional philoso phy of both the judicial and political elementS of the process of removal.
The ultimate authority remains with the Parliament in the sense that even if the Committee for investigation records a finding that the Judge is guilty of the charges it is yet open to the Parliament to decide not to present an address to the President for removal.
But if the Committee records a finding that the Judge is not guilty, then the political element in the process of removal has no further option.
The law is, indeed, a civilised piece of legislation reconciling the concept of accountability of Judges and the values of judicial independence.
Indeed, the dissenting note of Dr. L.M. Singhvi, in the Report of the Joint Committee on the Judges (Inquiry) Bill, 1964 brings into sharp focus the thrust of the report of the majority.
It is to be recalled that the 1964 Bill vested the power to initiate the process of removal with the Executive.
That was found objectionable and inconsistent with the idea of judicial independence.
However, as to the nature of the authority which was the repository of the power to investigate, the dissenting opinion, by necessary implication, emphasises the majority view which ultimately became the law.
Dr. Singhvi in his dissent says: "10.
The present Bill seeks to provide only the modality of a tribunal clothed in the nomenclature of a Committee.
The Committee contemplated in the Bill may well be consid ered a tribunal or an "authority" within the meaning of Articles 226 and 227 of the Consti tution, rendering itS work subject to judicial review and supervision.
What is more, the Parliament is not left with any choice in the matter and procedure of parliamen 66 tary committee has been wholly excluded.
With this I am not in agreement.
In both these matters in respect of which I have dissented from my esteemed colleagues in the Joint Select Committee, there appears to be an imprint on the provisions of the Bill of the now defunct Burmese Constitution, which provided that a notice of such resolution should be signed by not less than one fourth of the total membership of either Chamber of Parliament and further that the charge would be investigated by a special tribunal (section 143 of the Burmese Constitution).
In the Burmese case, the special tribunal was to consist of the President or his nominee and the Speakers of the Chamber of Nationalities and the Cham ber of Deputies.
I feel that the Burmese analogue is neither inspiring nor instructive, and that the more highly evolved procedures of other democratic constitutions which have been tried and tested for centuries would have served us better".
Our conclusions, therefore, on contentions B, C and D are as under: The constitutional process for removal of a Judge upto the point of admission of the motion, constitution of the Committee and the recording of findings by the Committee are not, strictly, proceedings in the Houses of Parliament.
The Speaker is a statutory authority under the Act.
Upto that point the matter cannot be said to remain outside the Court 's jurisdiction.
Contention B is answered accordingly.
Prior proof of misconduct in accordance with the law made under Article 124(5) is a condition precedent for the lifting of the bar under Article 121 against discussing the conduct of a Judge in the Parliament.
Article 124 (4) really becomes meaningful only with a law made under Article 124(5).
Without such a law the constitutional scheme and process for removal of a Judge remains inchoate.
Contention C is answered accordingly.
The Speaker while admitting a motion and constituting a Committee to investigate the alleged grounds of misbehaviour or incapacity does not act as part of the House.
The House does not come into the picture at this stage.
The provisions of the are not unconstitutional as abridging the powers and privileges of the House.
The is constitutional and is intra vires.
Contention D is disposed of accordingly.
67 RE: CONTENTION (E) 56.
It is urged by Shri Sibal that having regard to the serious consequences that flow from the admission of a motion by the Speaker and the decision to constitute a Committee for investigation, it is incumbent upon the Speak er to afford an opportunity to the Judge of being heard before such a decision is taken.
It is urged that such decision has momentous conseqences both to the Judge and to the judicial system as a whole and that any politically motivated steps to besmear a Judge will not merely affect the Judge himself but also the entire system of administra tion of justice.
If a motion brought up with collateral and oblique motives, it would greatly advance the objects and purposes of if the Judge con cerned himself is heard before a decision to admit a ,"notion which has shattering consequences so far as the Judge is concerned is taken.
The minimum requirements of natural justice, appropriate in the context, says learned counsel, require that the Judge should have an opportunity of being heard.
Shri Jethmalani, on the contrary, contended that it would be highly inappropriate that the Speaker should issue notice to a Judge and call upon him to appear before the Speaker.
That apart, Shri Jethmalani said at that stage of the proceedings where the Speaker merely decides that the matter might bear investigation no decisions affecting the rights, interests or legitimate expectation can be said to have been taken.
Shri Jethmalam sought to point out that these proceedings could not be equated with disciplinary or penal proceedings.
The Speaker does not decide anything against the Judge at that stage.
Referring to the nature and purpose of such preliminary proceedings Corpus Juris Secundum (Vol.
48A) says: "As a general rule, disciplinary or removal proceedings relating to Judges are sui generis and are not civil or criminal in nature; and their purpose is to inquire into judical conduct and thereby maintain standards of judicial fitness".
[p.614] As to the stage at which there is a need for notice and opportunity to the Judge to be heard the statement of the law is: "The general rule is that before a Judge may be disciplined, as by removal, he is entitled to notice and an opportunity to defend even though there is no statute so requiring.
Ordinarily, 68 the right to defend is exercised in a trial or hearing, as considered infra 51.
More specifi cally the Judge is entitled to notice of the particular charges against him.
In addition, notice of the charge should be given suffi ciently in advance of the time for presenting a defence to permit proper preparation of a showing in opposition".
(pp. 613 614) But negativing the position that the Judge would be entitled to notice even at the preliminary stage it is stated: "Investigations may be conducted into matters relating to judicial conduct as a preliminary to formal disciplinary proceedings.
A judiciary commission may conduct an investi gation into matters relating to judicial conduct as a preliminary to formal discipli nary proceedings, and a court may, under its general powers over inferior courts, appoint a special commissioner to preside over a prelim inary investigation.
A court rule providing that a Judge charged with misconduct should be given a reasonable opportunity in the course of a preliminary investigation to present such matters as he may choose, affords him more protection than is required by constitutional provisions".
[p. 615] 58.
The position is that at the stage of the provisions when the Speaker admits the motion under section 3 of the , a Judge is not, as a matter of right, entitled to such notice.
The scheme of the statute and rules made thereunder by necessary implication, exclude such a right.
But that may not prevent the Speaker, if the facts and circumstances placed before him indicate that hearing the Judge himself might not be inappropriate, might do so.
But a decision to admit the motion and constitute a Commit tee for investigation without affording such an opportunity does not, by itself and for that reason alone, vitiate the decision.
Contention E is disposed of accordingly.
RE:CONTENTION (F) 59.
The substance of this contention as presented by the learned counsel for the petitioner, "Sub Committee" argued with particular emphasis by Shri R.K. Garg is that the constitutional machinery for removal of a Judge is merely a political remedy for judicial misbehaviour 69 and does not exclude the judicial remedy available to the litigants to ensure and enforce judicial integrity.
It is urged that the right to move the Supreme Court to enforce fundamental rights is in itself a fundamental right and that takes within its sweep, as inhering in it, the right to an impartial judiciary with persons of impeccable integrity and character.
Without (his the fundamental right to move court itself becomes barren and hollow.
It is urged that the court itself has the jurisdiction nay a duty to ensure the integrity and impartiality of the members composing it and restrain any member who is found to lack in those essential qualities and attainments at which public confidence is built.
It is true that society is entitled to expect the high est and most exacting standards of propriety in judicial conduct.
Any conduct which tends to impair public confidence in the efficiency integrity and impartiality of the court is indeed forbidden.
In Corpus Juris Secundum (Vol.
48A) refer ring to the standards of conduct, disabilities and privi leges of Judges, it is observed: "The State which creates a judicial office may set appropriate standards of conduct for a Judge who holds that office, and in many jurisdictions, courts acting within express or implied powers have adopted or have followed certain canons or codes of judicial conduct.
The power of a particular court in matters of ethical supervision and the maintenance of standards for the judiciary may be exclusive.
Guidelines for judicial conduct are found both in codes of judicial conduct and in general moral and ethical standards expected of judi cial officers by the community.
Canons or codes are intended as a statement of general principles setting forth a wholesome standard of conduct for judges which will reflect credit and dignity on the profession and illsolar as they prescribe conduct which is malum in so as opposed to malum prohibitum they operate to restate those general prinici ples that have always governed judicial con duct.
Although these canons have been held to be binding on judges and may have the force of law where promulgated by the courts, except as legislatively enacted or judicially adopted they do not of themselves have the force and effect of law".
[pp. 593 594] the nature of prescribed conduct it is stated: 70 "A Judge 's official conduct should be free from impropriety and the appearance of impro priety and generally, he should refrain from participation in activities which may tend to lessen public respect for his judicial office.
It is a basic requirement, under general guidelines and canons of judicial conduct, that a Judge 's official conduct be free from impropriety and the appearance of impropriety and that both his official and personal beha viour be in accordance with the highest standard society can expect.
The standard of conduct is higher than that expected of lay people and also higher than that expected of attorneys.
The ultimate standard must be conducted which constantly reaffirms fitness for the high responsibilities of judicial office and judges must so comfor '.
themselves as to dignify the administration of justice and deserve the confidence and respect of the public.
It is immaterial that the conduct deemed objectionable is probably lawful albeit unjudicial or that it is perceived as lowhu mored horseplay.
In particular, a judge should refrain from participation in activities which may tend to lessen public respect for his judicial office and avoid conduct which may give rise to a reasonable belief that he has so participated.
In fact even in his private life a judge must adhere to standards of probity and propriety higher than those deemed acceptable for oth ers.
While a judge does have the right to entertain his personal views on controversial issues and is not required to surrender his rights or opinions as a citizen his right of free speech and free association are limited from time to time by his official duties and he must be most careful to avoid becoming involved in public controversies".
594~596] In Sampath Kumar & Ors.
vs Union of India & Ors, [1985 ] 4 S.C.C. 458, dealing with the qualifications, accomplish ments and attainments of the members of the Administrative Tribunal, which were intended to substitute for the High Courts, this court emphasised the qualities essential for discharging judicial functions.
But we are afraid the proposition that, apart from the constitutional machinery for removal of a Judge, the judiciary itself has the jurisdiction and in appropriate cases a duty to enquire into the integrity of one of its members and restrain the Judge from exercising judicial functions is beset with grave risks.
The court would then indeed be acting as a tribunal1 for the removal of a Judge.
Learned counsel supporting the proposition 71 stated that the effect of restraining a Judge from exercis ing judicial functions is not equivalent to a removal be cause the conditions of service such as salary etc.
of a Judge would not be impaired.
But we think that the general proposition that the court itself has such a jurisdiction is unacceptable.
It is productive of more problems then it can hope to solve.
The relief of a direction to restrain the Judge from discharging judicial functions cannot be granted.
It is the entire Constitutional Scheme including the provisions relat ing to the process of removal of a Judge which are to be taken into account for the purpose of considering this aspect.
It is difficult to accept that there can be any right in anyone running parallel with the Constitutional Scheme for this purpose contained in clauses (4) and (5) of Article 124 read with Article 121.
No authority can do what the Constitution by necessary implication forbids.
Inciden tally, this also throws light on the question of interim relief in such a matter having the result of restraining the Judge from functioning judicially on initiation of the process under the Judge (Inquiry) Act, 1968.
The Constitu tional Scheme appears to be that unless the alleged misbeha viour or incapacity is 'proved ' in accordance with the provisions of the law enacted under Article 124(5) and a motion for presenting an address for removal of the Judge on the ground of proved misbehaviour or incapacity is made, because of the restriction contained in Article 121, there cannot be a discussion about the Judge 's conduct even in the Parliament which has the substantive power of removal under Article 124(4).
If the Constitutional Scheme therefore is that the Judge 's conduct cannot be discussed even in the Parliament which is given the substantive power of removal, till the alleged misconduct or incapacity is 'proved ' in accordance with the law enacted for this purpose, then it is difficult to accept that any such discussion of the conduct of the Judge or any evaluation or inferences as to its merit is permissible according to law elsewhere except during investigation before the Inquiry Committee constituted under the statute for this purpose.
The indication, therefore, is that interim direction of this kind during the stage of inquiry into the alleged misbehaviour or incapacity is not contemplated it being alien to our Constitutional Scheme.
The question of propriety is, however, different from that of legality.
The absence of a legal provision, like Article 3 17(2) in the case of a Member of Public Service Commission, to interdict the Judge faced with such an inquiry from contining to discharge judicial functions pending the outcome of the inquiry or in the event of a finding of misbehaviour or incapacity being proved till the process of removal under Article 124(4) is complete, does not necessarily indicate that the Judge shall continue to function during that period.
That area is to be covered by the 72 sense of propriety of the learned Judge himself and the judicial tradition symbolised by the views of the Chief Justice of India.
It should be expected that the learned Judge would be guided in such a situation by the advice of the Chief Justice of India, as a matter of convention unless he himself decides as an act of propriety to abstain from discharging judicial functions during the interregnum.
Since the learned Judge would continue to hold the office of a Judge unless he resigns or is removed, an arrangement to meet the situation has to be devised by the Chief Justice.
The Constitution while providing for the suspension of a Member of a Public Service Commission in Article 3 17 (2) in a similar situation has deliberately abstained from making such a provision in case of higher constitutional function aries, namely, the Superior Judges and President and Vice President of India, facing impeachment.
It is reasonable to assume that the framers of Constitution had assumed that a desirable convention would be followed by a Judge in that situation which would not require the exercise of a power of suspension.
Propriety of the desirable course has to be viewed in this perspective.
It would also be reasonable to assume that the Chief Justice of India is expected to find a desirable solution in such a situation to avoid embarrass ment to the learned Judge and to the Institution in a manner which is conducive to the independence of judiciary and should the Chief Justice of India be of the view that the interests of the institution of judiciary it is desirable for the learned Judge to abstain from judicial work till the final outcome under Article 124(4), he would advise the learned Judge accordingly.
It is further reasonable to assume that the concerned learned Judge would ordinarily abide by the advice of the Chief Justice of India.
All this is, however, in the sphere of propriety and not a matter of legal authority to, permit any court to issue any legal directive to the Chief Justice of India for this purpose.
Accordingly Contention F is rejected.
RE:CONTENTION (G) 63.
This relates to the mala fides alleged against the Speaker.
The averments in this behalf are identical in both Raj Birbal 's and Sham Ratan Khandelwal 's peti tions.
We may notice the relevant averments: "It is, therefore, disconcerting to note that the Speaker acted contrary to Constitutional practice.
It is assumed that this high Consti tutional functionary would have known of the well settled and established constitutional practice in regard to the fact that motions lapse with the dissolution of the House.
The action of the Speaker, therefore, in admitting the motion in the manner that he did, smacks of mala fides and, therefore, de 73 serves to be struck down.
The action of the Speaker is mala fide on yet another count.
The Speaker has not resigned from the primary membership of the Janta Dal.
The petitioners verily believe that the first signatory to the motion is the erstwhile Prime Minister of India Shri V.P. Singh who happens also to be the leader of the Janta Dal.
The signatories to the said motion, the petition ers verily believe, belong mostly to the Janta Dal, though the details of this fact are not precisely known to the petitioners.
The Speak er, as has been indicated earlier, ought to have allowed parliament to look into the matter and discuss as to whether or not the motion ought to be admitted.
The Speaker ought to have at least tabled the motion in the House to ascertain the views of the Members of parliament belonging to various Houses.
The Speaker, to say the least, ought to have transmitted all materials to Justice Ramaswami and sought a response from him before attempt ing to admit the motion.
The Speaker ought to have dealt with the motion much earlier and transmitted to Justice Rammaswami all the materials as well as the views that might have been expressed to him in the course of his consultations which enabled him to come to a decision.
The Speaker in the very least ought to have ascertained the wishes of the House in this regard.
The Speaker ought not to have decided to admit the motion in the manner he did on the last evening of the 9th Lok Sabha amidst din and noise, when what he spoke was also not entirely audible in the House.
The Speaker is a high Constitutional functionary and ought to have exercised his functions in the highest traditions of the office of this high constitutional function ary.
The Speaker ought also not to have dealt with the motion, the prime movers of which are members of his own party. 'the Speaker ought to have disqualified himself in this regard and placed the matter for the discussion of the House.
The conduct of the Speaker in this entire episode was unbecoming of a high Con stitutional functionary.
The action of the Speaker is mala fide and deserves to be struck down on this count alone." The averments as to mala fides are intermixed with and inseparable from touching the merits of certain constitu tional issues.
Indeed, mala fides are sought to be impugned to the Speaker on the grounds that he did 74 not hear the Judge, did not have the motion discussed in the House etc.
We have held these were not necessary.
But a point was made that the Speaker not having entered appearance and denied these allegations on oath must be deemed to have admitted them.
It appears to us that even on the allegations made in the petition and plea of mala fides which require to be established on strong grounds, no such case is made out.
A case of mala fides cannot be made out merely on the ground of political affiliation of the Speaker either.
That may not be a sufficient ground in the present context.
At all events, as the only statutory au thority to deal with the matter, doctrine of statutory exceptions or necessity might be invoked.
Contention G cannot therefore be accepted.
RE :CONTENTION (H) 65.
This pertains to the locus standi of "Sub Committee on the Judicial Accountability" and the Supreme Court Bar Association to maintain the proceedings.
If this is true, then the petitioners in Transfer Petition No. 278 of 1991 and other writ petitions challenging the Speaker 's decision would not also have the necessary standing to sue.
The law as to standing to sue in public interest actions had under gone a vast change over the years and liberal standards for determining locus standi are now recognised.
The matter has come to be discussed at considerable care and length in S.P. Gupta & Ors.
vs Union of India & Ors. etc.
, [1982] 2 SCR 365.
The present matter is of such nature and the constitutional issues of such nature and importance that it cannot be said that members of the Bar, and particularly the Supreme Court Bar Association have no locus standi in the matter.
An elaborate re survey of the principles and prece dents over again is unnecessary.
Suffice it to say that from any point of view the petitioners satisfy the legal equip ments of the standing to sue.
We, therefore, reject the Contention H. 66.
We are constrained to say that certain submissions advanced on the prayer seeking to restrain the learned judge from functioning till the proceedings of the committee were concluded lacked as much in propriety as in dignity and courtesy with which the learned judge is entitled.
The arguments seemed to virtually assume that the charges had been established.
Much was sought to be made of the silence of the Judge and his refusal to be drawn into a public debate.
If we may say so with respect, learned judge was entitled to decline the invitation to offer his explanation to his detractors, No adverse inference as to substance and validity of the 75 charges could be drawn from the refusal of the learned judge to recognise these forums for his vindication.
While the members of the bar may claim to act in public interest they have, at the same time, a duty of courtesy and particular care that in the event of the charges being found baseless or insufficient to establish any moral turpitude, the judge does not suffer irreparably in the very process.
The ap proach should not incur the criticism that it was calculated to expose an able and courteous judge to public indignity even before the allegations were examined by the forum constitutionally competent to do so.
We wish the level of the debate both in and outside the Court was more decorous and dignified.
Propriety required that even before the charges are proved in the only way in which it is permitted to be proved, the Judge should not be embarrassed.
The constitutional protection to Judges is not for theft person al benefit; but is one of the means of protecting the judi ciary and its independence and is, / therefore, in the larger public interest.
Recourse to constitutional methods ' must be adhered to, if the system were to survive.
Learned Judge in his letter to the Registrar General which he de sired to be placed the Court had, indeed, expressed deep anguish at the way the petitioners had been permitted them selves to sit in judgment over him and deal with him the way they did.
RE: CONTENTION (I) 67.
This argument suggests that the court should, having regard to the nature of the area the decision of the court and its writ is to operate in, decline to exercise its jurisdiction, granting it has such jurisdiction.
It is urged that any decision rendered or any writ issued might, in the last analysis, become futile and infructuous as indeed the Constitution of and investigation by the committee are not, nor intended to be, an end by themselves culminating in any independent legal consequences but only a proceeding prelim inary to and preceding the deliberations of the House on the motion for the presentation of an address to the President for the removal of a Judge.
The latter, it is urged, is indisputably with in the exclusive province of the Houses of parliament over which courts exercise no control or juris diction.
The constitution of and the proceedings before the committee are, it is urged, necessarily sequential to and integral with the proceedings in the Houses of Parliament.
SinCe the committee and its investigations have neither any independent existence nor separate legal effect otherwise than as confined to, and for the purposes and as part of the possible prospective proceedings in the Houses of Parlia ment, the court should decline to exercise jurisdiction on a matter which is of no independent legal consequence of its own and which, in the last analysis, falls and remains entirely in an area outside the courts ' jurisdiction.
It is urged 76 that both from the point of view of infructuousness, propri ety and futility, the court should decline the invitation to interfere even though that part of the proceedings pertain ing to the constitution of the committee might not strictly be within the exclusive area of Parliament.
Courts, it is urged, would not allow its process to expect in a matter which will eventually merge in something over which it will have no jurisdiction.
The elements of infructuousness, it is suggested, arise in two areas.
The first is, as is posited, what should happen if the Houses of Parliament choose to say that in their view the motion has lapsed? Would the court then go into the legality of the proceedings of the Houses of Par liament and declare the decision of the House void? The second area of the suggested source of infructuous ness is as to the consequences of the position that the Houses of Parliament would, notwithstanding the report of the committee, be entitled to decide not to present an address to the President to remove the Judge.
It is, it is said, for the House of Parliament to discipline the Govern ment if the House is of the view that Government is guilty of an illegal inaction on the Speaker 's decision as ulti mately the House has dealt with the committee 's report.
On the first point there is and should be no diffi culty.
The interpretation of the law declared by this court that a motion under section 3(2) of the , does not lapse upon the dissolution of the House is a binding declaration.
No argument based on an assumption that the House would act in violation of the law need be entertained.
If the law is that the motion does not lapse, it is erroneous to assume that the Houses of Parliament would act in violation of the law.
The interpretation of the law is within the exclusive power of the courts.
So far as the second aspect is concerned, what is now sought by the petitioners who seek the enforcement and implementation of the Speaker 's decision is not a direction to the committee to carry out the investigation.
Such a prayer may raise some issues peculiar to that situation.
But here, the Union.
Government has sought to interpret the legal position for purposes of guiding its own response to the situation and to regulate its actions on the Speaker 's decision.
That understanding of the law is now found to be unsound.
All that is necessary to do is to declare the correct constitutional position.
No specific writ of direction need issue to any authority.
Having regard to the nature of the subject matter and the purpose it is ultimately intended to serve all that is necessary is to declare the legal and constitu 77 tional position and leave the different organs of the State to consider matters falling within the orbit of their re spective jurisdiction and powers.
Contention I is disposed of accordingly.
In the result, for the foregoing reasons, Writ Petition Nos. 491 and 541 of 1991 are disposed of by the appropriate declarations of the law as contained in the judgment.
Writ Petition Nos. 542 and 560 of 1991 are dismissed.
Transfer Petition No. 278 of 1991 is allowed.
Writ Petition No. 1061 of 1991 is withdrawn from the Delhi High Court.
The transferred writ petition is also dismissed.
SHARMA, J. I have gone through the erudite Judgment of my learned Brothers, and I regret that I have not been able to persuade myself to share their views.
In my opinion, all these petitions are fit to be dismissed.
The stand of the petitioners in W.P. (C) Nos. 491 of 1991 and 541 of 1991 is that the inquiry with respect to the alleged misbehaviour of Mr. Justice V. Ramaswami, the third respondent in W.P. (C) No. 491 of 1991, which was referred to a Committee under the provisions of the ought to proceed and accordingly the Union of India must take all necessary steps.
The main arguments on their behalf have been ad dressed by Mr. Shanti Bhushan, Mr. Ram Jethmalani and Mr. R.K.Garg, all appearing for the petitioners in W,P. (C) No. 491 of 1991, which has been treated as the main case.
Al though in substance their stand is similar, they are not consistent on some of the points debated during the heating of the case.
They have been supported in general terms by Ms. Indira Jaising and Mr. P.P. Rao, the learned counsel representing the Supreme Court Bar Association, the peti tioner in W.P. (C) No. 541 of 1991, and for the sake of convenience the petitioners in these two cases shall be hereinafter referred to as the petitioners.
The opposite point of view has been pressed by Mr. Kapil Sibal, on behalf of Mrs. Raj Birbal, the petitioner in T.P. (C) No. 278 of 1991, Mr. V.R.Jayaraman intervenor in W.P. (C) No. 491 of 1991 and Mr. Shyam Ratan Khandelwal, the petitioner in W.P.(C) No. 560 of 1991; and in view of their stand, they shall be referred to as respondents in this judgment.
The Committee for the investigation into the alleged misbehaviour of the third respondent was constituted on 12.3.1991 under the provi 78 sions of the (hereinafter re ferred to as the Act) by Shri Rabi Ray, the then Speaker of the Lok Sabha, not a party in W.P. (C) Nos. 491 of 1991 and 541 of 1991, but impleaded by Mr. Shyam Ratan Khandelwal as respondent No. 1 in W.P. (C) No. 560 of 1991.
The Lok Sabha was dissolved the very next day, i.e. 13.3.1991.
Mr. Attorney General appearing on behalf of the Union of India has contended that this Court should affirm the views expressed by the Union of India in its affidavit that on dissolution of the last Lok Sabha, the Motion against the third respondent lapsed and the matter cannot proceed further.
According to the case of the petitioners, once the Committee was constituted, the entire inquiry must be com pleted in accordance with the provisions of the Act, and the stand of the Union Government that the Motion in this regard lapsed on the dissolution of the House is fit to be reject ed.
The Union Government, in the circumstances, is under a duty to act in such manner by way of providing funds et cetera, that it may be practically possible for the Commit tee to complete its task.
Since the obligation to act ac cordingly, arises under the Act, this Court has full author ity to enforce the performance of the statutory duty; and having regard to the circumstances in the present case it is appropriate to exercise that power.
The petitioners further pray that in the meantime the third respondent should not undertake to dispose of judicial matters, and since he has not himself refrained from so doing, no judicial work should be allotted to him.
The Chief Justice of India has also been impleaded as a party respond ent but this Court while issuing Rule Nisi after hearing learned counsel for the parties, did not consider it expedi ent to issue notice to the Chief Justice.
A prayer for interim direction in this regard was also rejected.
During the hearing of the cases another application to the same effect was filed and was heard at considerable length and ultimately rejected by a reasoned order.
Mr. Sibal, the learned counsel for the respondents has challenged the maintainability of the writ petitions, on the ground that the matter is not justiciable.
It was fur ther argued that since the Speaker proceeded to admit the Notice of Motion initiated by 108 Members of the Lok Sabha without reference to the House, the order of the Speaker was void, and the constitution of the Committee is ultra vires.
The Speaker 's order has been challenged also on the grounds of violation of principles of natural justice and mala fides.
So far as the effect of the dissolution of the 79 last Lok Sabha is concerned the respondents have supported the stand of the Union Government that the Motion has lapsed, but consistent with their plea.
of non justiciabili ty, Mr. Sibal has indicated that it is for the House to decide this issue.
Long arguments were addressed by the learned counsel for the parties on the correct interpretation of Article 124(4) and (5) and the Act, and Mr. Sibal has contended that if the construction suggested by him of the provisions of the Act are not accepted, the Act has to be struck down either in its entirety or in part as ultra vires the Constitution.
In W.P. (C) No. 560 of 1991 Mr. Shyam Ratan Khandelwal has, inter alia, prayed for declaring the and the Rules framed thereunder as ultra vires Article 121 and 124(5) of the Constitution; for quashing the decision of the Speaker; and, for issuing a Writ of Mandamus to the Committee not to embark upon or proceed with the inquiry.
He also wants a declaration that the Chief Justice of India cannot withhold allocation of work to the third respondent for discharging his judicial functions, and seeks for consequential directions in this regard.
During the course of his argument, Mr. Sibal, in reply to a query from the Bench, clarified the position that if his plea of non justiciability is accepted, all the petitions may have to be dismissed.
It is appropriate that the point relating to the jurisdiction of this Court, and for that matter of any court in India, is considered first.
If the stand of the respond ents is correct on this issue, it may not be necessary to deal with the other questions raised by the parties.
In support of his argument, Mr. Sibal has relied upon the provisions of Article 122(2) of the Constitution read with Article 93, and has urged that the present matter relates to the conduct of the business of the Lok Sabha and is included within the functions of regulating its procedure, and as such the Speaker who is a Member and officer of the Parlia ment cannot be subjected to the jurisdiction of any Court in respect of the exercise of those powers.
The questions whether the Motion on the basis of which the present inquiry by the Committee has been ordered has lapsed or not and whether the inquiry should further proceed or not are for the House to determine, and its decision will be final.
Reference was also made to Article 100, but the learned counsel clarified his stand that in the present context a special majority as indicated in Article 124(4) will have to be substituted for a simple majority mentioned in Article 100(1).
It has been contended that the Speaker was not free to take a decision by himself to refer the matter to the Committee for inquiry and that too without hearing the Judge concerned; and in any event his order is subject to any decision 80 to the contrary of the House arrived at, at any stage.
Emphasis was laid on the concept of Separation of State powers amongst its three wings, and it was claimed that all matters within the House including moving of motions, ad journment motions and debates are beyond the purview of judicial scrutiny.
Counsel said that it does not make any difference that in the present case it is the Union Govern ment, which has taken a decision for itself on the disputed issue; and the petitioners cannot use this as an excuse for approaching the Court.
The Court should refuse to entertain the writ petitions on this ground, as it cannot be persuaded to do indirectly what it cannot do directly.
The crux is that the matter is in the exclusive domain of the Parlia ment.
Although in my final conclusion I agree with the respondents that the courts have no jurisdiction in the present matter, I do not agree with Mr. Sibal 's contention based on an assumption of the very wide and exclusive juris diction of the Parliament in the general terms, as indicated during his argument.
His stand that the Speaker could not have taken a decision singly also does not appear to be well founded.
He strenuously argued that since the matter relat ing to the removal of a Judge is from the very beginning within the exclusive control of one of the Houses of the Parliament every decision has to be taken by the entire House and if necessary a debate will have to be permitted.
As a result, the bar on discussion in the House on the Judges ' conduct will disappear from the initial stage it self, but that cannot be helped.
He relied upon the inter pretation of Mr. M.C.Setalvad on clauses 4 & 5 of Article 124 as stated by him before the Joint Committee on the Judges (inquiry) Bill, 1964 (being Bill No. 5 of 1964 which was ultimately dropped) and his view that the desired object of avoiding debate on the conduct of a Judge in the Parlia ment can be achieved only by the Speaker carefully exercis ing his discretion after taking into account the impropriety of such a debate.
Although the powers of State has been distributed by the Constitution amongst the three limbs, that is the Legis lature, the Executive and the Judiciary, the doctrine of Separation of Powers has not been strictly adhered to and there is some overlapping of powers in the gray areas.
A few illustrations will show that the courts ' jurisdiction to examine matters involving adjudication of disputes is sub ject to several exceptions.
Let us consider a case in which an individual citizen approaches the Court alleging serious violation of his fundamental rights resulting in grave and irreparable injury, arising as a consequence of certain acts, and the decision of his claim is dependent on the adjudication of a dispute covered by Article 262 or Article 363.
He does not have a legal remedy before the courts.
Similarly a Member of Parliament or of a State Legislature who 81 may have a just grievance in matters covered by Article 122(2) or 212(2) cannot knock the doors of the courts.
Let us take another example where a group of citizens residing near the border of the country are in imminent danger of a devastating attack from an enemy country in which they are sure to lose large number of lives besides theft property.
This can be averted only by accepting the terms offered by the enemy country, which are in their opinion reasonable and will be highly in the interest of the nation as a whole.
The concerned authorities of the State, however, hold a differ ent view and consider starting a war immediately as an unavoidable strategy, even in the face of imminent danger to the border area.
On an application by the aggrieved citi zens, the Court cannot embark upon an inquiry as to the merits and demerits of the proposed action of the State nor can it direct that the residents of the threatened area must be shifted to some safe place before starting of the war.
The examples can be multiplied.
Generally, questions involv ing adjudication of disputes are amenable to the jurisdic tion of the courts, but there are exceptions, not only those covered by specific provisions of the Constitution in ex press terms, but others enjoying the immunity by necessary implication arising from established jurisprudential princi ples involved in the Constitutional scheme.
It was observed by this Court in Smt.
Indira Gandhi vs Raj Narain, at page 415, that rigid Separation of Powers as under the American Constitution or under the Australian Constitution does not apply to our country and many powers which are strictly judicial have been excluded from the purview of the courts under our Constitution.
Judicial power of the State in the comprehensive sense of the expression as embracing all its wings is dif ferent from the judicial power vested or intended to be vested in the courts by a written Constitution.
The issue which arises in the present case is whether under the Con stitutional scheme a matter relating to the removal of a Judge of the superior courts (Supreme Court or High Courts) is within the jurisdiction of the courts or in any event of this Court.
On a close examination of the Constitution it appears to me that a special pattern has been adopted with respect to the removal of the members of the three organs of the State The Executive, the Legislature and the Judici ary at the highest level, and this plan having been con sciously included in the Constitution, has to be kept in mind in construing its provisions.
The approach appears to be that when a question of removal of a member of any of the three wings at the highest level i.e. the President; the Members of the Parliament and the State Legislatures; and the Judges of the Supreme Court and the High Courts arises, it is left to an organ other than where the problem has arisen, to be decided.
82 11.
The President has to be elected by the members of an electoral college as prescribed by Article 54, in the manner indicated in Article 55.
Since he has to exercise his func tions in accordance with the advice tendered by the Council of Ministers, the matter relating to his impeachment has been entrusted by Article 61 to the Parliament.
In the constitution of the two Houses of the Parliament and the Legislatures of the States, the people of the country are involved more directly, through process of election and any dispute arising therefrom is finally settled judicially.
When it comes to a disqualification of a sitting member, the matter is dealt with by Article 103 or 192 as the case may be and what is significant for the purpose of the present case is that instead of entrusting the matter to the rele vant House itself, the Constitution has provided for a different machinery, not within the control of the Legisla ture.
The decision on such a dispute is left to the Presi dent, and he is not to act on the advice of the Council of Ministers, but in accordance with the opinion of the Elec tion Commission which has been held by this Court to be a Tribunal falling squarely within the ambit of Article 136 of the Constitution in All Party Hill Leaders Conference vs
M. A. Sangma; , at 411.
Thus, the power to decide a dispute is not to be exercised by the Legislature, but lies substantially with the courts.
Consistent with this pattern clause (4) of Article 124 in emphatic terms declares that a Judge of the Supreme Court or the High Court shall not be removed from his office except on a special majority of the Members of each House of Parliament.
Both the Execu tive and the Judiciary are thus excluded in this process.
The provisions of the Constitution and the Act and relevant materials which ,viII be discussed later all unmistakably indicate this Constitutional plan.
The scheme, as mentioned above, which according to my reading of the Constitution has been adopted, cannot be construed as lack of trust in the three organs of the State.
There are other relevant considerations to be taken into account while framing and adopting a written constitution, which include the assurance to the people that the possibil ity of a subjective approach clouding the decision on an issue as sensitive as the one under consideration, has been as far eliminated as found practicable in the situation.
And where this is not possible at all, it cannot be helped, and has to be reconciled by application of the doctrine of necessity, which is not attracted here.
Hamilton, in "The Federalist", while discussing the position in the United States, observed that when questions arise as to whether a person holding very high office either in the Judiciary or the Legislature or the President himself has rendered him self unfit to hold the office, they are of a nature which relates chiefly to the injuries done immediately to the society itself.
Any proceeding for their removal will, 83 for this reason seldom fail to agitate the passions of the whole community and divide it into parties more or less friendly or inimical to the person concerned.
The delicacy and the magnitude of a trust which so deeply concerns the reputation and existence of every man engaged in the admin istration of public affairs speak for themselves.
Mr. Sibal has further relied on Hamilton stating that "the awful discretion which a court of impeachment must necessarily have to doom to honour or to infamy the most confidential and the most distinguished characters of the community, forbids the commitment of the trust, to a small number of persons.
" The counsel added that presumably that is the reason that the question of removal of a Judge of the superior court has been exclusively entrusted to the parlia ment and further in that spirit the Act requires a large number of Members of the parliament to even give the Notice of Motion.
Quoting from 'Harvard Law Review ' (1912 1913 vol.), counsel argued that judicial office is essentially a public trust, and the right of the public to revoke this trust is fundamental.
In a true republic no man can be born with a right to public office, Under such a system of gov ernment, office, whether elective or appointive, is in a sense a political privilege.
The grant of this privilege flows from the political power of 'the people, and so, ulti mately must it be taken away by the exercise of the politi cal power resident in the people.
After referring to the view of many Jurists of international repute Mr. Sibal again came back to "The Federalist", considering the inappropri ateness of the Supreme Court of United States of America to be entrusted with the power of impeachment in the following words: "It is much to be doubted whether the members of that Tribunal at all times be endowed with so eminent a portion of fortitude, as would be called for in the execu tion of so difficult a task, and it is still more to be doubted whether they would possess the degree of credit and authority, which might, on certain occasions be indispens able towards reconciling the people to their decision".
I am not sure whether these are the.precise considerations which appealed to the framers of our Constitution to adopt the Scheme as indicated earlier, but there is no doubt that the subject dealing with the removal of the very high function aries in three vital limbs of the State, received special treatment by the Constitution.
My conclusion is further supported by the materials discussed below.
Learned counsel for the parties referred to the historical background of the relevant provisions of the Constitution and the Act, as also to the constitutional provisions of several other countries, as aid to the inter pretation of the legal position in relation to removal of Judges of the superior courts.
Mr. Sibal laid great emphasis on the evidence of Mr. 84 Setalvad and several other persons before the Joint Commit tee on the Judges (inquiry) Bill, 1964.
His argument is that the Bill was dropped as a result of the opinion expressed before the Joint Committee, and consequently another Bill was drafted which was ultimately adopted by the Parliament as the 1968./Act.
The provisions of the earlier Bill, objec tions raised thereto, and the fact that the Act of 1968 was passed on a subsequent Bill, reconstructed immediately after the decision to drop the original Bill, are all permissible aids to the interpretation of the legal position which has to be ascertained in the present cases before us.
Although the learned counsel for the petitioners challenge their admissiblity, portions of the documents referred to by Mr. Sibal were attempted to be construed on behalf of the peti tioners as supporting their stand.
In my view, it is permis sible to take into consideration the entire background as aid to interpretation.
The rule of construction of statutes dealing with this aspect was stated as far back as in 1584 in Heydon 's case: 76 E.R. 637, and has been followed by our Court in a large number of decisions.
While interpreting Article 286 of our Constitution, reliance was placed by this Court in the Bengal Immunity Company vs The State of Bihar, at 632 & 633, on Lord Coke 's dictum in Heydon s case and the observations.
of the Earl of Halsbury in Eastman Photographic Material Company vs Comptroller General of Patents L R., at p. 576 reaffirm ing the rule in the following words: "My Lords, it appears to me that to construe the statute in question, it is not only legit imate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy.
These three being compared I cannot doubt the con clusion".
In B. Prabhakar Rao vs State of Andhra Pradesh, [1985] Suppl.
2 SCR 573, the observa tions at p. 591, quoted below, are illuminat ing: "Where internal aids are not forthcoming, we can always have recourse to external aids to discover the object of the legislation.
Exter nal aids are not ruled out.
This is now a well settled principle of modern statutory con struction.
Thus 'Enacting History ' is rele vant: "The enacting history of an Act is the surrounding corpus of public knowledge rela tive to its introduction into Parliament as a Bill, and subsequent progress through, and ultimate passing by, Parliament.
In particular it is the extrinsic material assumed to be within the contemplation of Parliament when it passed the Act." Again "In the period im 85 mediately following its enactment, the history of how an enactment is understood forms part of the contemporanea expositio, and may be held to throw light on the legislative inten tion.
The later history may, under the doc trine that an Act is always speaking, indicate how the enactment is regarded in the light of development from time to time".
"Official statements by the government department admin istering an Act, or by any other authority concerned with the Act, may be taken into account as persuasive authority on the meaning of its provisions".
Justice may be blind but it is not to be deaf.
Judges are not to sit in sound proof rooms.
Committee reports, Parliamentary debates, Policy statements and public utterances of official spokesmen are of relevance in statu tory interpretation.
But 'the comity, the courtsey and respect that ought to prevail between the two prime organs of the State, the legislature and the judiciary ', require the courts to make skilled evaluation of the extra textual material placed before it and exclude the essentially unreliable. "Nevertheless the court, as master of its own procedure, retains a residuary right to admit them where, in rare cases, the need to carry out the legisla tor 's intention appears to the court so to require".
With a view to correctly interpret the Act which was the subject matter of that case, the history and the succession of events including the initial lowering the age of superan nuation, the agitation consequent upon it, and the agreement that followed the agitation were all taken into considera tion.
I, accordingly, propose to briefly state the relevant background of both the Constitutional provisions and of the Act.
At the time of framing of the Constitution of India, the Constitutions of several other countries, which appeared to be helpful were examined, and a Draft was initially prepared.
On the amendment moved by Sir Alladi Krishnaswamy Iyyar the relevant provision was included in the Draft in terms similar to section 72(ii) of the Commonwealth of Australia COnstitution Act (1900) except the last sentence in the following terms: "Further provision may be made by the Federal Law for the procedure to be adopted in this behalf.
" When the matter was finally taken up by the Constituent Assembly the Debates indicate that there was a categorical rejection of the suggestion to entrust the matter to the Supreme Court or a Committee of a 86 number of sitting Judges of the Supreme Court; and while doing so, the law of the other Commonwealth countries were taken into consideration.
So far the last sentence of the draft was concerned, Sir Alladi explained the position by stating "that such a provision does not occur in other Constitutions, but there is a tendency to overelaborate the provisions on our side and that is the only justification for my putting in that clause.
Before further considering the Debates and the other steps in flaming of the Constitution, it may be useful to appreciate the relevance and importance of the point which has an impact on the controversial issue before us.
Accord ing to the petitioners, the question relating to the removal of a Judge comes to the Parliament only on receipt of a report by the Committee under the Act.
The Parliament or any of its Houses, not being in the picture earlier, does not have any control over the Committee, which is to function purely as a statutory body, and, therefore, amenable to the jurisdiction of this Court.
If this stand is correct, what was the position before 1968, when there was no Act? The question is whether the Parliament did not have any power to take any action even if an inquiry in the alleged misbeha viour or incapacity of a Judge was imminently called for.
In other words whether the exercise of the power under clause (4) of Article 124 by the Parliament was dependent on the enactment of a law under clause (5) and until this condition was satisfied no step under clause (4) could be taken.
If on the other hand the Parliament 's power was not subject to the enactment of a law, was it divested of this jurisdiction when it passed an Act? On what principle could the initial jurisdiction of the Parliament disappear in 1968? Since this aspect has a bearing, it was the subject matter of some discussion during the arguments of the learned advocates.
Mr. Sibal was emphatic in claiming that clause (5) was enabling in nature, and clause (4) could not be inter preted as dependent on clause (5).
He relied on Mr. Setal vad 's evidence before the Joint Committee of Bill No. 5 of 1964.
The stand of Mr. Shanti Bhushan, instructed by Mr. Prashant Bhushan, the Advocate on record on behalf of the petitioner in the leading case Writ Petition (C) No. 491 of 1991, has been that clause (5) was merely enabling, but not in the sense as stated by Mr. Setalvad in his evidence.
In the view of the latter, it is open to the Parliament either to follow the procedure laid down by an Act made under clause (5) or to ignore the same in any case and adopt any other procedure.
In other words, even after the passing of the 1968 Act, the Parliament can choose either to proceed according to the said Act or to act independently ignoring the same.
Mr. Shanti Bhushan said that this is not permissi ble.
Once the 1968 Act was enacted, the Parliament is bound to follow it, but earlier 87 it was free to proceed as it liked.
He, however, was quite clear in his submission that the exercise of power under clause (4) could not be said to be conditional on the enact ment of a law under clause (5), and that to interpret the provisions otherwise would lead to the extraordinary result that the Parliament was in a helpless condition for about 18 years till 1968, if a Judge was rendered unfit to continue.
I agree with the learned counsel.
The other learned advocates appearing for the peti tioners did not advert to this aspect pointedly.
The stand of Mr. Garg is that whether or not the third respondent is removed, or whether the inquiry proceeds before the Commit tee or not, he must cease to function as a Judge, as his image being under a cloud, must be cleared so that the people may have trust in the judiciary.
Mr. Ram Jethmalani, the other learned counsel who appeared on behalf of the petitioner in Writ petition (C).No. 491 of 1991, was ini tially of the view as Mr. Shanti Bhushan on the co relation of clause (4) and (5), but after some discussion, he recon sidered the position and took a positive stand that the exercise of power under clause (4) was dependent on a law being enacted under clause (5), and that the Parliament was bound to proceed in accordance with the provisions of the Act.
Now coming back to the Debates, Mr. Santhanam sug gested an amendment for including more details to which the answer of Sir Alladi was as follows: "We need not be more meticulous and more elaborate than people who have tried a similar case in other jurisdictions.
I challenge my friend to say whether there is any detailed provision for the removal of Judges more than that in any other Constitution in the world".
He requested the House to accept the general principle, namely, that the President in consultation with the Supreme Legislature of this country shall have that right, and assured that, "That does not mean that the Supreme Legisla ture will abuse that power".
He rejected the idea of making further additions to the provision relating to the framing of the law by saying, "To make a detailed provision for all these would be a noble procedure to be adopted in any Con stitution.
You will not find it in any Constitution, not even in the German Constitution which is particularly de tailed, not in the Dominion Constitution and not even in the Act of Settlement and the later Acts of British Parliament which refer to the" removal of Judges".
Some members strong ly suggested that the Supreme Court of India or a number of sitting Judges of the Court should be 88 involved in the proceeding, to which Sir Alladi had strong objection.
He called upon the members, "not to provide a machinery consisting of five or four Judges to sit in judg ment over a Chief Justice of the Supreme Court.
Are you really serious about enhancing the dignity of the Chief Justice of India ? You are.
I have no doubt about it".
The clause was ultimately drafted as mentioned above vesting the power in the "Supreme Parliament" as "there must be some power of removal vested somewhere".
He pointed out that the matter was not being left in the discretion of the either House to remove a Judge, but ultimate soverign power will be vested in the two Houses of the Parliament and, "that is the import of my amendment".
In this background, the Article was finally included in the Draft.
Although as was clear from the statements of Sir Alladi as also the language used, the intention of the Sub commit tee preparing the Draft was not to make clause (4) dependent on clause (5), still presumably with a view to allaying any misapprehension which could have arisen by including the entire provisions in one single clause, they were divided and put in two separate clauses and while so doing, the language was slightly changed to emphasise the limited scope of the law.
Clause (4) does not state that the misbehaviour or incapacity of the Judge will have to be proved only in accordance with a law to be passed by the Parliament under clause (5).
Clause (4) would continue to serve the purpose as it does now, without any amendment if clause (5) were to be removed from the Constitution today.
There is no indica tion of any limitation on the power of the Parliament to decide the manner in which it will obtain a finding on misbehaviour or incapacity for further action to be taken by it.
Clause (5) merely enables the Parliament to enact a law for this purpose, if it so chooses.
The word 'may ' has been sometimes understood in the imperative sense as 'shall ', but ordinarily it indicates a choice of action and not a com mand.
In the present context, there does not appear to be any reason to assume that it has been used in its extraordi nary meaning.
It is significant to note that while fixing the tenure of a Judge in clause (2) of Article 124, proviso Co) permits the premature removal in the manner provided in clause (4) without mentioning clause (5) at all.
The signif icance of the omission of clause (5) can be appreciated by referring to the language of clause 2(A) of Article 124 directing that the "age of a Judge of the Supreme Court shall be determined by such authority and in such manner as Parliament may by law provide".
On an examination of all the relevant materials, I am of the view that the exercise of power under clause (4) was not made conditional on the enactment of a law under clause (5), and the reason for inserting 89 clause (5) in Article 124 was, as indicated by Sir Alladi, merely for elaborating the provisions.
The other provisions with reference to which the matter needs further examination are Article 121 of the Constitution and the Act of 1968.
The object of Article 121 is to prevent any discussion in Parliament with respect to the conduct of a Judge of the Superior Courts, except when it cannot be avoided.
The Article, accordingly, prohibits such a discussion except upon a motion for presenting an 'address ' to the President for removal of a Judge.
The point is that if the entire proceeding in regard to the removal of a Judge from the very initial stage is assumed to be in the House, does the bar under Article 121 get lifted at that very stage, thus frustrating the very purpose of the Arti cle.
There is a complete unanimity before us, and rightly so, that the object of Article 121 to prevent a public discussion of the conduct of a Judge is in public interest and its importance cannot be diluted.
Mr. Shanti Bhushan elaborated this aspect by saying that any such discussion in the House is bound to be reported through the media and will thus reach the general public and which by itself, irrespec tive of the final outcome of the discussion, will damage the reputation of the Judge concerned and thereby the image of the entire judiciary; and must not, therefore, be permitted until a report against the Judge after a proper inquiry is available.
Mr. Sibal also agreed on the significance of Article 121 and relied on the views of several eminent international jurists, but we need not detain ourselves on this point, as there is no discordant note expressed by anyone before us.
The question, however, is as to whether the object of Article 121 will be defeated, if clause (4) of Article 124 is construed as complete in itself and independ ent of clause (5), and clause (5) be understood as merely giving an option to the Parliament to enact a law, if it so chooses; and further whether the inquiry before the Commit tee is within the control of the House of the Parliament so as to exclude an outside interference by any other authori ty, including the courts.
It is true that the provisions of an Act control or determine the constitutional provisions, but where the meaning of an Article is not clear it is permissible to take the aid of other relevant materials.
Besides, in the present context, where it is necessary to assess the effect of the construction of the other provisions of the Constitution and of the Act on Article 121, the Act provides useful assist ance; and its importance has been greatly enhanced in view of the points urged in the arguments of the learned counsel for the parties before us.
All the learned advocates for the petitioners as also the Attorney General are positive that the Act is a perfectly valid piece of legislation and no part of it is illegal or ultra vires.
It is on 90 this premise that the writ petitions of the petitioners have been filed and the reliefs are prayed for.
Mr. Sibal repre senting the respondents has halfheartedly challenged the Act, making it clear at the same time that if his interpre tation of the provisions is accepted no fault can be found with the Act.
Besides, the foundation of the reliefs, asked for in the writ petitions, is the Act and the inquiry there under and if the Act itself goes, the reference to the Committee of Inquiry itself will have to be held as nonex istent in the eye of Law and the writ petitions will have to be rejected on that ground alone.
We must, therefore, assume for the purpose of the present cases, that the Act is good and on that basis if the petitioners be found to be entitled to any relief, it may be granted.
I am emphasising this aspect as the Act gives a complete answer to the main ques tion as to whether the Committee is subject to the control of the Lok Sabha, and whether this construction of the provisions defeats the purpose of Article 121.
The is a short enactment containing only seven sections.
Section 1 gives the title and the date of commencement, Section 2 contains definitions and Section 7 deals with power to make rules.
The expression "motion" which has not been defined in the Act is signifi cant in the scheme and naturally, therefore, has been sub ject of considerable discussion during the hearing of these cases.
The Lok Sabha Rules flamed under Article 118 of the Constitution deal with "motions" in Chapter XIV.
There are separate rules of procedures for conduct of business adopted by the Rajya Sabha.
In view of the facts of this case, I propose to refer only to the Lok Sabha Rules.
Section 3(1) of the states that if a notice of"motion" is given for presenting an address to the Presi dent for the removal of a Judge, signed, in the case of a notice given in the Lok Sabha, by not less than 100 members, and in the case of a notice given in the Rajya Sabha, by not less than 50 members of the House, the Speaker or the Chair man, as the case may be, after consulting such persons as he deems fit, as also such relevant materials which may be available to him, either admit the "motion" or refuse to admit the same.
The manner in which this section refers to "motion" in the Act for the first time without a definition or introduction clearly indicates that it is referring to that "motion" which is ordinarily understood in the context of the two Houses of Parliament attracting their respective rules.
Section 3 does not specify as to how and to whom this notice of "motion" is to be addressed or handed over and it is not quite clear how the Speaker suddenly comes in the picture unless the Lok Sabha Rules are taken into account.
Rule 185 states that notice of "motion" shall be given in writing addressed to the Secretary General and its ' admissi bility should satisfy the conditions detailed in Rule 186.
Rule 187 directs the 91 Speaker to examine and decide the admissibility of a "mo tion" or a part thereof.
Rule 189 says that if the Speaker admits notice of a "motion" and no date is fixed for discus sion of such "motion", it shall be notified in the BUlletin with the heading "No,Day Yet Named Motions".
It is at this stage that 1968 Act by Section 3(1) takes over the matter and asks the Speaker to take a decision for admitting this "motion" or refusing it after consulting such persons and materials as he deems fit.
The conclusion is irresistible that the provisions of the Act have to be read along with some of the Lok Sabha Rules.
Rules 185, 186 and 187 should be treated to be supplementary to the Act.
Then comes sub section (2) of Section 3 which is of vital importance in the present context.
It says that if the "motions" referred to in sub section (1) is admitted, the Speaker "shall keep the motion pending" and constitute a Committee for investigation into the allegations consisting of three members of whom one shall be chosen among Chief Justice and other Judges of the Supreme Court and another from among the Chief Justices of the High Court.
The situs where the "motion" is pending is almost conclusive on the issue whether the House is seised of it or not.
Unless the "motion" which has to remain pending, as directed by Section 3(2) is outside the House and the Speak er while admitting it acts as a statutory authority and not qua Speaker of the Lok Sabha, as is the case of the peti tioners before us, the petitioners will not have any base to build their case on.
If the Speaker has admitted the "mo tion" in the capacity as the Speaker and consequently, therefore, representing the House, and has constituted a Committee, it will be entirely for him and through him the House, to pass any further order if necessary about the future conduct of the Committee, and not for this Court, for, the Committee cannot be subjected to a dual control.
So the question to ask is where is the "motion" pending, which is promptly answered by the provisions in the Act, by de claring that it remains pending in the House.
Section 6 deals with the matter from the stage when the report of the Committee is ready and sub section (1) says that if the report records a finding in favour of the Judge, "the motion pending in the House" shall not be proceeded with.
If the report goes against the Judge, then "the motion referred to in sub section (1) of Section 2 shall, together with a report of the Committee, be taken for consideration by the House or the Houses of Parliament in which it is pending".
The Act, therefore, does not leave any room for doubt that the "motion" remains pending in the House and not outside it.
This is again corroborated by the language used in Proviso to Section 3 (2) which deals with cases where no tices of"motion" under Section 3(1) are given on the same date in both Houses of Parliament.
It says that in such a situation, no Committee shall be constituted unless the "motion" has been "admitted in 92 both Houses" and where such "motion"has been admitted "in both Houses", the Committe shall be constituted jointly by the Speaker and the Chairman.
The rule making power dealt with in Section 7 is in the usual terms enumerating some of the subject matters without prejudice to the generality of the power, and permits the Joint Committee of both Houses of Parliament to frame the rules, and accordingly, the Judges (Inquiry) Rules, 1969 were made.
Rule 2(e) of these Rules describes "motion" as motion admitted under Section 3(1) of the Act.
Supplementing the provisions of Section 6(2), Rule 16(2) provides that "a copy of the motion admitted under sub section (1) of section 3 shall be reproduced as an Annexure to such an address".
Sub rule (4) states that "the address prepared under subrule (1) and the motion shall be put to vote together in each House of Parliament".
It is clear that it is not an inadvertent reference in the Act of the "motion" being pending in the House; the provisions unmistakably indicate that the Act and the Rules envisage and deal with a "motion" which is admitted in the House and remains pending there to be taken up again when the date is fixed by the Speaker on receipt of the report from the Committee.
The language throughout the Act has been consist ently used on this premise and is not capable of being ingored or explained away.
Nowhere in the Act or the Rules, there is any provision which can lend any support to the stand of the petitioners before us.
The scope of the Act and the Rules is limited to the investigation in pursuance of a "Motion" admitted by the Speaker.
At the Conclusion of the investigation the Commit tee has to send the report to the Speaker (or the Chairman as the case may be) along with a copy of the original Mo tion.
If the finding goes against the Judge, section 6(2) of the Act directs that the Motion, the same original Motion, shall together with the report be taken up for consideration by the House where the Motion is pending.
The relevant part of section 6(2) mentions: "the Motion referred to in sub section (1) of section 3 shall together with the report of the Committee, be taken up for consideration by the House. in which it is pending".
Rule 16(4) states that the address and the Motion shall be put to vote together in each House of Parliament.
What the Act and the Rules contemplate is the original Motion to be taken up for consideration by the House, and if this Motion is held to have exhausted itself on admission by the Speaker, as has been urged on behalf of the petitioners, nothing remains on which the Act would operate.
The concept of the original Motion being pending in the House, to be taken up for debate and vote on the receipt of the report of the Committee, is the life and soul of the Act, and if that Motion disappears nothing remains behind to attract the Act.
This 93 idea runs through the entire Act and the Rules, and cannot be allowed to be replaced by a substitute.
The existence of a Motion pending in the House is a necessary condition for the application of the Act.
Bereft of the same, the Act does not survive.
It is, therefore, not permissible to read the Act consistent with the stand of the petitioners that the House is not seised of the Motion and does not have anything to do with the inquiry pending before the Committee, until the report is received.
If clauses (4) and (5) of Article 124 are construed as suggested on behalf of the petitioners, the Act will have to be struck down as ultra vires, or in any event inoperative and infructuous and on this ground alone the Writ Petitions are liable to be dismissed.
It has been contended that if the Motion is held to be pending in the House on its admission, the object of Article 121 shall be defeated.
The apprehension appears to be misconceived.
The mandate of the Constitution against discussion on the conduct of a Judge in the House is for everybody to respect, and it is the bounden duty of the Speaker to enforce it.
He has to ensure that Article 121 is obeyed in terms and spirit, and as a matter of fact there is no complaint of any misuse during the last more than 41 years.
The question, however, is whether it will not be feasible for the Speaker to maintain the discipline, if the Motion on admission becomes pending in the House.
Before 1968 Act was passed, the motion, like any other motion, was governed by the Lok Sabha Rules, and Rule 189 enabled the Speaker to notify it as a No Day Yet Named Motion without fixing a date, and to permit the matter to be discussed only at the appropriate stage.
After the Act, what was left within the discretion of the Speaker, has been replaced by mandatory statutory provision, directing that the motion shall remain pending in the House, to be taken up only on receipt of a finding of the Committee against the Judge.
The pendency of the motion in the House, therefore, cannot be a ground to violate Article 121.
Mr Sibal, however, claimed that the members of the House are entitled to express their opinion on the proposed endictment from the very initial stage and as a part of his argument relied upon the statement of Mr. Setalvad before the Joint Committee.
Mr. Shanti Bhushan challenged the views of Mr. Setalvad on the ground that they would foul with Article 121.
I am afraid, the statements of Mr. Setalvad, referred to above, have not been properly appeciated by either side.
The modified Bill, on the basis of which the 1968 Act was passed, had not been drafted by then and Mr. Setalvad was expressing his opinion on the earlier Bill, which substantially vested the power of removal of a Judge in the Executive, and kept the Parliament out of the picture until the receipt of a report on the 94 alleged misbehaviour or incapacity.
If that Bill had been passed, the effect would have been that the entire proceed ing beginning with the initiation of the inquiry and con cluding with the report would have remained completely outside the House, an interpretation which is being attempt ed by the present petitioners before us, on the present Act too.
The objection to the entrustment of the power to the Executive was mainly on the ground that the intention of the Article 124 to leave the removal of a Judge in the hands of the Parliament would be frustrated.
In answer to a query of the Chairman of the Committee, Mr. Setalvad said that as a result of the provisions of the Bill (then under considera tion) the Parliament would be completely kept out until a finding of another body was received by the House and this would militate against the constitutional scheme.
In this background when his attention was drawn to the bar of Arti cle 121 he replied that it was possible to prevent a prema ture discussion in the Parliament, by the Speaker exercising his authority with discretion.
He referred to the Lok Sabha Rules in this context and furher recommended for the Speaker to be vested with larger powers.
He was emphatic that the President should not be entrusted with the matter, even at the initial stage, and that it should be left in the hands of the Speaker to take appropriate steps.
The suggested substitution of the Speaker (and the Chairman) in place of the President was in accordance with the view that the matter is within the exclusive domain of the two Houses of the Parliament which could exercise its powers through the respective representatives Speaker and the Chairman.
About Mr. Setalvad 's evidence I would like to clarify the position that I am not treating his opinion as an authority, and I have taken into account the same as one step in the history of the present legislation starting from the original Bill of 1964.
The report of the JointCommittee (presented on 17th May, 1966) sets out the observations of the Committee with regard to the principal changes proposed in the Bill.
Para graph 17 of the Report dealing with clause (2) states that the expression "Special Tribunal" has been substituted by "Committee" and "Speaker" and "Chairman" have been brought in "with a view to ensuring that the Committee may not be subject to writ jurisdiction of the Supreme Court & the High Courts".
With respect to clause (3), the following observa tions of the Committee are relevant: "The Committee are of the view that to ensure and maintain the independence of the judici ary, the Executive should be excluded from every stage of the procedure for investigation of the alleged misbehaviour or incapacity of a Judge and that the initiation of any proceed ing against a Judge should be made in Parlia ment by a notice of a motion.
The Committee 95 also feel that no motion for presenting an address to the President praying for the removal of a Judge should be admitted unless the notice of such motion is signed in the case of a motion in the Lok Sabha, by not less than one hundred members of that House and in the case of a motion in Rajya Sabha, by not less than fifty members of that House.
Fur ther, the Committee are of the opinion that the Speaker or the Chairman or both, as the case may be, may after consulting such persons as they think fit and after considering such materials, as may be available, either admit or reject the motion and that if they admit the motion, then they should keep the motion pending and constitute a Committee consisting of three members, one each to be chosen from amongst the Chief Justice and other Judges of the Supreme Court, Chief Justice of the High Courts and distinguished Jurists, respective ly".
Paragraph 20 of the Report deals with clause (6) and the proposed changes, that were more consistent with the motion being pending in the House or Houses.
Ultimately, another Bill on the lines suggested by the aforesaid Joint Committee was drafted and adopted.
Mr. Setalvad 's opinion is relevant as an important step in this history of legislation and can be referred to as such.
The wider proposition put forward by Mr. Sibal that the House was seised of the matter so effectively as to entitle every member to demand a discussion in the House at any stage is, however, not fit to be accepted.
This will not only violate Article 121, but also offend the provisions of the 1968 Act.
It is not correct to assume that if the right of the individual member to insist on immediate discussion is denied, the consequence will be to deprive the Parliament of the control of the motion.
When the Speaker exercises authority either under the Lok Sabha Rules or under the.1968 Act, he acts on behalf of the House.
As soon as he ceases to be the Speaker, he is divested of all these powers.
When he acts the House acts.
It is another matter that he may con sult other persons before admitting the motion, and while so doing, he may consult the members of the House also, but without permitting a discussion in the House.
The consulta tion, which the Act permits, is private in nature, not amounting to a public discussion while the object of Article 121 is to prevent a public debate.
It may also be open to the Speaker to consult the House on a legal issue which can be answered without reference to the conduct of Judge in question, as for example, the issue (involved in the present case) whether on account of dissolution of the old House the Motion has lapsed and the Committee of Inquiry is defunct.
What is prohibited is not every matter 96 relating to the removal of a Judge; the bar is confined to a discussion with respect to the conduct of a Judge in the discharge of his duties.
28: Mr. Shanti Bhushan strenuously contended that such portion of the 1968 Act which direct or declare the initial motion admitted by the Speaker to remain pending in the House, should be interpreted as creating a legal fiction limited for the purpose of ensuring that the bar under Article 121 is not lifted prematurely.
I do not see any justification for placing this construction on the Act.
This issue could not arise with reference to the original Bill which was ultimately dropped, as under its scheme the matter could not have reached the Parliament before the report the Special Tribunal was laid before the Houses under the Presi dent 's direction.
The petitioners are trying to put an interpretation on the present Act that may lead to the same conclusion, that is, that the Parliament does not come in the picture until the receipt of the report from the Commit tee.
This is wholly inconsistent with the original Bill not Finding favour with the Parliament.
But apart from this consideration, let us assume that the petitioners are right, and the matter does not reach the Parliament at all before it is ready for consideration on the basis of the Inquiry Report.
It cannot be suggested that even at that stage a discussion on the conduct of a Judge is banned; and before this stage is reached there is no occasion for relying upon Article 121 to prevent a discussion.
The situation, there fore, does not require the aid of any legal fiction.
The consequence of accepting the argument of Mr. Shanti Bhushan will be to render the aforesaid provisions of the statute wholly superfluous.
Also, had it been a case of a legal fiction as suggested, it would attract the observations of Lord Asquith in East End Dwellings Co. Ltd And Finsbury Borough Council: , (followed in 'this country in numerous cases) to the effect that if you are bidden to treat an imaginary state of affairs as real, you must also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevita bly have flowed from or accompanied it; and if the statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
The alternative sug gestion of Mr. Shanti Bhushan that the motion, on its admis sion, having served its purpose, is completely exhausted, and a new motion is to be moved again by a member on the receipt of the Report from the Committee, has also no merit, for if the motion completely exhausts itself and there.
fore does not remain in existence any further, no problem about the lifting of the bar under Article 121 arises for being solved with the help of a legal fiction.
An attempt was made by mr. Shanti Bhushan to derive some support 97 from that part of clause (4) of Article 124 which requires the voting in the two Houses to take place in the same session.
The provision appears to me to be absolutely irrel evant.
The clause does not require that the entire proceed ing with respect to the removal of a Judge commencing with the notice of motion has to be within the same session.
It refers only to the voting part.
A close reading of the entire Act indicates that the language therein, which com pletely demolishes the petitioners ' case, was consciously chosen to make the House seised of the matter, and conse quently it became necessary to include the provisions di recting the motion to remain pending for the purpose of preventing a premature discussion.
The Act has, thus, very successfully respected both Articles 124 and 121 in their true spirit, by neatly harmonising them.
Let us consider another argument of the petitioners that by reason of the expression "on the ground of proved misbehaviour or incapacity" occurring in clause (4) of Article 124 it should be held that until an adverse verdict of misbehaviour or incapacity by some other body is received by the House, the matter does not come within its purview.
The body in contemplation of clause (4) may be an authority, completely unassociated with either House of the Parliament or the Speaker or the Chairman, and the Parliament may not have any control over the same.
Such authority would be purely statutory, not amenable to the discipline of the Parliament, but subject to the Court 's jurisdiction.
Merely for the reason that a statute under clause (5) prescribes the procedure in this regard by entrusting the Speaker to take a decision at the initial stage, he could not cease to be a statutory authority.
In other words, he acts in his individual capacity under the power vested by the law and not in a representative capacity.
1 do not find this con struction of clauses (4) and (5) acceptable.
This would, in substance, deny the Parliament the power to remove a Judge exclusively vested in it by Constitution.
Let us ignore the present Act and consider another statute with provisions in express terms on the lines suggested by the petitioners, that is, entitling the statutory authority to act independ ently of the Parliament, the Speaker and the Chairman.
If that could be permissible it would lead to the Parliament being reduced to a helpless spectator, dependent on the statutory authority, to act on or to ignore a complaint.
This would be in complete violation of the intention of the Constitution to vest the power to remove a Judge exclusively in the Parliament.
It must, therefore, be held that the Parliament is in control of the matter from the very begin ning till the end, and it acted correctly in accepting the objections of the Joint Committee to the original Bill, aforementioned, and in passing the Act of 1968, iii the form we find it.
By the introduction of the Speaker and the requirement of a large number of members of either House to initiate the matter, the 98 House is brought in control of the proceeding through its representative the Speaker or the Chairman.
It has to be noted that "the ground of proved misbehaviour or incapacity" is necessary only for putting the matter to vote in the House under clause (4), and is not a condition precedent for initiating a proceeding and taking further steps in this regard.
Mr Sibal projected another extreme point of view by contending that a finding of the Committee in favour of the Judge cannot be held to be binding on the Parliament on account of the limited scope of a statute passed under clause (5).
There is no merit in this argument either.
Clause (4) authorises the Parliament to act on the ground of proved misbehaviour or incapacity and clause (5) permits it to pass a law to lay down the manner in which it may become possible to do so.
It is true that the Parliament can exer cise its power without formally framing a law.
The House in question could in the absence of a law, decide on the proce dure to be followed in a given case but it was perfectly open to it to pass an Act laying down a general code to be followed until the Act is repealed or amended.
It is a well established practice for a large body to entrust investiga tions to a smaller body for obvious practical reasons, and such an exercise cannot be characterised as indulging in abnegation of authority.
It could have asked a Parliamentary Committee to enquire into the allegations or employed any other machinery for the purpose.
The ratio in State of Uttar Pradesh vs Batuk Deo Pati Tripathi and Anr., , is attracted here.
In that case the Administrative Committee of the High Court, constituted under the Rules of the Court resolved that the District Judge should be retired compulsorily from the service, and the Registrar of the High Court communicated the decision to the State Government and thereafter circulated to all the Judges of the High Court for their information.
The State Government passed orders retiring the District Judge, whereupon he filed a writ petition in the High Court.
The matter was heard by a Full Bench and the majority of the Judges held that the writ petitioner could not have been compulsorily retired on the opinion recorded by the Administrative Committee, as the Full Court was not consulted.
The application was allowed and a writ was accordingly issued.
On appeal by the State Government this Court reversed the decision holding that Article 235 of the Constitution authorised the High Court to frame the rules for prescribing the manner in which the power vested in the High Court had to be exercised, and observed that though the control over the subordinate courts is vested constitutionally in the High Court by the Article, it did not follow that the High Court has no power to pre scribe the manner in which that control may, in practice, be exercised; and in fact, the very circumstance that the power of control, which comprehends matters of a wide ranging authority, vests in the entire body of Judges 99 makes it imperative that the rules are flamed so that the exercise of the control becomes feasible, convenient and effective.
The parliament is a far larger body than the High Court and the observations apply to it with greater force.
So long as the statute enables the House to maintain its control either directly or through the Speaker, the entrust ment of the investigation does not amount to abdication of power.
It is a case where the Parliament has taken a deci sion to respect the verdict of the Committee in favour of the Judge, consistently with clause (4) and no fault can be .found.
It has been stated on behalf of the respondents that the question whether the Motion against the respondent No. 3 has lapsed as a result of the dissolution of the old House is agitating the minds of the members of the Lok Sabha and the issue is under consideration of the new Speaker.
In support, he produced a copy of the proceeding of the House.
If the present Speaker holds that the Motion has lapsed, and the Committee does not have any duty to perform, the pro ceeding cannot be proceeded with any further.
In reply the learned counsel for the petitioners claimed that after the matter is entrusted to the Committee, neither he nor the Parliament at this stage can undo the admission of the Motion by the earlier Speaker, or withdraw the investiga tion.
If the petitioners are right, then what happens if a member of the Committee becomes unavailable by any reason whatsoever or another member renders himself unfit to be on the Committee, say by reason of his apparent and gross bias, against or in favour of the Judge concerned, coming to light after the formation of the Committee ? The answer is that the House which is in control of the proceeding is entitled to take all necessary and relevant steps in the matter, except discussing the conduct of the Judge until the stage is reached and the bar under Article 121 is lifted.
If on the other hand it is held that the Committee is an independ ent statutory body not subject to the control of the House directly or through the Speaker, as the petitioners suggest, the Act may be rendered unworkable.
Besides, this would impute to the Parliament to have done exactly what the Constituent Assembly refused to do by accepting Sir Alla di 's impassioned appeal, referred to above in para graph 19, not to lower the dignity of the Chief Justice of India by providing a machinery consisting of 5 or 4 Judges to sit in appeal over him.
It may be noted here that the Constitution has considered it fit to entrust the inquiry in the alleged misbehaviour of a member of a Public Service Commission, a constitutional functionary but lower in rank than the Supreme Court, to the Supreme Court without associ ating a Chief Justice of the High Court or any other person lower in rank.
If the Committee is held to be functioning under the supervision and control of the parliament, with a view to aid it for the purpose of a proceeding pending in the House, it will be the parliament which will be in con trol of the proceeding and not the Committee.
100 32.
Mr Jethmalani was fervent in his exhortation to construe the Constitution and the Act in a manner which will protect the independence of the judiciary from the politi cians, and this, according to him, is possible only if this Court comes to an affirmative conclusion on the question of justiciability.
There cannot be two opinions on the necessi ty of an independent and fearless judiciary in a democratic country like ours, but it does not lead to the further conclusion that the independence of judiciary will be under a threat, unless the matter of removal of Judges, even at the highest level, is not subjected to the ultimate control of Courts.
The available materials unmistakably show that great care was taken by the framers the Constitution to this aspect and the matter was examined from every possible angle, before adopting the scheme as indicated earlier.
So far as the district courts and subordinate courts are concerned, the control has been vested in the High Court, but when it came to the High Court and Supreme Court Judges, it was considered adequate for the maintenance of their independence to adopt and enact the Constitution as we find it.
I do got see any reason to doubt the wisdom of the Constituent Assembly in entrusting the matter exclusively in the hands of the Parliament and I do not have any ground for suspicion that the Members of Par liament or their representatives, the Speaker and the Chair man, shall not be acting in the rue spirit of the Constitu tional provisions.
Similarly, the task of enacting a law under clause (5) was taken up seriously by consid ering every relevant aspect, and the process took several years before the Act was passed.
do not propose to deal with this point any further beyond saying that the mandate of the Constitution is binding on all of us, and I would close by quoting the following words from Hamilton: "If mankind were to resolve to agree in no institution of government, until every part of it had been adjusted to the most exact stand ard of perfection, society would soon become a general scene of anarchy, and the world a desert.
Where is the standard of perfection to be found ? Who will undertake to unite the discordant opinions of a whole community, in the same judgment of it; and to prevail upon one conceited projector to renounce his infal lible criterion for the fallible criterion of his more conceited neighbour? To answer the purpose of the adversaries of the Constitu tion, they ought to prove, not merely that particular provisions in it are not the best which might have been imagined, but that the plan upon the whole is bad and pernicious".
It has not been suggested on behalf of the petition ers or by anybody else that it is open to the Court to examine the legality of a final decision taken by the Par liament under clause (4).
Even after a verdict against the Judge is returned by the Committee, the Parlia ment or for that matter any of the two Houses can refuse to vote in favour of the Motion for removal of a Judge, and the Court shall not have any jurisdiction to interfere in the matter.
Is it conceivable, in the circumstances, that at the intermediate stage of investigation the Court has got the power to intervene ? The answer is in the negative for more than one reason.
If the control of the House continues on the proceeding throughout, which can he exercised through the Speaker, it cannot be presumed that the Court has a parallel jurisdiction, which may result in issuance of contradictory directions.
Besides, the Court cannot he expected to pass orders in the nature of step in aid, where the final result is beyond its jurisdiction.
Any order passed or direction issued by this Court may result in merely an exercise in futility, and may cause a situation, embarassing both for the highest judicial and legislative authorities of the country.
The Constitution cannot he attributed with such an intention.
I, therefore, hold that the courts including the Supreme Court do not have any jurisdiction to pass any order in relation to a proceeding for removal of a Judge of the superior courts.
Reference was made by the learned counsel for the parties to the Constitutions of several other countries, but I do not consider it necessary to discuss them excepting the Australian Constitution as they do not appear to be helpful at all.
As has been mentioned earlier the language of Arti cle 124 (4) is similar to section 72(ii) of the Common wealth of Australia Constitution Act (1900), except with this difference that the Australian Constitution Act.does not specifically provide for any law to he made for regulat ing the procedure and investigation.
However, the constitu tional and the legal position in Austraila is not helpful to resolve the present dispute before us, as the Commonwealth of Australia Constitution Act (1900) has adopted rigid Separation of Powers between the Executive, Legislature and Judiciary (as has been observed by this Court on many occa sions including at page 415 in Smt.
Indira Gandhi vs Raj Narain, , relented to above in paragraph 9.
Reference has been made by P.H. Lane in his commentary on the Australian Constitution to the proceedings which were initiated for removal of Mr. Justice Murphy under section 72 (ii) of the Constitution Act.
On account of sharp difference amongst the members of the Select Committee of the Senate appointed to inquire into the matter and a further failure to resolve the situation by establishing a second Committee and in view of certain other facts an adhoc legislation was passed under the name of Parliamentary Commission of Inquiry Act, 1986.
Under this Act further steps were being taken when Mr. Justice Murphy moved the High Court of Austraila for an order of injunction challenging the validity of the Act and alleging that one of the members of the Commission constituted under the Act (a 102 retired Judge) was disqualified on account of bias.
The application was dismissed on merits without adverting to the question of justiciability.
This decision, to my mind, is of no help to the petitioners before us, mainly on account of the difference in the Constitutional scheme of the two countries with respect to the Separation of Powers.
The judicial powers there have been exclusively vested in the courts by section 71 of the Constitution Act of 1900.
Lane has at page 372 of his book opined that sec tion 72 (ii) may be non justiciable, since it seems to place the exercise under the section in Parliament itself.
He, however, further proceeds to say that the Parliament could seek the High Court 's help, for example, in the peripheral matter of the meaning of misbehaviour or incapacity in section 72(ii).
He has also referred to certain other provi sions of the Constitution Act, and analysed the roles of Parliament and Court with his comments.
I do not consider it necessary to proceed further beyond saying that Mr. Justice Murphy 's case does not provide any aid in deciding the issue in the cases before us.
Although our Constitution was made after examining the Constitutions of many other countries, it has adopted a pattern of its own.
The learned counsel also placed a large number of decisions; both Indian and foreign and since I have not found them relevant, I have refrained from discussing them.
None of the cases in which this Court has either interfered with the decision of the House or has refused to do so, related to a proceeding for removal of a Judge, and are clearly distinguishable in view of my opinion expressed above.
I am also not dealing with the other points urged by Mr. Sibal, as I agree with him on the main issue of justiciability.
I am avoiding to express any opinion on the controversy whether the Motion lapsed or not on the dissolution of the earlier House, as the issue is for the Lok Sabha to decide.
In view of the above findings this Court cannot pass any order whether permanent or temporary on the prayer that the respondent No. 3 should not be allowed to exercise his judicial powers.
In the result all the F writ petitions are dismissed.
The prayer for transfer of Writ Petition No. 1061 of 1991 in Transfer Petition No. 278 of 1991 is allowed and that Writ Petition is also dismissed.
There will be no order as to costs.
N.P.V. Petitions dis posed of.
[/INST]The appellant company was incorporated in the United Kingdom, with its registered office in London and its business in the United Kingdom consisted of stores and groceries, including tea which represented only about 10% of its business there.
Its operations in India were carried on by a branch with its head office in Calcutta, and the business there consisted mainly in the sale of " packeted " tea throughout India.
The Delhi office of its Indian branch controlled the salesmen and other employees employed in the Punjab, Delhi State, Rajasthan and Uttar Pradesh, but had no connexion with the export side of the business.
The Indian Branch had no subscribed capital nor any reserves, and the capital used in India was money advanced from the company 's fund in England.
The dispute between the respondents who were the employees of the Delhi office and the company related, inter alia, to (1) fixation of grades and scales of pay; (2) whether retrospective effect should be given to the new scales of, pay; and (3) bonus for the year 1951.
The respondents contended that the total global profits of the appellant company should form the basis for determining the claim to bonus on the ground that it was an integrated industry which had trading activities in various countries.
The Tribunal found that the Indian workmen did not in any way contribute to the profits which the appellant company derived from its ex India business, that the Indian branch maintained separate accounts which had been audited and accepted by the Income tax authorities as showing the profit and loss of the Indian branch of the business, and that though, at the relevant time, the appellant company was one legal entity and the capital of the Indian branch came from London, the Indian branch was treated as a separate entity for all practical purposes.
The Tribunal also found that for 195 I there was no available surplus for distribution as bonus to the employees in India.
In the matter of fixation of grades and scales of pay, the Tribunal found that the existing scale of wages of the Delhi employees was far below the standard of a living wage, and for fixing the wage level it took into consideration the company 's global capacity to pay and came to the conclusion that having regard to its global 151 resources the company was financially able to bear a slightly higher wage structure.
Accordingly, the Tribunal revised the grades by giving an increase of 20% to all workers.
As to the date from which the revised grades were to take effect, the Tribunal directed that they should have retrospective effect from January 1, 1954, instead of January 1, 1953, as claimed by the Union.
The appellant contended that the Tribunal erred in taking into consideration the global financial resources of the company in support of an increase in wages while holding that the Indian branch was a separate entity for the payment of bonus, that the financial resources of the Indian branch did not show any capacity to pay higher wages, and that, in any case, there was no reliable evidence to show that the existing wage structure required revision if it was compared to the wage structure in similar industries in the Delhi region.
A question was also raised as to whether the Industrial Tribunal, Delhi, had jurisdiction to make an award in respect of employees of the Delhi office who were employed outside the State of Delhi.
Held: (1) that on the finding that the Delhi office controlled all its employees in the matter of appointment, leave, transfer, supervision, etc., whether employed in Delhi State or outside it, the Industrial Tribunal, Delhi, had jurisdiction to adjudicate on the dispute between the appellant company and its workmen of the Delhi office, as the Delhi State Government was the appropriate Government within the meaning of section 2 of the , and under section 18 of the Act the award made by the Tribunal was binding on all persons employed in the Delhi office; (2) that in the circumstances in which the appellant com pany operated in India at the relevant time and on the finding that no part of the profits made in India was diverted to England and that the Indian business depended on its own trading results the global profits of the company could not be made the basis for awarding bonus to Indian workmen, and that the latter can claim bonus only if there was an available surplus of profits of the Indian business; Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , Ganesh Flour Mills Co. Ltd vs Employees of Ganesh Flour Mills, A.I.R. 1958 S.C. 382, Burn and Co., Calcutta vs Their Employees, ; and Baroda Borough Municipality vs Its workmen; , , referred to.
(3) that in determining the question of a revision of the wage scale, the relevant considerations were : (1) whether the existing wage structure required revision by reason of its being below the standard of living wage, and (2) whether the industry could bear the additional burden of an increase in the wage scale on the basis of industry cum region by reason of its financial resources in India ; that judged by the considerations stated 152 above, it could not be said that the Tribunal erred in revising the wage structure on the basis of the evidence adduced before it ; and that the increase in the wages was not beyond the financial resources of the company as disclosed by its trading results in India.
There is a distinction between bonus and wage.
Bonus comes out of profits and is paid, if after meeting prior charges, there is an available surplus.
Wages primarily rest on contract and are determined on a long term basis and are not necessarily dependent on profits made in a particular year.
Crown Aluminium Works vs Their Workmen, ; and Express Newspapers (Private) Ltd. vs The Union of India, , relied on.
(4) that the new scales of pay should be brought into effect from November 1, 1955, instead of January 1, 1954, as directed by the Tribunal.
</s>
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<s>[INST] Summarize the judgementvil Appeal No. 3 169 of 1981.
From the Judgment and Order dated 7.5.1981 of the Alla habad High Court in Second Appeal No. 1018 of 1974.
Jagan Mohan Rao and R. Ramachandran (N.P.) for the Appellant.
Subodh Markandeya, Mrs. Chitra Markandeya, W.A. Nomani and G.S. Giri for the Respondent.
779 The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
This is a case where an order of dismissal passed in a departmental enquiry was challenged in civil court and ultimately has found its way to this Court after a long litigation for over 16 years.
The re spondent was a bus conductor in U.P. State Road Transport Corporation (Corporation ' for short).
A trap was laid against him and a disciplinary enquiry was initiated and dismissal order was passed on 23rd March, 1965.
He filed a civil suit questioning the same.
One of the main plea taken by the respondent was that certain important documents were not made available to him during the enquiry and this caused serious prejudice to him.
The trial court dismissed the suit and an appeal preferred by him was also dismissed by the appellate court.
Relentless as he was, he carried the matter to the High Court by way of second appeal and his plea was accepted by the High Court and the second appeal was al lowed.
Aggrieved by the said judgment, the Corporation has approached this Court.
On behalf of the Corporation it is contended that the High Court has grossly erred in interfering in a second appeal with the concurrent findings and that the plea of the respondent that relevant documents were not supplied to him during the enquiry has no substance.
One of the main issues framed before the trial court was whether all the way bills, carbon copies of the tickets issued on the said dates and carbon copy of checking report were not shown to the delinquent employee by the investigat ing officer and if so what would be its effect? The charge against the respondent was that he erased the waybills and resold some already sold tickets.
During the enquiry the delinquent employee was permitted to inspect the documents but he intended to inspect the carbon copies and made a request by way of a letter.
However, the carbon copies of the way bills dated 7th, 8th and 10th January, 1963 which are the relevant dates and carbon copies of the checking report were not shown to him.
The plea of the delinquent employee has been that from the carbon copies he would have shown that he could not have carried on such erasure or made false entries and non supply of them had caused great preju dice.
As already mentioned, the trial court as well as the first appellate court did not accept this plea and held that no prejudice was caused inasmuch as he was shown the origi nals and also on the ground that he did not later insisted on those carbon copies being shown to him.
The High Court, however, in an elaborate judgment referred to the various documents 780 and it ultimately reached the conclusion that the important documents have been purposely withheld which resulted in prejudice to the employee.
In this appeal, the learned counsel for the Corporation contended that where failure to produce the carbon copies of some of the documents did not cause any prejudice and that at any rate it is a question of fact, the High Court erred in interfering in the second appeal.
To satisfy ourselves we wanted to peruse the judg ments of the trial court as well as of the first appellate court but the Corporation has not placed a copy of the appellate court judgment before us.
We have perused the trial court judgment and we find at more than one place that the learned District Munsif has observed that the employee could have insisted on production of these documents.
The High Court no doubt has considered this aspect in detail and in doing so has referred to the contents of the various documents.
From this alone it cannot be said that the High Court has not kept in view the scope of second appeal.
Since the employee has been throughout pleading that he did not make the erasures or any other false entry, it naturally became necessary to see whether they were also found in carbon copies.
From this point of view the High Court con sidered the various figures and entries in the originals in which such erasures and entries are alleged to have been made by the employee and eventually observed that the entire enquiry was based on some of these documents and if a carbon copy of the way bills had been shown, the authority may well have been convinced that the charge levelled against him was not correct, and that, therefore the non supply of these documents has caused prejudice.
Having examined the findings arrived at by the High Court, we are unable to say that the High Court has committed any error which warrants interfer ence under Article 136 of the Constitution.
The High Court decreed the suit for pendente lite and future pay and allowances and this was passed on 7th May, 1981.
It can therefore be seen that for the last 25 years this litigation went on i.e. from the date of dismissal till today.
Admittedly the respondent has already reached the age of superannuation some years ago.
During these years the respondent must have sought some employment or the other and the learned counsel also could not seriously dispute the same.
Under these circumstances the question is whether again the parties should be driven to go through the indefi nite execution proceedings.
On the question of granting lump sum amount towards the backwages and allowances till the date of his retirement we have also heard both sides.
Under somewhat similar circumstances this Court in Sohan Singh vs Union of India and Another, granted lump 781 sum amount instead of driving the parties to go to the executing court for further relief.
That was a case where the service of an airman in the Air Force was not extended for a period of six years as per the regulation and the matter ultimately came up before this Court.
Taking into consideration the facts and circumstances this Court held that the employee should be compensated by payment of a lump sum amount in lieu of the benefits to which he would have been otherwise entitled if he had continued in service for the extended period of six years.
Without going into the merits of the actual claim this Court awarded a sum of Rs.35,000 by way of compensation.
In the instant case also we are of the view that ends of justice require that such a relief should be granted.
Taking into consideration all these aspects including that the respondent would have been entitled for some retirement benefit, we award Rs.35,000 and direct the U.P. State Road Transport Corporation, the appellant herein, to pay this amount to the respondent within two months from today.
Since the amount would be received in lump sum by the respondent, it may attract the levy of income tax.
But since the amount represents the salary and allowances over the last so many years the respondent may make an application under Section 89 of the Income Tax Act for spreading over this lump sum amount.
We may also point out that in similar circumstances, this Court, in Sundaram Motors Pvt. Ltd. vs Ameerjan and Another, where the compensation by way of lump sum amount was awarded, observed that the same should be spread over and gave a direction to the concerned Income Tax Officer to give immediate relief under Section 89 with out further enquiry.
Accordingly We direct the Corporation to pay the lump sum amount of Rs.35,000 without deducting income tax.
Since the respondent is entitled for relief under Section 89 of the Income Tax Act, he shall make an application to the concerned Income Tax Officer who shall give the necessary relief without any further enquiry.
The appeal is disposed of accordingly.
In the circumstances of the case there will be no order as to costs.
N.P.V. Appeal disposed of.
[/INST]Section 14(1) of the provides that where a duty of customs is chargeable on any goods by refer ence to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale.
for delivery at the time and place of importation.
in the course of international trade.
The appellant company, a small scale manufacturer of plain paper copiers.
had submitted.
alongwith their applica tion for approval of the phased manufacturing programme, the quotations received by them from their foreign collaborators based in Hongkong in respect of the various components and obtained a licenee in this regard for Rs.4,94,500.
Subse quently, they imported three consignments of components and consumables in SKD/CKD form from suppliers at Hongkong and another consignment from Singapore.
The total value declared under the four bills of entry was Rs.99,612.
The Collector of Customs found that the invoices submit ted by the company were undervalued and determined the price of goods at Rs.7,15,485 with reference to the quotations, for the purposes of section 14(1) of the Act.
He thus held that there was a misdeclaration of value to the tune of Rs.6,15,873, that the duty payable thereon would be Rs.10,96,228.20 and that the entire goods were liable to confiscation under section 111(m) of the Act.
He also held that the goods imported were fully finished copiers in SKD/CKI) form and as such there was a misdeclaration that the import ed goods were only parts of the copiers, that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence, that fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence.
In the alternative he held that even if all the parts contained in SKD/CKD packs were 29 viewed individually, none of the items was covered by the licence.
He further held that the value of the parts import ed for the purposes of section 14(1) of the Act would be Rs.5,63,332, whereas the importers were permitted to import goods worth Rs.4,94,500, that there was thus an excess of Rs.68,832 and as such the goods were liable to confiscation under section 111(d) of the Act.
Consequently, he directed con fiscation of the entire goods with an option to the company to pay Rs.3 lakhs in lieu thereof and also Rs.2 lakhs in personal penalties.
The Customs, Excise and Gold (Control) Appellate Tribunal dismissed their appeals.
In these appeals under section 130(e) of the Act, it was contended for the appellants that the quotations had indi cated prices at Hongkong and not the place of importation, that at the time of submitting the application for grant of licence the prices were quoted for fixing the upper limit of the value of the licence, that when the actual purchase transactions were entered into the company negotiated for the price and having regard to the quantum of purchase and the prospects of future sales the company was given 25 per cent discount by the suppliers, and that in the absence of any other material on record the invoice price alone could form the basis of valuation of the imported goods.
For the respondents, it was contended that the prices quoted by the collaborators were based on the prices given by the manufac turers.
and there was no question of supplying the compo nents on a lesser price than given by the manufacturers themselves, that the goods imported were not components of plain paper copiers as declared, that the cartons in fact comprised of all the parts required for full and complete assembly of 14 copiers, that the company in importing them in the guise of separate components and accessories had not only violated the terms and conditions of the licence but also committed a complete fraud, that in the circumstances the adjudicating authority was fully justified in placing reliance on the prices mentioned in the quotations.
Dismissing the appeals under section 130(e) of the Act, the Court, HELD: 1.1 According to section 14(1) of the for purposes of assessment the value of the imported goods is to be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation, in the course of interna tional trade, where the seller and the buyer have no inter est in the business of each other and the price is the sole consideration for the sale or offer for sale.
[36G H] 1.2 In the instant case the appellant company itself had produced 30 a copy of the quotations received by them from their collab orators at Hongkong in respect of the copiers and other items imported, alongwith their application for approval of their phased manufacturing programme.
They, therefore.
could not dispute the correctness of the prices mentioned in the said quotations.
Not only that, they have also failed to produce any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time.
The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determining the correct value of the imported goods.
[37A C] 2.1 The goods covered by the three bills of entry dated 3rd February, 1987 had been shipped from Hongkong on the same day i.e. on 21st January, 1987.
The entire goods had arrived on the same day and by the same flight on 30th January, 1987.
These goods had been supplied by the same supplier.
They comprised of ten numbers copiers in SKD/CKD condition, accessories, spares, consumables and excess items.
The goods covered by the 4th bill of entry were four numbers copiers in SKD/CKD condition and consumables.
If assembled together these would constitute full and complete copiers.
The licenee produced was valid for certain compo nents and was not valid for fully assembled copiers.
The appellant company was thus doing indirectly what they were not permitted to do directly under the licence.
[37H; 38A B] Girdbari Lal Bansi Dhar vs Union of India, ; referred to.
Union of India vs Tarachand Gupta & Bros., ; distinguished.
2.2 The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62% of the components of the copiers and the balance of 38% was to be manufactured by them indigenously.
This percentage of 62% was to be reduced in the subsequent years.
The import policy was not meant for such entrepre neurs who instead of importing 62% of the components, im ported 100% of the components of a fully finished and com plete goods manufactured by a foreign country.
Fully fin ished plain paper copiers were the end product of the im porters and hence could not be imported by them.
The device a, looted by the company in the instant case was thus a complete fraud on the import policy itself.
[37D F] 31 2.3 The order confiscating the goods and imposing fine was, therefore, rightly made.
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<s>[INST] Summarize the judgementivil Appeal No. 1213 of 1979.
583 From the Judgment and Order dated 24.4.
1978 of the Gujarat High Court in L.P.A. No. 97 of 1978.
Appellant in person.
H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellant, D.M. Bharati, challenges the validity of an order dated 30.9.
1976 passed by the Deputy Municipal Commissioner of the Municipal Corporation of the City of Ahmedabad.
By the said order, the Deputy Municipal Commissioner, consequent on the staff of the Municipal Corporation working in the Town Planning Estab lishment having to be absorbed in the Municipal Corporation, "reverted" the appellant from the post of junior draftsman in the Establishment and appointed him to act in the post of a tracer in the Town Development Department of the Corpora tion.
The High Court rejected his writ petition and hence the present appeal.
It is necessary to state the relevant facts.
The appel lant had been appointed as a tracer in the Estate Department of the Municipal Corporation on 26.6.
1955 and worked there till 18th February, 1957.
It appears that the Government appointed a Town Planning Officer under the provisions of section 31 of the Bombay Town Planning Act.
The Town Planning Officer had to be supplied with an establishment.
The establishment of the Town Planning Officer was admitted ly temporary.
An arrangement was entered into between the two authorities that the arbitrator in the planning office could select such persons from the Corporation for his establishment as he thought fit.
The Town Planning Officer demanded the services of the appellant and he was appointed as a tracer in the Town Planning Establishment on 22.2. 1957.
It is not clear whether the appellant went therein by way of transfer or by way of deputation as the original order dated 22.2.
1957 is not available with us.
However, the High Court and the appellant have proceeded on the footing that the appellant was deputed from the Municipal Corporation to the Town Planning Establishment.
Sometime later, the post of a junior draftsman fell vacant in the Town Planning Establishment.
The appellant tells us that he was asked to take charge of that post on 4.12.
It appears that Mr. Yevla (Respondent No. 6 in the W.P.) was posted to fill in that vacancy but, 584 on 21.4.
1960, his appointment was cancelled and the appel lant was appointed as junior draftsman in the Town Planning Establishment w.e.f.
The appellant tells us that he had also been subsequently recommended for appointment to the post of Surveyor cum Draftsman, which was a higher post and which had fallen vacant on 28.2.
But before this proposal could materialise the appellant was suspended on 5th December, 1962 by the Corporation and was removed from service on 13.5.64.
The Industrial Court granted approval to the removal of the appellant from service but made certain observations suggesting that he may be re appointed to the said post.
The appellant filed a writ petition against the order of the industrial court.
The High Court eventually, set aside the order of the industrial court on 1.2.
1969 and remanded the matter for fresh disposal to the industrial court.
The Municipal Corporation preferred S.L.P. 48/71 in this Court which was dismissed on 27.1.71.
The industrial court re heard the matter pursuant to the order of the High Court and declined approval to the order of removal of the appellant from service with the result that the order of removal dated 13.5.64 stood vacated and an order was passed on 3.3.71 by the Municipal Commissioner that the appellant was reappointed as a junior draftsman in the Town Planning Establishment.
In the meantime, on 16.8.
1965, consequent on the recom mendations of the industrial court, the appellant was ap pointed as junior draftsman in the Estates Department of the Municipal Corporation where he had been previously working.
This purported to be a fresh appointment and so the appel lant made a representation that he should be appointed in this post according to his seniority.
No orders were passed on this representation except a direction that the appellant should join service within a week of receipt of the memo and then represent his case for seniority, if he so desired.
Thereupon the appellant accepted the order re appointing him as junior draftsman in the Estates Department and took charge of his office.
The order of the High Court has found that the appellant was relieved from service on 1.10.1967 because of retrenchment.
When the above proceedings in the case of the appellant were taking place respondents 6 to 11 were directly selected as junior draftsmen by the Staff Selection Committee and promoted to the said post.
The appellant did not appear before the Staff Selection Committee perhaps because of the various proceedings above referred to, as a result of which he was under suspension from 5.12. 1962 to 13.5.
1964, when he was removed and then again till 16.8.65, when he was re 585 appointed as a draftsman.
Once the proceedings against the appellant came to a close, the Municipal Commissioner passed order on 3.3. 1971, cancelling the order dated 13.5.
1964 removing the appellant from service.
He was re appointed as a junior draftsman in the Town Planning establishment.
Subsequently, however, the Town Planning Establishment was abolished, and the appellant was served with the order dated 30.9.
1976, by which he was reverted to the services of the Municipal Corporation.
On such reverter, however, as we have seen, he was posted as a tracer and not as a junior drafts man.
The appellant filed an appeal against the said order before the Standing Committee but his appeal was rejected on 15.3.
1977 on the ground that in the Corporation direct recruits were already working as junior draftsmen, and that there was no post of junior draftsman vacant in the Corpora tion, to which the appellant could be appointed.
The appel lant thereupon filed a writ petition and, as already stated, he was unsuccessful therein and hence this present appeal.
The appellant 's contention before the High Court was two fold.
The first contention was that since he had been ap pointed as junior draftsman in the Town Planning establish ment by the order dated 21.4.
1960, he could not be repatri ated as a tracer in the Municipal Corporation, that is, to a lower post.
It was also contended that the order dated 30.9.
1976 has been passed by the Deputy Municipal Commissioner, who is a person lower in rank than the person who appointed him, namely, the Municipal Commissioner and that, therefore, the order dated 30.9.76 was passed by an officer without jurisdiction.
These two arguments have been reiterated before us also.
So far as the second contention is concerned it may at once be pointed out that if the order dated 30.9.76 is an order of reversion by way punishment, the appellant 's contention may be correct in view of the provi sions contained in sections 53 and 56 of the Bombay Provin cial Municipal Corporation Act.
However, if the order dated 30.9.76 has merely given effect to the abolition of the Town Planning establishment and restored the appellant to the post he can properly hold in the Municipal Corporation then no element of reversion would be involved and the Deputy Commissioner would be quite competent to pass the order in question.
The only question therefore that survives for consideration is regarding the validity of an order dated 30.9.76 in so far as it purported to appoint the appellant as a tracer in the Municipal Corporation instead of as a junior draftsman.
We may mention here that a point was also made that the appellant should not have been appointed as an "acting" tracer but it has been explained by the Corporation that it was a verbal inaccuracy and that the appointment 586 of the appellant in the Municipal Corporation is not an acting but a substantive one.
This point, therefore, does not survive.
We shall proceed on the assumption that the appellant went to the Town Planning establishment (which was a tempo rary one) by way of deputation from the Municipal Corpora tion.
There is some controversy as to whether the appellant was properly promoted as junior draftsman in the Town Plan ning establishment.
There is a suggestion that both the demand by the Town Planning establishment for the services of the appellant as well as his promotion therein were not acceptable to the Corporation and that they were the conse quence of undue favour shown to the appellant by the Arbi trator who was the appointing authority.
We do not think it is necessary to go into this controversy here because it is quite clear that the appellant 's promotion as junior drafts man and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpo ration and joined the Town Planning establishment he was a tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e., as tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post, that benefit cannot be denied to him.
In the present case, unfortunately, what happened was that when junior draftsmen were recruited by the Municipal Corporation in 1959 60 and in 1963 64, persons were selected and ap pointed to the said posts through the machinery of a Staff Selection Committee.
The appellant submits that he had been wrongly overlooked and that the respondents had been wrongly promoted as junior draftsmen.
He points out that, under the regulations, junior draftsmen had to be appointed by promo tion on the basis of seniority cure fitness and that the question of Staff Selection Committee did not at all arise.
According to him, the procedure for selecting by Staff Selection Committee would not come into force when the recruitment was restricted to persons in the municipal service.
In the present case, however, all the persons, who were appointed as junior draftsmen during the appellant 's absence were from the municipal service.
The appointment should, therefore, have been made directly by promotion without the intervening machinery of the Staff Selection Committee and the appellant being the seniormost tracer should have been appointed as junior draftsman in preference to respondents 6 to 11.
There are considerable difficulties in accepting this case of the appellant.
In the first place, what he is really attempting is to challenge 587 the appointments of respondents 6 to 11, which had been made in 1963 64, by a writ petition filed in 1978, more than a decade after the above selections and appointments had been made It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had disapproved the appellant 's removal from service by the order dated 13.5.
At least in 1971.
when the order was passed restoring him to the position of junior draftsman in the Town Planning establishment, he could and should have taken steps to obtain his "pro forma" promotion in the parent department.
The appellant says he was making some representations but this was not enough.
The fact is that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the writ petition or atleast upto 1.10.1976, when he made a represen tation against the order of reversion.
Quite apart from the above consideration, there is no material before us to show that the appointments of respond ents 6 to 11 were made irregularly and that the constitution of a Staff Selection Committee for selecting junior drafts men did not conform to the regulations and the provisions of the Bombay Provincial Municipal Corporations Act.
The Corpo ration has stated that they have been directly recruited.
The High Court has pointed out that the relevant regulation gave a discretion to the Commissioner to make the appoint ments by promotion or by direct recruitment.
section 54(2) of the Municipal Act, on which the petitioner relies, no doubt dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found as a fact at more than one place in the judgment that the respondents 6 to 11 had been directly selected as junior draftsmen after proper scrutiny by the Staff Selection Committee.
Even the appel lant stated before us that there was a circular among the municipal employees in regard to these appointments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appro priate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and not forward his claim for promotion as junior draftsman by virtue of his 588 seniority.
That he failed to do at the crucial time.
It may be that this was because he had certain difficulties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no imme diate steps to claim his rights in the parent department.
He was apparently satisfied with his restoration as junior draftsmen in the Town Planning establishment.
We are in agreement with the High Court that, having regard to the circumstances of the appointment of respondents 6 to 11, he was not entitled to any promotion in preference to them and that he cannot claim appointment as junior draftsman when there was no such post in 1976 to which he could be appoint ed.
It is not his case that any posts of junior draftsmen became vacant after his reversion to the parent department to which he could have been promoted.
The appellant contends that the fact that his eligibili ty for appointment as a junior draftsman in the parent department had been accepted by the order dated 16.8.1965 referred to earlier.
It is also pointed out that subsequent ly a question arose of the seniority as between the appel lant and one Kavadia.
This was gone into and the Municipal Corporation accepted the position that the appellant pos sessed qualifications required for the post of junior draftsman and that he was senior to Mr. Kavadia.
This was sometime in 1966.
We, however, find that this aspect of the matter does not help the appellant because the order dated 16.8.
1965 was passed in pursuance of the recommendation of the industrial court, while approving the appellant 's remov al, that he may be reconsidered for appointment.
In view of this order of the industrial court, the appellant had to be given a posting and since he had been discharged from serv ice when he was a junior draftsman, orders were passed appointing him as junior draftsman.
This again was made as an order of fresh appointment and the appellant 's represen tation that he should be given seniority was not accepted, rightly, for the reason mentioned above.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparent ly, no challenge to this order.
Moreover, these orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of seniority be tween appellant and Kavadia in 1966 do not help the appel lant 's case.
Learned counsel for the Municipal Corporation submitted to us that the appellant had not joined his post as a tracer in compliance 589 with the order dated 30.9.76 and that by now he has also reached the age of superannuation.
We are not here concerned in this appeal with the consequences of "non acceptance" of the order dated 30.9.76 by the appellant.
We are only con cerned with the question whether the appellant was rightly appointed as tracer on his reverter to the Municipal Corpo ration and that question we have answered in the affirma tive.
We do not express any opinion on the questions raised by the learned counsel for the respondent.
In the circumstances, we are of the opinion that there are no grounds to interfere with the order of the High Court.
We, therefore, dismiss this appeal but, in the cir cumstances, we make no order as to costs.
G.N. Appeal dis missed.
[/INST]With a view to nationalise the road transport services under Ch.
IV A of the (IV Of 1939), inserted into it by the amending Act 100 of 1956, the General Manager of Andhra State Transport Undertaking published a scheme under section 68C of the Act in the Official Gazette and invited objections thereto.
By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Department, who was in charge of Transport, but were decided by the Chief Minister.
The State Government approved of the scheme and published it in the Official Gazette.
The petitioners, who were plying their buses on various routes in the Krishna District as permit holders under the Act, apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme, applied to this Court for the protection of their fundamental rights to carry on their business.
It was contended, inter alia, on their behalf, (i) that Ch.
IVA of the Act was a piece of colourable legislation whose real object was to take over their business, under cover of cancellation of permits, in contravention of article 31 of the Constitution, (2) that the scheme itself was ultra vires the Act, for the reason, amongst others, that the State Government whose duty it was to act judicially in approving the scheme, had transgressed certain fundamental principles of natural justice.
Held (Per curiam), that the question of colourable legislation was, in substance, really one of legislative competence of the legislature that enacted it.
The legislature could only make laws within its legislative competence.
Its legislative field might be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution.
The legislature could not over step the field of its competency, directly or indirectly.
It would be for the Court to scrutinize if the legislature in purporting to make a law within its sphere, in effect and substance, 320 reached beyond it, it had infact the power to the law, its motive in making it would be irrelevant.
K. C. Gajapaji Narayan Deo vs The ' State of Orissa, [1954] S.C.R. i, followed.
The State of Bihar vs Maharajadhiraja sir Kameshwar singh of darbhangha considered So judged; it could not said that CH.
IVA of the Act was a colourable piece of legislation.
The power vested in the Regional ' Transport Authority by section 68F of the Act involved no transfer of business of the ,existing permit holders to the State Transport Undertaking nor could the latter be said thereunder to take over any assets of the former.
Section 68G of the Act in providing for compensation for un expired period of the permit did not imply that CH.
IVA of the Act involved any transfer of property or possession so as to entitle the permit holder to any compensation under article 31(2) Of the Constitution.
Chapter 1VA of the Act did not, therefore infringe the fundamental right of the petitioners under ' article 31 Of the Constitution.
Per Das, C. J., Bhagwati, and Subba Rao, jj.
While the purpose of section 68C of the Act was no doubt to provide a scheme of road transport service on the lines prescribed by it, the scheme proposed might affect the rights of individual permit holders by excluding them, partially or completely, from the business in any particular route or routes, and the procedure prescribed by section 68D and Rules 8 and 10 framed under the Act, required that the Government should hear both the objectors and the State Transport Undertaking before approving or modifying the scheme.
There was no doubt, therefore, that the State was deciding a lis and it was to do so judicially.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, and Express Newspapers Ltd. vs The Union of India, , relied on.
Franklin vs Minister of Town and Country Planning, [19481 A. C. 87, held inapplicable.
It was a fundamental principle of natural justice that the authority empowered to decide a matter must have no bias in it and another, no less fundamental, was that where the Act provided for a personal hearing the authority that heard the matter must also decide it.
The procedure followed in the instant case whereby the Home Secretary, in charge of Transport, himself a party to the dispute, heard the objections and the Chief Minister decided them, violated those principles, and the order of the State Government approving the scheme, therefore,must be quashed.
Per Sinha and Wanchoo, jj.
The sole object of Ch.
IVA, of the Act was to nationalise the road, transport services and the inquiry envisaged by it was of a limited character.
That inquiry 321 was meant to find out whether the scheme propounded was in public interest as required by section 68C of the Act, and not to adjudicate rival claim of permit holder on the one hand and the State Transport Undertaking on the other ; for, on approval of the scheme, exclusion of private transport as proposed by the scheme was bound to follow as a matter of course.
There could, therefore, be no lis, and the Government in approving or modifying the scheme under Ch.
IVA and the Rules framed thereunder must be held to act in its normal administrative capacity.
No objections could be taken, in the instant case, to the procedure adopted by the Government in empowering the Secretary to hear objections while the Chief Minister decided them, and the Secretary could in no sense be a party to any dispute.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, ; and Express Newspapers Ltd. vs The Union of India, , referred to.
Franklin vs Minister of Town and Country Planning, [19481 A.C. 87, applied.
Robinson vs Minister of Town and Country Planning, [1947] I All E. R. 851, referred to.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 115 of 1975.
Appeal by Special Leave from the Judgment and order dated 10 1 1972 of the Madras High Court in Crl.
Appeal No. 64 No. 657/70.
A. V. Rangam for the Appellant.
A. T. M. Sampath for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On November 1, 1969, a sample of gingelly oil was purchased by the Food Inspector, Madurai Municipality from the shop of the first respondent, who is now reported to be dead and against whom, this appeal, has, therefore, abated.
At that time respondent No. 2 was attending to the business.
After completing the necessary formalities the Food Inspector arranged to send one part of the sample to the Public Analyst at Madras for analysis.
The sample was analysed by the Public Analyst on November 11, 1969 and it was reported by him that it contained 5.1% of Free Fatty Acid as against the limit of 3.0% permissible under clause A.17.11 of Appendix B to the Prevention of Food Adulteration Rules, 1955.
In his report he also mentioned that the sample was properly sealed, it was air and moisture tight and packed in thick paper so as to be proof against light, and, the Free Fatty Acid content of the oil would, therefore, remain unchanged for several months.
On receipt of the Public Analyst 's report a complaint was filed against the two respondents for an offence under sec.
16(1) (a) and Sec.
7(i) read with sec.
2(i) (L) and Clause A.17.11 of Appendix 'B ' to the Prevention of Food Adulteration Rules.
Both the respondents denied the offence.
The 776 second respondent stated that he signed on the various documents produced by the prosecution as he was asked to do so by the Inspector.
He did not read the contents of those documents.
The brother of the second respondent was examined as a defence witness and he stated that he was in the shop when the Food Inspector came there and purchased the sample and that at the time of the sale the Food Inspector was told that the gingelly oil was not meant to be used as an article of food but was meant for "oil bath".
At the trial a request was made by the respondents that another part of the sample which had been produced by the Food Inspector in the Court might be sent to the Director, Central Food Laboratory, Calcutta, for analysis.
It was sent as desired.
The sample was analysed by the Director, Central Food Laboratory, Calcutta on February 6. 1970.
According to his report the gingelly oil contained 6.2% of Free Fatty Acid and was, therefore, adulterated.
The learned District Magistrate, Madurai acquitted both the respondents observing that the Free Fatty Acid had increased from 5.1% to 6.2% between November 11, 1969 and February 6, 1970 and it was, therefore, likely that the Free Fatty Acid content in the oil might have similarly increased between November 1, 1969 when the sample was taken and November 11, 1969, when the sample was analysed by the Public Analyst, Madras.
On that ground, the District Magistrate held that it was not possible to say that the prosecution had established that on the date when the sample was taken the Free Fatty Acid content of the oil exceeded 3%.
The State preferred an appeal to the Madras High Court against the order of acquittal.
The High Court confirmed the order of acquittal for the same reason as that given by the District Magistrate.
The State has filed this appeal after obtaining special leave of this Court under Art 136 of the Constitution.
Under Sec. 2(i)(L) (before it was amended in 1976) of the , an article of food is deemed to be adulterated "if the quality of 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".
Paragraph A.17.11 of Appendix 'B ' to the Rules made under the prescribes the standard in the case of Til oil (Gingelly or seasame oil) and to the extent relevant it reads as follows: ["A.17.11.
Til oil (Gingelly or sesame oil) means the oil expressed from clean and sound seeds of Til (Sesamum indicum), black, brown, white, or mixed.
It shall be clear, free 777 from rancidity, suspended or other foreign matter, separated water, added colouring or flavouring substances, or mineral oil.
It shall conform to the following standards: (a) Butyro rafractometer reading at 40oC . 58.0 to 61 (b) Saponification value . 188 to 193 (c) Iodine value . 105 to 115 (d) Unsaponifiable matter .
Not more than 1.5 per cent.
(e) Free fatty acid as Oleic acid.
Not more than 3.0 per cent.
(f) Bellier test(Turbidity temperature Not more than Acetic acid method).
22oC).] .]" Now, a sample of food purchased by a Food Inspector has to be divided by him into 3 parts and each part has to be marked, sealed and fastened separately.
Before the Act was amended in 1976, one part was to be delivered to the person from whom the sample was taken, another part was to be sent for analysis to the Public Analyst and the third part was to be retained with the Food Inspector to be produced by him in case legal proceedings were taken or it became necessary to send it for analysis to the Director of the Central Food Laboratory.
The Public Analyst was required to deliver a report of the result of his analysis and this report was ordinarily the foundation of the prosecution by the Food Inspector.
After the institution of the prosecution, the accused was given the right to request the Court to send the third part of the sample retained by the Food Inspector to the Director, Central Food Laboratory for a certificate.
The Director, Central Food Laboratory was required to send to the Court a certificate specifying the result of his analysis and the certificate of the Director, Central Food Laboratory, thereupon, superseded the Public Analyst 's report.
The Public Analyst 's report, if not superseded by the Certificate of the Director.
Central Food Laboratory and the Certificate of the Director, Central Food Laboratory might be used as evidence of the facts stated therein in any proceeding under the Act with this difference that the certificate of the Director, Central Food Laboratory was to be final and conclusive evidence of the facts stated therein.
In the present case the certificate of the Director showed that the sample of gingelly oil contained 6.2% of Free Fatty Acid whereas the permissible limit was 3% only.
We are not concerned with the Public Analyst 's report since that has been superseded by the certificate of the Director, Central Food Laboratory, and the latter certificate has been made conclusive evidence of the facts mentioned in it.
The sample, it must therefore be found, was adulterated.
778 The sample, as we mentioned earlier, was taken on November 1, 1969, the analysis by the Public Analyst was on November 11, 1969 and the analysis by the Director, Central Food Laboratory was on February 6, 1970.
The learned District Magistrate and the High Court thought that although the Free Fatty Acid content in that part of the sample which was sent to the Director, Central Food Laboratory was 6.2% on the date when the Director analysed the oil it could not be said to have been established that on the date when the sample was taken by the Food Inspector the Free Fatty Acid content exceeded 3%.
According to them it could well be that the Free Fatty Acid content increased due to natural causes.
We are unable to agree with the lower Courts.
There is nothing in the evidence, nor has anything been shown to us from any scientific work which would suggest that the Free Fatty Acid content would so rapidly increase in the space of about three months that what was less than 3% on November 1, 1969, when the sample was taken increased to 6.2% by February 6, 1970, when the sample was analysed by the Central Food Laboratory.
On the other hand in the New Encyclopaedia Britannica Volume 13 (pages 526 527) it is said: "Fats can be heated to between 200o and 250oC without undergoing significant changes provided contact with air or oxygen is avoided.
On exposure to air, oils and fats gradually undergo certain changes.
The drying oils absorb oxygen (dry) and polymerize readily; thin layers form a skin or protective film.
The semidrying oils absorb oxygen more slowly and are less useful as paint oils.
Still, sufficient oxygen is absorbed in time to produce distinct thickening and some film formation.
Oxidation of the drying and semidrying oils is accelerated by spreading the oil over a large surface.
On greasy cloths, for example, oxygen absorption may proceed so rapidly that spontaneous combustion ensues.
The nondrying oils, of which olive oil is typical, do not oxidize readily on exposure to air, although changes do take place gradually, including slow hydroysis (splitting to fatty acids and glycerol) and subsequent oxidation.
This slow oxidation causes a disagreeable smell and taste described by the term rancidity.
779 The chemical reactions involved in oil oxidation have been studied widely, when oils and fats are exposed to air, little change takes place for a period of time that varies from oil to oil depending upon the amount and type of unsaturation and the content of natural antioxidants.
During this so called induction period, there is virtually no change in either odour or chemistry of the oil because of the protective effect of natural antioxidants, especially tocopherol.
Gradually, the effectiveness of the anti oxidant is overcome and there is an accelerating rate of oxidation of unsaturated acids, called autoxidation.
Chemically, the first identifiable oxidation products are hydroperoxides.
These break down into a large variety of low molecular weight aldehydes, esters, alcohols, ketones, acids, and hydrocarbons, some of which possess the pungent, disagreeable odours characteristic of rancid fats.
In soyabean oil exposed to air to the point of incipient rancidity, more than 100 different oxidation products have been identified.
Natural oils such as coconut oil, with very low levels of unsaturation, are very stable to flavour deterioration, but the more highly unsaturated oils such as soyabean oil or safflower oil lose their flavour more quickly.
Sesame oil is unique in its flavour stability because of the presence of several natural antioxidants (sesamin, sesamolin, sesamol).
Synthetic antioxidants such as propyl gallate, butylated hydroxyanisole (BHA), and butylated hydroxytoluene (BHT) have been used to retard the onset of rancidity and increase the storage life of edible fats".
Gingelly (Til or seasame) oil we may mention is a semi drying oil.
From the extract from the Encyclopaedia Britannica it is only after prolonged exposure to air and light that there may be some discernible chemical changes in gingelly (til or seasame) oil.
In fact it is mentioned in the Encyclopaedia Britannica that seasame oil is unique in its flavour stability because of the presence of several natural antioxidants.
There is nothing to indicate that the samples were not packed as required by the rules.
The report of the Public Analyst mentions "The sample has been received properly sealed, to be air and moisture tight and packed in thick paper to be proof against access to light.
Under these conditions the Free Fatty Acid content of oils 780 remains unchanged for several months".
The certificate of the Director, Central Food Laboratory mentions "The seals were intact".
We are, therefore, clearly of opinion that there was no justification for the conclusion of the District Magistrate and the High Court that the Free Fatty Acid content of the oil on the date when the sample was taken might have been less than 3% and therefore, not adulterated.
We set aside the judgments of the District Magistrate and the High Court and convict the second respondent under Sec.
16(1)(a)(i) read with sec.
7(i) and 2(i) (L) of the and sentence him to pay a fine of Rs. 100 in default to undergo simple imprisonment for a period of two weeks.
We are imposing a nominal sentence having regard to the circumstance that we are interfering with a concurrent order of acquittal more than ten years after the commission of the offence.
[/INST]M/s. Shethia Mining and Manufacturing Corporation, Calcutta owned three non coking coal mines one of which was New Satgram Coal Mines.
besides a workshop called the New Satgram Engineering Works built on a plot adjacent to the New Satgram Coal Mines in 1964, a building known as the Technical Director 's Bungalow, built somewhere in 1957 58 outside the mining area but adjacent to it, and another building constructed in 1960 61 on the same plot of land, namely the Guest House used for the residence of officers and staff of mines.
The management of the New Satgram Coal Mines along with two other coal mines was taken over by the Central Government under the Coal Mines.
(Taking over of Management) Act, 1973, with effect from January 31, 1973.
Thereafter the was passed and by virtue of section 3(1) thereof, the right title and interest of M/s. Shethia Mining and Manufacturing Corporation vested in the Central Government with effect from May 1973 and subsequently by a notification in the Government company that is, the Coal (India) Ltd.
On May 17, 1973, the Central Government took over possession of the Technical Director 's Bungalow and the Guest House.
The. appellants who had filed two writ petitions challenging the taking over and the Nationalisation Act in the Supreme Court withdrew them and filed a petition under Article 226 of the Constitution in the Delhi High Court for the issuance of a writ or direction in the nature of mandamus in regard to the taking over of New.
Satgram Engineering Works and the dues pertaining to the New Satgram Coal Mines and New Majri Coal Mines.
The High Court partly allowed the petition but declined to go into the question as to whether the Engineering Unit, together with Shethia Bhavan and all its assets etc the Technical Director 's Bungalow and Guest House were or not covered by the definition.
of the term "mine" in section 2(h)(vi), (vii) & (xi) of the Nationalisation Act.
Hence the appeals by special leave one by New Satgram Engineering Works and the other by the Union of India.
Allowing the Government 's appeal and dismissing the appeal of the Engineering Works, the Court ^ HELD: (1) When the facts themselves are seriously controverted, the dispute relating to the properties in question raise a "serious question of title" and the parties must get their rights adjudicated upon in a civil court and not 407 under article 226 of the Constitution.
The question whether the engineering unit, was "situate in, or adjacent to" the new Satgram Coal Mines and was "substantially" used for the purposes of the mine as well as the question whether the Technical Director 's Bungalow and the Guest House were "solely" used for the residence of officers and staff of the mine and! therefore.
fell within the definition of 'mine ' as contained in section 2(h) of the Nationalisation Act, cannot be decided in proceedings under article 226 of the Constitution.
The proper remedy is by way of a suit.
[416H; 418G H] (2) Parliament instead of providing that the word 'mine ' shall have the meaning assigned to it in the , has given an enlarged definition of 'mine ' in section 2(h) so that not merely the colliery but everything connected with the mining industry should vest in the Central Government, that is, not only that part of the industry which consisted of raising, winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity.
Parliament by an enlarged definition of mine as contained in section 2(h) of the Act has indicated the nature of the properties that vest, and the question whether a particular asset is taken within the sweep of i. 2(h) depends on whether it answers the description given therein.
[415 H, 416 A D] (3) The language used in section 2(h)(vii) and (xi) of the are different.
Sub clause (vii) used the words "in, or adjacent to, a mine" and "used substantially" for the purposes of the mine or a number of mines under the same management, in relation to workshops.
The use of the word 'and ' makes both the conditions conjunctive.
Sub Clause (xi) used the words "if solely used" for the location of the management, sale or liaison offices, or for the residence of officers and staff of the mine, in relation to lands and buildings.
The difference in language between the two expressions "used substantially" and "solely used" is clear.
A workshop cr a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine.
What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine.
The subsequent user may not b. very material.
[415 B E] (4) Merely because the land on which a workshop of a coal mine is located bears a different plot number, or even if there is a compound wall between the main office of the coal mine and the workshop, it would not cease to be part of the mine.
The question in such cases will always be whether the workshop is "located in, or adjacent to, a mine" and was "used substantially for the purposes of the mine under the same management".
Further the question whether a workshop is "substantially" used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to, or in substance is, part of the mine.
The value of jobs executed for the mine as against those for others is not really determinative of the question.
If a workshop is, in fact a part of a coal mine, it does not cease to be so merely because its utilisation lies in the production of materials supplied to third parties.
While a workshop may form part of a mine and is substantially used as such, it may be utilised for turning out other products; it all depends upon the circumstances of each case, whether it forms part of a mine or not.
[416F G, 417 D F] (5) Sub sections (3) and (4) of section 19 of the Act are part of an integrated scheme and must be read with sub section (2) of section 18.
According to the provisions of sub sections (3) and (4) of section 19 the Central 408 Government, or the Government company was exclusively entitled to receive monies in question to the exclusion of other persons up to the specified ate and to utilise the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day.
Under the scheme of the Act, the owner of the coal mine which has vested in the Central Government under sub section (1) of section 3 is entitled to receive, besides the compensation amount as determined under section 8, additional compensation amount under sub section (1) of section 9, simple interest thereon at 40% per annum for the period specified therein, together with "such amount as may become due" to tho owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government 35 provided by sub section (2) of section 18.
[421 C E] Provisions in sections 8, 9, 18 and 19 make it clear that unless the requirements of section 19 are fulfilled there can be no ascertainment of "such amount as may become due" to the owner of a coal mine, in relation to the period during which the management of the coal mine remained vested in the Central Government, as required under sub section (2) of section 18.
Anr other construction would render sub section (2) of section 18 entirely otiose.
The amounts collected on behalf of the erstwhile owners of coal mines, represent the money of such owners without distinction, and whether they were sale proceeds of coal or realisations from debtors.
the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day, but also were liable to be spent for the purposes of management.
All the rights and liabilities arise from the provisions of the Acts, and the net balance in relation to the management period, means the difference between authorised collections and legitimate liabilities of the erstwhile owners.
It is necessarily this balance which "becomes due in relation to the period during which the management of the coal mines remained vested the Central Government" within the meaning of sub section (2) of section 18.
[423 B E] When there is a payment made by the Central Government under subs.
(2) of section 18, the elaborate procedure provided under sections 20 27 have to be followed.
The owner of a coal mine is entitled to the payment by the Commissioner of Payments, under section 26 of "the balance, if any out of the total amount of money credited to the account of the coal mine" after he has gone through all the stages provided for in Chapter VI.
Such being the scheme, there is no question of the owner of a coal mine, who is divested of his right, title and interest under sub section (1) of section 3 to realise from the Central Government any amount due to a coal mine, which remained to be realised until the specified date, that is, June 30, 1975.
In the instant case, in view of all these provisions of sections 20 to 27 of the Act and particularly, of sub section (1) of section 26 the claims made by the appellants Engineering Works are not proper.
They are certainly not entitled to recover any definite or ascertained sum.
All that they are entitled to under sub section (5) of section 19 is that they should be furnished with a copy of each statement of accounts prepared under section 19, to its being audited under sub section (6) and to the audit being conducted in such manner as the Central Government may direct under sub section (7), and to the payment under sub section (1) of section 26 of the balance, if any, out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged.
[423F, 424F H, 425A, D E] (6) There is no duty cast on the Central Government to make realisations 409 of any money due to a coal mine if it pertains to a period prior to the appointed, day, and to discharge the liabilities of the coal mine beyond the specified dated that is, June 30, 1975.
The 'appointed day ' under section 2(a) of the Management Act under the Nationalisation Act was January 31, 1973 and May 1, 1973 respectively; while the 'specified date ' for purposes of sub sections (3) & (4) of section 19 was June 30, 1975.
All that vested in the Central Government under sub section (I) of section 3 of the Management Act was the management of all coal mines, as defined in section 2(g) of The Act, which included sundry debts etc.
, pending nationalisation of such mines, with effect from the appointed day, that is, January 31, 1973.
But this was only for the purposes of management, the title all the time remaining in the erstwhile owners of the coal mines.
In the course of management under that Act, all the collections belonged to the owners, and the liabilities also in relation to the mines were the liabilities of the owners. 'The Custodian appointed by the Central Government under section 6 of the Management Act was liable for, the net balance in relation to the management period.
He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act.
[426 C F] (7) The conferral of power upon the Central Government under subsections (3) and (4) of section 19 to make realisation of monies due to the coal mines and from such realisation to discharge the liabilities as well as to incur expenses in relation to the management thereof, was a necessary concomitant of the vesting of such coal mines under sub section (I) of section 3 of the Act.
The Nationalisation Act received the assent of the President on May 30, 1973 but the provisions of sub section (I) of section 3 were brought into force with retrospective effect, that is, with effect from the appointed day, that is, May 1, 1973.
It follows that, although there was a complete extinction of all the rights, title and interest of the owners of coal mines with effect from May 1. ; 1973, there was a fictional extension of the period of management under the Management Act from May 1 to May 30, 1973.
There is, therefore, provision made in section 9 that apart from the amount of compensation provided for by section 8, as mentioned in the Schedule, the owners of every coal mine shall be entitled to receive additional compensation under sub section (I) thereof.
This was to be an amount equal to the amount which would have been, but for the provisions of sections 3, 4 and S payable to such owner for the period commencing on May 1, 1973 and ending on the date on which the Act received P the assent of the President that is, May 30, 1973.
Under sub section (1) of section 11 the Central Government is entitled to exercise all such things as the owner of the coal mine was authorised to do.
[427C, 426G 427B] (8) The definitions of coal mine in section 2(h)(xii) includes the current assets belonging to a mine.
but by reason of the explanation inserted by the Coal Mines Nationalisation (Amendment) Act, 1978, the expression "current assets" appearing therein does not include amounts which had become due before the appointed day, that is, May 1, 1973.
Thus these dues did not vest in the Central Government.
This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to section 2(g)(xii) of that Act.
[427 D E] (9) The Management Act was to be followed by the Nationalisation Act and, therefore, the accountability of the Central Government in regard to the management period was provided for in section 19 of the Nationalisation Act.
Although there was vesting of the coal mines in the Central Government under 410 sub section (1) of section 3 of the Act, the accounts had still to be settled Sub sections (3) and (4) of section 19, therefore, extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day, that is, May 1, 1973 till the specified date, that is, June 30, 1975.
The liabilities of the coal mines were not taken over under the Management Act.
Section 7 of the Nationalisation Act implies that after the specified date, that is, June 30, 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day.
It must result in the inevitable consequence, as a necessary corollary that any amount which could not be realised by the Central Government until the specified date, would be realisable by the owners directly in order to meet their pre existing liabilities.
[427 F 428 B] (10) Provisions of sub section (4) of section 19 of the are in part materia with sub section (3) of section 22 of the .
The subsidy receivable from the erstwhile Coal Board established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952, being a payment "by way of reimbursement" was like any other dues, and, therefore, must be treated as 'any money due to the coking coal mine '.
Therefore, the directions made by the Court requiring the Union of India to pay to the Satgram Engineering Works Rs. 7,28,342 54 which is to be recovered by the erstwhile Coal Board as subsidy, is incorrect.
[428C D] Industrial Supplies Pvt. Ltd., & Anr.
vs The Union of India & Ors.
[1981] 1 SCR p. 375, followed.
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 1932 of 1970.
Appeal by special leave from the judgment and decree dated the 31st December, 1969, of the Madras High Court in Second Appeal No. 348 of 1966, M. Natesan, Mrs. Janaki Ramachandran and K. Kumar for the Appellants.
Vepa P. Sarathy, Gopal Subramanian and Mrs. section Gopalakrishnan, for the Respondents.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave is by the plaintiffs.
The material facts of the case are that the suit land belonged to one Venkataramabhadra Naidu, a Zamindar (hereinafter 'Naidu '), who donated it to Bhoodan Yagna on August 18, 1953 by executing documents, Exs.
B 1 and B 2, which were unregistered deeds.
Later in 1958, in Madras Bhoodan Yagna Act, 1958 (hereinafter 'The Bhoodan Act ') came into force.
The Madras Bhoodan Yagna Board constituted under section 3 of the Bhoodan Act and functioning under the Act allotted the suit land to the defendants who claimed to have been in possession of the land since before the donation.
On August 3, 1960, Naidu sold the suit land to the plaintiff by a registered sale deed for a sum of Rs. 2000.
The plaintiffs alleged that they were in possession of the suit land but as the defendants were interfering in their possession, they filed the suit for declaration of their title to, and possession of, the suit land.
176 The plaintiffs ' case was that as the donation of the land by Naidu was not by any registered deed, no title passed to the Bhoodan Board and subsequently to its allottees, namely, the defendants and that Naidu validly transferred title to them.
The defendants ' case, inter alia, was that the land vested in the Bhoodan Board under the provisions of the Bhoodan Act, and Naidu had no saleable interest thereto which he could transfer to the plaintiffs by the sale deed.
The Trial Court decreed the plaintiffs ' suit.
The decree was upheld by the First Appellate Court on appeal by the defendants.
Both the courts held that the donation of the suit and by Naidu was not in conformity with Section 17 of the Registration Act and Section 12 of the Transfer of Property Act and as such title to the suit land did not pass from Naidu to the Bhoodan Board.
The defendants preferred a second appeal before the High Court.
The High Court reversed the decree of the courts below and dismissed the plaintiffs ' suit.
It has to be mentioned that the First Appellate Court passed its decree on October 1, 1962 while the High Court passed its impugned decree on 31st December, 1969; while in the meantime, in 1964, the Madras Bhoodan Yagna Act of 1958 was amended by the Madras Bhoodan Yagna (Amendment) Act, 1964 (hereinafter 'the Bhoodan (Amendment) Act ').
Learned counsel for the appellants submits that the donation of the suit land by Naidu to the Bhoodan Board was before the passing of the Bhoodan Act of 1958 and the Bhoodan (Amendment) Act of 1964; as such the provisions of these two Acts could not save the donation of the suit land by Naidu to Bhoodan Board from the operation of the relevant provisions of the Transfer of Property Act and the Indian Registration Act.
In other words, the submission is that the donation was invalid for want of a registered deed.
It may be mentioned that counsel of the appellants has not challenged the validity or vires of the provisions of the Bhoodan Act or Bhoodan (Amendment) Act.
His submission is that the above provisions do not have retrospective effect.
The object of the Bhoodan Act is, as it appears from the preamble, "to facilitate the donation of lands for the Bhoodan Yagna 177 initiated by Shri Acharya Vinobha Bhave and the transfer and settlement of such lands for the benefit of landless poor persons or for community purposes and to provide in Gramdan Villages for the vesting of lands in, and the management of those lands by the Sarvodaya Panchayat in the State of Madras." 'Bhoodan Yagna ' has been defined under clause (a) of section 2 as meaning "the movement initiated by Shri Acharya Vinobha Bhave for the acquisition of lands through voluntary gifts for distribution to landless poor persons, cooperative societies or Sarvodaya Panchayats or for community purposes.
" It is why, therefore; it appears, the donations of land to Bhoodan Yagna were exempted from the operation of the Indian Registration Act and the Transfer of Property Act, as it will, presently appear.
I shall first refer to the relevant provisions of the original Bhoodan Act (of 1958) and examine the position of the law that was before the amendment of 1964.
Section 3 of the Bhoodan Act provided for the establishment and incorporation of a Board to be called "The Madras State Bhoodan Yagna Board" (herein after the 'Bhoodan Board ').
Section 11 of the Bhoodan Act provided, "All lands donated for the purposes of the Bhoodan Yagna whether before (emphasis added) or after the commencement of this Act shall, subject to the provisions of section 16, 17 and 20, vest in the State Board".
Section 11 clearly shows that the intention of the Legislature was to bring in to the purview of the Bhoodan Act lands donated by any person before the commencement of the Bhoodan Act.
Clause (a) of sub section (1) of Section 16 which is material is in the following terms: "16(1) Notwithstanding anything to the contrary contained in any other law for the time being in force, (a) any owner may, by declaration made in the prescribed manner, donate his land for the Bhoodan Yagna.
Provided that . . . .
Provided further that . .
Sub section (3) to Section 16 reads: 178 "Every declaration made under sub section (1) shall be filed with the Tahsildar or the Deputy Tahsildar in independent charge having jurisdiction in the taluk or sub taluk where the land is situate." Sub section (1) of Section 17 provided "Every declaration filed under sub section (3) of section 16 shall, as soon as may be, be published in the Fort St. George Gazette and in such other manner as may be prescribed." Any person whose interest were affected by the declaration of the donation might file objections before the Tahsildar or Deputy Tahsildar under sub section (2).
Under sub section (3), the Tahsildar or the Deputy Tahsildar had to register every such objection, fix a date of hearing and give notice of the date of hearing to the donor, and the objector, the Bhoodan Board and the Local Committee concerned, and then under sub section (4), had to investigate and dispose of the objection, and by an order confirm the declaration or declare it null and void.
Sub sections (5) and (6) which are important were in the following terms: "Sub section (5) If the Tahsildar or the Deputy Tahsildar confirms the declaration, then, notwithstanding anything contained in any other law for the time being in force, all the right, title and interest of the donor in such land shall stand transferred to and vest in the State Board for the purchases of the Bhoodan Yagna (emphasis added).
Sub section (6) Every order under sub section (5) confirming a declaration shall be published in the Fort St. George Gazette and on such publication, the donation of land shall, subject to the provisions of section 23, be irrevocable.
" Sub section (5) in clear terms lays down that on the confirmation of the declaration of the donation, notwithstanding the provisions of 'any other law ', (to wit the Transfer of Property Act and the Indian Registration Act in this case) right, title and interest in the land "shall stand transferred to and vest in" the Bhoodan Board.
And after publication of the order of confirmation of the donation, it can be challenged only by a suit contemplated by Section 23.
179 Sub section (1) of section 20 provided that "The State Board shall prepare a list of all lands donated for purposes of Bhoodan Yagna prior to (emphasis added) the commencement of this Act" showing the area, description and other particulars of the land, the name and address of the donor and allied matters.
Sub section (1) to section 20 also shows that the Bhoodan Act was intended to include the donations made prior to the commencement of this Act.
Sub section (2) provides for publication of the list prepared under sub section (1) in the Fort St. George Gazette.
The proviso added after sub section (3) of section 20, and sub section (4) of section 20 are important and need be extracted.
They are as follows: "Sub section (3). . .
Provided that where an order is made by the Inquiry Officer under sub section (4) of section 17 confirming the donation, such donation shall be deemed to have been accepted with effect from the date on which the donation was made and for this purpose, this Act shall be deemed to have been in force on such date.
Sub section (4) Where such land has been granted to any person it shall, with effect from the date of grant, be deemed further to have been granted to the grantee under and in accordance with the provisions of Section 19." These two are deeming provisions and are a complete answer to the appellants ' contention.
The meaning of the proviso is that although the Bhoodan Act was not in existence at the time a donation was made its acceptance by the Tahsildar or Deputy Tahsildar later on after the commencement of the Act, (as in the case in hand), by virtue of the deeming provision, the Act shall be deemed to be in existence on the date of the donation.
Sub section (4) had made a similar deeming provision for the grant made in favour of a grantee before the coming into force of the Bhoodan Act.
Section 24 reads: "Notwithstanding anything contained in any other law, every declaration and every grant of land made or deemed to have been made under this Act shall be and be deemed always to have been exempt from the payment of stamp duty and of encumbrance certificate fee, registration fee or of the fee payable for the attestation of a power of attorney under section 33, sub section 180 (2), of the Indian (Central Act XVI of 1908)." (emphasis added).
The provision of this section also shows that donations and grants under the Bhoodan Act were exempted from the provisions of the Transfer of Property Act and the Indian with retrospective effect.
The above considerations leave no doubt at all that the provisions of the Bhoodan Act had retrospective effect and intended to include donations of land by any person to the Bhoodan Yagna made before the commencement of the Bhoodan Act, and such donations were also exempted from the relevant provisions of the Transfer of Property Act and the Indian with retrospective effect.
Section 23 made the order of Tahsildar or Deputy Tahsildar under sub section (4) of Section 17, final and not subject to appeal or revision.
An aggrieved party however was not without remedy.
Under the proviso of section 23, any person whose interest was affected as a result of the donation to the Bhoodan Yagna, whether before or after the commencement of the Act, might file a suit to set aside the order of the Tahsildar or the Deputy Tahsildar.
The plaintiffs in the present suit (appellants before us) filed no such suit.
Let us now turn to the relevant provisions of the Bhoodan (Amendment) Act of 1964.
There was no material amendment to section 16 of the original Act.
Only "The State Board" was substituted for "Tahsildar or Deputy Tahsildar".
There was also no material amendment to Section 17.
"Tahsildar or Deputy Tahsildar" was replaced by 'Inquiry Officer '.
Only with the substitution of 'Inquiry Officer ' for 'Tahsildar or Deputy Tahsildar ', section 20 and section 23 have been retained.
Section 24 as amended is as follows: "Notwithstanding anything contained in any other law, every declaration and every grant of land made or deemed to have been made under this Act shall be and be deemed always to have been exempt from registration and payment of stamp duty and of encumbrance certificate fee.
" A comparison of the new section 24 with the old section 24 shows that there has been no change in the law so far as registration and stamp duty were concerned.
181 10.
Section 11 of the Bhoodan (Amendment) Act of 1964 is new and very important.
Clauses (b) and (c) which are material for our purpose need be extracted: "Section 11 Notwithstanding anything contained in any judgment, decree or order of any Court, no donation of any land for the Bhoodan Yagna or for Gramdan and no grant of any such land made or deemed to have been made under the principal Act as in force immediately before the commencement of this Act, shall be deemed to be invalid on the ground only that the donation or the grant of land as aforesaid was not made in accordance with any law relating to transfer of property or registration, and any such donation or grant of land shall, for all purposes, be deemed to be and to have always been validly made and accordingly (a) . . (b) no suit or other proceeding shall be maintained or continued in any Court for the declaration of title to, or the recovery of possession of, any land donated for the Bhoodan Yagna or for Gramdan on the ground that the donation was not made in accordance with the law relating to transfer of property or registration; (c) no Court shall enforce any decree or order declaring any donation of land for the Bhoodan Yagna or for Gramdan to be invalid or directing the recovery of possession of any such land by the person who donated it or any other person claiming under him, on ground referred to in clause (b): Provided that. . .
Provided further that. . .
Provided also that. . . . Explanation. . . . . " Clause (b) of section 11 of the Bhoodan (Amendment) Act puts a bar on the maintenance of a suit or other proceedings in any Court for the declaration of title to, or recovery of possession of, any land donated for the Bhoodan Yagna on the ground that the transfer (donation) was not in accordance with the provisions of the 182 Transfer of Property Act or Indian .
Clause (c) to section 11 goes one step further and lays down that even if a decree has already been passed in such a suit, no court shall execute a decree in a suit referred to in clause (b).
It is thus seen that the law both under the old and the new Acts so far as the operation of the provisions of the Transfer of Property Act and the is concerned, is the same.
The law ingrained in section 11 is merely declaratory in express terms of the already existing law under the Bhoodan Act of 1958.
The second appeal that was pending before the High Court fell within the mischief of clause (b) of section 11.
Even if there had been no appeal by the defendants, the execution of the decree passed by the First Appellate Court could have been successfully objected to by the defendant or any other person as void on the ground that the suit itself was barred under section 23 of the old Act itself.
This appeal has no merit and is dismissed with costs.
N.K.A. Appeal dismissed.
[/INST]The suit land belonged to one Naidu who donated it to Bhoodan Yagna in 1953 through unregistered deeds.
Later the Madras Bhoodan Yagna Act 1958 came into force and this Act of 1958 was further amended by Bhoodan (Amendment) Act 1964.
The said land was allotted to the respondents under the Act who claimed to have been in possession of the land since before the donation.
Naidu sold the suit lands to the appellants by a registered sale deed.
The appellants filed the suit for declaration of their title to, and possession of, the said land and pleaded that (i) as the donation of the land by Naidu was not by any registered deed, no title could be passed to the Bhoodan Board and subsequently to the respondents and (ii) Naidu validly transferred title of the lands to them.
The respondents pleaded that (i) the land vested in the Bhoodan Board under the Bhoodan Act and (ii) Naidu had no saleable interest thereto which he could transfer to the appellants by the deed of sale.
The trial court decreed the appellant 's suit which was upheld by the first appellate court.
The respondents preferred second appeal before the High Court which reversed the decree of the courts below and dismissed the plaintiff 's suit.
On appeal, it was argued by the appellants that the donation was invalid for want of registered deed and the provisions of the Bhoodan (Amendment) Act do not have retrospective effect.
Dismissing the appeal, ^ HELD: 1.
The object of the Bhoodan Yagna Act is "to facilitate the donation of lands for the Bhoodan Yagna initiated by Shri Acharya Vinoba Bhave and the transfer and settlement of such land for the benefit of poor landless persons or for community purposes and to provide in Gramdan villages for the vesting of lands in, and the management of those lands by the Sarvodaya Panchayat in the State of Madras." [176 H, 177 A B] 2.
Section 11 clearly shows that intention of the Legislature was to bring in to the purview of the Bhoodan Act lands donated by any person before the commencement of the Bhoodan Act.
The law ingrained in section 11 is merely declaratory in express terms of the already existing law under the Bhoodan Act of 1958.
[177 E F, 182 B] 175 3.
Clause (b) of section 11 of the Bhoodan (Amendment) Act puts a bar on the maintenance of a suit or other proceedings in any Court for the declaration of title to, or recovery of possession of, any land donated for the Bhoodan Yagna on the ground that the transfer (donation) was not in accordance with the provisions of the Transfer of Property Act or Indian Registration Act.
Clause (c) to section 11 goes one step further and lays down that even if a decree has already been passed in such a suit, no court shall execute a decree in a suit referred to in clause (b).
[181 G H, 182 A B] 4.
Section 24 of the Act leaves no doubt that the provisions of the Bhoodan Act had retrospective effect and intended to include donations of land by any person to the Bhoodan Yagna made before the commencement of the Bhoodan Act, and such donations were also exempted from the relevant provisions of the Transfer of Property Act and the Indian Registration Act with retrospective effective.
[180 B C]
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<s>[INST] Summarize the judgementAppeals Nos. 290 to 292 of 1959.
Appeals by special leave from the judgment and order dated December 6, 1957, of the Kerala High Court in Agricultural Income tax Referred Cases Nos. 15, 18 and 19 of 1955.
C.K. Daphtary, Solicitor General of India, Thomas Vellapally and M. R. K. Pillai, for the appellants (in all the appeals) Sardar Bahadur, for the respondents.
December 15.
The Judgment of the Court was delivered by KAPUR, J.
These three appeals are brought by special leave against the judgment and order of the High Court of Kerala and arise out of a common judgment of that court given in three Agricultural Income tax References Nos. 15, 18 and 19 of 1955.
In the first reference the question raised was: "Whether under the Travancore Cochin Agricul tural Income Tax Act, 1950 in calculating the assessable agricultural income of a rubber estate already planted and containing both mature yielding rubber trees and also immature rubber plants which have not come into bearing, the annual expenses incurred for the upkeep and maintenance of such rubber plants, are not a permissible deduction, and if so, whether the sum of Rs. 42,660 4 1 expended by the assessee in the relevant accounting year 1952, under this head may be deducted." and in the other two the question referred was: 281 "Whether the expenses incurred for the mainte nance and upkeep of immature rubber trees constitute a permissible deduction within the meaning of section 5(j) of Act XXII of 1950?" In all the references the questions were answered in the negative and against the appellant.
The appeals relate to three accounting years 1950, 1951 and 1952 (assessment years 1951 52, 1952 53 and 1953 54).
The appellants have rubber plantations and in the accounting year 1950, corresponding to the assessment year 1951 52, the appellants had under cultivation 3558 84 acres out of which 334 64 acres had immature rubber trees growing and the rest i.e. 3224 20 acres mature rubber yielding trees under cultivation.
In that year a sum of Rs. 19,056 0 9, which was expended for the upkeep and maintenance of immature portion of the rubber plantation, was allowed by the Agricultural Income tax Tribunal and at the instance of the respondent a reference was made to the High Court under section 60(1) of the Agricultural Income tax Act (Act XXII of 1950) hereinafter termed the 'Act ' and that was reference No. 18 of 1955.
During the accounting year 1951 corresponding to the assessment year 1952 53 the appellant had under cultivation.
a total area of 3426,55 acres of which 3091.91acres were mature rubber yielding trees and 334.64 acres had immature rubber trees.
In that year a sum of Rs. 59,271.9 5 was the expenditure incurred for the upkeep and maintenance of immature portion of the rubber estate.
That sum was allowed by the Agricultural Income tax Tribunal and at the instance of the respondent a reference was made under section 60(1) of the Act to the High Court and that was reference No. 19 of 1955.
In Agricultural Income tax Reference No. 15 of 1955 which related to, accounting year 1952 and the assessment year 1953 54, the area under cultivation was 3453,65 out of which 2967,91 acres had mature rubber yielding trees and 485,74 acres had immature rubber growing trees.
In that year the amount expended on the maintenance and tending of the imma ture rubber trees was Rs. 42,660,4 1.
In that case, 36 282 however, the Agricultural Income tax Tribunal rejected the appellant 's claim and disallowed the expenditure.
At the instance of the appellant a case was stated to the High Court under section 60(1) of the Act and was answered in the negative and against the appellant.
In all the cases the assessee company is the appellant and the main question for decision is whether the amount expended for the upkeep and maintenance of the immature, rubber trees is a permissible deduction under section 5(j) of the Act.
The charging section under the Act is section 3 and section 5 relates to computation of agricultural income.
It provides: S.5 "The agricultural income of a person shall be computed after making the following deductions, namely: expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of deriving the agricultural income;".
In regard to this income the High Court held: "We find it impossible to say that the 'amounts spent on the upkeep and maintenance of the immature rubber plants were laid out or expended "for the purpose of deriving the agricultural income", much less that they were laid out or expended "wholly and exclusively for that purpose". "The agricultural income", in the context, can only mean the agricultural income obtained in the accounting year concerned and not the agricultural income of any other period." In our opinion the High Court has taken an erroneous view of the relevant provision.
It is not denied that the expenditure claimed as a deduction was wholly and exclusively laid out for the purpose of deriving income but the use of the definite article "the" before agricultural income has given rise to the interpretation that the deduction is to be from the income of the year in which the trees on which the amount claimed 283 was expended bore any income.
In a somewhat similar case Vallambrosa Rubber Co. Ltd. vs Farmer (1) the expenditure of the kind now claimed was allowed under the corresponding provision of the English Income tax Act.
In that case a rubber company had an estate in which in the year of assessment only 1/7 produced rubber and the other 6/7 was in process of cultivation for the production of rubber.
It may be added that rubber trees do not yield any rubber until they are about six years old.
The expenditure for the superintendence, weeding etc.
incurred by the company in respect of the whole estate including the nonbearing rubber estate was allowed on the ground that in arriving at the assessable profits the assessee was entitled to deduct the expenditure for superintendence, weeding etc.
on the whole estate and not only on the 1/7 of such expenditure.
Lord President said at page 534: "Well that is for the case quite correct, but it must be taken, as you must always take a Judge 's dicta, secundum materiam subjectum of the case that is decided.
But to say that the expression of Lord Esher 's lays down that you must take each year absolutely by itself and allow no expense except the expense which can be put against the profit which is reaped for the year is in my judgment to press it much further than it will go." Counsel for the respondent relied upon a judgment of this Court in Assam Bengal Cement Co. Ltd. vs The Commissioner of Income tax, West Bengal (2) and particularly on a passage at page 983 where Bhagwati J. observed: "The distinction was thus made between the acquisition of an income earning asset and the process of the earning of the income.
Expenditure in the acquisition of that asset was capital expenditure and expenditure in the process of the earning of the profits was revenue expenditure.
" But that case has no relevancy to the facts of the present case nor has that passage any applicability to the facts of the present case.
The question there was (1) (2) 284 whether certain payments made were by way of capital expenditure or revenue expenditure.
The assessee acquired a lease from Government for twenty years and in addition to paying the rent and royalties for the lease the assessee had to pay two further sums as 'protection fees ' under the terms of the lease.
Those sums were held to be capital expenditure inasmuch as they were incurred for the acquisition of an asset or an advantage of enduring nature and were no part of the working or operational expenses for carrying on the business of the assessee.
In our opinion the amount expended on the superintendence, weeding etc.
of the whole estate should have been allowed against the profits earned and it is no answer to the claim for a deduction that part of those expenses produced no return in that year because all the trees were not yielding rubber in that year.
We therefore allow these appeals, set aside the judgments and orders of the High Court and answer the questions in favour of the appellant in all the three agricultural Income tax References.
The appellant will have its costs in this Court and the High Court.
One hearing fee in this Court.
Appeals allowed.
[/INST]In computing the agricultural income of a person section 5(f) of the Travancore Cochin Agricultural Income tax Act, 1950, allowed deductions of any expenditure "laid out wholly and exclusively for purpose of deriving the agricultural income".
The assessee who had rubber plantations claimed that the amount expended on the maintenance and tending of immature rubber trees should be deducted in computing its agricultural income but this was disallowed on the ground that the use of the article "the" before the words agricultural income implied deduction (1) ; 280 from the income of the year in which the trees on which the amount was expended bore income.
Held, that the assessee was entitled to the deduction claim ed.
It was no answer to the claim for the deduction that these expenses produced no return in the year in question as the trees were not yielding rubber in that year.
Vallambrosa Rubber Co. Ltd. vs Farmer, , followed.
Assam Bengal Cement Co. Ltd. vs The Commissioner of Income tax, West Bengal, , not applicable.
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<s>[INST] Summarize the judgementl Appeal No. 2483 of 1968.
Appeal by special leave from the Award dated July 24, 1968 o,f the Labour Court, Meerut in Case No. 92 of 1966.
S.V. Gupte, D.N. Mukherjee and M.L. Car, for the appellant.
Mohan Kumaramangalam, M.K. Ramamurthi, Vineet Kumar, Shyamala Pappu and J. Ramamurthy, for the respondents.
The Judgment of the Court was delivered by Shelat, J.
In this appeal, by special leave, two questions arise: (1) whether standing orders govern the employees appointed before they ,are certified under the , 20 of 1946, and (2) whether the appellant company was entitled to terminate the service of a workman appointed as a probationer before the expiry of the period of probation except on the ground of misconduct.
The first question relates to 3 workmen, Alladin, Ram Prasad and Noorul Zaman, who were employed in 1929, 1935 and 1937 respectively, long before the company 's standing orders were certified and brought into force in 1951 and who were superannuated 811 under standing order 32 of the said standing orders.
Prior to 1951 there were no rules or conditions of service prescribing the age of superannuation.
Standing order 32 for the first time laid down 55 years as the age of superannuation.
Relying on standing order 32 the company served on the three workmen notices dated December 19, 1964, November 20, 1963 and January 27, 1964, who had by then attained the age of 58, 64 and 59 years, by which the company retired them with effect from January 1, 1965, December 29, 1963 and March 1, 1964 respectively.
The Labour Court, to which the dispute arising from the compulsory retirement was referred, held that the company 's standing orders having been certified long after these workmen were employed and the conditions of their employment not having provided any age of retirement, the company could not apply standing order 32 to them, and therefore, the orders of superannuation were bad, and directed their reinstatement and payment to.
them of their wages from the date of retirement till the date when they would be reinstated.
Thus, the question involved in this appeal is whether the company could retire 'by applying standing order 32 these three workmen, who admittedly had long passed the age of superannuation provided thereunder.
Counsel for the company argued that once the standing orders are certified and come into operation, they would, subject to their modification as provided under the Act, bind all workmen, irrespective of whether they were employed before or after they came into force ', and that therefore, the Labour Court was in error in holding to the contrary and ordering their reinstatement.
Mr. Kumaramangalam, on the other hand, argued ( 1 ) that the company 's action amounted to applying standing order 32 retrospectively, that was not warranted, for, if the standing orders were intended to be so applied, they would have so expressly provided, and (2) that in a previous reference, being Ref.
91 of 1964, between the appellant company and its workmen, this very Labour Court had decided that these standing orders did not apply to workmen previously employed, that an appeal was sought to be filed in this Court against that order but no special leave was granted, and therefore, that order became final.
Consequently, the company was not entitled to reagitate the same question, as it was precluded from doing so by principles analogous to the principle of res judicata.
The question as to whether standing orders were retrospective in their application can obviously arise only if they do not in law bind workmen previously employed.
Such a question can hardly arise if the provisions of the Act show, as contended by counsel for the Company, that once they are certified and come into force, they bind both the employer and all the workmen presently employed.
812 As observed in Shahdara (Delhi) Saharanpur Light Railway Company Ltd. vs Shahdara Saharanpur Railway Workers ' Union(1) the Act is a beneficent piece of legislation, its object being to require, as its preamble and its long title lay down, employers industrial establishments to define with sufficient precision the conditions of employment of workmen employed under them and to make them known to such workmen.
Before the passing of the Act, there was nothing in law to prevent an employer having different contracts of employment with workmen employed by him with different and varying conditions of service.
Such a state of affairs led to confusion and made possible discriminatory treatment between employees ,and employees though all of them were appointed in the same premises and for the same or similar work.
Such a position is clearly incompatible with the principles of collective bargaining and renders their effectiveness difficult, it not impossible.
To do away with such diversity and bargaining with each individual workman, the legislature provided by section 3 of the Act that every employer of an industrial establishment must, within 6 months from the date of the Act becoming applicable to his industrial establishment, submit to the certifying authority under the Act draft standing orders prepared by him for adoption in his industrial establishment providing therein for *all matters set out in the Schedule to the Act, and where model standing orders are prescribed to have such draft standing orders in conformity with them.
The draft standing orders are to be accompanied by particulars of workmen employed in the establishment as also the name of the union, if any, to which they belong.
This requirement clearly means particulars of the workmen in employment at the date of the submission of the draft standing orders for certification and not those only who would be employed in future after certification.
Under section 4, such draft orders 'are certifiable if they provide for all matters set out in the Schedule, are otherwise in conformity with the Act and are adjudicated as fair and reasonable by the certifying officer or the appellate authority.
Section 5 requires the certifying officer to forward a copy of the draft standing orders to the union or in its absence to workmen in the prescribed manner with a notice requiring objection, if any, from the workmen.
After giving the employer and the union or the workmen 's representatives an opportunity of being heard, the certifying officer has to decide whether or not any modification or addition to the draft submitted by the employer is necessary and then certify the draft standing orders 'and send copies thereof and of his order in that behalf to the employer, the union or the representatives of the workmen.
Section 6 confers the right of appeal to any person aggrieved by such order to the appellate authority, who, by his order, can.
either confirm or amend the standing orders.
Under section 7, such standing (1) 813 orders are to come into operation on the expiry of 30 days from the date on which their authenticated copies are sent by the certifying officer to the parties where no appeal against these orders is filed or where such appeal is filed on expiry of 7 days from the date on which copies of the appellate authority 's order are sent as required by section 6(2).
Section 9 requires the employer to post the standing orders 'as finally certified on boards maintained for that purpose at or near the entrance through which the majority of workmen inter the industrial establishment and in ' all departments thereof.
Section 10 confers the right to an employer or any of the workmen to apply for modification after expiry of 6 months from the date on which they of the last modification thereof came into operation.
The Schedule to the Act sets out matters which the standing orders must provide for.
These matters are classification of workmen, shift working, periods and hours of work, holidays, pay days, wage rates, conditions and procedure for applying for grant of leave, closing and reopening of sections of the industrial establishment, temporary stoppage: of work, liabilities and rights of the employer and the workmen arising therefrom, termination of employment, disciplinary action, penalties etc.
The obligation imposed on the employer to have standing orders certified, the duty of the certifying authority to adjudicate upon their fairness and reasonableness, the notice to be given to the union and in its absence to the representatives of the workmen, the right conferred on them to raise objections, the opportunity given to them of being heard before they are certified, the fight of appeal and the right to apply for modifications given to workmen individually, the obligation on the employer to have them published in such a manner that they become easily known to the workmen, all these provisions abundantly show that once the standing orders are certified and come into operation, they become binding on the employer and all the workmen presently employed as also those employed thereafter in the establishment conducted by that employer.
It cannot possibly be that such standing orders would bind only those who are employed after they come into force and not those who were employed previously but are still in employment when they come into force.
The right of being heard given to the union or, where there is No. union, to the representatives of the workmen, the right of appeal and the right to apply for modification given to workmen individually clearly indicate that they were provided for because the standing orders, as they emerge after certification, are intended to be binding on all workmen in the employment of the establishment at the date when they come into force and those employed thereafter.
Surely, the union or, in its absence, the representatives of workmen, who are given the right to raise objections either to the draft standing orders proposed by the employer or to the fairness and reasonableness of their provi 814 sions, could not have been intended to speak for workmen to be employed thereafter and not those whom they presently represent.
Besides, if the standing orders were to bind only those who are subsequently employed, the result would be that there would be different conditions of employment for different classes of workmen, one set of conditions for those who are previously employed and another for those employed subsequently, and where they are modified, even several sets of conditions of service depending upon whether a workman was employed before the standing orders are certified or after, whether he was employed before or after a modification is made to any one of them and would bind only a few who are recruited after and not the bulk of them, who though in employment were recruited previously.
Such a result could never have been intended by the legislature, for, that would render the conditions of service of workmen as indefinite and diversities, as before the enactment o,f the Act.
Why does section 3 (3) of the Act require the employer to give particulars of the workmen employed by him at the date of his submission of the draft standing orders unless the object of making him furnish the particulars was to have uniformity of conditions of service and to make the standing orders binding on all those presently employed.
That is why the Act also insists among other things that after they are certified they must be made known to all workmen by posting them at or near the entrance through which they pass and in the language known to the majority o,f them.
In Guest, Keen, Williams Pvt.
Ltd. vs
P.J. Sterling(1) a view apparent contrary to the one above stated was said to have been taken since it was held there that it was unfair in that particular case to fix the age of superannuation of previous employees by a subsequent standing order, which should apply in that matter to future entrants.
In that view the Court fixed 60 years as the age of retirement for such previous employees although the standing order had provided 55 years as the age of superannuation.
Salem Erode Electricity Distribution Company Ltd. vs Salem Erode Electricity Distribution Co. Ltd. Employees Union(2) this Court, however, took the same view which we have stated above and held that the provisions of the Act clearly indicated that matters specified in the Schedule to the Act should be covered by uniform standing orders applicable to all workmen employed in an industrial establishment and not merely to entrants employed after their certification.
The question arose out of an application made by the employer for modification of the existing standing orders by providing different rules relating to holidays and leave for employees appointed before a certain date and those appointed after that date.
Negativing such a modification, the Court, after examining (1) ; (2) ; 815 the relevant provisions of the Act, stated at pages 504 and 505 as follows: "One has ' merely to.
examine these clauses one by one to be satisfied that there is no scope for having two separate Standing Orders in respect to any one of them.
Take the case of classification of workmen.
It is inconceivable that there can be two separate Standing Orders in respect of this matter.
What we have said about classification is equally true ,about each one of the other said clauses; and so, the conclusion appears to be irresistible that the object of the Act is to, certify Standing Orders in respect of the matters covered by the Schedule; and having regard to these matters, Standing Orders so certified would be uniform and would ,apply to all workmen alike who are employed in any industrial establishment.
On principle, it seems expedient and desirable that matters specified in the Schedule to the Act should be covered by uniform Standing Orders applicable to all workmen employed in an industrial establishment.
It is not difficult to imagine how the application of two sets of Standing Orders in respect of the said matters is bound to lead to confusion in the working of the establishment and cause dissatisfaction amongst the employees.
If Mr. Setalvad is right in contending that the Standing Orders in relation to these matters can be changed from time to time, it may lead to the anomalous result that in course of 10 or 15 years there may come into existence 3 or 4 different sets of Standing Orders applicable to the employees in the same industrial establishment, the application of the Standing Orders depending upon the date of employment of the respective employees.
That, we think, is not intended by the provisions of the Act.
" At page 509 to 510 the Court referred to.
the case of Guest, Keen, Williams Private Ltd. (1), relied on by the employers ' counsel, and explained why the Court had fixed 60 years as the age of superannuation ,for the employees appointed before the standing orders were certified although the standing orders had fixed 55 years as the.
age of superannuation stating that: "that course was adopted under the special and unusual circumstances expressly stated in the course of the judgment." (1) ; LISSupCI/69 8 816 This decision thus confirms the view taken by us that the object of the Act is to have uniform standing orders providing for the matters enumerated in the Schedule to.
the Act, that it was not intended that there should be different conditions of service for those who are employed before and those employed after the standing orders come into force, and finally, that once the standing orders come into force, they bind all those presently in the employment of the concerned establishment as well those who are appointed thereafter.
Counsel for the workmen, however, drew our attention to.
the award in Ref.
91 of 1964 under section 4(k) of the U.P.
That reference, no doubt, was between the appellant company and its workmen and the question decided there was whether the company was right in compulsorily retiring the six workmen there concerned under these very standing orders although they were employed.
before they were certified and came into force.
The Labour Court, relying on Workmen of Kettlewell Bullen & Co. Ltd. vs Kettlewell Bullen & Co. Ltd.(1) which in turn had relied on Guest, Keen, Williams ' case(2), held that Standing Order 32 of these Standing Orders could not be applied to those previously appointed and that, therefore, the company 's action in retiring those workmen was.
not justified.
We may mention that the case of Kettlewell Bullen & Co.(1) was not one concerned with Standing Orders but with rules made by the company and this Court, relying on the decision in Guest, Keen, Williams Private Ltd. (2) held that where the rules of retirement are framed by the company they would have no application of its prior employees unless such employees have accepted the new rules.
It is clear that neither the case of Kettlewell Bullen & Co.(1) nor the case of Guest, Keen, Williams Private Ltd.(2) in the fight of the explanation given in the case of Salem Erode Electricity Distribution Ca. Ltd.(a), was applicable and the Labour Court was, therefore, clearly in error in basing its award on the decision in the case of Kettlewell Bullen & Co. (1).The argument, however, was that even if that award was erroneous, the company did not appeal against it, consequently it became final and the issue there decided being the same and between the same parties, principles analogous to the principle of res judicata would apply and therefore no relief should be granted in the present case to the company.
It is.
true, as stated in The Newspapers Ltd. vs The State Industrial Tribunal, U.P.(4) that an award bind 's not only the individualS present or represented but all workmen employed in the establishment and even future entrants.
But that principle is rounded on the essential condition for the (1) , (2) ; (3) (4) ; , 761. 817 raising of an industrial dispute itself.
If an industrial dispute can be raised only by a group of workmen acting on their own or through their union, the conclusion must be that all those who sponsored the dispute ,are concerned in it and therefore bound by the decision on such dispute.
(see M/s. New India Motors (P) Ltd. vs
K.T. Morris)(1).
Such a consideration, however, is not the same as the principle of res judicata or principles analogous to res judicata.
In Workmen vs Balmer Lawrie & Co.(2) no doubt, a case of revision of wage scales, this Court cautioned against applying technical considerations of res judicata thereby hampering the discretion of industrial adjudication.
(see also Shahdara (Delhi) Saharanpur Light Railway Co. Ltd. vs Shahdara Saharanpur Railway Workers ' Union(a).
How inexpedient it is to apply such a principle.
is evident from the fact that the 'award in Ref.
91 of 1964 was based on the decision in Kettlewell Bullen & Co. Ltd. (4) which in turn had followed the case of Guest, Keen, Williams Private Ltd.(5) on the supposition (which, as aforesaid, was no.t correct) that standing orders are not binding on those who are employed prior to their certification and their coming into force.
The company, presumably, did not challenge the correctness of that award because it was perhaps then thought that was the law laid down in Guest, Keen, Williams Private Ltd.(5).
The consequence of holding that the company is barred by principles analogous to res judicata would be that there would be two sets of conditions of service, one for those previously employed and the other for those employed after the standing orders were certified, a consequence wholly incompatible with the object and policy of the Act.
The very basis of the award in Ref.
91 of 1964, namely, the wrong understanding of the decision in Guest, Keen, Williams Private Ltd.(5), having gone, it becomes all the more difficult and undesirable to perpetuate the distinction made therein between those who were previously appointed and those appointed subsequently and to refuse on such an untenable distinction relief to the company.
The award in Ref.
91 of 1964 was made on May 24, 1965 when it was believed that the decision in Guest, Keen, Williams Co. Ltd.(5) laid down the principle that standing orders would not bind workmen previously employed.
That was not so was clarified in the case of Salem Erode Electricity Distribution Co. Ltd.(6), the decision in which was pronounced on November 3, 1965 removing thereby any possible misapprehension.
The present reference was made on June 23, 1966, tong after the decision in Salem Erode Electricity Distribution Co. Ltd.(6) and the Labour Court gave the award impugned in this appeal on July 24, 1968.
Thus, both the Reference and the award were made in circumstances different from those which (1) , 357.
(2) ; (3) (4) (5) ; (6) ; 818 prevailed when Ref.
91 of 1964 was made and disposed of, a factor making it doubtful the application of a principle such as res judicata.
The second question relates to the workman, Shameem Khan.
The company appointed him under a letter of appointment dated December 2, 1965 to the post of a cleaner as a probationer for 6 months with discretion to the resident engineer to extend that period.
The letter also stated that during his probationary period his service would be liable to termination without any notice and without assigning any reason therefore and that he would not be deemed to have been confirmed automatically in the post on the expiry of the probation period unless so advised in writing.
The workman worked ,as such probationer till February 28, 1966 when he was served with a memorandum that his service was terminated as from the close of that day.
The workman 's case was that the company had no right to terminate his service before the expiry of the 6 months period of probation which is the period prescribed by standing order 2(c), that the stipulation in the letter of appointment that his service was liable to termination during the probation period was contrary to.
that standing order, and that therefore, that stipulation was not valid, and lastly, that the said order, though apparently one of termination simpliciter, was not a bona fide order, was in truth punitive m nature, and therefore, could not be passed without an opportunity of being heard having been given to him in a properly held enquiry.
The ,fact is that no such enquiry was held and no opportunity was given to the workman to explain any misconduct for which he could be removed or dismissed.
The evidence before the Labour Court was that the concerned workman had unauthorisedly used the motor cycle belonging to one Sidhana, a shift engineer in the company and that motorcycle met with an accident while the workman was using it causing damage to it.
Three days after that accident a report alleging that his work as a probationer was unsatisfactory was made by his superior officer.
On this evidence the Tribunal came to the conclusion that the impugned order was not an order of termination simpliciter, that though couched in that language it was.
passed as a punishment or the workman having used that vehicle without the consent of its owner and was, therefore, an order of dismissal.
The Tribunal was also of the opinion that the said report alleging unsatisfactory work by the.
workman was colourable and made at the instance of the shift engineer or at any rate was inspired by the s.aid incident.
In this view the Labour Court held that the exercise of power to terminate the service of the workman was not bona fide and consequent it set aside that order and directed his reinstatement.
819 Now, it is a well settled principle of industrial adjudication that even if an impugned order is worded in the language of a simple termination of service, industrial tribunals can look into the facts and circumstances.
of the case to ascertain if it ' was passed in colourable exercise of the power of the management to terminate the service of an employee and find out whether it was in fact passed with a view to punish him.
The letter of appointment clearly states that the workman, Shameem Khan, was appointed as a probationer for a period of 6 months with power to the resident engineer to extend the period of probation.
Ordinarily, that would mean that at the end of the probation period the company would have to decide whether to confirm him to a permanent post or, if that is not possible, to terminate his service.
Standing order 2 (c) provides that a probationer is 'an employee who is provisionally employed to fill a permanent vacancy in a post and who has not completed the period of probation thereunder.
It also lays down that the normal period of probation shall be 6 months but the resident engineer has the discretion to extend that period, the maximum period of probation being 12 months in all.
Ordinarily, this would mean that a probationer 's service cannot be terminated except for some misconduct until the expiry of the probation period.
The letter of appointment, No. doubt, contained a provision that the service of the workman was liable to.
termination even during the probationary period.
That provision, however, must be read to mean that the appointment was subject to the management 's power of termination as provided in the standing orders.
Standing order 14 provides for such a power 'and lays down that the service of "any employee" (which expression includes a probationer as is clear from the classification of employees in standing order 2) can be terminated on grounds (a) to (f) therein set out.
It is quite clear that the termination of service of the concerned workman cannot be attributed to any one of these grounds.
Therefore, that order cannot be said to have been passed conformity with the power to terminate his service under the standing orders.
But apart from this consideration, the Labour Court came to a finding on the evidence before it that the real reason for passing the impugned order was not the alleged unsatisfactory work on the part of the workman but his having unauthorisedly used the motorcycle and causing damage to.
it, that the order was punitive and not a Simple termination of service and was therefore in colourable exercise of the power of termination.
This finding is clearly one of fact and meant that the Labour Court rejected the evidence led by the management that the work of the concerned workman was ,found unsatisfactory.
It is impossible to say from the evidence before the Labour Court that finding was perverse o.r such as could not be reasonably arrived at.
In that view, it is 820 impossible to interfere with the order of the Labour Court relating to workman, Shameem Khan.
In the result, the appeal is partly ,allowed.
The order of the Labour Court in connection with the 3 workmen whom the company retired, is set aside but its order relating to workman, Shameem Khan, is confirmed.
In accordance with the order, passed by this Court on January 24, 1969, while granting stay to the appellant company, the company will pay to the workman, Shameera Khan, interest at 6% per annum on the amount of the arrears of wages still due to him under the order of the Labour Court.
As the appeal is partly allowed and partly dismissed, there will be nO order as to costs.
V.P.S. Appeal partly allowed.
[/INST]The assessee, owners of a tea estate in Assam, after carrying on the business of cultivation, manufacture and sale of tea during the years 1948 to 1953 sold the tea estate on July 9, 1953.
In 1961, they received a notice from the Agricultural Income tax Officer to furnish returns of their agricultural income for the assessment years 1949 50 to 1953 54 in respect of that tea estate.
They did not submit any returns.
Thereafter, they received a notice of demand under section 23 of ' the Assam Agricultural Incometax Act, 1939, for payment of the tax assessed on best judgment basis under section 20(4).
The assessees were not served with any notice under s.19(2) which provides for a notice to be served personally on the assessee, during the respective years, nor under section 30 of the Act which deals with escaped assessment.
The purchasers of the tea estate were served.
in 1961, with assessment orders under section 20(4) in respect of the assessment years 1951 52 to 1955 56 with notices of demand for payment of the tax assessed for each year.
These assessees were also not served with any notice under section 19(2) or section 30.
All the assessees challenged the assessments in writ petitions and the High Court allowed the petitions.
In appeal to this Court, it was contended that the assessment proceedings commenced with the publication of a general notice under section 19(1), that it was open to the Agricultural Income tax Officer to make a best judgment assessment under section 20(4) without any limitation as to time and that it was not necessary to issue any individual notice under section 19(2) or to initiate proceedings under section 30.
HELD: Notwithstanding the difference in language between section 20(4) of the Act and section 23(4) of the Income tax Act the principles laid down by this Court in interpreting sections 22, 23 and 34 of the Income tax Act apply in the interpretation of sections 19, 20 and 30, the corresponding sections of the Assam Agricultural Income tax Act.
[788 A C] On those principles the publication of the general notice in any financial year under section 19(1) of the Assam Act to furnish a 'return o.f one 's agricultural income in the previous year, does not initiate proceedings against an assessee unless such assessee files a return.
If no return is made pursuant to the general notice under section 19(1) assessment could be made against an assessee under section 19(2), serving an individual notice on that assessee during that financial year.
Once that financial year is over, and no return has been made in response to the general notice under section 19(1) and no individual notice has been served under section 19(2), there would arise a case of escaped assessment; and, the only way to bring that income to tax is to initiate proceedings by a notice in accordance with section 30 within 3 years of 781 the end of that financial year.
Since no such proceedings were initiated in the present case, the assessment orders.
were rightly quashed.
[787 E H] The Commissioner of Income tax, Bombay vs Ranchhodas Karsondas, Bombay, ; , Ghanshyam Das vs Regional Assistant Commissioner of Sales tax, Nagpur; , and The State of Assam vs Deva Prasad Barua, [1969] 1.
S.C.R. 698, followed.
</s>
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<s>[INST] Summarize the judgementition Nos.
7014, 7426 28 of 1982, 7419, 7377 78, 7278, 6460, 7078, 6461, 5720, 7428, 7454 6896, 6894, 7288, 6895, 6892 97, 7421, 75 0, 7289, 7525, 7422, 6897, 6462, 7378, 5720, 5719 & 7290 91 of 1982.
(under Article 32 of the Constitution of India) With Special Leave Petition (Civil) No. 9149 of 1982.
From the Judgment and order dated the 14th September, 1982 of the Punjab and Haryana High Court in C.W.P. No. 3460 of 1982.
And Special Leave Petition (Civil) No. 9076 of 1982.
From the Judgment and Order dated the 1st September, 1982 of the Punjab and Haryana High Court in WP No. 3299 of 1982.
And Special Leave Petition (Civil) No. 9289 of 1982.
Dr. Adarsh Kapoor & Mrs. V.D. Khanna for the Petitioners.
P.P. Rao, R. Venkataraman, A. Mariapatham & M/s. Aruna Mathur for M.D. University.
R.N. Poddar for the State.
The Judgment of the Court was delivered by 275 DESAI J.
As the matter brooked no delay, at the conclusion of the arguments, the Court pronounced the following order reserving reasons to be given at a later date.
"The petitions succeed to the extent herein indicated.
Let a writ be issued quashing reservation of 25 seats in favour of candidates coming from Rural Areas and educated in common Rural School for admission to MBBS Course 1982 at Medical College, Rohtak affiliated to Maharshi Dayanand University.
Consequently the respondents are directed to admit in 1st MBBS Course of the same College commencing from July, 1983, such number of students who secured admission against the reservation for candidates coming from Rural Areas and educated in Common Rural School in 1982, according to the general merit list drawn up in respect of candidates, who sought admission and in the absence of such a list, a waiting list should be drawn up according to merits, for the year 1982.
The respondents are directed to work out the admissions as per the direction herein made before May 31, 1983 and give intimation to the students who become eligible for admission.
There will be no order as to costs.
Reasons to follow," Here are the reasons.
In this group of petitions under article 32 of the Constitution, the petitioners questioned the validity and legality of reservation of 25 seats for candidates coming from rural areas for admission to first M.B.B.S./B.D.S. Course for 1982 session in the Medical Faculty or the Third respondent Maharishi Dayanand University Rohtak ( 'University ' for short).
The University issued a prospectus on June 12, 1982 inviting applications for appearing at an Entrance Test for selecting candidates for admission to MBBS/BDS Course, 1982.
In this prospectus, reserved seats were shown as under: "(A) RESERVED SEATS: Categories No. of Seats (a) Scheduled Caste/Tribes 30 (b) Rural areas 25 276 (i) Out of these 5 are reserved for girls, if available, otherwise these will also be for boys.
(ii) For deciding the eligibility of a candidate from rural areas, the following criterion will be observed: A candidate must have received education from Class I to Class 8 and passed 8th class examination from a common Rural School situated in any village not having any Municipality or notified area or Town Area Committee.
For this purpose a certificate is required to be submitted which may be seen in Appendix 'C '.
. . . . . . . . . " In short out of a total of 148 seats available for admission, 80 seats were to be filled in according to the merit list drawn up on the performance at the entrance examination and the rest were reserved for different classes of candidates.
The petitioners challenge only the reservation of 25 seats for candidates coming from the rural areas as being violative of articles 14, 15(4) and 29 (2) of the Constitution inasmuch as the classification is arbitrary, unintelligible and unrelated to the objects sought to be achieved and not saved by article 15(4).
It was alleged that to classify candidates on the basis of their education in a school in rural area and urban area is irrational inasmuch as before seeking admission to the Medical Faculty even the student coming from rural areas and having been educated in common rural school from 1st to 8th standard would have taken further education for a period of 40 years before seeking admission to the medical college.
It was therefore said that earlier education from 1st to 8th standard either in urban schools or common rural schools both having identical syllabus and examination evaluation prescribed by a common authority is hardly of any relevance while considering the merit for admission to the medical college more so because all students coming either from urban schools or those educated in common rural schools were required to undergo further education for a period of 4 years after the 8th standard in urban schools or schools which can be compared with urban schools.
The petitioners contend that the reservation is not sustainable under article 15(4) because candidates educated in common rural school cannot as a class be said to be society and educatio 277 nally backward and therefore, the reservation would not satisfy the test prescribed by article 15(4) of the Constitution.
The petitioners aver that the syllabus for 1st to 8th standard adopted in common rural schools and urban schools is entirely identical prescribed by the same Government and the qualification of teachers for being appointed in the urban schools or the common rural school is the same and they are transferable from one area to the other area.
It was also contended that the majority of the population in the State of Haryana as in whole country is residing in rural areas and the reservation in favour of majority would be void ab initio.
Lastly it was said that the classification apart from being arbitrary and irrational does not satisfy the twin tests of it being based on intelligible differentia and having any nexus to the objects sought to be achieved.
The petitioners say that some from amongst respondents 5 to 49 have been admitted against reservation for candidates coming from rural areas and even though the petitioners had obtained higher marks at the entrance examination and were placed higher in the merit list yet they have been denied admission on account of the constitutionally invalid reservation and therefore, their admissions should be struck down and the University may be directed by a mandamus to reconsider the eligibility for admission after ignoring the reservation in favour of students from rural areas.
Mr. K.L. Guglani, Registrar of the University filed his affidavit in opposition inter alia contending that the classification and the consequent reservation is valid under article 14 of the Constitution.
It was submitted that in order to correct the regional imbalance in the matter of admissions to medical college, the Govt.
of Haryana had carried out a sample survey of the comparative facility/inequalities between the students of the schools situated in the rural and the urban areas at the primary, middle and high school stages in 1979 which revealed that the students studying in common rural schools suffer from serious handicap such as non availabilty of electric fans in summer and on the onset of rainy season, the difficulty of access to the school resulting in shortening of the academic year in such schools with consequent disadvantages in their academic achievement as compared to children in the urban schools where the academic sessions goes undisturbed by extreme summer or rainy season.
The sample survey further revealed that most of the common rural schools are ill houses, ill staffed and ill equipped.
There is no provision for regular medical check up of students at 278 any common rural school resulting in the neglect for the upkeep of their health and this becomes a factor for the low achievements of students in rural schools.
The sample survey also revealed that the teachers attached to common urban schools residing in urban areas reached the school premises just in time to take the classes and leave soon after the school time is over thus denying the establishment of personal contact with the students resulting in the denial to such students an opportunity of development.
It was further submitted that the students coming from urban areas after taking medical education declined to settle down in rural areas and this will help in extending medical facilities solely needed for rural population.
In order to correct this imbalance and the utter handicap felt by the students studying in common rural schools, students seeking admission were divided into different classes based on intelligible differentia and that if the object of medical education is to extend medical facilities where it is needed the most, reservation for candidates coming from rural areas would achieve the object and therefore, the State Govt.
was perfectly justified in making this reasonable and rational classification.
At a later date Dr. D.C. Mehrotra, Director Principal, Medical College, Rohtak filed affidavit in opposition on behalf of respondents 1 to 3 which appears to be a carbon copy of the affidavit filed by the Registrar Mr. Guglani.
The only question which needs answer is whether reservation of '25 seats for rural areas ' for admission to 1982 session in the Medical College attached to the University is constitutionally valid.
It must at once be made clear that the respondents did not at all attempt to sustain the reservation under sub article
(4) of article 15 which enabled the State to make special provision for advancement of any socially and educationally backward classes of citizens or for the scheduled caste and scheduled tribes.
The respondents contended that the reservation of 25 seats for candidates coming from rural areas is valid and can be sustained under article 14 of the Constitution.
Therefore, the question is: whether the classification between the students educated in urban school and common rural schools is based on any intelligible differentia which has a rational nexus to the objects sought to be achieved ? It is well settled that article 14 forbids class legislation but 279 permits reasonable classification in the matter of legislation.
In order to sustain the classification permissible under article 14, it has to satisfy the twin tests: (1) that the classification is founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (2) the differentia must have a rational relation to the object sought to be achieved by the impugned provision.
Does the classification on the basis of candidates coming from rural areas against urban area in the matter of admission to medical college satisfy the twin tests.
If the attempt at amplification of the classification resorted to by the respondents is ignored for the time being, the broad classification is that the students coming from rural areas are classified separately for the purpose of admission to the medical college.
The reservation is described in the prospectus as: 'Rural areas 25 seats '.
If the matter were to rest here, it would have been unnecessary to write this judgment in view of the decision of this Court in State of U.P. vs Pradeep Tandon(1) In that case the State of U.P. had made reservation for admission to medical college in favour of the candidates from rural, hill and Uttarkhand areas on the ground that the people coming from these areas belonged to socially and educationally backward classes.
The reservation was challenged as being violative of articles 14 and 15 and not protected by article 15(4).
The State sought to sustain the classification under article 15(4) urging that the object of the classification was the advancement of facility for medical education for candidates coming from reserved areas as the people coming from these areas belonged to socially and educationally backward classes.
This contention was accepted in part and negatived in past.
Striking down reservation of candidates coming from rural areas, the Court held that reservation for rural areas cannot be sustained on the ground that the rural areas represent socially and educationally backward classes of citizens and the reservation appears to be made for the majority population of the State and on the ground of place of birth.
The Court upheld reservation in favour of candidates from Hill and Uttarkhand areas on the ground that reservation in favour of the people in those areas who belonged to socially and educationally backward classes of citizens.
Distinguishing the case of reservation in favour of candidates coming from rural areas, the Court observed that the backwardness contemplated by article 15(4) is both social and educa 280 tional backwardness of the citizens, the accent being on classes of citizens socially and educationally backward and therefore, socially and educationally backward citizens cannot be equated with areas as a whole socially and educationally backward.
The Court concluded that some people in the rural areas may be educationally backward, some may be socially backward and there may be few who are both socially and educationally backward but it cannot be said that all citizens residing in rural areas are socially and educationally backward.
Accordingly, the reservation in favour of candidates coming from rural areas was held as constitutionally invalid.
This reasoning would apply mutatis mutandis to the facts in the present case because the reservation is in favour of candidates coming from rural areas.
It was however, contended by Mr. P.P. Rao on behalf of the University that the Court should not merely confine itself to the headline in the prospectus but read the entire entry specifying reservation especially the conditions of eligibility for the reserved seats.
Reading it thus it was said that the reservation was in favour of students not coming from rural areas but in favour of students who were educated in common rural schools.
Proceeding along it was said that before making the reservation the State Government had undertaken a sample survey, portions of which are extracted in certain correspondence annexed to the affidavit in opposition which when examined in proper perspective would show that the students educated in common rural schools suffered certain handicaps and are comparatively at a disadvantage in the matter of attaining high merit for competing with students coming from urban schools and therefore, the State deemed it proper to extend the protection in the matter of admission to such handicapped students.
This submission was further amplified by saying that students coming from urban areas and joining medical colleges are generally disinclined to go to rural areas for rendering medical service while if students coming from rural areas are encouraged by reservation to take the medical education, one can reasonably expect them to return to the rural areas, the habitat of their childhood, and to make such rural places their field of activity, which would simultaneously extend medical service to rural areas which is otherwise ill starved in this behalf.
It was pointed out that the common rural schools have neither laboratories nor library facilities and that it is ill equipped, ill housed and ill manned in the matter of staff, facilities and equipment.
To over come these handicaps and to provide an opportunity 281 to the students educated in such schools against fierce competition from those students coming from well equipped and manned by highly trained staff urban schools, the classification between the students coming from common rural schools and those coming from urban school in the matter of admission to the medical college satisfied the twin tests of constitutionally valid classification.
Before anyone becomes eligible to compete for admission to the medical college in the year 1982, it was incumbent upon such a student to clear the 12th standard examination.
This is true in respect of all students seeking admission to medical college irrespective of the fact whether they have been educated in the common rural schools or urban schools.
Now the reservation is in favour of candidates from rural areas which expression in amplified to mean 'a candidate must have received education from Class 1 to class 8 and passed 8th Class examination from a common Rural School situated in any village not having any Municipality or Notified Area or Town Area Committee. ' It would at once appear that every candidate seeking admission to medical college must have studied upto the 12th class which would mean that even a candidate coming from the common rural school meaning thereby one who has taken his education upto 8th standard in such a school, yet subsequently he has joined a school which imparts education upto the 12 standard.
Such a candidate has joined a school for a period of 4 years after having come out of the common rural school.
It is nowhere suggested that this education for 4 years by a student coming from common rural school is in a school which is either unequal to the urban school or comparatively ill equipped, ill housed or ill staffed.
The necessary inference that follows from this is that all students seeking admission to the medical college have atleast taken education for the last 4 years, in schools which are comparatively similar.
What then is the relevance of the education taken from Class I to Class 8 for the purpose of admission to a medical college.
It was conceded that the specialised subjects which will qualify a student for appearing at the entrance examination for admission to medical college are to be selected from the 11th standard onwards.
It was also conceded that the syllabus for students from Class I to Class 8 either for urban schools or common rural schools is entirely identical and prescribed by the same authority, and this syllabus includes subjects of general knowledge.
It does not provide any specialised knowledge.
Therefore, it passes comprehension as to what importance can be 282 attached to education from Class 1 to Class 8 for admission to medical college which is divided by a span of over 4 years that of Class IX to Class XII (both inclusive) and in respect of which students coming from all schools are similarly situated, similarly circumstanced and similarly placed and similarly treated and exposed to same educational environments without the slightest difference.
The question then is: can the previous differentiation, if there by any, provided a rational basis for classification The answer obviously is in the negative.
The knowledge acquired in the years spent from Class 1 to Class VIII is of a general nature exposing the student to reading, writing, understanding simple arithmetics, general knowledge of History, Geography and introductory mathematics.
The introductory knowledge of these subjects could hardly be said to equip a student for admission to medical college.
The education imparted in Class IX and X is little more than introductory.
In these classes, the student is being prepared for deeper study.
The selection of specialised subjects has to be made in Classes XI and XII and in respect of education in Classes IX to XII, all students being educated in all schools are similarly situated similarly circumstance and similarly placed with no differentiation.
The earlier handicap of education in Classes 1 to 8, if there be any, becomes wholly irrelevant and of no consequence and therefore, cannot provide an intelligible differentia which distinguishes persons say students seeking admission being grouped together as having been educated in common rural schools from those left out namely the rest.
It would therefore, follow as a corollary that classification based on students coming from common rural schools meaning thereby educated upto 1 to 8th standard in common rural schools vis a vis students educated in urban schools from Ist to 8th standard would not provide intelligible differentia for founding a classification thereon The classification in such a situation will be wholly arbitrary and irrational and therefore the reservation based on such classification would be constitutionally invalid.
This view which we are taking finds support from a decision of this Court in Arti Sapru v State of Jammu and Kashmir & Ors.(1) wherein this Court struck down reservation of 20% of the seats to be filled on the basis of inter se merit to ensure rectification of imbalance in the admission for various parts of the State, if any, so as to give equitable and uniform treatment to those parts.
The Court following the decision in Pradeep Tandon 's case held that the classification attempted by the State suffers from the vice 283 of arbitrariness and must be declared invalid.
It was however., contended on behalf of the respondents that the decision in Pradeep Tandon 's case would not be of any assistance and is distinguishable because in that case reservation was in favour of candidates coming from rural, hill and Uttarkhand areas on the ground that people coming from these areas belonged to socially and educationally backward classes while the reservation in the instant case is founded on the lack of facility for education in common rural schools functioning in rural areas and also that in Pradeep Tandon 's case one of the contentions which found favour with the Court was that the reservation was in favour of a majority which aspect does not arise in the present case.
In support of this submission, learned counsel for the respondents extensively read before us the decision of the full Bench of the Punjab & Haryana High Court in Amar Bir Singh & Ors vs Moha Rishi Dayanand University, Rohtak & Ors(1) The full Bench of the High Court presided over by the then learned Chief Justice upheld the impugned reservation.
The High Court distinguished the decision in Pradeep Tandon 's case observing that the State sought to sustain the reservation under article 15 (4) contending that candidates coming from rural areas belonged to socially and educationally backward classes of citizens and the submission did not find favour with the Court though the Court unreservedly accepted that candidates coming from hill and Uttrakhand areas belonged to socially and educationally backward classes of citizens and sustained reservation in favour of the latter.
It is true that the State did not attempt to sustain the reservation under article 14 but certain observations in the judgment would leave no room for doubt that the aspect of valid classification was present to the mind of the Court.
It was observed that 80% of the population reside, in rural areas and it cannot be said to be a homogeneous class.
Rural habitation cannot constitute it into class.
And it is reservation related to place of birth.
The Court thus examined whether candidates coming from rural areas constitute a distinct homogeneous class for the purpose of admission to medical college and rejected it.
The High Court in Amar Bir Singh 's case on the contrary attempted to sustain the classification of students educated in common rural schools which does not carry conviction.
Having read this judgment minutely and with care and attention that a judgment of the 284 Full Bench of High Court bearing on the same topic merits, we are of the opinion that the manner in which Pradeep Tandon 's case, was sought to be distinguished was artificial apart from being unintelligible.
Undoubtedly the State in Pradeep Tandon 's case attempted to sustain the classification under article 15 (4) but that was not the crux of the matter.
The reservation was in favour of candidates coming from a certain area to wit rural areas.
Now if the amplification of what constitutes candidates coming from rural areas will not enlarge or restrict the operative portion, indisputably the reservation was for candidates coming from rural areas which were styled Pradeep Tandon 's case as socially and educationally backward areas.
It is true that one of the reasons which weighed with the Court in striking down reservation in Pradeep Tandon 's case was that the reservation was in favour of a majority.
Such an argument though available in the present case was not advanced, because any day rural area is comparatively much larger in area and size population to urban area in the State of Haryana.
Therefore, we are not impressed by the submission that the judgment in Pradeep Tandon 's case is distinguishable.
In fact, this Court in Arti Sapru 's case followed the decision in Pradeep Tandon 's case.
Assuming that the decision in Pradeep Tandon 's case does not conclude the point as herein raised, the differentia on which the classification is founded appears to us arbitrary and irrational.
How arbitrary and irrational it is, can be demonstrably established.
In order to take advantage of the reservation students from nearby urban areas can join common rural school on the periphery of urban agglomeration.
And all rural schools without an exception cannot be condemned as ill housed, ill staffed and ill equipped.
Agriculture in Haryana has been a very profitable pursuit and standard of life of average farmer in rural area has gone up compared to middle class and industrial workers and the slum dwellers whose children will attend as a necessity urban schools.
And yet the better place will enjoy reservation.
Further the basis of classification based on education upto 8th standard is wholly irrational.
And it has no nexus to the object sought to be achieved, of providing extra facility to students coming from rural schools to enter medical college.
What was the object sought to be achieved by the classification ? It was said that students taking education in common rural 285 schools from Ist to 8th standard are at a comparative disadvantage to those taking education in urban schools in the same standards.
The comparison in our opinion is fallacious for the reason that the same Government prescribes standards of education, equipment, grants and facilities including the qualification of the staff for being employed in urban and rural schools imparting instructions from Ist to 8th Standard.
However, as pointed out earlier, the knowledge acquired by the students while taking instructions in Class I to VIII has hardly any relevance to his being equipped for taking the test for entrance to the medical college.
The real challenge would come in Standard XI and XII.
In this behalf all students those coming from common rural school and urban school are similarly.
placed and similarly situated and yet by a reference to a past event wholly unrelated to the objects sought to be achieved, they are artificially divided.
It was however said that there was another discernible purpose in making the reservation.
The urbanised students are disinclined to go to rural areas for practice or service and therefore if the students coming from rural common schools are encouraged to seek admission they may return after obtaining qualification to their childhood habitat and thus help extend efficient medical service to rural areas at present wholly neglected.
It was urged if a region is woefully deficient in medical services, there occurs serious educational and health service disparity for that human region which must be redressed by a Welfare State.
It was submitted that the reservation was a step in this direction.
This submission was sought to be supported by referring to Jagdish Saran vs Union of India.(1) This approach overlooks the fact that even students educated in common rural schools would be joining urban schools for four years before going to medical college and then spend about five years in medical college.
There is no guarantee save a wishful thinking that they would return to rural areas.
This is so flimsy a material to sustain classification.
We are therefore satisfied that the classification is not founded on intelligible differentia and at any rate it has no rational nexus to the object sought to be achieved.
The classification is irrational and arbitrate.
The reservation based on such classification is constitutionally invalid.
286 Before we conclude, a reference to Sukhvindkr Kaur vs State of Himachal Pradesh & Ors.(1) may be made.
In that case the High Court upheld reservation of 12 seats for candidates who have passed matriculation or Higher Secondary examination from schools located in the rural areas.
The aforementioned reservation was upheld by merely observing that it does not appear to be unreasonable inasmuch as the children in the rural areas who usually attend such schools are socially, economically and educationally poor and they cannot compete with the children of their age group coming from the urban area.
The judgment does not refer to the material on which the finding was based that the ' children attending the schools in rural areas cannot compete with children of the same age group coming from the urban areas.
That apart the situation in that case was that the students took education upto the Higher Secondary examination in the schools situated in the rural areas and had thereafter straightaway to compete for entrance to the medical college with students coming from urban areas.
Such is not the situation before us.
As pointed out earlier, in the instant case, the students in whose favour the reservation is made took education only upto the 8th standard in common rural school and for the last 4 years they were on par in every respect with students coming from urban areas.
Therefore, this decision is of no assistance.
These were the reasons which weighed with us in allowing the writ petitions.
S.R. Petitions allowed.
[/INST]Selection of text books and books for reading to be kept in school and college libraries is a matter of vital importance to the imparting of proper education.
Such selection must depend upon the ability and fitness for the purpose of those who are charged with that responsibility.
In the State of Orissa, there was no statutory rule or regulation prescribing the procedure for selection of books for general reading to be kept in school and college libraries, except the State Government 's periodical administrative instructions in the form of resolutions constituting committees namely, an Assessment Sub Committee, a Distribution Sub Committee and a Purchase Committee to which Government officials as well as non officials were appointed as members.
The procedure followed was that each year the Member Secretary of the Purchase Committee would call upon publishers and authors by advertisements given in local newspapers to submit books for consideration.
The Assessment Sub Committee could than consider the books so submitted and thereafter recommend a list of books which, according to it, were suitable for general reading by school and college students.
The Purchase Committee would consider the recommendations made by the Assessment Sub Committee prepares a final list and submit it for approval to the State Government which could reject any book out of the list so submitted without giving any reason.
The decision of the State 323 Government regarding the assessment, selection purchase and distribution of books was made final.
The selection of the books for the years 1980, 1981 and 1982 was made in this fashion.
Admittedly, some of the members of the Assessment Sub Committee were themselves authors of books and some of the books written by them were selected and purchased.
The Purchase Committee restricted the list for the years 1980, 1981 and 1982 to 466 books out of 1,718 books submitted for selection, but as further funds became available the Government decided to select more books and accordingly a committee constituted under the Chairmanship of Director of Public Instruction (Schools), Orissa, selected a supplementary list of 105 books out of the said 1,718 books which had been submitted for selection.
Before further steps could be taken, in the unprecedented fiords and cyclones of August/September 1982, number of schools and colleges suffered in the calamity and the libraries of many schools and colleges were washed away.
The Central Government thereupon, as part of its relief programme for the State, gave grants to the State during February and March, 1983 aggregating to Rs. 45 lakhs for the purchase of books for the libraries of non governmental schools and colleges and to be utilised before June 1983.
Due to Paucity of time and delay in the normal process of selection of books, the State Government took a decision or April 5, 1983 to utilise the grant made by the Central Government by purchasing books out of the books selected for the years 1980, 1981 and 1982 and the said supplementary list of 105 books.
In the meeting convened on April 13, 1983, to consider the selection of books to be purchased, all the 466 books selected for the years 1980, 1981 and 1982 together with the 105 supplementary list of books were approved.
Thereupon, the appellants who were publishers filed a Writ Petition under Article 226 of the Constitution against the State of Orissa and the Director of Public Instruction, Orissa to quash the list of books selected for the years 1980, 1981 and 1982 and the State Government 's said decision with respect to purchasing books out of the cyclone and flood relief grant made by the Central Government, inter alia on the ground of bias on the part of some of the members of the Assessment Sub Committee whose books were submitted for selection.
This Writ Petition was heard along with a similar Writ Petition filed by the Orissa Publishers and Book Sellers Association.
The High Court by a common judgment delivered on August 10, 1983 dismissed both these Writ Petitions.
Hence the appeals by Special Leave of the Court.
Allowing the appeal, the Court 324 ^ HELD : 1.
The law with respect to locus standi has considerably advanced both in this country and in England and in the case of public interest litigation it is not necessary that a petitioner should himself have a personal interest in the matter.
Merely by submitting books for selection, of which some might have been selected, a person cannot be said to have waived the objection which he may have to the constitution of the committee which selects the books.
Similarly, merely because a person does not submit any book for selection, it cannot, be said that he is not a person aggrieved.
[331 E; D] 2.
In the absence of any statutory rule or regulation with respect to selection of books and the selection being made each year as an administrative measure it was open to the State Government to change both the constitution of the committee and sub committees as also the procedure for selecting books to be purchased.
Since the procedure normally adopted by the State Government would have taken more time than what the time bound grant of the Central Government would have permitted, the State Government was justified in convening the meeting on April 13, 1983 and selecting the books to be purchased from the Central Government grant.
[331 G H] 3:1.
Nemo judex in causa sua, that is, no man shall be a judge in his own cause, is a principle firmly established in law.
Justice should not only be done but should manifestly be seen to be done.
It is on this principle that the proceedings in courts of law are open to the public except in those cases where for special reason the law requires or authorizes a hearing in camera.
Justice can never be seen to be done if a man acts as a judge in his own cause or is himself interested in its outcome.
The principle applies not only to judicial proceedings but also to quasi judicial and administrative proceedings.
[332 G H] A. K. Kraipak and others vs Union of India and others, , followed.
A person who has written a book which is submitted for selection either by himself or by his publishers, is interested in the matter of selection and therefore an author member should not be a member of any such committee or sub committee for several considerations namely : (a) Authors stand to benefit financially in several ways by getting either royalty from the publishers or by direct sales; (b) Though an author member may be only one of the members of the Assessment Sub Committees and that the ultimate decision of selection may rest with the State Government which may reject any book out of the list of the approved books, normally the State would be guided by the list of books approved by the Assessment Committee ; (c) The author member can certainly influence the minds of the other members against selecting books by other authors in preference 325 to his own ; (d) Books by some of the other members may also have been submitted for selection and there can be between them a quid pro quo or, in other words you see that my book is selected and in return I will do the same for you.
In either case, when a book of an author member comes up for consideration, the other members would feel themselves embrassed in frankly discussing its merits ; (e) Such author member may also be a person holding a high official position whom the other members may not want to displease ; and (f) Though it may be that the other members may not be influenced by the fact that the book which they are considering for approval was written by one of their members, whether they were so influenced or not would, however, be a matter impossible to determine.
It is not, therefore, the actual bias in favour of the author member that is material but the possibility of such bias.
[333 F H; 334A G] 4 : 1.
The doctrine of necessity is, however, an exception to the doctrine of bias, that no man shall be a judge in his own cause.
An adjudicator, who is subject to disqualification on the ground of bias or interest in the matter which he has to decide, may be required to adjudicate if there is no other person who is competent or authorized to adjudicate or if a quorum cannot be formed without him or if no other competent tribunal can be constituted.
In such cases, the principal of natural justice would have to give way to necessity for otherwise there would be no means of deciding the matter and the machinery of justice or administration would break down.
[334 H; 335 A B] The Judges vs Attorney General for Saskatchewan, 53 The Times Law Reports 464 (1937) quoted with approval.
In the instant case, the High Court wrongly applied the doctrine of necessity to the author member of the Assessment Sub Committee.
Though the members of this Sub Committee were appointed by a Government resolution and some of them were appointed by virtue of the official position they were holding, such as, the Secretary, Education Department of the Government of Orissa, and the Director, Higher Education, etc.
, there was, nothing to prevent those whose books were submitted for selection from pointing out this fact to the State Government so that it could amend its resolution by appointing a substitute or substitutes, as the case may be.
There was equally nothing to prevent such non official author members from resigning from the committee on the ground of their interest in the matter.
[335 C E] 5:1.
The High Court, however, was justified in refusing to grant any relief in respect of the books selected for the year 1980, 1981 and 326 1982 inasmuch as the books selected for those years had already been purchased.
Since a similar fait accompli stared at the Supreme Court not only in respect of the books selected and purchased for those years, but also with respect to the books selected to be purchased from the Central Government grant, in the instant fase, the Court could lay down only certain guide lines to be followed in future in selecting not only books for libraries in educational institutions but also in prescribing text books and in constituting committees for these purposes.
The Supreme Court accordingly laid down such guidelines.
[335 F H] 5:2.
However, the guide lines laid down by a court can only ensure the selection of worthwhile books.
This must necessarily depend upon the social consciousness and moral fibre of the members of the committee.
Further, no judgment of a court can eliminate the evil of behind the scene influence.
Here, one must perforce trust the sense of responsibility of the members of the committee in the discharge of the important duty with which they are entrusted.
[338 B C] 6:1.
Clause 8 of the Government resolution dated November 24, 1983, issued after the grant of Special Leave Petition to Appeal does not satisfy the principle of natural justice and fair play.
Since several books would come up for consideration before the committee, one or more of them by one of the member and the other or others by some of the other members, mere non participation in the discussion by the member concerned or even his withdrawing from the deliberations of the committee while his or her book or books are being considered is not sufficient because the evil of quid pro quo cannot be eliminated by such a resolution.
Members deliberating would bear in mind that the turn for selecting their books would also come and the concerned member who had not participated or had withdrawn would not then be favourably inclined to select their books.
[336 B; E G] 6:2.
Many a person falls a victim to the disease called cacoethes scribendi.
It would, therefore, be unfair to prohibit publishers from submitting books for selection merely because they had at one time published a book written by any one of the members of the committee or sub committee concerned with the selection of books.
The number of publishers is large but good publishers are few and such publishers will, therefore, be publishing the majority of books.
To lay down such a guide line would be to eliminate a large number of books which may be worthy of selection.
[337 A C]
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<s>[INST] Summarize the judgementivil Appeal Nos.
1219 20(NM) of 1987.
From the Judgment and Order dated 17.3.
1987 of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. CD/BOM 398 & 399 of 1984.
M.S. Ganesh for the Appellants.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These two appeals are under Section 130E(b) of the (hereinafter called the Act) from the orders passed by the Customs, Excise & Gold (Control) Appellate Tribunal (hereinafter called `the CEGAT).
The questions involved in these two appeals are identical.
The appellants ' claim to be the citizens of India is not disputed.
At the material time in 1983 they were based in Hong Kong and Singapore respectively.
In February, 1993, when the appellants came to India, they were charged with alleged offences under Sections 112 and 114 of the Act and also simultaneously with the alleged offences under the Foreign Exchange Regulation Act, 1973 (hereinafter called `the FERA ').The
Enforcement authorities recorded under Section 40 of the FERA the appellants ' statements at the time of their arrest.
It is alleged that these statements were obtained under duress and by using third degree methods against them, who soon thereafter retracted their statements.
No statements were, however.
recorded by the Customs authorities under the corresponding Section 108 of the Act.
In the FERA proceedings.
the Enforcement Directorate, it is stated, applied that there was no evidence against the appellant Vijay Prakash Mehta and the Directorate had no objection to his discharge.
Accordingly, by an order dated 29.10.1985, of the Additional Chief Metropolitan Magistrate, 8th Court, Esplanade, Bombay, has was discharged and his bailbond was cancelled.
So far as the appellant J.D. Mehta is concerned, he had replied to the show cause notice issued by the Enforcement Directorate and the mater is pending adjudication.
In the meantime the proceedings under Sections 111 to 114 & 118 of the Act resulted in the order dated 19.1.1984 of the Addl.
Collector of Customs (Preventive) Bombay, whereby he imposed a penalty of Rs. 3,00,000 on each of the appellants.
It may be mentioned that each of the appellants was alleged to have PG NO 437 been caught red handed with the foreign exchange to the tune of Rs. 11,90,648.
The appellants had admitted their part in the systematic illegal export of foreign exchange from India during the past several years.
Against the said order dated 19.1.
1984, the appellants preferred their respective appeals to the Appellate Tribunal under Section 129A of the Act.
The Tribunal reduced the amount of penalty to be deposited, in an application made under Section 129E of the Act.
pending hearing of the appeal, to Rs. 1 lakh for each of the appellants.
It is alleged that since neither of the appellants were in any financial position to deposit even Rs. 1 lakh, they sought further reduction.
The Appellate Tribunal, after considering the facts and circumstances of the case and taking: into consideration all the relevant material facts and factors, by its order dated 17th February, 1987, declined to do so and dismissed the appeals for non compliance with the provisions of Section 129E of the Act.
Aggrieved thereby the appellants have appealed to this Court.
Section 129E of the Act provides as follows.
"Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under this Act.
the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case.
the Collector (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.
" The aforesaid Section provides a conditional right of appeal in respect of an appeal against the duty demanded or penalty levied.
Although the Section does not expressly provide for rejection of the appeal for non deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty, pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal.
See, in this connection, the observations of this Court in respect of Section 129 prior to substitution PG NO 438 of Chapter XV by the Finance Act, 1980 in Navin Chandra Chhotelal vs Central Board of Excise & Customs & Ors. ; The proviso, however,gives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships.
It is a matter of judicial discretion of the Appellate Authority.
The case of the appellants was that they had not gone out of India and had no assets in India.
Their passports were impounded at the time of arrest.
Their visa had lapsed and could not be renewed.
They had no money, hence, the right of appeal could be illusory unless they are permitted to deposit only Rs.60,000 each which they contend they are able to procure with the assistance of their father.
In the impugned order the Tribunal noted the several abortive and defective attempts made to get extension of time to deposit the security.
Firstly.
the prayer was to accept the deposit of Rs.35,000 and secondly, to accept the deposit of Rs.60,000 in 2 months.
The Tribunal took into account the probability of the prima facie case of the appellants.
The appeals were filed two years ago.
After taking into consideration these factors, the Tribunal rejected the prayer for reduction.
It was contended that this was wrong Shri M. section Ganesh.
learned advocate for the petitioners.
pleaded that in a situation of this type the condition for deposit of penalty was bad as it whittled down the appellants right of appeal.
This, in our opinion is incorrect Shri Ganesh tried to contend that the right of appeal is being whittled down by the procedure followed in this case, He drew our attention to certain observations of this Court in Hoosein Kasam Dada (India) Ltd. V. The State of Madhya Pradesh & Ors., ; There this Court held that when the right to appeal vests, change of law after initiation of proceedings in lower court would not divest the vested rights of the appellant.
The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by the inferior court and such a right cannot be taken away except by express enactment or necessary intendment.
The aforesaid observations, in our opinion.
have no application to the instant case.
Here the right that was granted, w as a right held with a condition.
There was o question of change of that right.
In the instant case the only substantive right is the right of appeal as contemplated under Sections 129A and 129E of the Act and that right is a conditional one and the Legislature in its wisdom has imposed that condition.
No question of whittling PG NO 439 down that right by an alteration of procedure arises in this case.
Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications.
The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
Counsel referred us to the decision of this Court in Collector of Customs & Excise, Cochin & Ors.
vs A.S. Bava, [l968] 1 SCR 82.
There this Court found that Section 35 of the Central Excises & Salt Act, 1944 (Excises Act) gave a right to appeal.
Under Section 12 of the Act, the Central Government was authorised to apply to appeals under the Excises Act the provisions of the dealing with the procedure relating to appeals.
In exercise of that power the provisions of Section 129 of the Act were made applicable to appeals under the Excises Act.
The Section required an appellant to deposit, pending the appeal, the duty or penalty imposed, and empowered the Appellate Authority, in his discretion, to dispense with such deposit pending the appeal in any particular case.
The respondent therein filed an appeal against the duty imposed on him under the Excises Act and prayed for dispensation of the deposit.
The Collector, who was the appellate authority, rejected the prayer and when no deposit was made within the time fixed, dismissed the appeal.
The respondent filed a petition in the High Court which was allowed, and the Collector was directed to hear the appeal on merits.
This Court held that Section 35 of the Excises Act gave a right of appeal and Section 129 of the Act whittled down that substantive right and, as such, Section 129 could not be regarded as "Procedure relating to appeals" within Section 12 of the Excises Act.
These observations cannot be applied to the facts of this case.
Here we are concerned with the right given under Section 129 A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right.
The petitioner in this case has no absolute right of stay.
He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitation of Section 129E.
The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships".
That discretion must be exercised on relevant materials, honestly, bona fide and objectively.
Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority.
In this case it is manifest that the order of the Tribunal was passed honestly, PG NO 440 bona fide and having regard to the plea of "undue hardship ' as canvassed by the appellant.
There was no error of jurisdiction or misdirection.
Though in a different context the public policy involved in not granting interim stay has been explained by this Court in Asstt.
Collector of Central Excise West Bengal vs Dunlop India Ltd., It is not the law that adjudication by itself following the rules of natural justice would be violative of any right constitutional or statutory, without any right of appeal, as such.
If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant.
The proviso to Section l29E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce.
It is a discretion vested in an obligation to act judicially and properly.
In the facts and circumstances of the case and all the relevant factors, namely, the probability of the prima facie case of the appellants, the conduct of the parties, have been taken into consideration by the Tribunal.
The purpose of the Section is to act in terrorem to make the people comply with the provisions of law.
In that view of the matter, we are unable to accept the submission that there was improper rejection and non consideration of material and relevant facts.
If that is the position then the appeals have no merit and are accordingly rejected.
P.S.S. Appeals dismissed.
[/INST]Section 129A of the confers right of appeal to the Appellate Tribunal.
Where, however, the order appealed against relates to duty demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under the Act, section 129E requires the aggrieved person to deposit with the proper officer the duty demanded or the penalty levied, pending the appeal.
The proviso thereto, however, empowers the Appellate Authority to dispense with such deposit in case of under hardship.
The appellants, Indian citizens based in Hong Kong and Singapore respectively, were caught red handed, while on a visit to India, with huge amounts of foreign exchange.
They admitted their part in systematic illegal export of foreign exchange from the country over the past several years.
In proceedings under sections 111 to 114 and 118 of the Act the Addl.
Collector of Customs imposed a penalty of Ks.3 lacs on each of them.
They preferred appeals to the Appellate Tribunal under section 129A. In an application made under section 129E the Tribunal reduced the amount of penalty to be deposited to Rs. 1 lac for each of them.
The appellants sought further reduction.
Their case was that they had not gone out of the country and had no assets in India.
Their passports were impounded at the time of arrest.
Their visas had lapsed and could not be renewed.
They had no money and that in a situation of this type the condition for deposit of penalty was bad as it whittled down the appellants ' right of appeal.
The Tribunal after considering the relevant factors declined to reduce the penalty further and dismissed the appeal for non compliance with the provisions of section 129E. Dismissing the appeals under section 130E(b) of the .
HELD: Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which PG NO 434 PG NO 435 must be followed in all judicial and quasi judicial adjudications.
The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
[439A B] 2.
It is not the law that adjudication by itself following the rules of natural justice would be violative of any right, constitutional or statutory, without any right of appeal, as such.
If a statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant.
[440C] 3.
The purpose of section 129E of the is to act in terrorem to make the people comply with the provisions of law.
The right of appeal provided therein is a conditional one.
The petitioner could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations contemplated therein.
Although the section does not expressly provide for rejection of the appeal for non deposit of duty or penalty yet it makes it obligatory on the appellant to deposit the same pending the appeal? failing which the Appellate Tribunal is fully competent to reject the appeal.
The proviso thereto gives a discretion to the authority in cases of undue hardships to condone the obligation to deposit or reduce.
It is a discretion vested in an obligation to act judicially and properly.
[440E, 439F, 437G, 440C] In the instant case, the order of the Tribunal was passed honestly, bona fide and having regafd to the plea of `undue hardship ' as canvassed by the appellants.
All the relevant factors, namely, the probability of the prima facie case of the appellants and the conduct of the parties were taken into consideration.
The Tribunal noted the several abortive and defective attempts made to get extension of time to deposit the security.
Firstly, the prayer was to accept Rs.35,000 and secondly to accept Rs. 60,000 in two months .
It also noted the fact that the appeals were filed two years ago.
It could not therefore, be said that there was any improper exercise of jurisdiction or misdirection by the Appellate Authority.
[439H,440A,D,438C] Navin Chandra Chhotelal vs Central Board of Excise & Customs & Ors.
, ; , referred to.
Hoosein Kasam Dada (India) Ltd. vs The State of Madhya Pradesh & Ors., ; and Collector of Customs & Excise, Cochin & Ors.
vs A.S. Bava, , distinguished.
PG NO 436
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<s>[INST] Summarize the judgementAppeal No. 105 of 1953.
Appeal by Special Leave granted by this Court 's Order dated the 24th September, 1951 from the Judgment and Decree dated the 2nd day of September, 1949 of the High Court of Judicature at Bombay in Appeal No. 274 of 1948 from Original Decree arising out of the Decree dated the 30th day of July, 1946 of the Court of Civil Judge, Senior Division at Hubli in Special Suit No. 56 of 1944.
K. R. Bengeri and Sardar Bahadur for the appellant.
section B. Jathar and I. N. Shroff for respondents Nos. 3, 4 and 5.
December 10.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C. J.
This appeal raises a question of importance "whether a widow can exercise a power of adoption conferred on her or possessed by her at any time during her life irrespective of any devolution of property or changes in the family or other circumstances and even after a grandson has come on the scene but has subsequently died without leaving a widow or a son".
The situation in which this question arises can properly be appreciated by reference to the following genealogy: 1137 Dyamappa I I I Kalasappa I I Krishtarao Radhabai=Gangabai (deft.2) (Deft.1) (Senior widow) (Junior window) | Gurunath | (Appellsnt adopted | by Gsngsbai on | | 18 11 53) | | | Dattatraya (son) (died 1913) | | =Sundarabai (died after | | her husband in 1913) Kamalabai Yamunabai (Resp.1) (Resp.2) | | | | | | | Kalasappa Jagannath (predeceased (died 1914) Dattatraya) Girimaji | Hanamanta | | | | | | Malhar Ganesh (Resp.3) (Resp.5) Venkatesh Hanamant (Resp.4) (Resp.6) 1138 Gurunath, the plaintiff, claims that he was adopted in 1943 by Gangabai, widow of Krishtarao.
Krishtarao died in 1890, leaving him surviving two widows Radhabai and Gangabai and a son Dattatraya.
Dattatraya died in 1913 leaving him surviving a widow Sundarabai and a son Jagannath.
Sundarabai died shortly after Dattatraya while Jagannath died in the year 1914.
After an interval of about 30 years since his death, it is alleged that Gangabai who survived both her son, and grandson adopted the plaintiff, and thus raised the problem which we are called upon to solve.
On the 15th of March, 1944 the appellant instituted the suit out of which this appeal arises in forma pauperis on the allegation that he was the adopted son of Krishtarao and adopted to him by Gangabai, his junior widow, and as such was entitled to the possession of his adoptive father 's properties comprised in the suit.
He also claimed a declaration regarding the amount of compensation money payable to the plaintiff 's family for the land acquired by Hubli Municipality.
The defendants who are the sons and grandsons of the first cousin of Krishtarao disputed the plaintiff 's adoption on the ground that Gangabai 's power to adopt was extinguished when Dattatraya died in 1913, leaving behind him a widow Sundarabai and a son Jagannath who could continue the family line.
Gangabai in her written statement supported the plaintiff 's claim and asserted that the senior widow Radhabai had given consent to her adopting the plain tiff.
The trial judge upheld the defendants ' contention and dismissed the plaintiff 's suit.
The factum of the plaintiff 's adoption was however upheld, and it was further held that Radhabai did not give her consent to the adoption.
On appeal this decision was affirmed by the High Court and it was held that Gangabai 's power to adopt came to an end at the time when her son died leaving a son and a widow to continue the family line.
No finding was given on the question whether Radhabai had given her consent to the adop tion.
That perhaps would have been the simplest way to end the dispute.
Against the decision of the High 1139 Court this appeal in forma pauperis is now before us by special leave.
The only question canvassed in the appeal is in respect to the validity of the plaintiff 's adoption.
It was contended that Hindu Shastric Law itself sets no limit to the exercise of the widow 's power of adoption once she has acquired that power or is possessed of it, and that being so, the power can be exercised by her during her life time when necessity arises for the exercise of it for the purpose of continuing the line of her husband.
On the other hand, it was argued that though Hindu Shastric Law itself sets no limit to the exercise of the power, yet it has long been judicially recognised that the power is not an unlimited and absolute one, and that it comes to an end when another heir has come on the scene and he has passed on to another the duty of continuing the line.
The question at what point of time the widow 's duty of continuing the line of the husband comes to an end has been the subject matter of a number of decisions of Indian High Courts and of the Privy Council and the point for our consideration is whether the limits laid down in these decisions have been arbitrarily fixed and are not based on sound principles and should be reviewed by us.
A brief reference to the different decisions of the Privy Council is necessary for a proper appreciation of the state of law on this subject at the present moment.
The two leading cases on this point are the decisions of the Privy Council arising out of the adoption made by Shrimati Chundrabullee and decided in 1876 and 1878.
The judgment in the first of these cases, i.e. in Bhoobun Moyee vs Ram Kishore(1) was delivered by Lord Kingsdown.
What happened there was that one Gour Kishore died leaving a son Bhowanee and a widow, Chundrabullee, to whom he gave authority to adopt in the event of his son 's death.
Bhowanee married and died at the age of 24 without issue, but leaving him surviving his widow Bhoobun (1) (1965] 10 M.I.A. 279. 146 1140 Moyee.
Chundrabullee then adopted Ram Kishore.
Ram Kishore brought a suit against Bhoobun Moyee for the recovery of the estate.
The Privy Council held that the claim of Ram Kishore failed on the ground that even if he had been in existence at the death of Bhowanee he could not displace the widow of the latter.
It was further held "that at the time when Chundrabullee professed to exercise her power of adoption, the power was incapable of execution on the ground that Bhowanee had married and left a widow as his heir".
The following quotation from the judgment of Lord Kingsdown may be cited as indicating the reasons for the decisions: "In this case, Bhowanee Kishore had lived to an age which enabled him to perform and it is to be presumed that he had performed all the religious services which a son could perform for a father.
He had succeeded to the ancestral property as heir; he bad full power of disposition over it; he might have alienated it; he might have adopted a son to succeed to it if he had no male issue of his body.
He could have defeated every intention which his father entertained with respect to the property.
On the death of Bhowanee Kishore, his wife succeeded as heir to him and would have equally succeeded in that character in exclusion of his brothers, if he had any.
She took a vested estate, as his widow, in the whole of his property.
It would be singular if a brother of Bhowanee Kishore, made such by adoption, could take from his widow the whole of his property, when a natural born brother could have taken no part.
If Ram Kishore is to take any of the ancestral property, he must take all he takes by substitution for the natural born son, and not jointly with him. .
The question is whether the estate of his son being unlimited, and that son having married and left a widow his heir, and that heir having acquired a vested estate in her husband 's property as widow, a new heir can be substituted by adoption who is to defeat that estate, and take as an adopted son what a legitimate son of Gour Kishore would not have taken.
1141 This seems contrary to all reason and to all the principles of Hindoo law, as far as we can collect them. .
If Bhowanee Kishore had died unmarried, his mother, Chundrabullee Debia, would have been his heir, and the question of adoption would have stood on quite different grounds.
By exercising the power of adoption, she would have divested no estate but her own, and this would have brought the case within the ordinary rule; but no case has been produced, no decision has been cited from the Text books, and no principle has been stated to show that by the mere gift of a power of adoption to a widow, the estate of the heir of a deceased son vested in possession, can be defeated,.
and divested".
In the result the suit of Ram Kishore was dismissed.
After the deaths of Bhoobun Moyee and Chundrabullee, Ram Kishore got possession of the property under a deed of relinquishment executed in 1869 in his favour by Chundrabullee, who herself had entered into possession of the property as mother and next heir of Bhowanee Kishore after the death of Bboobun Moyee in 1867.
If Ram Kishore 's adoption was good he was undoubtedly the next heir to the property.
A distant collateral however claimed the estate on the ground that his adoption was invalid.
The Privy Council then held that "upon the vesting of the estate in the widow of Bhowanee, the power of adoption of Chudrabullee was at an end and incapable of execution" and that Ram Kishore had therefore no title.
This was the decision in Padma Coomari vs Court of Wards(1) wherein a second effort to maintain the validity of his adoption by Chundrabullee was made but without success.
The High Court in its judgment in Padma Coomari 's case(1) remarked that the decision in Bhoobun Moyee vs Ram Kishore(2) did not decide that Chundrabullee could not adopt on the extinction of the issue either of natural born son or of the first to be adopted son, and that if Chundrabullee had on the death of Bhoobun Moyee made the adoption and so divested her own estate,, there would be (1) [1881] L.R. 8 I.A, 229.
(2) [1865] 10 M.I.A. 279, 1142 nothing in the judgment of the Privy Council and nothing in the law to prevent her doing that which her husband authorised her to do, and which would certainly be for his spiritual benefit, and for that of his ancestors and even of Bhowanee Kishore.
The learned Judges of the High Court proceeded then to observe as follows: "With all respect, therefore, we imagine that Lord Kingsdown must have said by inadvertence, in reference to the idea of adopting a son to the great grandfather of the last taker, that at that time 'all the spiritual purposes of a son, according to the largest construction of them, would have been satisfied '; and again, Bhowanee Kishore had lived to an age which enabled him to perform, and it is to be presumed that he had performed, all the religious services which a son could perform for a father.
There is really no time at which the performance of these services is finally completed, or at which the necessity for them comes to an end".
To this Sir Richard Couch, who delivered the judgment of the Privy Council, gave a very emphatic answer in these terms: "The substitution of a new heir for the widow was no doubt the question to be decided, and such.
substitution might have been disallowed, the adoption being held valid for all other purposes, which is the view that the lower Courts have taken of the judgment, but their Lordships do not think that this was intended.
They consider the decision to be that, upon the vesting of the estate in the widow of Bhowanee, the power of adoption was at an end, and incapable of execution.
And if the question had come before them without any previous decision upon it, they would have been of that opinion.
The adoption intended by the deed of permission was for the succession to the zemindary and other property, as well as the performance of religious services; and the vesting of the estate in the widow, if not in Bhowanee himself, as the son and heir of his father, was a proper limit to the exercise of the power".
The question of limitations upon the power of the 1143 widow to adopt thus stated in the Chundrabulle series of decisions was again affirmed by the Judicial Committee in Thayammal and Kuttiswami Aiyan vs Venkatarama Aiyan(1) decided in 1887 and in Tarachurn vs Suresh Chunder(2) decided in 1889.
In the year 1902 this question came up for consideration before the Full Bench of the Bombay High Court in Ramkrishna Ramchandra vs Shamrao(3).
There a grandmother succeeded to her grandson who died unmarried andit was held that her power to make an adoption hadcome to an end and that the adoption was invalid.
Chandavarkar, J., who delivered the judgment of the Full Bench, enunciated the principle in these words: "Where a Hindu dies leaving a widow and a son, and that son dies leaving a natural born or adopted son or leaving no son but his own widow to continue the line by means of adoption, the power of the former widow is extinguished and can never afterwards be revived".
This principle was approved and applied by the Judicial Committee in Madana Mohana vs Purushothama Deo(4) in these words: "Their Lordships are in agreement with the principle laid down in the judgment of the Full Court of Bombay as delivered by the learned judge, and they are of opinion that, on the facts of the present case, the principle must be taken as applying so as to have brought the authority to adopt conferred on Adikonda 's widow to an end when Brojo, the son she originally adopted, died after attaining full legal capacity to continue the line either by the birth of a natural born son or by the adoption to him of a son by his own widow".
The next and the most important decision of the Judicial Committee in regard to this matter was given in the year 1933 in Amarendra Mansingh vs Sanatan(5) where there was a departure from or at least a reorientation of the old doctrine, and stress was laid on the spiritual rather than on the temporal aspect (1) (1887] L.R. 14 I.A. 67.
(3) Bom.
(2) [1889] L.R. 16 I.A. 166.
(4) [1918] L.R. 45 I.A. 150.
(5) [1933] L R. 60 I.A. 242.
1144 of adoption, linking it up with the vesting and divesting of the estate.
There a Hindu governed by the Benaras school was survived by an infant son and a widow, to whom he had given authority to adopt in the event of the son dying.
The son succeeded to his father 's impartible zamindari but died unmarried at the age of 20 years and 6 months.
By a custom of the family which excluded females from inheritance the estate did not go to his mother but became vested in a distant collateral.
A week after the son 's death she made an adoption.
It was held that the adoption was valid and it divested the estate vested by inheritance in the collateral.
All the previous decisions were reviewed in this case by Sir George Lowndes who delivered the judgment of the Board.
At page 248 of the report it is said as follows: "In their Lordships ' opinion, it is clear that the foundation of the Brahminical doctrine of adoption is the duty which every Hindu owes to his ancestors to provide for the continuance of the line and the solemnization of the necessary rites.
And it may well be that if this duty has been passed on to a new generation, capable itself of the continuance, the father 's duty has been performed and the means provided by him for its fulfilment spent: the "debt" be owed is discharged, and it is upon the new generation that the duty is now cast and the burden of the "debt" is now laid.
It can, they think, hardly be doubted that in this doctrine the devolution of property, though recognised as the inherent right of the son, is altogether a secondary consideration. . that the validity of an adoption is to be determined by spiritual rather than temporal considerations; that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it.
Having regard to this well established doctrine as to the religious efficacy of sonship, their Lordships feel that great caution should be observed in shutting the door upon any authorised adoption by the widow of a sonless man, The Hindu law itself sets no limit 1145 to the exercise of the power during the lifetime of the widow and the validity of successive adoptions in continuance of the line is now well recognised.
Nor do the authoritative texts appear to limit the exercise of the power by any considerations of property.
But that there must be some limit to its exercise, or at all events some conditions in which it would be either contrary to the spirit of the Hindu doctrine to admit its continuance, or inequitable in the face of other rights to allow it to take effect, has long been recognised both by the Courts in India and by this Board, and it is upon the difficult question of where the line should be drawn, and upon what principle, that the argument in the present case has mainly turned".
In another part of the judgment their Lordships observed as follows: "It being clear upon the decisions above referred to that the interposition of a grandson, or the son 's widow, brings the mother 's power of adoption to an end, but that the mere birth of a son does not do so, and that this is not based upon a question of vesting or divesting of property, their Lordships think that the true reason must be that where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone.
But if the son die himself sonless and unmarried, the duty will still be upon the mother, and the power in her which was necessarily suspended during the son 's lifetime will revive".
The learned counsel for the appellant placed reliance upon the last sentence in the passage in the Privy Council judgment quoted above and contended that if the power of the widow which remained suspended during the lifetime of the son could revive on the son dying sonless and unmarried, logically the power must also revive when the son and his widow and the grandson and his widow all died out.
Reliance was also placed on the passage already cited in which 1146 their Lordships laid emphasis on the proposition that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it and it was contended that the grounds on which an outside limit was laid on the exercise of the widow 's power in the Chundrabullee series of decisions no longer survived, in view of the ratio in Amarendra 's decision and that it having been held that the power of adoption did not depend on and was not linked with the devolution of property or with the question of vesting or divesting of property and could be exercised whenever necessity for continuing the line arose, it should be held that when the son and his widow were dead and the grandson to whom he handed the torch for continuing the line also died, the power of Gangabai to make the adoption revived and thus the adoption was valid.
This argument, in our opinion, is not well founded as it is based on an incorrect apprehension of the true basis of the rule enunciated in this judgment, the rule being that "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to the grandson or to the son 's widow, the mother 's power is gone".
In the words of Chandavarkar, J. affirmed by the Judicial Committee in Madana Mohana vs Purushothama Deo(1) "the power having once been extinguished it cannot afterwards be revived".
In other words the true rule is this: "When a son dies before attaining full legal competence and does not leave either a widow or a son or an adopted son then the power of the mother which was in abeyance during his lifetime revives but the moment he hands over that torch to another, the mother can no longer take it".
The contention of the learned counsel therefore that even if the second generation dies without taking steps to continue the line the grandmother still (1) [1918] L R. 45 I.A. 156.
1147 retains her authority and is still under a duty to continue the line cannot be sustained.
The three propositions that the Privy Council laid down in Amarendra 's case therefore cannot now be questioned.
These propositions may be summed up in these terms: (1) That the interposition of a grandson, or the son 's widow, competent to continue the line by adoption brings the mother 's power of adoption to an end; (2) that the power to adopt does not depend upon any question of vesting or divesting of property; and (3) that a mother 's authority to adopt is not extinguished by the mere fact that her son had attained ceremonial competence.
The rule enunciated in Amarendra 's case was subsequently applied in Vijaysingji vs Shivsangji(1) and was again restated and reaffirmed as a sound rule enunciating the limitations on the widow 's power to adopt in Anant Bhikappa Patil vs Shankar Ramchandra Patil(2).
One of the propositions enunciated in this decision was not accepted by this court in Shrinivas Krishnarao Kango vs Narayan Devji Kango(3), but that apart no doubt was cast in this decision on the above rule.
The result of these series of decisions is, that now for about three quarters of a century the rule that "the power of a widow to adopt comes to an end by the interposition of a grandson or the son 's widow competent to adopt" has become a part of Hindu Law.
though the reasons for limiting the power may not be traceable to any Shastric text; and may have been differently stated in the several judgments.
It is well known that in the absence of any clear Shastric text the courts have authority to decide cases on principles of justice, equity and good conscience and it is not possible to bold that the reasons stated in support of the rule are not consistent with these principles.
During the arguments no substantial grounds have (1) [1935] L.R 62 I.A. 161.
(2) [1943] L.R. 70 I.A. 232.
(3) ; 147 1148 been suggested for holding that the rule is either in equitable or unjust or is repugnant to or inconsistent with any doctrine or theory of Hindu Law of adoption.
In this situation we are bound to hold that it is too late in the day to say that there are no limitations of any kind on the widow 's power to adopt excepting those that limit the power of her husband to adopt, i.e. that she cannot adopt in the presence of a son, grandson or great grandson.
Hindu Law generally and in particular in matters of inheritance, alienation and adoption gives to the widow powers of a limited character and there is nothing in the limitations laid down by the course of decisions above referred to repugnant to that law.
For the reasons given above, we are unable to depart from the rule that a widow 's power to make an adoption comes to an end by the interposition of a grandson or the son 's widow competent to continue the line by adoption.
The learned counsel for the appellant placed considerable reliance on two decisions of the Indian High Courts in support of his contention and suggested that the rule laid down in Amarendra 's case had no application to the situation that has arisen in the present case and that on the death of the grandson the widow 's power to adopt which was in abeyance during his life revived.
Reference in this connection was made to the decision of the Nagpur High Court in Bapuji vs Gangaram(1).
There a Hindu died leaving a widow and his son and the son died leaving a widow only who re married.
It was held that the power of the mother revived on the re marriage of the son 's widow.
Reliance for this proposition curiously enough was placed on the decision of the Judicial Committee in Amarendra 's case as appears from the following quotation from that judgment: "If the observation quoted from Amarendra Mansingh vs Sanatan Singh(2) be understood as limited to the case where the widow D or the grandson E stands between (is interposed) the grand widow C and her power, everything is clear except for the (1) (1941) I.L.R. Nagpur 178.
(2) Pat.
642, 658.
1149 words "and can never be revived" quoted from Ramkrishna vs Shamrao(1).
Strictly the above is the true meaning of their Lordships ' words.
That amounts to nothing more than this: that while D or E is alive and competent to adopt his or her existence prevents any adoption being made by C.
That leaves at large what happens when the "interposition" is ended.
Logic says that as the death of the son removes his "inter position" whereupon C 's power revives so the death of D removes her interposition and so C 's power revives".
In our judgment there is not only an obvious fallacy in this reasoning but it is based on a wrong apprehension of the true reasons stated for the rule in Amarendra 's case.
The reason for the rule in Amarendra 's case was "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone".
If that is the true reason, obviously the duty having come to an end cannot be revived on logical grounds.
We are therefore clearly of opinion that the ratio of the decision in Bapuji vs Gangaram(2) was erroneous.
The second decision to which reference was made is a decision of the Lucknow Court reported in Prem Jagat Kuer vs Harihar Bakhsh Singh(3).
The learned Judges in that case followed the decision of the Nagpur High Court above quoted, and further added (though under some misapprehension) that this decision had been approved by their Lordships of the Privy Council.
As a matter of fact, there was another decision reported in the same report on a different question that had been upheld by the Privy Council and not the decision above referred to.
The authority of this later decision therefore is considerably shaken by this error and even otherwise the decision gives no independent reasons of its own apart from those contained in the Nagpur case.
(1) Bom.
(2) (3) Luck.
1. 1150 For the reasons given above, this appeal fails and is dismissed, but in the circumstances of the case we will make no order as to costs.
Appeal dismissed.
[/INST]An industrial dispute arose between the appellant and its workmen as to 'whether the employers were required to pay wages for the festival holidays allowed to their workmen in a year.
The appellant contested the workmen 's claim mainly on the grounds that neither in law nor in practice was there any provision for festival holidays with wages, that the appellant was already paying wages for three holidays allowed to the workmen under the U.P. Industrial Establishment (National Holidays) Act, 1961 and that in the entire region in which this mill is situated, no textile mill pays wages for festival holidays.
The mill was stated to be an uneconomic unit and, therefore, not in a position to b@r an extra burden.
The workmen, on the other band, in their separate written statements, filed through three Unions.
pleaded that the grant of holidays without wages was illegal and against social justice.
In their rejoinder the appellant pleaded that the holidays mentioned by the Unions were (,ranted because the workmen had demanded the same and those holidays were substituted by other days in lieu of holidays and as they were paid for the days on which they worked on account of those holidays there was no loss of wages caused to them.
The Tribunal by its award made the appellant liable to pay to their daily rated and piece rated workmen for 17 festival holidays, besides three national holidays, plus arrears, on the ground that the Secretary of,the appellant mill admitted that the festival holidays were paid holidays in the sense that workers were allowed to work on their unpaid rest days in substitution of the said festival holidays.
The appellant being aggrieved by the award presented a writ petition before the High Court which was dismissed by a single Judge.
Special leave to a Divisional Bench of the High Court was dismissed in Iimine, but the Bench certified the case to be fit for appeal to this Court.
The appellant was held entitled ' to certificate either under cl.
(a) or cl.
(b) of article 133(1) of the Constitution on the ground that value of the subject matter of dispute or claim The respondent in the Supreme Court objected to the competence of the certificate on the ground that though the judgment of the Division Bench was one of affirmance the certificate did not disclose on its face the existence 'of any substantial question of law.
This objection was upheld but as the case was considered fit for special leave, on oral request special leave was granted on the condition that the appellant would file a formal application for special leave accompanied by an application for condoning the delay 911 Allowing the appeal on the merits, HELD : By reading the statement of the Secretary of the appellant along with the pleadings as disclosed in the respective statement of cases of the parties, it is not possible to bold that the appellant had admitted that the 17 festival holidays were being given by them as paid holidays dispensing with the enquiry into the question referred for adjustment to the Industrial Tribunal.
Even the workmen did not plead that the festival holidays were treated as paid holidays.
The Secretary 's statement that no festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays.
This statement clearly explains that sense in which the Secretary meant to say that the festival holidays were paid.
The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as the festival holidays are.
This statement read with the detailed explanation could not logically serve as a ground for ignoring the unequivocal denial in the written state ment.
The industrial Tribunal, was therefore, wrong in holding that the statement made by the Secretary was an admission on behalf of the appellant.
The learned single Judge also missed the real point and held that the Secretary 's statement constituted an admission and all 'facts evidence was therefore, excluded.
The Division Bench fell into the, same error in summarily dismissing the appeal in limine.
(920 A EJ (ii) The U.P. Industrial Establishments (National Holidays) Act, 1961 and rules provide for paid National Holidays but that Act dotes not deal with festival holidays.
In determining the number of paid festival holidays per year, certain facts, like custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased produCtion are some of the relevant factors to be taken into account.
The question affects national economy and does not remain confined only to the establishment concerned but has its impact on other concerns as well.
This aspect has been completely ignored by the, Industrial Tribunal.
Further the Tribunal proceeded solely on the basis of misreading of the Secretary 's statement.
thereby ignoring the plea taken by the appellant.
There is.
thus the manifest error of law apparent on the fact of the record which resulted in grave failure of justice, because evidence on the only material point was illegally shut out.
[921 A] The District Board (afterwards Zila Parishad Allahabad vs Syed Tahir Hussain & ors C.A. No. 57 8 of 1963 decided oh July 23, 1965, Shiri Durga Prasad & Anr.
vs The Banaras Bank Ltd., [1964] 1 S.C.R.475.preferred to.
</s>
|
<s>[INST] Summarize the judgementvil Appeal Nos.6230 and 6231 of 1983.
321 From the Judgment and Order dated 20.6.1983 of the Orissa High Court in O.J.C. Nos. 237 and 46 of 1983.
F.S. Nariman, A.K. Ganguli, S.N. Kacker, R.F. Nariman, A. Patnaik and M.M. Kshatriya for the Appellants.
G. Ramaswamy, Additional Solicitor General and R.K. Mehta for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On December 12, 1967, the State of Orissa granted 'a license for collection of Sal Seeds ' from eleven Forest Divisions to M/s. Utkal Contractors and Joinery Private Limited.
The agreement provided for the sale and purchase of Sal Seeds failing on the ground naturally in the forests.
There was a stipulation that the company should establish solvent extraction units in the backward areas of Mayurbhanj and Sambalpur.
There was also an option for renewal of the lease for a further period of ten years.
It was later agreed that the period from October 1, 1967 to September 30, 1969 should be treated as experimental period and the lease should be deemed to have commenced from Octo ber 1, 1969 and to last for a period of ten years.
The Orissa Oil Industries Limited, a public limited company, was floated by the Utkal Contractors and Joinery Private Limited and it was agreed that the State Government should also contribute to the share capital of the company.
It was agreed that the Utkal Contractors and Joinery Private Limit ed should supply Sal Seeds to the two solvent extraction plants of the Orissa Oil Industries Limited, one set up at Bairangpur in Mayurbhanj District with a capacity to crush 21,000 M.T. Sal Seeds and the other at Sasan in Sambalpur District with a capacity to crush 21,000 M.T. sal seeds.
Thereafter on May 25, 1979, agreements renewing the leases for the purchase and removal of sal seeds from the eleven Forest Divisions for a further period of ten years from October 1, 1979 to September 30, 1989 were entered into by the Utkal Contractors and Joincry Private Limited and the Government of Orissa.
This was followed up by an agreement between the Utkal Contractors and Joinery Private Limited and the Orissa Oil Industries Limited for the supply of the entire collection of sal seeds from the eleven Forest Divi sions by the Utkal Contractors to the Orissa Oil Industries.
While so the Orissa Forest Produce (Control of Trade) Bill 1981 was introduced in the Legislative Assembly of Orissa State.
The Statement of Objects and Reasons was as follows: 322 "Smuggling of various forest pro duces is increasing day by day.
The present provisions of the Orissa Forest Act, 1972 for checking, hoarding and transport of forest produce are not adequate to bring the culprits to book.
The said Act is not adequate for imposition of any restrictions of control on trade in forest produce by framing rules thereunder.
Barring few items like sal seeds.
most of the important items of minor forest produce such as Mahua flower, Tamarind, Charmaji, Karanja and the like are grown in private holdings as well as in the forest areas owned by Government.
Unscrupulous trad ers take advantage of this situation and evade the law under the cover that the produce relates to private land and not to forests under the control of Government.
Instances of smuggling in such cases are too many and the smugglers are escaping with impunity because of absence of any legislation providing for State monopoly in forest produce.
Enactment of a separate legislation for the purpose is, therefore, absolutely necessary.
The Bill seeks to achieve the above purpose.
" It appears from a perusal of the Statement of Objects and Reasons that the object of the proposed Act was to prevent smuggling of forest produce like Mahua flowers, Tamarind, Charmaji, Karanja, etc.which were grown both in private holdings and Government forests.
The object of the legislation was to prevent smuggling in such forest produce and to provide for State monopoly therein.
It is seen that the Statement of Objects and Reasons expressly mentions sal seeds as a forest produce which is grown in Government Forests and not in private holdings.
The Orissa Forest Produce (Control of Trade) Act, 1981 received the assent of the President of India on August 21, 1981.
Under section 1(3) of the Act, the State Government is empowered from time to time to issue a notification specify ing the area or areas, the forest produce in relation to which and the date with effect from which the Act shall come into force.
Purporting to act under this provision, a notification was issued by the Government of Orissa on December 9, 1982 directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds.
We are told that this is the only notification issued so far under section 1(3) of the Act, despite the fact that in the very Statement of Objects and Reasons it was expressly 323 recited that sal seeds was not a forest produce grown in Government forests.
In fact, we find that even after the commencement of the Act and before the issue of the Notifi cation, there were negotiations between the Utkal Contrac tors and Joinery Private Limited and the State Government for long term agreements for purchase _and sale of sal seeds in Athagarh and Puri Forest Divisions.
Such agreements were in fact entered into in relation to Parlakhemundi Forest Division between the State of Orissa and Indo East Extraction Limited.
On December 24, 1982, the Government refused to accept royalty from Utkal Contractors and Joinery Private Limited in respect of Dhenkanal and Sambalpur Forest Divi sion on the ground that the Notification dated December 9, 1982 had the effect of rescinding the contract between the company and the Government.
Thereupon Utkal Contractors and Joinery Private Limited and Orissa Oil Industries Limited filed a writ petition in the Orissa High Court for a decla ration that the Notification dated December 9, 1982 did not have the effect of rescinding the contracts which they had with the State Government.
The Writ Petition was dismissed by the Orissa High Court.
The Utkal Contractors and Joinery Private Limited and Orissa Oil Industries Limited have filed Civil Appeal No. 6230 of 1983.
In another case, on similar facts the Orissa Minor Oil Private Limited have filed Civil Appeal No. 6231 of 1983.
On behalf of the appellants, it was submitted by Shri F.S. Nafiman in Civil Appeal No. 6230 of 1983 and Shri S.N. Kacker in Civil Appeal No. 6231 of 1983 that the Orissa Forest Produce (Control of Trade) Act, 1981 had no applica tion to forest produce grown in Government forests.
The Act was aimed at creating a monopoly in forest produce in the Government.
Since the Government was already the owner of forest produce in Government forests all that was necessary to create a monopoly in all forest produce in the Government was to vest in the Government the exclusive right to pur chase forest produce grown in private holdings.
That was precisely what was done by the Orissa Forest Produce (Con trol of Trade) Act, 1981 according to the learned counsel.
It was further argued that even otherwise Explanation II to section 5(1) saved such contracts for the purchase of specified forest produce from Government forests also.
It was also brought to our notice that such contracts were entered into in pursuance of the avowed Industrial Policy of the Govern ment of Orissa.
Shri G. Ramaswamy, learned Additional Solic itor General argued that Orissa Forest Produce (Control of Trade) Act, 1981 was a comprehensive Act intended to control and regulate trade in forest produce whether grown in Gov ernment forest or land held by private owners.
He urged 324 that the language of section 5(1)(a) was so wide as to be incapa ble of any construction other than to say that all contracts relating to trade in forest produce shall stand rescinded irrespective of whether the contract related to forest produce grown in Government forests or forest produce grown on private lands.
He urged that Explanation II, properly viewed, was an explanation to section 5(1)(b) only and not to section 5(1)(a) He argued that in any event the contract was for the collection and not for the purchase of forest produce and therefore, not saved by the explanation.
He further urged that the agents contemplated by section 4 of the Act were not agents to act on behalf of the Government.
They were "public agents", named as such, to carry on the activity of purchas ing and trading in specified forest produce.
They could purchase from and sell to the Government.
We may straight away say that it was never the case of the Government in the High Court that the character of the agents was as suggested by the learned Additional Solicitor General.
We do not, therefore, propose to consider the submission of learned Additional Solicitor General whatever justification there may be for the submission on the language of section 4.
The learned Additional Solicitor General further submitted that even if the agreement which Utkal Contractors and Joinery Private Limited had with the Government was saved by Expla nation II, the further agreement by which the Utkal Contrac tors and Joinery Private Limited was required to supply sal seeds to Orissa Oil Industries Limited and the latter was required to purchase from the former was not saved by Expla nation II and therefore, no relief could be granted to the appellants.
This submission again is a new point raised for the first time in this Court.
We do not think we will be justified in permitting the Additional Solicitor General to raise the question at this stage.
Such a question was not raised in the High Court probably because the contract between Utkal Contractors and Joinery Private Limited and Orissa Oil Industries Limited appears to have been entered into at the behest of the Government.
The questions for consideration, therefore, are whether purchase of sal seeds grown in Government forests is outside the purview of the Orissa Forest Produce (Control of Trade) Act, 1981 and whether, in any event, a contract such as the one with which we are concerned is saved by Explanation II to section 5(1).
We have already referred to the Statement of Objects and Reasons of the Orissa Forest Produce (Control of Trade) Act.
We have noticed that ' the object was to prevent smuggling of those varieties of forest produce as were grown both in Government forests and private lands.
We also notice that it was expressly mentioned in the Statement of Objects and Reasons that such varieties of forest 325 produce were unlike sal seeds which were grown only in Government forests.
Even so we notice that the only notifi cation ever issued under the Act was in respect of sal seeds and no other forest produce.
We can only comment that curi ous indeed are the ways of the powers that be.
Section 1(3) of the Act declares that the Act shall come into force in such area or areas and in relation to such forest produce and on such date or dates as the State Gov ernment may, from time to time, by notification, specify in that behalf.
Section 2(c) defines 'forest produce ' and enumerates various items of forest produce.
One of them is sal seeds.
Section 2(d) defines "growers of forest produce" to mean "(i) in respect of forest produce grown on land owned by any person, the owner of such land, and (ii) in all other cases the State Government." Section 2(h) and 2(i) define 'specified area ' and 'specified forest produce ' in the following terms: "(h) "specified area" in relation to a specified forest produce means the area speci fied in the notification under sub section (3) of section 1 for such specified forest produce ;" "(i) "specified forest produce" in relation to a specified area means the forest produce specified in the notification issued under sub section (3) of section 1 for such specified area.
" Section 4 authorises the Government to appoint one or more agents for the purchase of and trade in specified forest produce in respect of one or more subdivisions of a speci fied area.
It is also provided that any person including a Gram Panchayat, a Cooperative Society or the State Tribal Development Corporation may be appointed as an agent.
Sec tion 5 is important and we are particularly concerned with subsections (1) and (3) of section 5 which may be fully extracted here.
They are as follows: "5.Restriction on purchase and transport and rescission of subsisting contracts (1) On the issue of a notification under sub section (3) of section 1 in respect of any area (a) all contracts for the purchase, sale, gathering or collection of specified forest produce grown or found in the said area shah stand rescinded, and 326 (b) no person other than (i) the State Government, (ii) an officer of the State Government autho rised in writing in that behalf, or (iii) an agent in respect of the unit in which the specified forest produce is grown or found shall purchase or transport any specified forest produce in the said area.
Explanation 1 "purchase" shall include pur chase by barter.
Explanation II Purchase of specified forest produce from the State Government or the aforesaid Government Officer or agent or a licensed vendor shall not be deemed to be a purchase in contravention of the provisions of this Act.
Explanation III A person having no interest in the holding who has acquired the right to collect the specified forest produce grown or found on such holding shall be deemed to have purchased such produce in contravention of the provisions of this Act.
(2) . . . . . . . (3) Any person desiring to sell any specified forest produce may sell them to the aforesaid Government Officer or agent at any depot situated within the unit wherein such produce was grown or found: Provided that State Government, the Government Officer or the agent shall not be bound to repurchase specified forest produce once sold.
(4). . . . . . . We notice that though section 5(1)(a) is in general terms and declares that 327 all contracts for the purchase and sale of forest produce shall stand rescinded and clause (b) bans purchase and transport of forest produce by any person other than the State Government or its officers or agents.
Explanation II is clear that purchase of specified forest produce from the State Government or its officers or agents is not to be deemed to be a purchase in contravention of the provisions of the Act.
Explanation III, we see, declares that a person having no interest in the holding but acquires the right to collect the specified forest produce grown or found on such holding shall be deemed to have purchased such produce in contravention of the provisions of the Act.
It is obvious that the reference to holding here is to land held by a person other than the Government and not to land owned by the Government.
We are primarily concerned in this case with the effect of section 5(1)(a) and (b) in the light of Explanation II.
Sub section (3) of section 5 also, we further notice, refers to sale to the officers, or agents of the Government by individuals and not sale by the Government or its offi cers or agents to individuals.
Section 5(2), which we have not extracted, is an excep tion to the ban imposed by section 5(1)(b) on transport of speci fied forest produce.
Section 5(2)(b) provides that notwith standing anything contained in sub section(1), any person may transport any specified forest produce within the prescribed limits from the place of purchase of any such produce to the place where such produce is required for bona fide use or for consumption.
It is further provided that any specified forest produce purchased from the State Government or any Officer or agent or any person for manufacture of goods within the State in which such specified forest produce is used as raw material or by any person for sale outside the State may be transported in accordance with the terms and conditions of a permit issued by the prescribed authority.
Section 6 provides for the constitution of an Advisory Committee in respect of each specified forest produce for each Revenue Division.
The object of the Committee is to advise the Government "in the matter of fixation of fair and reasonable price of each specified forest produce at which such produce may be purchased by the State Government or its authorised officers or agents when they are offered for sale in such division in accordance with the provisions of this Act.
" Section 7 enables the State Government, after consul tation with the Advisory Committee to fix the price at which specified forest produce may be purchased by it or by its officers or agents.
Again we see that the price to be fixed is in regard to authorised produce that may be purchased by the State Government and not forest produce that may be sold by the 328 State Government.
Section 8 enables the State Government to open depots for the convenience of the growers of specified forest produce and section 9 obliges the State Government to purchase at the price fixed under section 7 any specified forest produce offered for sale at the depot.
Section 10 enables growers of forest produce to get themselves registered.
Section 11 enables every manufacturer who uses any specified forest produce as a raw material and every trader or consum er to get himself registered.
Section 12 enables the State Government to dispose of specified forest produce purchased by the State Government or its officers or agents by sale or otherwise as the State Government may direct.
Section 13 bans any person from engaging himself in retail sale of any specified forest produce except under a licence granted under this section.
Section 15 provides for searches and seizures.
Section 16 provides for penalties.
Section 22(1) rovides "Nothing contained in the Orissa Forest Act, 14 of 1972 shall apply to specified forest produce in respect of matters for which provisions are made under this Act.
" In considering the rival submissions of the learned counsel and in defining and construing the area and the content of the Act and its provisions, it is necessary to make certain general observations regarding the interpreta tion of statutes.
A statute is best understood if we know the reason for it.
The reason for a statute is the safest guide to its interpretation.
The words of a statute take their colour from the reason for it.
How do we discover the reason for a statute? There are external and internal aids.
The external aids are Statement of Objects and Reasons when the Bill is presented to Parliament, the reports of Commit tees which preceded the Bill and the reports of Parliamen tary Committees.
Occasional excursions into the debates of Parliament are permitted.
Internal aids are the preamble, the scheme and the provisions of the Act.
Having discovered the reason for the statute and so having set the sail to the wind, the interpreter may proceed ahead.
No provision in the statute and no word of the statute may be construed in isolation.
Every provision and every word must be looked at generally before any provision or word is attempted to be construed.
The setting and the pattern are important.
It is again important to remember that Parliament does not waste its breath unnecessarily.
Just as Parliament is not expected to use unnecessary expressions, Parliament is also not expected to express itself unnecessarily.
Even as Parliament does not use any word without meaning something, Parliament does not legislate where no legislation is called for.
Parliament cannot be assumed to legislate for the sake of legislation, nor can it be assumed to make pointless legis lation.
Parliament does not indulge in legislation merely 329 to state what it is unnecessary to state or to do what is already validly done.
Parliament may not be assumed to legislate unnecessarily.
Again, while the words of an enact ment are important, the context is no less important.
For instance, "the fact that general words are used in a statute is not in itself a conclusive reason why every case falling literally within them should be governed by that statute, and the context of an Act may well indicate that wide or general words should be given a restrictive meaning" (see Halsbury, 4th edn. 44 para 874).
In Attorney General vsH.R.H. Prince Augustus, , Viscount Simonds said, "My Lords, the contention of the Attorney General was, in the first place, met by the bald, general proposition that, where the enacting part of a statute is clear and unambiguous, it cannot be cut down by the preamble, and a large part of the time which the hearing of this case occupied was spent in discussing authorities which were said to support that proposition.
I wish, at the outset, to express my dissent from it, if it means that I cannot obtain assistance from the preamble in ascertaining the meaning of the relevant enacting part.
For words, and partic ularly general words, cannot be read in isola tion; their colour and content are derived from their context.
So it is that I conceive it to be my right and duty to examine every word of a statute in its context, and I use context in its widest sense which I have already indicated as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mis chief which I can, by those and other legiti mate means, discern that the statute was intended to remedy."
In Chertsey, U.D.C.v.Mixnam 's Properties, , Lord Reid said that the general effect of the au thorities was properly stated in Maxwell 's Interpretation of Statutes as follows: "General words and phrases ,therefore, however wide and comprehensive they may be in their literal sense, must usually be construed as being limited to the actual objects of the Act.
" Though no reference was made to Maxwell this Court in Em press Mills vs Municipal Committee, Wardha, ; stated the same proposition: 330 "It is also a recognised principle of construction that general words and phrases however wide and comprehensive they may be in their literal sense, must usually be con strued as being limited to the actual objects of the Act."
In Maunsell vs Olins, , Lord Wilber force observed, " . .I am not, myself, able to solve the problem by a simple resort to plain meaning.
Most language, and partic ularly all languages used in rent legislation, is opaque: all general words are open to inspection, many general words demand inspection, to see whether they really bear their widest possible meaning.
" But we think that when we rely upon rules of construc tion we must always bear in mind ' Lord Reid 's admonition in Maunsell vs Olins (supra) to the following effect: "Then rules of construction are relied on.
They are not rules in the ordinary sense of having some binding force.
They are our serv ants not our masters.
They are aids to con structions, presumptions or pointers.
Not infrequently one 'rule ' points in one direc tion, another in a different direction.
In each case we must look at all relevant circum stances and decide as a matter of judgment what weight to attach to any particular 'rule '.
" Bearing these broad rules in mind, we may now examine the Act and the argument.
The reason for the Act is not far to seek.
Earlier we have set out the Statement of Objects and Reasons.
The Statement of Objects and Reasons is explic it that the Act was proposed to be enacted to prevent smug gling of forest produce grown in Government lands under the guise of produce grown on private lands.
This was sought to be achieved, as stated in the preamble by the creation of a State monopoly.
Since the State was already the owner of the forest produce grown in Government land, what was necessary and sufficient to be done by the proposed legislation was to vest in the Government the exclusive right to purchase forest produce grown on private land.
We may now proceed to examine the scheme and the provisions of the Act to find out whether this was not precisely what was done.
At the outset, we notice that 'grower of forest produce ' is 331 defined to include the State Government but on an examina tion of the remaining provisions of the Act we find that the expression 'grower of forest produce ' is not found in any other provision except sec.5(2)(a) and section 10.
Section 5(2)(a) provides for the transport of produce by the grower of forest produce from a place within one unit to another place within the unit.
Section 10 requires every grower of specified forest produce to get himself registered in the prescribed manner.
Obviously neither section 5(2)(a) nor section 10 has any application to the Government.
Therefore, the cir cumstance that grower of forest produce is defined so as to include the Government appears to us to be of no consequence in determining whether the Act is applicable to forest produce grown on Government lands.
On the other hand, from the extracts and summary of the other provisions of the Act that we have given earlier, we find that section after section deals with purchase of forest produce which, in the circumstances, can only refer to purchase of forest produce grown on private holdings since there can be no question of or providing for the purchase by the Government of forest produce grown on Government lands.
Section 4 enables the appointment by the State Government of agents for the pur chase of and trade is specified forest produce.
Section 5(1)(b) refers to purchase or transport of specified forest produce by the State Government, its officers and agents.
Section 5(3) refers to sale of forest produce to the Govern ment, its officers or agents.
Section 7 refers to the fixa tion of price at which the Government, its officers or agents may purchase forest produce.
Section 8 enables the opening of depots for the purchase of forest produce by the Government, its officers and agents.
Section 9 deals with the obligation of the State Government, its agents and officers to purchase specified forest produce.
All these provisions, we see, deal with purchase of forest produce by the State Government.
As stated by us earlier, this can only be of forest produce grown in private holdings and not in Government forests.
The only provision which deals with sale of forest produce by the State Government is section 12 and that again is confined to the sale of specified forest produce purchased by the State Government, its officers or agents.
Thus, section 4, section 5(1)(b), section 5(3), section 7, section 8, section 9, section 10 and section 12, all deal with the forest produce grown in private holdings and all these provisions except sections 10 and 12 deal with purchase of forest produce by the Govern ment, its officers or agents.
Section 10, as we have already seen, deals with registration of growers of forest produce and section 12 with sale of forest produce purchased by the Government.
Thus none of these provisions deals with forest produce grown in Government lands nor is there any other provision in the Act which expressly deals with forest produce grown in Government lands.
The scheme of 332 the Act is, therefore, fully in tune with the object set out in the Statement of Objects and Reasons and in the Preamble, namely, that of creating a monopoly in forest produce by making the Government the exclusive purchaser of forest produce grown in private holdings.
It was argued by the learned Additional Solicitor General that section 5(1)(a) was totally out of tune with the rest of the provisions and, while the rest of the provisions dealt with forest produce grown in private holdings, the very wide language of section 5(1)(a) made it applicable to all forest produce whether grown in private holdings or Government forests.
We do not think that it is permissible for us to construe section 5(1) (a) in the very wide terms in which we are asked to construe it by the learned Additional Solicitor General because of its wide language, as that would merely introduce needless confusion into the scheme of the Act.
Having scanned the object and the scheme of the Act, having examined each of the provisions of the Act textually and contextually, we do not think that it is proper for us to construe the words of section 5(1)(a) in their literal sense; we think that the proper way to construe section 5(1)(a) is to give a restricted meaning to the wide and general words there used so as to fit into the general scheme of the Act.
Section 5(1)(a) and 5(1)(b) are connected by the conjunction 'and ', and having regard to the circumstances leading to the enactment and the policy and design of the Act, we think that clauses (a) and (b) must be construed in such a way as to reflect each other.
We have no doubt that the contracts relating to specified forest produce which stand rescinded are contracts in rela tion to forest produce grown in private holdings only.
If the very object of the Act is to create a monopoly in forest produce in the Government so as to enable the Government, among other things, to enter into contracts, there was no point in rescinding contracts already validly entered into by the Government.
Again section 5(1) does not bar any future contracts by the Government in respect of forest produce; if so, what is the justification for construing section 5(1)(a) in such a way as to put an end to contracts already entered into by the Government.
Viewing section 5(1)(a) and 5(1)(b) together and in the light of the preamble and the Statement of Objects and Reasons and against the decor of the remain ing provisions of the Act, we have no doubt that section 5(1), like the rest of the provisions, applies to forest produce grown in private holdings and not to forest produce grown in Government lands.
One of the submissions of the learned Additional Solici tor General was that despite noticing in the Statement of Objects and Reasons that 'sal seeds ' were grown in Govern ment lands only yet 'sal seeds ' were included in the defini tion of forest produce and this was a clear indication that forest produce grown in Government lands was 333 also meant to be dealt with by the Act.
We do not think that the mere inclusion of 'sal seeds ' in the definition of forest produce can lead to such consequences in the teeth of the several provisions of the Act.
Several species of forest produce were included in the definition of forest produce and among them 'sal seeds ' were also included so as to eliminate even the remote possibility of the existence of some stray private holdings in which sal seeds may have been grown.
In the view that we have taken it is unnecessary for us to consider the further submission that Explanation II to section 5(1) saves the present contract or t, hat Explanation II is an explanation only to section 5(1)(a) and not to section 5(1)(b).
We declare that the Act and the notification issued under the Act do not apply to forest produce grown in Government forests and that it was not therefore, open to the Govern ment to treat the contract dated May 25, 1979 as rescinded.
As a result of the attitude of the Government in treating the contract as rescinded from the date of the notification the appellants were not able to collect and purchase the sal seeds from the Government forests which they have taken on lease for a period of about four years.
The question arises whether any further relief in addition to declaration may be granted by us.
It was suggested on behalf of the appellants that their lease should be extended by another period of four years.
We do not think that it is permissible for us to extend the lease for a further period of four years in that fashion.
We can only leave it open to the parties to work out their rights in the light of the declaration granted by us.
We find that various interim orders were made from time to time.
The rights of the parties will naturally have to be worked out after taking into account the interim orders.
Civil Appeal No. 6231 is an appeal by other persons similarly placed as the appellants in Civil Appeal No. 6230 of 1983 in respect of a different contract.
Both the appeals are allowed with costs in the manner indicated above.
We mentioned at the outset that although several species of forest produce were included in the definition of forest produce under the Act, the only notification issued under the Act in respect of any specie of forest produce was in respect of sal seeds, an item in respect of which no notifi cation whatsoever was necessary if what was stated in the Statement of Objects and Reasons was correct.
We are not a little surprised that the only occasion for using the ma chinery of Orissa Forest Produce (Control of Trade) Act, 1981 was to issue a notification in respect of sal seeds and not in respect of other forest produce, leaving an uneasy feeling with us that the notification was issued only with the object of putting an end to 334 these contracts solemnly entered into by the Orissa Govern ment for the avowed purpose of encouraging the setting up of certain industries in the State of Orissa.
The allegation of the appellants is that this has been done with a view to help certain industrialists outside the State.
We desire to express no opinion on this allegation.
P.S.S. Appeals allowed.
[/INST]The Petitioner 's husband, Mohan Lal Jatia, was detained by an 47 order passed under sub section
(1) of section 3 of the (COFEPOSA) by the Additional Secretary to the Government of India, Ministry of Finance on being satisfied that it was necessary to detain him 'with a view to prevent ing him from acting in any manner prejudicial to the augmen tation of foreign exchange '.
The residential premises of one Subhash Gadia, a very rich and prosperous businessman of Bombay, the brother in law of the detenu, were searched on the basis of intelli gence gathered by the Directorate of Revenue Intelligence that he was under invoicing imports of yarn from Japan and it resulted in seizure of certain documents.
As the seized documents not only revealed violation of the provisions of the Customs Act but also indicated certain payments and transactions in violation of the Foreign Exchange Regulation Act, 1973 (FERA), the matter was referred to the Enforcement Directorate Investigation from the FERA angle.
Subhash Gadia was summoned under section 40 of the FERA and his statement was recorded by Shri R .C.
Singh, an officer of the Enforcement Directorate.
The incriminating documents seized from the residential premises of Subhash Gadia and the revelations made by him during his examination in relation to the docu ments seized which revealed that the detenu Mohan Lal Jatia was engaged in foreign exchange racketeering to the tune of several crores of rupees formed the basis of the aforesaid order of detention.
The petitioner approached the High Court with petitions under article 226 of the Constitution seeking to challenge the impugned order of detention.
Upon the dismissal of the first of these petitions by the High Court, the petitioner had approached this Court under article 136, and, the Court, while declining to grant special leave to appeal, had directed that the detenu should appear before the Commissioner of Police and, upon his doing so, he should immediately be released on parole for a period of ten days.
Thereafter, the petitioner filed the second petition under article 226 with an application for extending the period of parole which was rejected by the High Court.
The petition filed under article 136 against refusal of interim relief by the High Court was also rejected by this Court.
Thereafter, the High Court dismissed the writ petition, against which, the petitioner sought special leave to appeal and also filed a petition under article 32 challenging the order of detention.
While issuing notice on the petitioner, the Court directed the release of the detenu on parole for a week and by a subse quent order further extended the period of parole.
Both the special leave petition and the writ petition were heard together.
48 In the writ petition filed before the High Court from which the petition for special leave petition arose, the petitioner had challenged the order of detention on two grounds: that there was no material on which the satisfac tion of the detaining authority could be reached that the detention of the detenu was necessary; and, that there was total non application of mind on the part of the detaining authority to the material on record, and in particular, to the factual mis statements contained in paragraph 44 of the grounds of detention as detailed in entries 'A ' to 'F '.
The writ petition filed before this Court was principally based on the ground that there was information of the Constitu tional Safeguard Contained in article 22(5) of the Constitution inasmuch as there was failure on the part of the detaining authority to consider an alleged representation made by the detenu under section 8(b) read with section 11 01 ' the COFEPOSA against the order of detention addressed to the President of India which was presented through one Ashok Jain at the President 's Secretariat.
The other substantial question raised was that R.C. Singh was not a gazetted officer of Enforcement within the meaning of section 40 of the FERA and therefore the statements recorded by him could not be re garded as valid statements under the aforesaid section 40 and thus could not form the basis upon which the satisfaction of the detaining authority could be reached.
Alternatively, it was contended that the statements recorded by him could not be treated as statements recorded under section 39.
The respondents not only denied that the detenu had addressed any representation to the President of India but made an application under section 340, Cr.
P.C. for prosecution of persons responsible for forgoing the document purporting to be the alleged representation made by the detenu and for making certain interpolations in the Dak Register kept at the President 's Secretariat.
The respondents also placed on record an order showing that R.C. Singh had been appointed an officer of enforcement on ad hoc basis three years before he had summoned Subhash Gadia for examination.
Dismissing both the petitions, HELD: 1. (a) The expression 'officers of Enforcement ' as defined in section 3 of the Foreign Exchange Regulation Act, 1973, embraces within itself not only (a) a Director (b) Additional Director (c) Deputy Director and (d) Assistant Director of Enforcement but also (e) such other class of officers of Enforcement as may be appointed for the purpose or ' the Act.
Obviously, R.C. Singh who was Assistant En forcement Officer having been appointed as an officer of Enforcement on an ad hoc basis 49 in 1982 tell within the category 'such other class of offi cers ' covered by section 3(e).
Sub section
(1) of section 4 provides that the Central Government may appoint such persons, as it thinks fit, to be officers of Enforcement.
Sub section
(2) there of provides for delegation of such power of appointment by the Central Government to a Director of Enforcement or an Additional Director of Enforcement etc., to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement.
Sub section
(3) of section 4 provides that subject to such conditions and limitations as the Central Government may impose, an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under the Act.
Undoubtedly R.C. Singh was discharging his duties and functions as a gazetted officer of Enforcement under section 40(1) when he recorded the statements in question.
The expression 'gazetted officer of Enforcement ' appearing in section 40(1) must take its colour from the context in which it appears and it means any person appointed to be an offi cer of Enforcement under section 4 holding a gazetted post.
There is no denying the fact that R.C. Singh answered that de scription.
[69G H; 70A D] (b) Even if the contention that R.C. Singh was not a gazetted officer of Enforcement within the meaning of section 40(1) were to prevail, it would be of little consequence.
If evidence is relevant the Court is not concerned with the method by which it was obtained.
There is a long line of authority to support the opinion that the Court is not concerned with how evidence is obtained.
The rule is however subject to an exception.
The Judge has a discretion to exclude evidence procured, after the commencement of the alleged offence, which although technically admissible appears to the Judge to be unfair.
This being the substan tive law, it follows that the detaining authority was enti tled to rely upon the statements recorded by R.C. Singh under section 40(1).
Even if R.C. Singh was not competent to record such statements under section 40(1), the statements were clearly relatable to section 39(b) of the Act.
It cannot there fore be said that there was no material on which the detain ing authority could have based his subjective satisfaction.
[70E H] Barindra Kumar Ghose vs Emperor, ILR ; Kuruma vs Reginam, ; R.V. Sang; , ; Magruder Patodia vs R.K. Birla & Ors.
, ; ; R.M. Malkani vs State of Maharashtra, ; ; and Pooran Mal, etc.
vs Director of Inspection; , ; referred to.
(c) Where an office exists under the jaw, it matters not how the appointment of the incumbent is made, do far as validity of its acts are 50 concerned.
It is enough that he is clothed with the insignia of the office, and exercises its powers and functions.
The official acts of such persons are recognised as valid under the de facto doctrine, born of necessity and public policy to prevent needless contusion and endless mischief.
[69B C] Gokaraju Rangaraju vs State of Andhra Pradesh, ; ; Pulin Behari vs King Emperor, [1912] 15 Cal.
ZJ 517; and P.S. Menon vs State of Kerala & Ors., AIR (1970) Kerala 165; referred to.
(a) It has long been established that the subjective satisfaction of the detaining authority as regards the factual existence of the condition on which the order of detention can be made, i.e., the grounds of detention con stitutes the foundation for the exercise of the power of detention and the Court cannot be invited to consider the propriety or sufficiency of the grounds on which the satis faction of the detaining authority is based.
Nor can the Court, on a review of the grounds, substitute its own opin ion for that of the authority.
But this does not imply that the subjective satisfaction of the detaining authority is wholly immune from the power of judicial review.
It inferen tially follows that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, the Court can always examine whether the requisite satisfaction was arrived at by the authority; if it is not, the condition precedent to the exercise of the power would not be fulfilled and the exercise of the power would be bad.
The simplest case is where the authority has not applied its mind at all; in such a case, the authority could not possibly be satisfied as regards the tact in respect of which it is required to be satisfied.
[66E H] Emperor vs Shibnath Banerjee & Ors., AIR (1943) FC 75 and Khudi Ram Das vs State of West Bengal & Ors.
, ; , referred to.
In this case, it is quite apparent that the so called factual mis statements listed as items 'A ' to 'F ' in para graph 44 of the grounds of detention are not mis statements at all.
The High Court rightly held that the alleged mis takes or infirmities pointed out were not so material or serious in nature as to vitiate the impugned order of deten tion and rightly observed that the facts stated in paragraph 44 of the grounds cannot be read in isolation and the grounds of detention have to be read as a whole with the accompanying documents and material.
The grounds of deten tion was only one, viz., that the detenu was engaged 51 in activities prejudicial to the augmentation of foreign exchange and therefore it became necessary in the public interest to place him under detention.
It cannot be said on a perusal of the grounds that there was no material on which the detaining authority could have acted.
[74E; 78A B] (b) The contention that, even if one of the grounds or reasons which led to the subjective satisfaction of the detaining authority is non existent or misconceived or irrelevant, the order of detention would be invalid since it is not possible to predicate as to whether the detaining authority would have made an order for detention even in the absence of non existent or irrelevant ground, cannot be accepted.
That principle was enunciated by this Court some 30 years ago.
With the change in law brought about by the introduction of section 5A of the COFEPOSA Act that though one or more of the grounds of detention were found to be vague, non existent, not relevant, not connected, irrational or invalid for any other reason whatsoever, the detention could be sustained on the remaining grounds, that principle no longer holds goods.
[63A C] Shibban Lal Saxena vs State of Uttar Pradesh & Ors.
, ; ; Dr. Ram Manohar Lohia vs State of Bihar & Ors., ; and Pushkar Mukherjee & Ors.
vs State of West Bengal; , ; referred to.
Mohd. Shakeel Wahid Ahmed vs State of Maharashtra & Ors.
, ; ; Asha Devi vs K. Shivraj, Addi tional Chief Secretary; , and Kurjibhai Dhanjibhai Patel vs State of Gujarat, ; distinguished.
(c) Sufficiency of grounds is not for the Court but for the detaining authority for the formation of his subjective satisfaction that the detention of a person under section 3(1) of the COFEPOSA Act is necessary with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange.
The Act is a law relating to preventive detention.
That being so, the power of detention exercisable under sub section
(1) of section 3 of the Act is subject to the limi tations imposed by the Constitution.
When the liberty of the subject is involved, it is the bounden duty of the court to satisfy itself that all the sate guards provided by the law have been scrupulously observed and that the subject is not deprived of his personal liberty otherwise than in accord ance with law.
Nevertheless, the community has a vital interest in the proper enforcement of its laws, particularly in an area such as conservation of foreign exchange and prevention of smuggling activities in dealing effectively with persons engaged in such smuggling and foreign exchange 52 rackteering by ordering their preventive detention and at the same time, in assuring that the law is not used arbi trarily t9 suppress the citizen of his right to life and liberty.
The Government must therefore ensure that the constitutional safeguards of article 22(5) read with subs.
(1) of section 3 of the Act are fully complied with.
[65A B] Mangalbhai Motiram Patel vs State of Maharashtra, ; and Narendra Purshotam Umrao vs B.B. Gujral, ; ; relied on.
In the instant case there was no failure on the part of the Government to discharge its obligation under article 22(5).
The relevant records of the Enforcement Directorate placed before us clearly show that there was sufficient material for the formation of the subjective satisfaction of the detaining authority under sub s.(1) of section 3 of the Act.
They also show that the detenu was afforded a reasonable opportu nity for making an effective representation against his detention.
[66C D] 3.
(a) Preventive detention is an extraordinary measure resorted to by the State on account of compulsive factors pertaining to maintenance of public order, safety of public life and the welfare of the economy of the country.
The need for this extraordinary measure was realised by the founding fathers of the Constitution as an inevitable necessity and hence a specific provision has been made in cl.
(3) of article 22 providing for preventive detention.
Placing the interests of the nation above the individual liberty of the anti social and dangerous elements who constitute a grave menace to society by their unlawful acts, the preventive detention laws have been made for effectively keeping out of circula tion the detenus during a prescribed period by means of preventive detention.
The underlying object cannot be achieved if the detenu is granted parole and brought out of detention.
Even if any conditions are imposed with a view to restrict the movements of the detenu while on parole, the observance of those conditions can never lead to an equation of the period of parole with the period of detention.
Due to the spectacular achievements in modern communication system, a detenu, while on parole, can sit in a room in a house or hotel and have contracts with all his relations, friends and confederates in any part of the country or even any part of the world and thereby pursue his unlawful activities if so inclined.
It will, therefore, be futile to contend that the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should find a natural merger and they stand denuded of their distinctive characteristics.
It will not be out of place to point out here that inspite of the Criminal Procedure Code providing 53 for release of the convicted offenders on probation of good conduct, it expressly provides, when it comes to a question of giving set off to a convicted person in the period of sentence, that only the actual pre trial detention period should count for set off and not the period of bail even if bail had been granted subject to stringent conditions.
In contrast.
in so far as preventive detentions under the COFEPOSA Act are concerned.
it has been specifically laid down in section 12(6) that a person against whom an order of detention has been passed shall not be released on bail or bail bond or otherwise and that any revocation or modifica tion of the order of detention can be made by the Government in exercise of its power under section 11.
[78E H; 79G] (b) The question whether the period of parole should be treated as part of the detention period itself was elabo rately considered by this Court in Smt.
Poonam Lata vs M.L. Wadhawan & Ors., and it was held therein that the period of parole has to be excluded in reckoning the period of deten tion under sub section
(1) of section 3 of the COFEPOSA Act.
[78C] Smt.
Poonam Lata vs M.L. Wadhawan & Ors.
J.T., , relied on.
The respondents have placed sufficient material before the Court to show that the alleged representation addressed to the President of India was neither filed by the detenu nor was it received at the President 's Secretariat.
The attempt to assail the order of detention on the ground of violation of the constitutional sate guard enshrined in article 22(5) and the violation of section 11 of the Act by the Central Government is a well planned and ingenuous move on the part of the detenu.
The facts revealed not only warrant an inference that the detenu and his associates have gone to deplorable lengths to create evidence favourable to the detenu but arouse convulsive thoughts in our minds about the efficiency and integrity of the concerned sections of the President 's Secretariat.
The case with which and the fascile manner in which the detenu 's agent Ashok Jain claims to have entered the President 's Secretariat and delivered the Dak and obtained an endorsement of acknowledgement in a copy of the representation and the length to which the concerned Secretariat staff have gone to give credence to the version of Ashok Jain not only reveals the deep fall in standards but also lack of security and vigilance.
We feel fully persuaded to hold that this is a fit case in which the detenu, the petitioner, Ashok Jain and all other persons responsible for the fabrication of false evidence should be prosecuted lot the offences committed by them.
We defer the passing of 54 final orders on the application filed under section 340, Cr.
P.C. till the investigation by the Central Bureau of Investiga tion is completed.
[80E F; 82F H; 83A B]
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 183 of 1956.
Appeal from the judgment and order dated September 11, 1953, of the Bombay High Court, in Income tax Reference No. 23 of 1953.
A. V. Viswanatha Sastri, section, N. Andley and J. B. Dadachanji, for the appellants.
M. C. Setalvad, Attorney General for India, K. N. Rajagopal Sastri, and D. Gupta, for the respondent.
August 4.
The Judgment of the Court was delivered by DAS C. J.
This is an appeal from the judgment and order of the High Court of Bombay delivered on September 11, 1953, on a reference made by the Income tax Appellate Tribunal under section 66 (1) of the Indian Income tax Act, whereby the High Court answered the referred question in the affirmative and directed the appellant to pay the costs of the respondent.
The appellant, which is a registered firm and is hereinafter referred to as " the assessee firm ", was appointed the managing agent of Godrej Soaps Limited (hereinafter called the " managed company ").
It has been working as such managing agent since October 1928 upon the terms and conditions recorded originally in an agreement dated October 28, 1928, 529 which was subsequently substituted by another agreement dated December 8, 1933, (hereinafter referred to as " the Principal Agreement ").
Under the Principal Agreement the assessee firm was appointed Managing Agent for a period of thirty years from November 9, 1933.
Clause 2 of that Agreement provided as follows: " The Company shall during the subsistence of this agreement pay to the said firm and the said firm shall receive from the company the following remuneration, that is to say: (a) A commission during every year at the rate of twenty per cent.
on the net profits of the said company after providing for interest on loans, advances and debentures (if any), working expenses, repairs, outgoings and depreciation but without any deduction being made for income tax and super tax and for expenditure on capital account or on account of any sum which may be set aside in each year out of profits as reserved fund.
(b) In case such net profits of the Company after providing for interest on loans, advances and debentures (if any), working expenses, depreciation, repairs and outgoings and after deduction therefrom the commission provided for by sub clause (a) shall during any year exceed a sum of rupees one lac the amount of such excess over rupees one lac up to a limit of rupees twenty four thousand.
(c) In case such net profits of the Company after providing for interest on loans, advances and debentures (if any), working expenses, depreciation, repairs and outgoings and after also deducting therefrom the commission provided for by subclause (a) shall during any year exceed a sum of rupees one lac and twenty four thousand one half of such excess over rupees one lac and twenty four thousand shall be paid to the firm and the other half to the shareholders.
" Some of the shareholders and directors of the managed company felt that the scale of remuneration paid to the assessee firm under cl.
(2) of the Principal Agreement was extraordinarily excessive and unusual and 530 should be modified.
Accordingly negotiation were started for a reduction of the remuneration and, after some discussion, the assessee firm and the managed company arrived at certain agreed modifications which were eventually recorded in a special resolution passed at the extraordinary general meeting of the managed company held on October 22, 1946.
That, resolution was in the following terms: " Resolved that the agreement arrived at between the managing agents on the one hand and the directors of your Company on the other hand, that the managing agents, in consideration of the Company paying Rs. 7,50,000 as compensation, for releasing the Company from the onerous term as to remuneration contained in the present managing agency agreement should accept as remuneration for the remaining term of their managing agency ten per cent.
of the net annual profits of the Company as defined in section 87C, Sub section (3) of the Indian Companies Act in lieu of the higher remuneration to which they are now entitled under the provisions of the existing managing agency agreement be and the same is hereby approved and confirmed.
Resolved that the Company and the managing agents do execute the necessary document modifying the terms of the original managing agency agreement in accordance with the above agreement arrived at between them.
Such document be prepared by the Company 's solicitors and approved by the managing agents and the directors shall carry the same into effect with or without modification as they shall think fit." The agreed modifications were thereafter embodied in a Supplementary Agreement made between the assessee firm and managed company on March 24, 1948.
After reciting the appointment of the assessee firm as the Managing Agent upon terms contained in the Principal Agreement and further reciting the agreement arrived at between the parties and the resolution referred to above, it was agreed and declared as follows 531 " 1.
That the remuneration of the Managing Agents as from the 1st day of September 1946 shall be ten per cent.
of the net annual profits of the Company as defined in section 87C, sub section (3) of the Indian Companies Act, 1913, in lieu of the higher remuneration as provided in the above recited cl.
(2) of the Principal Agreement.
Subject only to the variations herein contained and such other alterations as may be necessary to make the Principal Agreement consistent with these presents the principal agreement shall remain in full force and effect and shall be read and construed and be enforceable as if the terms of these presents were inserted therein by way of substitution.
" The sum of Rs. 7,50,000 was paid by the managed company and received by the assessee firm in the calendar year 1947 which was the accounting year for the assessment year 1948 49.
In the course of the assessment proceedings for the assessment year 1948 49, it was contended by the departmental representative, (i) that though the payment of Rs. 7,50,000 had been described as compensation, the real object and consideration for the payment was the reduction of remuneration, (ii) that being the character of payment, it was a lump sum payment in consideration of the variation of the terms of employment and was, therefore, not a capital receipt but was a revenue receipt, and (iii) that there was, in fact, no break in service and the payment was made in course of the continuation of the service and, therefore, represented a revenue receipt of the managing agency business of the assessee firm.
The assessee firm, on the other hand, maintained that the sum of Rs. 7,50,000 was a payment made by the managed company to the assessee firm wholly in discharge of its contingent liability to pay the higher remuneration and in order to discharge itself of an onerous contingent obligation to pay higher_ remuneration and it was, therefore, a capital expenditure incurred by the managed company and a capital receipt obtained by the assessee firm and was as such not liable to tax.
532 The Income tax Officer treated the sum of Rs. 7,50,000 as a revenue receipt in the hands of the assessee firm and taxed it as such.
On appeal this decision was confirmed by the Appellate Assistant Commissioner and thereafter, on further appeal, was upheld by the Tribunal by its order dated July 23, 1952.
At the instance of the assessee firm the Tribunal, under section 66(1) of the Act, made a reference to the High Court raising the following question of law: " Whether on the facts and in the circumstances of the case the sum of Rs. 7,50,000 is a revenue receipt liable to tax.
The said reference was heard by the High Court and by its judgment, pronounced on September 11, 1953, the High Court answered the referred question in the affirmative and directed the assessee firm to pay the costs of the reference.
The High Court, however, gave to the assessee firm a certificate of fitness for appeal to this Court and that is how the appeal has come before us.
As has been said by this Court in Commissioner of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd.(1), " it is not always easy to decide whether a particular payment received by a person is his income or whether it is to be regarded as his capital receipt".
Eminent Judges have observed that " income " is a word of the broadest connotation and that it is difficult, and perhaps impossible, to define it by any precise general formula.
Though in general the distinction between an income and a capital receipt is well recognised, cases do arise where the item lies on the borderline and the problem has to be solved on the particular facts of each case.
No infallible criterion or test has been or can be laid down and the decided cases are only helpful in that they indicate the kind of consideration which may relevantly be borne in mind in approaching the problem.
The character of payment received may vary according to the circumstances.
Thus, the amount received as consideration for the sale of a plot of land may ordinarily be capital; but if the business of the recipient is to (1) ; 228.
533 buy and sell lands, it may well be his income.
It is, therefore, necessary to approach the problem keeping in view the particular facts and circumstances in which it has arisen.
There can be no doubt that by paying this sum of Rs. 7,50,000 the managed company has secured for itself a release from the obligation to pay a higher remuneration to the assesee firm for the rest of the period of managing agency covered by the Principal Agreement.
Prima facie, this release from liability to pay a higher remuneration for over 17 years must be an advantage gained by the managed company for the benefit of its business and the immunity thus obtained by the managed company may well be regarded as the acquisition of an asset of enduring value by means of a capital outlay which will be a capital expenditure according to the test laid down by Viscount Cave, L.C., in Atherton vs British Insulated and Helsby Cables Limited(1) referred to in the judgment of this Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax (2).
If the sum of Rs. 7,50,000 represented a capital expenditure incurred by the managed company, it should, according to learned counsel for the assessee firm, be a capital receipt in the hands of the assessee firm, for the intrinsic characteristics of capital sums and revenue items respectively are essentially the same for receipts as for expenditure.
(See Simon 's Income tax, II Edn., Vol. 1, para. 44, p. 31).
But, as pointed out by the learned author in that very paragraph, this cannot be an invariable proposition, for there is always the possibility of a particular sum changing its quality according as the circumstances of the payer or the recipient are in question.
Accordingly, the learned Attorney General appearing for the respondent contends that we are not concerned in this appeal with the problem, whether, from the point of view of the managed company, the sum represented a capital expenditure or not but that we are called upon to determine whether this sum represented a capital receipt in the hands of the assessee firm.
(1) (2) [19551 1 S.C.R. 972.
68 534 In the Resolution adopted by the managed company as well as in the recitals set out in the Supplementary Agreement this sum has been stated to be a payment "as compensation for releasing the company from the onerous term as to remuneration contained" in the Principal Agreement.
It is true, as said by the High Court and as reiterated by the learned Attorney General, that the language used in the document is not decisive and the question has to be determined by a consideration of all the attending circumstances; nevertheless, the language cannot be ignored altogether but must be taken into consideration along with other relevant circumstances.
This sum of Rs. 7,50,000 has undoubtedly not been paid as compensation for the termination or cancellation of an ordinary business contract which is a part of the stock in trade of the assessee and cannot, therefore, be regarded as income, as the amounts received by the assessee in The Commissioner of Income tax and Excess Profits Tax vs The South India Pictures Ltd. (1) and in The Commissioner of Income tax, Nagpur vs Rai Bahadur Jairam Valji (2) had been held to be.
Nor can this amount be said to have been paid as compensation for the cancellation or cessation of the managing agency of the assessee firm, for the managing agency continued and, therefore, the decision of the Judicial Committee of the Privy Council in The Commissioner of Income tax vs Shaw Wallace and Co.(1) cannot be invoked.
It is, however, urged that for the purpose of rendering the sum paid as compensation to be regarded as a capital receipt, it is not necessary that the entire managing agency should be acquired.
If the amount was paid as the price for the sterilisation of even a part of a capital asset which is the framework or entire structure of the assessee 's profit making apparatus, then the amount must also be regarded as a capital receipt, for, as said by Lord Wrenbury in Glenboig Union Fireclay Co. Ltd. vs The Commissioners of Inland Revenue (4), "what is true of the whole must be equally true of part " a principle which has been adopted by (1) ; , 228.
(3) (1932) L.R. 59 I.A. 206.
(2) ; (4) 535 this Court in The Commissioner of Income tax, Hyderabad Deccan vs Messrs. Vazir Sultan and Sons(1).
The learned Attorney General, however, contends that this case is not governed by the decisions in Shaw Wallace 's case (2) or Messrs. Vazir Sultan and Sons ' case(1) because in the present case there was no acquisition of the entire managing agency business or sterilisation of any part of the capital asset and the business structure or the profit making apparatus, namely, the managing agency, remains unaffected.
There is no destruction or sterilisation of any part of the business structure.
The amount in question was paid in consideration of the assessee firm agreeing to continue to serve as the managing agent on a reduced remuneration and, therefore, it bears the same character as that of remuneration and, therefore, a revenue receipt.
We do not accept this contention.
If this argument were correct, then, on a parity of reasoning, our decision in Messrs. Vazir Sultan and Sons ' case (1) would have been different, for, there also the agency continued as before except that the territories were reduced to their original extent.
In that case also the agent agreed to continue to serve with the extent of his field of activity limited to the State of Hyderabad only.
To regard such an agreement as a mere variation in the terms of remuneration is only to take a superficial view of the matter and to ignore the effect of such variation on what has been called the profit making apparatus.
A managing agency yielding a remuneration calculated at the rate of 20 per cent.
of the profits is not the same thing as a managing agency yielding a remuneration calculated at 10 per cent.
of the profits.
There is a distinct deterioration in the character and quality of the managing agency viewed as a profit making apparatus and this deterioration is of an enduring kind.
The reduced remuneration having been separately provided, the sum of Rs. 7,50,000 must be regarded as having been paid as compensation for this injury to or deterioration of the managing agency just as the amounts paid in Glenboig 's case (3) (1) Civil Appeal NO. 346 of 1957, decided (2) (1932) L.R. 59 I. A. 206.
on March 20, 1959 ; (3) 536 or Messrs. Vazir Sultan 's case(1) were held to be.
This is also very nearly covered by the majority decision of the English House of Lords in Hunter vs Dewhurst(2).
It is true that in the later English cases of Prendergast vs Cameron(3) and Wales Tilley (4), the decision in Hunter vs Dewharst(2) was distinguished as being of an exceptional and special nature but those later decisions turned on the words used in r. 1 of Sch.
E. to the English Act.
Further, they were cases of continuation of personal service on reduced remuneration simpliciter and not of acquisition, wholly or in part, of any managing agency viewed as a profit making apparatus and consequently the effect of the agreements in question under which the payment was made upon the profit making apparatus, did not come under consideration at all.
On a construction of the agreements it was held that the payments made were simply remuneration paid in advance representing the difference between the higher rate of remuneration and the reduced remuneration and as such a revenue receipt.
The question of the character of the payment made for compensation for the acquisition, wholly or in part, of any managing agency or injury to or deterioration of the managing agency as a profit making apparatus is covered by our decisions hereinbefore referred to.
In the light of those decisions the sum of Rs. 7,50,000 was paid and received not to make up the difference.
between the higher remuneration and the reduced remieration but was in reality paid and received as compensation for releasing the company from the onerous terms as to remuneration as it was in terms expressed to be.
In other words, so far as the managed company was concerned, it, was paid for see tiring immunity from the liability to pay highser remuneration to the assessee firm for the rest of the term of the managing agency and, therefore, a capital expenditure and so far as the assessee firm was concerned, it was received as compen sation for the deterioration or injury to the managing agency by reason of the release of its rights to get higher remuneration and, therefore, a capital receipt (1) Civil Appeal No. 346 of 1957.
decided on March 20, 1959; (2) (3) (4) ; 537 within the decisions of this Court in the earlier cases referred to above.
In the light of the above discussion it follows, therefore, that the answer to the referred question should by in the negative.
The result, therefore, is that this appeal is allowed, the answer given by the High Court to the question is set aside and the question is answered in the negative.
The appellant must get the costs of the reference in the High Court and in this Court.
Appeal allowed.
[/INST]The term "foodstuff" is ambiguous.
In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric.
In a wider sense it includes everything that goes toto the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible.
Whether the term is used in a particular statute in its wider or narrower sense cannot be answered in the abstract 878 but must be answered with due regard to the background and context.
Turmeric is a "foodstuff" within the meaning of cl.
(3) of the Spices (Forward Contract Prohibition) Order of 1944, read with s.2 (a)of the Essential Supplies (Temporary Powers) Act (XXIV of 1946).
The said order of 1944 falls within the purview of section 5 of Ordinance No. XVIII of 1946, which was later reenacted as Act XXIV of 1946, and it is equally saved by section 17 (2) of the Act.
James vs Jones , Hinde vs Allmond (87 L.J. K.B. 893), Sainsbury vs Saunders referred to.
</s>
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<s>[INST] Summarize the judgementNo. 528, of 1959.
Appeal from the judgment and order dated September 20, 1957, of the former Bombay High Court in I.T.R. No. 15 of 1957.
Hardayal Hardy and D. Gupta, for the appellant.
R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent.
635 1960.
November 24.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The Commissioner of Income tax, Bombay City 11, has filed this appeal with a certificate under section 66A(2) of the Income tax Act, against the judgment and order of the High Court of Bombay dated September 20, 1957, in Income tax Reference No. 15 of 1957.
The question referred to the High Court for its opinion by the Income tax Appellate Tribunal, Bombay was: "Whether the assessee is entitled to a deduction of Rs. 1,350 and Rs. 18,000 from his total income of the previous year relevant to the assessment years, 1953 54, 1954 55?" The assessee, Sitaldas Tirathdas of Bombay, has many sources of income, chief among them being property, stocks and shares, bank deposits and share in a firm known as Messrs. Sitaldas Tirathdas.
He follows the financial year as his accounting year.
For the assessment years 1953 54 and 1954 55, his total income was respectively computed at Rs. 50,375 and Rs. 55,160.
This computation was not disputed by him, but he sought to deduct therefrom a sum of Rs. 1,350 in the first assessment year and a sum of Rs. 18,000 in the second assessment year on the ground that under a decree he was required to pay these sums as maintenance to his wife, Bai Deviben and his children.
The suit was filed in the Bombay High Court (Suit No. 102 of 1951) for maintenance allowance, separate residence and marriage expenses for the daughters and for arrears of maintenance, etc.
A decree by consent was passed on March 11, 1953, and maintenance allowance of Rs. 1,500 per month was decreed against him.
For the account year ending March 31, 1953 only one payment was made, and deducting Rs. 150 per month as the rent for the flat occupied by his wife and children, the amount paid as maintenance under the decree came to Rs. 1,350.
For the second year, the maintenance at Rs. 1,500 per month came to Rs. 18,000 which was claimed as a deduction.
636 No charge on the property was created, and the matter does not fall to be considered under section 9(1)(iv) of the Income tax Act.
The assessee, however, claimed this deduction on the strength of a ruling of the Privy Council in Bejoy Singh Dudhuria vs Commissioner of Income tax (1).
This contention of the assesses was disallowed by the Income tax Officer, whose decision was affirmed on appeal by the Appellate Assistant Commissioner.
On further appeal, the Tribunal observed: "This is a case, pure and simple, where an assessee is compelled to apply a portion of his income for the maintenance of persons whom he is under a personal and legal obligation to maintain.
The Income tax Act does not permit of any deduction from the total income in such circumstances.
" The Tribunal mentioned in the statement of the case that counsel for the assessee put his contention in the following words: "I claim a deduction of this amount from my total income because my real total income is whatever that is " computed, which I do not dispute, less the maintenance amount paid under the decree.
" The assessee appears to have relied also upon a decision of the Lahore High Court in Diwan Kishen Kishore vs Commissioner of Income tax(2).
The Tribunal, however, referred the above question for the opinion of the High Court.
The High Court followed two earlier decisions of the same Court reported in Seth Motilal Manekchand vs Commissioner of Income tax (3) and Prince Khanderao Gaekwar vs Commissioner of Income tax (4), and held that, as observed in those two cases, the test was the same, even though there was no specific charge upon property so long as there was an obligation upon the assessee to pay, which could be enforeed in a Court of law.
In Bejoy Singh Dudhuria 's case (1), there was a charge for maintenance created against the assessee, and the Privy Council had observed that the income must be deemed to have never reached that assessee, (1) (3) (2) (4) 637 having been diverted to the maintenance holders.
In the judgment under appeal, it was held that the income to the extent of the decree must be taken to have been diverted to the wife and children, and never became income in the hands of the assessee.
The Commissioner of Income tax questions the correctness of this decision and also of the two earlier decisions of the Bombay High Court.
We are of opinion that the contention raised by the Department is correct.
Before we state the principle on which this and similar cases are to be decided, we may refer to certain rulings, which illustrate the aspects the problem takes.
The leading case on the subject is the decision of the Judicial Committee in Bejoy Singh Dudhuria 's case(1).
There, the stepmother of the Raja had brought a suit for maintenance and a compromise decree was passed under which the stepmother was to be paid Rs. 1,100 per month, which amount was declared a charge upon the properties in the hands of the Raja, by the Court.
The Raja sought to deduct this amount from his assessable income, which was disallowed by the High Court at Calcutta.
On appeal to the Privy Council, Lord Macmillan observed as follows: "But their Lordships do not agree with the learned Chief Justice in his rejection of the view that the sums paid by the appellant to his step mother were not 'income ' of the appellant at all.
This in their Lordships ' opinion is the true view of the matter.
When the Act by Section 3 subjects to charge 'all income ' of an individual, it is what reaches the individual as income which it is intended to charge.
In the present case the decree of the court by charging the appellant 's whole resources with a specific payment to his step mother has to that extent diverted his income from him and has directed it to his stepmother; to that extent what he receives for her is not his income.
It is not a case of the application by the appellant of part of his income in a particular way, it is rather the allocation of a sum out of his revenue before it becomes income in his hands." (1) 81 638 Another case of the Privy Council may well be seen in this connection.
That case is reported in P. C. Mullick vs Commissioner of Income tax, Bengal (1).
There, a testator appointed the appellants as executors and directed them to pay Rs. 10,000 out of the income on the occasion of his addya sradh.
The executors paid Rs. 5,537 for such expenses, and sought to deduct the amount from the assessable income.
The Judicial Committee confirmed the decision of the Calcutta High Court disallowing the deduction, and observed that the payments were made out of the income of the estate coming to the hands of the executors and in pursuance of an obligation imposed upon them by the testator.
It observed that it was not a case in which a portion of the income had been diverted by an over riding title from the person who would have received it otherwise, and distinguished the case in Bejoy Singh Dudhuria 's case (2).
These cases have been diversely applied in India, but the facts of some of the cases bring out the distinction clearly.
In Diwan Kishen Kishore vs Commissioner of Income tax (3), there was an impartible estate governed by the law of primogeniture, and under the custom applicable to the family, an allowance was payable to the junior member.
Under an award given by the Deputy Commissioner acting as arbitrator and according to the will of the father of the holder of the estate and the junior member, a sum of Rs. 7,200 per year was payable to the junior member.
This amount was sought to be deducted on the ground that it was a necessary and obligatory payment, and that the assessable income must, therefore, be taken to be pro tanto diminished.
It was held that the income never became a part of the income of the family or of the eldest member but was a kind of a charge on the estate.
The allowance given to the junior member, it was held, in the case of an impartible estate was the separate property of the younger member upon which he could be assessed and the rule that an allowance given by the head of a Hindu coparcenary to its members by way of maintenance was liable to be assessed (1) (2) (3) 639 as the income of the family, had no application.
It was also observed that if the estate had been partible and partition could have taken place, the payment to the junior member out of the coparcenary funds would have stood on a different footing.
In that case, the payment to the junior member was a kind of a charge which diverted a portion of the income from the assessee to the junior member in such a way that it could not be said that it became the income of the assessee.
In Commissioner of Income tax, Bombay vs Makanji Lalji (1), it was stated that in computing the income of a Hindu undivided family monies paid to the widow of a deceased coparcener of the family as maintenance could not be deducted, even though the amount of maintenance had been decreed by the Court and had been made a charge on the properties belonging to the family.
This case is open to serious doubt, because it falls within the rule stated in Bejoy Singh Dudhuria 's case (2); and though the High Court distinguished the case of the Judicial Committee, it appears that it was distinguished on a ground not truly relevant, namely, that in Bejoy Singh Dudhuria 's case (2) the AdvocateGeneral had abandoned the plea that the stepmother was still a member of the undivided Hindu family.
It was also pointed out that this was a case of assessment as an individual and not an assessment of a Hindu undivided family.
In Commissioner of Income tax, Bombay vs D. R. Naik (3), the assessee was the sole surviving member of a Hindu undivided family.
There was a decree of Court by which the assessee was entitled to receive properties as a residuary legatee, subject, however, to certain payments of maintenance to widows.
The widows continued to be members of the family.
It was held that though section 9 of the Income tax Act did not apply, the assessee 's assessable income was only the balance left after payment of the maintenance charges.
It appears from the facts of the case, however, that there was a charge for the maintenance (1) (2) (3) 640 upon the properties of the assessee.
This case also brings out correctly the principles laid down by the Judicial Committee that if there be an overriding obligation which creates a charge and diverts the income to some one else, a deduction can be made of the amounts so paid.
The last case may be contrasted with the case reported in P. C. Mullick and D. C. Aich, In re(1).
There, under a will certain payments had to be made to the beneficiaries.
These payments were to be made gradually together with certain other annuities.
It was held that the payments could only be made out of the income received by the executors and trustees from the property, and the sum was assessable to income tax in the hands of the executors.
It was pointed out that under the wilt it was stated that the amounts were to be paid "out of the income of my property", and thus, what had been charged was the income of the assessees, the executors.
The case is in line with the decision of the Privy Council in P. C. Mullick vs Commissioner of Income tax, Bengal(2).
In Hira Lal, In re,(3) there was a joint Hindu family, and under two awards made by arbitrators which were made into a rule of the Court, certain maintenance allowances were payable to the widows.
These payments were also made a charge upon the property.
It was held that inasmuch as the payments were obligatory and subject to an overriding charge they must be excluded.
Here too, the amount payable to the widows was diverted from the family to them by an overriding obligation in the nature of a charge, and the income could not be said to accrue to the joint Hindu family at all.
In Prince Khanderao Gaekwar vs Commissioner of Income tax (4), there was a family trust out of which two grandsons of the settlor had to be paid a portion of the income.
It was provided that if their mother lived separately, then the trustees were to pay her Rs. 18,000 per year.
The mother lived separately, and two deeds were executed by which the two grandsons agreed to pay Rs. 15,000 per year to the mother, (1) (3) (2) (4) 641 and created a charge on the property.
The sons having paid Rs. 6,000 in excess of their obligations, sought to deduct the amount from their assessable income, and it was allowed by the Bombay High Court, observing that though the payment was a voluntary payment, it was subject to a valid and legal charge which could be enforced in a Court of law and the amount was thus deductible under section 9(1)(iv).
There is Do distinction between a charge created by a decree of Court and one created by agreement of parties, provided that by that charge the income from property can be said to be diverted so as to bring the matter within section 9(1)(iv) of the Act.
The case was one of application of the particular section of the Act and not one of an obligation created by a money decree, whether income accrued or not.
The case is, therefore, distinguishable from the present, and we need not consider whether in the special circumstances of that case it was correctly decided.
In V. M. Raghavalu Naidu & Sons vs Commissioner of Income tax (1), the assessees were the executors and trustees of a will, who were required to pay maintenance allowances to the mother and widow of the testator.
The amount of these allowances was sought to be deducted, but the claim was disallowed.
Satyanarayana Rao and Viswanatha Sastri, JJ. distinguished the case from that of the Privy Council in Bejoy Singh Dudhuria (2).
Viswanatha Sastri, J. observed that the testator was under a personal obligation under the Hindu law to maintain his wife and mother, and if he had spent a portion of his income on such maintenance, he could not have deducted the amount from his assessable income, and that the position of the executor was no better.
Satyanarayana Rao, J. added that the amount was not an allowance which was charged upon the estate by a decree of Court or otherwise and which the testator himself had no right or title to receive.
The income which was received by the executors included the amount paid as maintenance, and a portion of it was thus applied in discharging the obligation.
(1) (2) 642 The last cited case is again of the Bombay High Court, which seems to have influenced the decision in the instant case.
That is reported in Seth Motilal Manekchand vs Commissioner of Income tax(1).
In that case, there was a managing agency, which belonged to a Hindu joint family consisting of A, his son B and A 's wife.
A partition took place, and it was agreed that the managing agency should be divided, A and B taking a moiety each of the managing agency remuneration but each of them paying A 's wife 2 as. 8 pies out of their respective 8 as.
share in the managing agency remuneration.
Chagla, C. J. and Tendolkar, J. held that under the deed of partition A and B had really intended that they were to receive only a portion of the managing agency commission and that the amount paid to A 's wife was diverted before it became the income of A and B and could be deducted.
The learned Judge observed at p. 741 as follows: "We are inclined to accept the submission of Mr. Kolah that it does constitute a charge, but in our opinion, it is unnecessary to decide this question because this question can only have relevance and significance if we were considering a claim made for deduction under section 9(1)(iv) of the Income tax Act where a claim is made in respect of immovable property where the immovable property is charged or mortgaged to pay a certain amount.
It is sufficient for the purpose of this reference if we come to the conclusion that Bhagirathibai had a legal enforceable right against the partner in respect of her 2 annas and 8 pies share and that the partner was under a legal obligation to pay that amount.
" These are the cases which have considered the problem from various angles.
Some of them appear to have applied the principle correctly and some, not.
But we do Dot propose to examine the correctness of the decisions in the light of the facts in them.
In our opinion, the true test is whether the amount sought to be deducted, in truth, never reaches the assessee as his income.
Obligations, no doubt, there are in every case, but it is the nature of the obligation which is the (1) 643 decisive fact.
There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee.
Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow.
It is the first kind of payment which can truly be excused and not the second.
The second payment is merely an obligation to pay another a portion of one 's own income, which has been received and is since applied.
The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable.
In our opinion, the present case is one in which the wife and children of the assessee who continued to be members of the family received a portion of the income of the assessee, after the assessee had received the income as his own.
The case is one of application of a portion of the income to discharge an obligation and not a case in which by an overriding charge the assessee became only a collector of another 's income.
The matter in the present case would have been different, if such an overriding charge had existed either upon the property or upon its income, which is not the case.
In our opinion, the case falls outside the rule in Bejoy Singh Dudhuria 's case and rather falls within the rule stated by the Judicial Committee in P. C. Mullick 's case For these reasons, we hold that the question referred to the High Court ought to have been answered in the negative.
We, accordingly, discharge the answer given by the High Court, and the question will be answered in the negative.
The appeal is thus allowed with costs here and in the High Court.
Appeal allowed.
[/INST]A consent decree was passed against the assessee awarding maintenance to his wife and children.
The decree did not create any charge upon the income of the assessee.
The assessee claimed in the assessment of income tax deduction of the amount paid under the decree from his total income.
Held, that the assessee was not entitled to the deduction.
Where by the obligation income was diverted by an overriding title before it reached the assessee, it was deductible; but where the income was required to be applied to discharge an obligation after such income reached the assessee, it was not deductible.
The true test was whether the amount sought to be deducted, in truth, never reached the assessee as his income.
In the present case, the wife and children of the assessee received a portion of the income of the assessee, after the assessee had received the income as his own.
Bejoy Singh Dudhuria vs Commissioner of Income tax, (1933) I I.T.R. 135, not applicable.
P. C. Mullick vs Commissioner of Income tax, Bengal, , applied.
Diwan Kishen Kishore vs Commissioner of Income tax, , Seth Motilal Menekchand vs Commissioner of Income tax, , Prince Khanderao Gaekway vs Commissioner of Income tax, , Commissioner of Income tax, Bombay vs Makanji Lalji, , Commissioner of Income tax, Bombay V. D. R. Naik, , D. C. Aich, It; re, , Hira Lal, In re, and V. M. Raghavalu Naidu & Sons vs Commissioner of Income tax, , referred to
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<s>[INST] Summarize the judgementriminal Appeal No. 361 1975.
(Appeal by Special Leave from the Judgment and Order dated the 19th Sept., 1975 of the Karnataka High Court in Criminal Petition No. 52 of 1975.) D. Mookerjee and B.R.G.K. Achar, for the appellant.
H.B. Datar and R.B. Datar, for respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
, This appeal by special leave raises a short but interesting question of law relating to the interpretation of certain provisions of the Code of Criminal Procedure, 1898 (hereinafter referred to as the "Old Code").
The facts giving rise to the appeal are few and may be briefly stated as follows.
One Bodegowda was murdered and in regard to this inci dent a case was registered at the Police Station on 13th October, 1973 as Crime No. 62 of 1973.
The police inves tigated the case and after the investigation was complete, a charge sheet was filed against the respondents in the Court of Judicial Magistrate, 1st Class Chickmagalur and the case was registered as C.C. No. 2319 of 1973.
The learned Magistrate held an inquiry in accordance with the provisions of Chapter XVIII of the old Code and being of the opinion that the respondents should be committed for trial, the learned Magistrate framed a charge against the respondents for having committed an offence under section 302 read with section34 of the Indian Penal Code.
The learned Magis trate then read and explained the charge to the respondents and after giving an opportunity to the respondents to.
give in a list the names of witnesses whom they wished to be summoned to give evidence, the learned Magistrate made an order committing the respondents for trial by the Court of Sessions, Chickmagalur.
This order of committal was made on 15th March 1974 and in pursuance of it, the records of the case were forwarded to the Court of Sessions, Chickmaga lur where they reached on 23rd March, 1974 and the case was registered as S.C. No. 5 of 1974.
The Sessions Judge fixed the trial of the case on 15th July, 1974 but before that date, the Public Prosecutor filed an 352 application on 29th June, 1974 praying for permission to withdraw from the prosecution under section 494 of the old Code.
The learned Sessions Judge by an order passed on the same day accorded permission to the Public Prosecutor to withdraw from the prosecution and 'discharged ' the respond ents in respect of the offence charged against them.
The State thereafter ordered fresh investigation into the of fence and ha consequence of such investigation, a new charge sheet was filed against the respondents and three other accused in the Court of Judicial Magisrate, 1st Class, Chickmagalur.
Since this chargesheet was filed after 1st April, 1974 when the Code of Criminal Procedure, 1973 (hereinafter referred to as "New Code") had come into force, the learned Magistrate, following the provisions of the New Code, committed the respondents and the other three accused to stand their trial before the Court of the Ses sions Judge, Chickmagalur for the same offence.
When the case came up for hearing before the Sessions Judge, the respondents made an application contending that by virtue of the order dated 29th June, 1974 made by the Sessions Judge under section 494 of the Old Code, the respondents had been acquitted and they were, therefore, not liable to be prose cuted again for the same offence in view of section 300 of the New Code.
The Sessions Judge rejected the applica tion, taking the view that the respondents were discharged and not acquitted under the Order dated 29th June, 1974 and, therefore, section 300 of the New Code was not applicable and there was no bar against their fresh prosecution for the same offence.
The respondents challenged this Order by preferring a revision application to the High Court.
This revision application was allowed and the High Court held that though the Order passed by the Sessions Judge directed that the respondents be 'discharged ', the legal effect of this order was to bring about the acquittal of the respond ents since the withdrawal from the prosecution was made after the charge had been framed and the respondents having been acquitted under that Order, the bar of section 300 of the New Code was attracted and the respondents were not liable to be prosecuted again for the same offence.
This order made by the High Court is challenged in the present appeal preferred by the State with special leave obtained from this Court.
It may be pointed out that before the High Court it was contended on behalf of the State that the earlier case before the Sessions Judge, viz., Sessions Case No. 5 of 1974, was governed by the provisions of the new Code and, therefore.
in view of section 228 of the new Code, t was the obligation of the Sessions Judge to frame a charge before proceeding with the trial and since the withdrawal from the prosecution was effected before the framing of such charge by the Sessions Judge, the order passed by the Sessions Judge amounted to an order of discharge and not of acquit tal.
This contention was, however, not pressed at the hearing of the appeal before us and it was conceded, and in our opinion rightly, that the earlier case before the Ses sions Judge was governed by the provisions of the old Code and the new Code had no application to it.
Section 484 of the new Code clearly provides that where a trial is pending immediately before the commencement of the new Code, it shall be proceeded with in accordance with the provisions of the old Code as if the new Code were not in force.
Here in the present case the Judicial Magistrate had already made an order of.
353 committal on 15th March, 1974 and pursuant to that order, the records of the case had reached the Court of the Ses sions Judge on 23rd March, 1974.
The case was, therefore, already before the Court of Sessions prior to 1st April, 1974 and it was pending before that court for trial on 1st April, 1974 when the new Code came into force.
It is immaterial as to when the case was actually registered and a number given to it.
Since the case was pending for trial before the Sessions Court on 1st April, 1974, it was liable to be tried in accordance with.
the provisions of the old Code and it was for this reason that the application for withdrawal from the prosecution was also made by the Public Prosecutor under section 494 of the old Code and not under the corresponding provision of the new Code.
Sec tion 494 of the old Code provides that any Public Prosecutor may, with the consent of the Court, in cases tried by jury before the return Of the verdict and in other cases, before the judgment is pronounced, withdraw from.
the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried and the section then goes on to add that: "upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall be discharged (in respect of such offence or offences); (b) if it is made after a charge has been framed or when under this Code no charge is required he shall be acquitted in respect of such offence or offences) .
" The withdrawal from the prosecution in the present case having been made under this section, it is clear that if it was made before a charge was framed, the respondents would be discharged but if it was made a charge had been framed, the consequence would be that the respondents would be acquitted.
It, therefore, becomes material to inquire whether at the date when the withdrawal from the prosecution was made, a charge had been framed against the respondents or not.
Whether the order of the Sessions Judge granting consent to the withdrawal from the prosecution amounted to an order of discharge or acquittal would depend upon the answer to this question.
It may be pointed out that it is of no consequence that the Sessions Judge directed the respondents to be 'discharged ' because if the legal effect of the order was to acquit the respondents, then the incor rect use of the expression 'discharged ' by the Sessions Judge would not alter the legal position and convert the order of acquittal into one of discharge.
Now, in order to determine whether the withdrawal from the prosecution was made before the framing of the charge or after, it is necessary to notice the scheme of the relevant provisions of the old Code.
Sessions Case No. 5 of 1974 in which the withdrawal was made was committed to the Sessions Court by the Judicial Magistrate under the provisions of Chapter XVIII of the old Code.
The proceeding before the Judicial Magistrate was instituted on a police report and the learned Magistrate, therefore, followed the procedure specified in section 207A.
This section lays down a special procedure to be adopted in proceedings instituted on police report with a view to expeditious disposal of criminal cases.
Sub section (1) provides that the Magistrate, on 354 receipt of the report forwarded under section 173, shall fix a date for the purpose of holding an enquiry and sub section (2) empowers the Magistrate to issue process for compelling the attendance or any witness or the production of any document.
The Magistrate is required by sub section (3) to satisfy himself at the commencement of the enquiry that the documents referred in section 173 have been furnished to the accused.
Sub section (4) then requires the Magistrate to proceed to.
take the evidence of such persons as may be produced by the prosecution as witnesses to the actual commission of the offence and also empowers the Magistrate to take the evidence of any other witness for the prosecu tion if he thinks it necessary to do so in the interest of justice.
The accused is given liberty under sub section (5) to cross examine the witnesses examined under sub sec tion (4) and subsection (6) provides that the Magistrate shall, if necessary, examine the accused for the purpose of enabling him to explain any circumstance appearing in the evidence against him and thereafter give to the prosecution and the accused an opportunity of being heard.
If the Magis trate, at the end of this procedure, feels that there is no ground for committing the accused for trial, he is bound to discharge the accused under subsection (6).
But where "upon such evidence being taken.
, such documents being considered, such examination (if any) being made and the prosecution and the accused being given an opportunity of being heard," the Magistrate forms an opinion that the accused should be committed for trial, sub section (7) provides that the Magistrate shall frame a charge under his hand declaring with what offence the accused is charged.
Sub section (8) then requires the Magistrate to real and explain the charge to the accused and to give a copy thereof to him free of cost.
Sub section (9) provides that the accused shall then be required to give in at once, orally or in writing, a list of the persons, if any, whom he wishes to be summoned to give evidence at the trial and when the accused on being required to.
give the list under sub section (9) declines to do so., or gives such list, the Magistrate is empowered under sub section (10) to make an order committing the accused for trial by the Court of Session.
It will thus be seen that, according to this procedure, the Magistrate is required to frame a charge and to read and explain it to the accused before making an order of committal and the accused is in fact committed to stand his trial before the Court of Session on the charge so framed.
This was the procedure followed by the Judicial Magistrate in the present case and in accordance with it, the Judicial Magistrate framed a charge against the respond ents and committed them for trial to.
the Court of Session on this charge.
The procedure to be followed by the Sessions Court when an accused is committed to it for trial is laid down in Chapter XXII of the old Code.
Section 271 provides that when the court is ready to commence trial, the accused shall appear or be brought before it and the charge shall be read out and explained to him and he shall be asked whether he is guilty of the offence charged or claims to be tried.
That is the first step to be taken by the Sessions Court in relation to the case committed to it for trial.
Nov, obvi ously, the charge that is required to be read out and ex plained to the accused is the charge that has been framed by the Committing Magistrate under sub section (7) 355 of section 207A.
There is no provision in Chapter XXIII which requires the Sessions Court to frame a charge before proceeding with the trial of the accused.
That is plainly unnecessary because a charge is already framed by the Magis trate when he commits the accused for trial to the Sessions Court and that is the charge on which the Sessions Court is to try the accused.
Of course, the Sessions Court is given an overriding power under section 226 that when it finds that an accused is committed for trial without a charge or the charge is imperfect or erroneous, it may frame a charge or add to or otherwise alter the charge, as the case may be, having regard to the rules contained in the old Code as to the framing of charges.
But this is only an enabling power to frame a charge where, for some reason or the other, no charge has been framed by the committing Magistrate or to correct a charge where the charge is imperfect or erroneous.
It does not say that in every case the Court of Session shall frame a new charge before proceeding with the trial.
On the contrary, it clearly postulates that ordinarily there would be a charge framed by the committing Magistrate and it is on that charge that the accused would be tried, unless the Court of Session finds it necessary to alter or amend the charge.
It is interesting to compare the procedure under the new Code where there is no provision for framing a charge by the committing magistrate and it is only when the Court of Session to which the case is committed finds, after considering the record of the case and the documents submit ted therewith and after hearing the submissions of the accused and the prosecution, that there is ground for presuming that, the accused has committed an offence which is exclusively triable by the Court of Session, that it is required by section 220 of the new Code to frame a charge against the accused.
The charge against the accused under the procedure prescribed in the new Code is to be framed for the first time by the Court of Session while according to the procedure prescribed under the old Code, the charge is framed by the committing Magistrate and the Court of Session is merely given the power to alter or amend the charge, if it thinks necessary to do so.
It is, therefore, clear that when the Court of Session commences the trial of an accused, there is already before it a charge framed by the committing Magistrate and it is that charge, unless altered or amended under section 226, that is required to be read out and explained to the accused and on which the plea of the ac cused is required to be taken.
It must follow inevitably as a necessary corollary from this proposition that when the prosecution against an accused who has been committed for trial is allowed to be withdrawn by the Court of Session under section 494, the withdrawal of the prosecution would be after the framing of the charge against the accused and it must result in the acquittal of the accused under clause (b) of that section.
We find that this view which we are taking has prevailed with the Madras High Court since the last about eight or nine decades.
The Madras High Court held as far back as 1888 in Queen Empress vs Sivarama(1) that where an accused is committed to stand his trial before a court of session on a Charge and the prosecution is withdrawn by (1) 356 the public prosecutor with the consent of the court of session under section 494, the accused is entitled to be acquitted and not merely discharged.
The same view was reiterated by the Madras High Court in In re Velayudha Mudali(1).
We are in agreement with the view taken in these two decisions of the Madras High Court.
We accordingly affirm the decision of the High Court holding that by reason of the Order dated 29th June, 1974 passed by the Sessions Judge granting consent to the with drawal from the prosecution in the earlier case, the re spondents were acquitted and in view of section, 300 of the new Code, they were not liable to be tried again for the same offence and dismiss the appeal.
P.B.R. Appeal dismissed.
(1) A.I.R 1949 Mad.
[/INST]Ram Sanehi received two gun shot wounds on his chest, and died within ten minutes.
Two of his children claimed to have witnessed the occurrence.
The dead body was subjected to post mortem only after about 24 hours had elapsed.
The same evening, appellant Subhash surrendered, and appellant Shyam Narain was arrested, though for another offence altogether.
The Sessions Court convicted them under section 302 I.P.C. and sentenced Subhash to death and Shyam Narain to imprisonment for life.
The accused moved the High Court in appeal, while the Sessions Court referred the matter to it under section 374, for confirmation of the death sentence.
The question before this Court was, whether in the case of such references, the High Court was obliged to examine the entire evidence independently.
Allowing the appeal, the Court, ^ HELD: On a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code.
The High Court must not only see whether the other order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence.
[589A B] Jumman and Ors.
vs The State of Punjab AIR 1957 S.C. 460; Ram Shanker Singh and Ors.
vs State of West Bengal [1962] Supp. 1 SCR 49 at 59 and Bhupendra Singh vs The State of Punjab ; , followed.
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<s>[INST] Summarize the judgementAppeal No. 176 of 1956 and Petition No. 165 of 1955.
Appeal by special leave from the judgment and order dated March 15/23,1955 of the Orissa High Court, in Civil Reference No, 4 of 1954, 169 N. C. Chatterji, D. N. Mukherjee and R. Patinaik, for the appellant.
Porus A. Mehta and R. H. Dhebar, for respondent No. 1. 1956.
November 29.
The Judgment of the Court was delivered by S.K. DAS J.
The appellant is Shri Lalit Mohan Das, a pleader of about 25 years ' standing.
who ordinarily practiced in the Courts at Anandapur in the district of Mayur bhanj in Orissa.
The Munsif of Anandapur, one Shri L. B. N. section Deo ' drew up a proceeding under sections 13 and 14 of the , against the pleader for grossly improper conduct in the discharge of his professional duty and submitted a report to the High Court through the District Judge of Mayurbhanj on December 12, 1953.
The District Judge forwarded the report, accompanied by his opinion, to the High Court of Orissa on March 9, 1954.
The recommendation of the Munsif was that the pleader should be suspended from practice for one year.
The reference was heard by the High Court of Orissa ' and by its order dated March 15, 1955, the High Court came to the conclusion that the pleader was guilty of grave professional misconduct and suspended him from practice for a period of five years with.
effect from March 15,1955, Shri Lalit Mohan Das then obtained special leave from this Court to appeal against the judgment and order of the Orissa High Court dated March 15 /23, 1955.
He also filed a petition under article 32 of the Constitution.
Learned counsel for the petitioner has not pressed the petition under article 32 and nothing more need be said about it.
We proceed now to deal with the appeal which has been brought to this Court on special leave.
The charges against the appellant were the following On July 15, 1953, the appellant was appearing on behalf of the defendant in Suit No. 81 of 1952 pending before the Munsif of Anandapur.
On that date, there were two other suits pending before the same Munsif.
There were petitions for time in all the three suits.
22 170 The Munsif wanted to take up the oldest suit for hearing, and the oldest suit being Suit No. 54 of 1952, it was taken up first and five witnesses for the plaintiff were examined.
Suit No. 81 of 1952 was postponed to August 18, 1953.
The appellant, who appeared for the defendant in that suit, was informed of the postponement.
When so informed, the appellant made a remark in open Court and within the hearing of the Munsif to this effect: " If the Peshkar is gained over, he can do everything." He then left the Court.
The Munsif was surprised at the remark made and asked the appellant to explain his conduct, by means of a letter sent the same day.
As the appellant sent no reply, the Munsif wrote again to the appellant on July 18, 1953.
To this letter the appellant sent the following reply: "Dear Sir, I am painfully constrained to receive memo after memo for some imaginary act of mine not in any way connected with my affairs for which if any explanation is at all warranted officiallv.
For your second memo I felt it desirable as a gentleman to reply.
Further I may request you to be more polite while addressing letters to lawyers.
Yours faithfully, Sd.
L. M. Das.
Pleader.
" It is obvious that the letter of the appellant was couched in very improper terms and considerably strained the relation between the Munsif and the appellant.
The appellant, it may be stated here, was at that time the President of the Anandapur Sub Divisional Bar Association which consisted of about 14 legal practitioners.
On July 21, 1953, Shri B. Raghava Rao, who was the predecessor in office of Shri Deo, came to Anandapur.
He was the guest of Shri A. V. Ranga Rao, the Sub Divisional Officer.
One Shri N. C. Mohanty, a pleader of.
Anandapur and who was related to the appellant, came to invite the two Munsifs to a luncheon on the occasion of a housewarming ceremony.
On hearing about the trouble between Shri Deo 171 and the appellant, Shri B. Raghava Rao interceded and it appears that the appellant was persuaded to come to the house of the Sub Divisional officer and to ,say that he was sorry for what had happened in court on July 15, 1953, and that he did not happean to insult Shri Deo; Shri Deo, it appears, accepted the apology and for the time being.
the trouble between the two was smoothed over.
A second incident, however, took place on September 25, 1953.
The appellant was appearing for a defendant in another suit before the Munsif It was Suit No. 101 of 1952.
This suit was fixed for hearing on September 21, 1953.
As that date was a holiday, the suit was taken up 'on September 22, 1953.
Another suit, Suit No. 86 of 1952, was also fixed for hearing on that date but Shri N. C. Mohanty, pleader for the defendants in that suit, took time on the ground of the illness of one of the defendants, which ground was supported by a medical certificate.
In Suit No. 101 of 1952 also, the defendants applied for time.
on the ground of illness of their witnesses; but there being no medical certificate in support of the allegation of illness and no witnesses having been summoned in that suit, the learned Munsif refused to grant time, and one Shri P. N. Patnaik who also represented the defendants agreed to go on with the suit.
The suit was then heard for two days, i. e., on September 22 and 23, 1953, and at the request of the defendants ' lawyers the hearing of arguments was postponed to September 25, 1953.
On that date the appellant came to Court accompanied by his junior Shri P. N. Patnaik, for the purpose of arguing the case on behalf of the defendants.
At the very outset of his arguments the appellant made the follwing remarks:The Court is unfair to me, while the Court was fair to Mr. Misra (meaning Shri Bhagabat Prasad Misra who was appearing for the plaintiffs in that suit).
The Court is accommodating and granting adjournments to Mr. Misra while it was not accommodating me.".
The Munsif took objection to these remarks but nothing untoward happened.
The appellant concluded his arguments.
172 A third incident brought matters to a climax, and this incident took place on September 29, 1953.
The appellant was appearing for the defendants in Suit No. 6 of 1951.
In that suit a preliminary point of jurisdiction and sufficiency of court fees was raised and Shri B. Raghava Rao, the predecessor in office of Shri Deo, had dealt with the point and decided it against the appellant 's client.
A Civil Revision taken to the High Court was also rejected. 'The appellant, however, again pressed the same preliminary point and on September.
29, 1953, Shri Deo passed an order dismissing the preliminary objection.
When this order was shown to the appellant, he stood up and shouted at the top of his voice I 'I on behalf of the Bar Association, Anandapur, challenge the order of the Court,.
The Court has no principle as it is passing one kind of order in one suit and another kind of order in another suit.
" The Munsif, it appears, was disgusted at the conduct of the appellant and he stood up and, left the Court room, directing the bench clerk to send a telegram to the District Judge.
, A telegram was accordingly sent to the District Judge asking him to come to Anandapur.
The District Judge asked for a detailed report which was sent on October 1, 1953.
On October 5, 1953, the Munsif drew up a proceeding against the appellant on a charge under section 13 of the referring therein to the three incidents mentioned above.
The appellant was asked to show cause by October 26, 1953.
On November 3, 1953, the appellant denied the allegations made and took up the attitude that the Munsif was not competent to hold the enquiry on the ground that the Munsif was in the position of a complainant.
The appellant gave a different version of what happened on the three dates in question.
With regard to the incident of July 15, 1953, the appellant 's plea was that some other client had come to him.
in connection with a criminal case pending in another Court and to that client the appellant had said that an enquiry should be made from the Peshkar as to the date fixed.
With regard to the incident, on September 25, 1953, the plea of the appellant was^ total denial, and with regard to the last incident, the appellant said 173 that the Munsif behaved rudely and wanted to ' assault the appellant, for which the appellant appears, to have filed a petition to the Governor of Orissa on September 30, 1953, for according sanction for the prosecution of the Munsif.
It may be stated here that on October 8, 1953, a resolution was passed, numbered Resolution 6, which purported to be a resolution on behalf of the Bar Association, Anandapur.
The resolution was in these termis: "Resolved that on September 29, 1953, the Court 's (Munsif) action on the.
dais in rising from the chair, thumping on the table, shouting at the top of his voice, and using the words 'shut up ' against one honourable member (President) of this Bar Association is quite unprecedented.
, undesirable and affecting the prestige of the Bar and may cause apprehension in the mind of the litigant public to get fair justice.
" It may be stated that some other members of the Bar dissociated themselves from the a id resolution at a later date.
The proceeding against the appellant under the stated, as we have said earlier, on October 5, 1953, and the appellant filed his written statement on November 3, 1953.
On November 5, 1953, the Munsif sent the record to the District Judge in connection with the plea of the appellant that the enquiry should be made by some other judicial officer.
The District Judge, however, took the view that under the provisions of sections 13 and 14 of the the enquiry should be made by the Munsif himself and the records were accordingly sent back to the Munsif.
Thereafter, the appellant non co operated and did not appear at the enquiry though more than one communication was sent to ham The enquiry was concluded on December 11, 1953, and the Munsif submitted his report.
the High Court through the District Judge on December 12, 1953.
On December 22, 1953, the appellant filed an application to the Additional District Judge for time to move the High Court to get an order to have the matter heard by some other judicial officer.
One month 's time was 174 accordingly granted and the Additional District Judge, for some reason which is not very apparent, sent the record back to the learned Munsif In the meantime, the Additional District Judge, it appears, made an effort to settle the trouble.
On December 23, 1953, he met the members of the Bar Association and the Munsif at the inspection bungalow at Anandapur on his way to Mayurbhanj.
At a meeting held there, a copy of a draft resolution to be passed by the members of the Bar Association, Anandapur, was made over.
This draft resolution was in these terms: "This Association re rets very much that an incident relating to the bench clerk of the Civil Court.
should have led to the subsequent unhappy differences between the Bench and the members of the Bar.
As in the interest of the litigant public it is felt not desirable to allow these strained feelings to continue further, this Association unanimously resolves to withdraw Resolution No. 6 dated October 8, 1953, passed against the Court and communicate copies of the same to the addressees previously communicated.
It is further resolved to request the Court to see to the desirability of withdrawing the proceedings that had been started against the various members of the Bar and their registered clerks on their expressing regret to the Court individually in connection with those proceedings.
It is further resolved that the members of the Bar involved in the proceedings be requested to take immediate steps in this direction.
The Association hopes that the bench clerk who has to some extent been the cause for this friction between the Bench and the Bar would be replaced by a person from a different place at an earlier date.
" On January 8, 1954, the appellant appeared in the Court of the Munsif and filed a written apology and expressed his regret.
His signature wag taken on the order sheet and the order of that date reads: "Sri L. M. Das, pleader, appears and expresses his regret.
So the proceeding No. 2 of 1952 is dropped.
Intimate Additional District Judge.
" No resolution, however, was passed in the terms 175 suggested by the Additional District Judge.
On January 19, 1954, two resolution,% were passed in the following terms: "No. 1.
In view of the fact that past misunderstandings between the Munsif and members of the Bar caused by an incident relating to the bench clerk of the Civil Court, have been removed by amicable settlement of differences existing between both parties, it is unanimously resolved that resolution No. 6 dated October 8, 1953, stands withdrawn.
No. 2.
It is further resolved that the copies of the above resolution be sent to the addressees previously communicated of resolution No. 6 of October 8, 1953.
" The learned Munsif, it appears, wanted to see the minute book of the Bar Association, presumably to find out in what terms the proposed resolution was passed.
There was again trouble between the Munsif and the appellant over the production.
of the minute book.
Ultimately, the minute book was produced, and on February 2,1954, the Munsif expressed the view that the resolution passed did not fully carry out the terms of settlement suggested by the Additional District Judge.
Accordingly, the proceeding was re opened and the record was re submitted to the District fudge.
The District Judge thereupon sent the report of the Munsif to the High Court accompanied by his opinion.
The High Court dealt with the report with the result which we have already indicated.
The main contention of Mr. N. C. Chatterji, who has appeared on behalf of the appellant is this.
He has submitted that there was no valid reason for reviving the proceeding against the appellant, after the proceeding had been dropped on January 8, 1954, on the submission of an apology and expression of regret by his client; because, in substance and effect, the terms of the settlement suggested by the Additional District Judge had been complied with.
According to Mr. Chatterji an expression of regret having been made earlier than the passing of the resolutions on January 19, 1954, by the Anandapur Bar Association and the bench clerk having already been transferred from 176 Anandapur, the resolutions could not be in the same terms as were suggested by the Additional District Judge; but the two resolutions passed on January 19, 1954 coupled with the expression of individual regret made on January 8, 1954, complied in substance with the essential terms of the draft resolution which the Additional District Judge had made over on December 23, 1953.
Mr. Chatterji has contended that this view of the matter has not been properly considered by the High Court.
He has submitted that in view of the order passed by the learned Munsif himself on January 8, 1954, the proceeding against the appellant should be treated as having been dropped and concluded on that date.
Mr. Chatterji has also drawn our attention to ground No. VI in the petition for special leave dated May 9, 1955, in which the appellant said that he was " willing and prepared to submit before this Court expressions of unreserved regret and apology for his error of judament and indiscretion, if any, in the discharge of his professional duties.
" We cannot accept the contention of Mr. Chatterji that the order passed by the learned Munsif on January 8, 1954, had the effect of terminating and bringing to an end the proceeding against the appellant.
The learned Judges of the High Court rightly pointed out that the report of the Munsif dated December 12, 1953, was a report which was submitted to the High Court.
Under the provisions of section 14 of the , such a report had to be forwarded to the High Court by the District Judge accompanied by his opinion.
It was not open to.
the Additional District Judge to send back the record to the Munsif The efforts of the Additional District Judge were, indeed, well intentioned; but at that stage, after the Munsif had made his report to the High Court, the High Court alone Was competent to pass final orders in the matter.
Apart, however, from that difficulty, we are not satisfied that the terms of settlement suggested by the Additional District Judge were fully complied with in this case.
It is true, that the appellant did express his 177 regret and to that extent the settlement suggested by the Additional District Judge was carried out.
It is also true that by the resolutions passed on January 19, 1954, the earlier resolution of October 8, 1953, was cancelled, but one essential and important part of the terms of settlement suggested by the Additional District Judge was that the Association should express regret at what had happened.
Resolution No. I dated January 19, 1954, was so worded as to give the impression that the misunderstanding between the Munsif and the appellant was all due to the bench clerk and that misunderstanding having been removed Resolution No. 6 dated October,$, 1953, should be withdrawn.
There is nothing in the resolution to show that the appellant was in any way at fault, a fault which he had expiated I by an expression of regret.
It may be pointed out that the earlier ,resolution, Resolution No. 6 dated October 8, 1953, had been communicated to a large number of persons and authorities and the later resolution dated January 19, 1,954, passed in the diluted form in which it was passed, could hardly undo the damage which had been made by the earlier resolution.
On merits we agree with the High Court that the appellant was undoubtedly guilty of grave professional, misconduct.
A member of the Bar undoubtedly owes a duty, to his client and must place before the Court all that can fairly and reasonably be submitted on behalf of his client.
He may even submit that a particular order is not correct land may ask for a review of that order.
At the same time, a member of the 'Bar is an officer of the Court and owes a duty to the Court in which he is appearing.
He must phold the dignity and decorum of the Court and must not do any thing to.
bring the Court itself into disrepute.
The appellant before us grossly ' overstepped the limits of proprieety when he made imputation$; of partiality and unfairiness against the Munsif in open Court.
In suggesting that the Munsif followed no principle in his orders the appellant was adding insult to injury, because the 'Munsif had merely up held an order of his predecessor on the preliminary point of jurisdiction and Court fees, 23 178 which order had been upheld by the High Court in s revision.
Scandalising the Court in such manner is really polluting the very fount of justice; such conduct as the appellant indulged in was not a matter between an individual member of the Bar and a member of the judicial service; it brought into disrepute the whole administration of justice.
From that point of view, the conduct of the appellant was highly reprehensible.
The appellant gave no evidence in support of his version of the incidents, though he had an opportunity of doingso, if he so desired.
The only point left for consideration, is the question of punishment.
On a matter of this nature, this Court would be reluctant to interfere with the order of the High Court as respects the disciplinary action to be taken against a member of the Bar who has been guilty of professional misconduct.
There are, however, two mitigating circumstances.
One is that the learned Munsif himself recommended suspension of practice for one year only.
The appellant was suspended from practice with affect, from March 15,1955.
The order of suspension has now lasted for a little more than a year and eight months.
The second mitigating circumstance is that the appellant did file la written apology and expressed regret to the learned Munsif onJanuary 8, 1954.
It is unfortunate that the appellantdid not take up a more contrite attitude in the High Court.
In this Court, the appellant tried to make out that the proceeding against him should not have been revived; he however showed his willingness to offer an apology and ex pression of regret Having regard to all the circumstances, we think that the punishment imposed errs on the side of excess.
We would accordingly reduece the period of susppusion to, two years only.
In the result, the petition, under article 32 is dismissed and the appeal is,also dismissed subject to the reduction of the period of suspension as indicated above.
In the circumstances of this case, there will be, no 'order for costs.
[/INST]The appellant pleader who already had strained relation with the Munsif made certain objectionable remarks in open Court, suggesting partiality and unfairness on the part of the Munsif.
The Munsif drew up a proceeding under sections 13, 14 Of the , against the pleader and submitted a report to the High Court through the District judge.
An application to the Additional District judge was filed by the pleader, for time to move the High Court to get an order to have the matter heard by some judicial Officer other than the 168 Munsif who had made the report.
One month 's time was accordingly granted, and for some reason which is not very apparent, the Additional District judge sent the record back to the Munsif.
The Additional District judge made an effort to settle the trouble.
It was arranged that the pleader should apologise and a resolution should be passed by the members of the local Bar Association.
Accordingly, the pleader appeared in the Court of the Munsif and filed a written apology and expressed his regret, and the Munsif dropped the proceeding.
It was later found that the resolution was not passed in the terms suggested by the Additional District judge, and the terms of settlement suggested by the latter were not fully carried out.
Accordingly, the proceeding was re opened and the report was re submitted to the District judge who with his opinion forwarded the same to the High Court.
The High Court suspended the pleader for 5 years.
It was contended on behalf of the appellant that there was no valid reason for reviving the proceeding, after it had once been dropped on the submission of an apology and expression of regret.
Held, that the report under section 14 of the is a report which is submitted to the High Court.
When a report is made to the High Court by any Civil judge subordinate to the District judge, the report shall be made through the District judge and the report must be accompanied by the opinion of such judge.
Once the report has been made, it is not open to the District judge to send back the record to the Subordinate Civil judge, and no order passed by the Subordinate Civil judge can have the effect of terminating or bringing to an end the proceeding.
The High Court alone is competent to pass final orders on the report.
A member of the Bar is an officer of the Court, and though he owes a duty to his client and must place before the Court all that can fairly and reasonably be submitted on behalf of his client, he also owes a duty to the Court and must uphold the dignity and decorum of the Court in which he is appearing.
Making amputations of partiality and unfairness against the subordinate Civil judge in open Court is scandalizing the Court in such a way as to pollute the very fount of justice ; such conduct is not a matter between an individual member of the Bar and a member of the judicial Service.
With regard to disciplinary action against a member of the Bar, the Supreme Court would be reluctant to interfere with the order of the High Court unless there are clear mitigating circumstances.
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<s>[INST] Summarize the judgementivil Appeal No. 1187 of 1974.
From the Judgment and Order dated 19.12.1973 of the Calcutta High Court in Appeal No. 131 of 1971.
S.C. Manchanda and Ms. A. Subhashini for the Appellants.
B.P. Maheshwari, S.P. Mittal and R.S. Rana for the Respondent, The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal by the Revenue is by certificate and is directed against the judgment of a Divi sion Bench of the Calcutta High Court which upheld the decision of a single judge in a writ petition quashing the notices issued to the petitioner under section 147(a) of the Income Tax Act of 1961 in respect of assessment years 1960 61, 1961 62 and 1962 63.
Respondent was assessed to income tax for the assessment year 1960 61 under section 23(3) of the Act of 1922 on 4.3.1961 and for the following two assessment years under section 143(3) of the Act of 1961 on 10th and 11th June, 1963, respectively.
Notices under section 147(a) read with section 148 of the Act of 1961 were issued to the respondent in respect of these three assessment years whereupon he challenged the validity of those notices by filing an appli cation under Article 226 of the Constitution.
Though the notices did not disclose any material to justify their issue, the Income tax Officer in his return to the rule nisi before the High Court stated: " . .
The assessment for the year 1963 64 of Smt.
Sushila Bala Devi Ladia, wife of the petitioner, was taken up by me.
During the course of the said assessment, she contended having received valuable assets from the petitioner between 11th December, 1955 and 28th October, 1960, without adequate consider ation in money or money 's worth.
It was con tended on her behalf that she received over 1203 tolas of gold in jewellery on or about 11.12./1955 and 1104 Rs.1,00,000 in cash on or about 28.10.1960.
It was further contended on her behalf that the said jewellery was sold between the years 1959 and 1962.
The income from the said assets which should have been included in the return of the petitioner was not so included by him.
The capital gains arising therefrom was also not included or disclosed by the petitioner in his returns.
" On behalf of the assessee reliance was placed on the deci sion of this Court in V.D.M. RM. M. RM.
Muthiah Chettiar vs Commissioner of Income tax, Madras, where with reference to failure of the assessee to include the share income of his wife and minor child in a firm, this Court held: "In considering the first question it is necessary to refer to certain provisions of the Income tax Act, 1922.
By section 3 the total income of the previous year of every individual, Hindu Undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually was charged to tax for that year in accordance with, and subject to the provi sions of the Act at any rate or rates pre scribed by the Finance Act.
Total income was defined in section 2(15) as meaning 'total amount of income, profits gains referred to in sub section (1) of section 4 computed in the manner laid down this Act '.
Section 4(1) set out the method of computation of total income; it enacted: '(I) subject to the provisions of this Act, a total income of any previous year of any person includes all income, profits and gains from whatever source derived which: (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b) if such person is resent in the taxable territories during such year (i) accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or . . ' 1105 Section 22 by sub section (1) required the income tax officer to give notice by publica tion in the press in the prescribed manner, requiring every person whose total income during the previous year exceed the maximum exempt from tax, to furnish a return in the prescribed form setting forth his total in come.
Sub section (2) authorised the Income tax Officer to serve a notice upon a person whose income in the opinion of the income tax officer exceeded the minimum free from tax.
Section 23 dealt with the assessment.
It conferred power upon the Income tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return submitted by him.
Rule 19 framed under section 59 of the Income tax Act, 1922 required the assessee to make a return in the form prescribed thereunder, and in Form A applicable to an individual or a Hindu Undi vided family or an association of persons there was no clause which required disclosure of income of any person other than the income of the assessee, which was liable to be in cluded in the total income.
The Act and rules accordingly imposed no obligation upon the assessee to disclose to the Incometax Officer in his return information relating to income of any other person by law taxable in his hands." "But section 16 sub section (3) provided in computing the total income of any individu al for the purpose of assessment there shall be included the classes of income mentioned in clauses (a) and (b).
Sub section 3(a)(ii) insolar as it is material, provided: 'In computing the total income of any individual for the purpose of assessment there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly . . (ii) From the admission of minor to the benefits of partnership in a firm of which such individual is a partner. ' The assessee was bound to disclose under section 22(5) the names and addresses of his partners, if any, engaged in business, profes sion or vocation together with the location and styled of the principal place and branches 1106 thereof and the extent of the shares of all such partners in the profits of the business, profession or vocation and branches thereof, but the assessee was not required in making a return to disclose that any income was re ceived by his wife or minor child admitted to the benefits of partnership of a firm of which he was a partner.
" Upon this conclusion this Court therein held: "For failing or omitting to disclose that income proceedings for reassessment cannot, therefore, be commenced under section 34( l)(a)." Relying upon this decision the learned Single Judge quashed the notices.
The Revenue appealed to the Division Bench but failed to obtain any relief in view of the said decision of this Court.
The Division Bench also took note of the decision in the case of Malegaon Electricity Co. (P) Ltd. vs Commissioner or Income tax, Bombay, Therein after referring to Muthiah Chettiar case (supra).
Hedge, J. speaking for the Court, stated: "Hence, by not showing the income of his wife and minor children, the assessee cannot be deemed to have failed to disclose fully and truly all material facts necessary for his assessment within the meaning of section 34(1)(a) of the Act.
" It is appropriate to take note of a later decision of this Court in Commissioner of Income tax, Kerala vs Smt.
P.K. Kochammu Amma, Peroke, That was of a two Judge Bench.
Reliance was sought to be placed on Muthiah Chettiar 's case (supra).
Dealing with the question of impo sition of penalty under section 27 1(l)(c) of the 1961 Act, the Division Bench observed: "It is obvious that on this view the order imposing penalty on the assessee would have to be sustained but there is a decision of this Court in V.D.M. RM, M. RM.
Muthiah Cheuiar vs Commissioner of Income tax, which is binding upon us and where we find that a different view has been taken by a Bench of three Judges of this Court.
It was held in this case that even if there were any printed instructions in the form of the return requiring the assessee to disclose the income received by his wife and 1107 minor child from a firm of which the assessee was a partner.
there was, in the absence in the return of any head under which the income of the wife or minor child could be shown, no obligation on the assessee to disclose this item of income, and the assessee could not be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assessment within the meaning of 34(l)(a) of the Indian Income Tax Act, 1922.
With the greatest respect to the learned Judges who decided this case.
we do not think, for reasons already discussed, that this decision lays down the correct law on the subject, and had it not been for the fact that since 1st April, 1972, the form of the return prescribed by rule 12 has been amended and since then.
there is a separate column provid ing that 'income arising to spouse/minor child or any other person as referred to in Chapter V of the Act ' should be shown separately under that column and consequently there is no longer any scope for arguing that the assessee is not bound to disclose such income in the return to be furnished by him, we would have referred the present case to a larger Bench.
But we do not propose to do so since the question has now become academic in view of the amendment in the form of the return car ried out with effect from 1st April, 1972.
we would, therefore, follow this decision in Muthian Chettiar 's case which being a decision of three Judges of this Court is binding upon us . . . . . . ." We agree with what has been stated in Kocharammu Amma 's case and for the reasons indicated therein, we do not pro pose to refer this case to a larger bench.
Following the law as laid down in the two cases reported in and we dismiss the appeal.
There would be no order for costs throughout.
A.P.J. Appeal dis missed.
[/INST]Clause (c) of sub section
(3) of section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, enables a landlord occupying only a part of a building, whether resi dential or non residential, to seek eviction of a tenant occupying the whole or any portion of the remaining part of the building, notwithstanding anything contained in cl.
(a), for bona fide requirement of additional accommodation.
The first proviso thereto enjoins the Rent Controller to reject the application of the landlord under that clause even where the need is found to be genuine, if the hardship caused to the tenant would outweigh the advantage to the landlord.
Sub clause (i) of cl.
(a) of section 10(3) enables eviction from residential building if the landlord or any member of his family is not occupying a residential building of his own in the city, while sub cl.
(iii) enable eviction from non residential building if the landlord or any member of his family is not occupying for purposes of a business a non residential building in the city.
A 'building ' is defined in section 2(2) to mean any building or hut or part of a building or hut, let or to be let separately for residential or non residential purposes.
The respondent legatees of the landlady, using the first floor of the building for residence sought eviction of the appellant tenant from the ground floor used by him as a godown for storing his business wares on the ground that they bona fide required additional accommodation 1174 for their residential needs.
The Rein Controller upheld their claim.
The Appellate Authority reversed the findings of the Rent Controller but in revision the High Court re stored the order of eviction passed by the Rent Controller.
In this Appeal by Special leave it was contended that since the ground floor constituted a building by itself within the meaning of section 2(2) of the Act.
the respondents could seek eviction of the appellant only under section 10(3)(a)(i) of the Act and not under section 10(3)(c), that even if the respondents were entitled to invoke section 10(3)(c) they could seek eviction only if they required the ground floor for non residential purposes and not for residential pur poses, that the factors of relative hardship between the parties weighed more in favour of the appellant than the respondents, and that the High Court was in error in inter fering with the findings of fact rendered by the Appellate Authority while exercising its revisional powers under section 25 of the Act.
Dismissing the Appeal, the Court, HELD: 1.1 The ground floor of the building in occupation of the appellant did not constitute a distinct and separate unit.
The respondent landlords could.
therefore seek evic tion under section 10(3)(c) of the Act.
1.2 A 'building ' has been defined in section 2(2) of the Act as not only a building or hut but also part of a building or hut, let separately for residential or non residential purposes, which could only means that a part of a building that has been let out or that has to be let out separately can also be construed as a separate and independent building without reference to the other portion or portions of the building where it is not necessary to treat the entire building as one whole and inseparable unit.
A limitation has thereby been placed by the Legislature itself, by providing that the application of the definition is subject to the contextual position.
It follows therefrom that where the context warrants.
the entire building being construed as one integral unit.
It would be inappropriate to view the build ing as consisting of several disintegrated units and not as one integrated structure.
1.3 In enacting section 10(3)(c) the Legislature has intended that the entire building.
irrespective of one portion being occupied by the landlord and the other portion or portions being occupied by a tenant or tenants should be viewed as one whole and integrated unit and not as different entities.
1175 1.4 There is vast difference between the words "residen tial building" and "non residential building" used in section 10(3)(a)(i) and (iii) on the one hand and section 10(3)(c) on the other.
While section 10(3)(a)(i) and (iii) refer to a building only as residential or non residential, section 10(3)(c) refers to a landlord occupying a part of a building, whether resi dential or non residential.
Furthermore, section 10(3)(c) states that a landlord may apply to the Controller for an order of eviction being passed against the tenant occupying the whole or any portion of the remaining part of the building.
1.5 TO import the expansive definition of the word "building" in section 2(2) into section 10(3)(c) would result in rendering meaningless the words "part of a building" occu pied by the landlord and a tenant "occupying the whole or any portion of the remaining part of the building", leaving no scope for such a landlord to seek eviction.
1.6 The provisions of an Act should be interpreted in such a manner as pot to render any of its provisions otiose unless there are compelling reasons for the Court to resort to the extreme contingency.
If a portion of a building let out to a tenant is to be treated in all situations as a separate and independent building then section 10(3)(c) will be rendered otiose because the landlord can never then ask for additional accommodation since section 10(3)(a) does not provide for eviction of tenants on the ground of additional accommo dation for the landlord either for residential or non resi dential purposes.
Saraswathi Sriraman vs
P.C.R. Chetty 's Charities, ; Mohammed Jaffar vs Palaniappa Chettiar, [1964] 1 M .L.J. 112 and Cheilaromal vs Accommodation Controller, , approved.
2.1 It cannot be said that a landlord can seek addition al accommodation for residence only if the building is a residential one and likewise he can seek additional accommo dation for business purposes only if the building is a non residential one.
2.2 Section 10(3)(c) provides for both situations, viz. a landlord occupying a part of a building which is residen tial or non residential.
The words used in it arc "any tenant" and not "a tenant" who can be called upon to vacate the portion in his occupation.
Unless the legislature had intended that both classes of tenant i.e. residential or nonresidential, can be asked to vacate by the Rent Control ler for providing landlord the additional accommodation it would not have used the 1176 words "any" instead of using the letter "a" to denote a tenant.
Further, the words "as the case may be" in cl.
(0) only mean "whichever the case may be", i.e. either residen tial or non residential.
They do not restrict the landlord 's right to secure additional accommodation for residential purposes only in respect of a residential building and in the case of additional accommodation for business purposes only to a non residential building.
2.3 Section 10(3)(c) stands on a different footing from section 10(3)(a) (i) and section 10(3)(a)(iii).
The non obstante clause has been added to cl.
(c) to give it an overriding effect over both the restrictions placed by cls.
(a)(i) and (a)(iii), viz., landlord seeking eviction of a tenant should not be occupying a building of his own and secondly the nature of user of the leased property by the tenant must correspond to the nature of the requirement of the landlord.
Thus, the requirement of additional accommodation under cl.
(c) is not a case of a landlord not occupying a residential or non residential building of his own but a case of a landlord occupying a part of a residential or non residen tial building of his own and putting it to such user as deemed fit by him.
If it was the intention of the legisla ture that only a tenant occupying a residential portion of a building can be asked to vacate for providing additional residential accommodation to the landlord and corresponding ly a tenant occupying a portion of a building for non resi dential purposes alone being asked to vacate for the non residential requirements of the landlord.
it would have provided specific stipulation to that effect in cl.
In the instant case.
the requirement of additional accommodation pertains to the need of the landlord and the manner of user of the portion of the building already in his occupation and consequently the bona fides of his require ment will outweigh all the restrictions imposed by section 10(3)(a).
K. Parasuramaiah vs Lakshmamma, (AIR 1965: 220).
approved.
Thirupathi vs Kanta Rao.
[1981] Vol. 1 ILR Madras 128 overruled.
Once a landlord is able to satisfy the Controller that he is bona fide in need of additional accommodation for residential or nonresidential purposes and that the advan tage derived by him by an order of eviction will outweigh the hardship caused to the tenant.
then he is entitled to an order of eviction irrespective of any other consideration.
1177 4.
The Rent Controller has gone into the question of comparative hardship and rendered a finding in favour or the respondents.
The Appellate Authority 's findings have been vitiated because of its non advertance to the evidence and application of wrong tests in assessing the comparative hardship between the parties.
The High Court, was.
there fore, entitled to allow the revision.
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<s>[INST] Summarize the judgementiminal Appeal No. 16 of 1958.
Appeal by special leave from the Judgment and order dated January 14, 1958, of the Bombay High Court in Criminal Application No. 60 of 1958 arising out of the judgment and order dated January 9, 1958, of the Court of Chief Presidency Magistrate at Bombay in an application for cancellation of bail in Case No. 608/W of 1957.
1227 Purshottam Tricumdas, Rajni Patel and I. N. Shroff, for the appellant.
K. J. Khandalwala and R. H. Dhebar, for respondent No. 1. 1958.
February 7.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
The appellant, along with( others, has been charged under section 120B of the Indian Penal Code and section 167(81) of the Sea Customs Act (8 of 1878).
There is no doubt that the offences charged against the appellant are bailable offences.
Under section 496 of the Code of Criminal Procedure the appellant was released on bail of Rs. 75,000 with one surety for like amount on December 9, 1957, by the learned Chief Presidency Magistrate at Bombay.
On January 4, 1958, an application was made by the complainant before the learned Magistrate for cancellation of the bail; the learned Magistrate, however, dismissed the application on the ground that under section 496 be had no jurisdiction to cancel the bail.
Against this order, the complainant preferred a revisional application before the High Court of Bombay.
Another application was preferred by the complainant before the same Court invoking its inherent power under section 561 A of the Code of Criminal Procedure.
Chagla C. J. and Datar J. who heard these applications took the view that, under section 561A of the Code of Criminal Procedure the High Court had inherent power to cancel the bail granted to a person accused of a bailable offence and that, in a proper case, such power can and must be exercised in the interests of justice.
The learned Judges then considered the material produced before the Court and came to the conclusion that, in the present case, it would not be safe to permit the appellant to be at large.
That is why the application made by the complainant invoking the High Court 's inherent power under section 561 A of the Code of Criminal Procedure was allowed, the bail bond executed by the appellant was cancelled and an order was passed directing that the appellant be arrested forthwith and committed to 156 1228 custody.
It is against this order that the appellant has come to this Court in appeal by special leave.
Special leave granted to the appellant has, however, been limited to the question of the construction of section 496 read with section 561A of the Code of Criminal Procedure.
Thus the point of law which falls to be considered in the present appeal is whether, in the case of a person accused of a bailable offence where bail has been granted to him under section 496 of the Code of Criminal Procedure, it can be cancelled in a proper case by the High Court in exercise of its inherent power under section 561A of the Code of Criminal Procedure? This question is no doubt of considerable importance and its decision would depend upon the construction of the relevant sections of the Code.
The material provisions on the subject of bail are contained in sections 496 to 498 of the Code of Criminal Procedure.
Section 496 deals with persons accused of bailable offences.
It provides that " when a person charged with the commission of a bailable offence is arrested or detained without warrant by an officer in charge of a police station or is brought before a court and is prepared at any time, while in the custody of such officer or at any stage of the proceedings before such court, to give bail, such person shall be released on bail.
" The section further leaves it to the discretion of the police officer or the court if he or it thinks fit to discharge the accused person on his executing a bond without sureties for his appearance and not to take bail from him.
Section 497 deals with the question of granting bail in the case of non bailable offences.
A person accused of a non bailable offence may be released on bail but he shall not be so released if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life.
This is the effect of section 497(1).
Sub section (2) deals with cases where it appears to the officer or the court that there are not reasonable grounds for believing that the accused has committed a non bailable offence but there are sufficient grounds for further enquiry into his guilt and it lays down that in such cases the accused shall, pending such 1229 enquiry, be released, on bail or at the discretion of the officer or court, on the execution by him of a bond without sureties for his appearance as hereinafter provided.
Sub section (3) requires that, when jurisdiction under sub section
(2) is exercised in favour of an accused person, reasons for exercising such jurisdiction shall be recorded in writing.
Sub section (3A) which has been added in 1955 deals with cases where the ' trial of a person accused of any non bailable offence is not concluded within a period of sixty days from the first day fixed for taking evidence in the case and it provides that such person shall, if he is in custody during the whole of the aid period, be released on bail unless for reasons to be recorded in writing the magistrate otherwise directs.
The last sub section confers oil the High Court and the Court of Session, and on any other court in the case of a person released by itself, power to direct that a person who hap, been released on bail under any of the provisions of this section should be arrested and committed to custody.
Section 498(1) confers on the High Court or the Court of Session power to direct admission to bail or reduction of bail in all cases where bail is admissible under sections 496 and 497 whether in such cases there be an appeal against conviction or not.
Sub section (2) of section 498 empowers the High Court or the Court of Session to cause any person who has been admitted to bail under sub section
(1) to be arrested and committed to custody.
There is one more section to which reference must be made in this connection and that is section 426 of the Code.
This section incidentally deals with the power to grant bail to persons who have been convicted of non bailable offences when such convicted persons satisfy the court that they intend to present appeals against their orders of conviction.
That is the effect of section 426(2A) which has been added in 1955.
A similar power has been conferred on the High Court under sub section
(2B) of section 426 where the High Court is satisfied that the convicted person has been granted special leave to appeal to the Supreme Court against any sentence which the High Court has imposed or maintained.
Sub section (3) provides that, if the appellant 1230 who is released on bail under said sub section
(2) or (2B) is ultimately sentenced to imprisonment, the time during which he is so released shall be excluded in computing the term for which he is so sentenced.
That briefly is the scheme of the Code on the subject of bail.
There is no doubt that under section 496 a person accused of a bailable offence is entitled to be released on bail pending his trial.
As soon as it appears that the accused person is prepared to give bail, the police officer or the court, before whom he offers to give bail, is bound to release him on such terms as to bail as may appear to the officer or the court to be reasonable.
It would even be open to the officer or the court to discharge such person on executing his bond as provided in the section instead of taking bail from him.
The position of persons accused of non bailable offences is entirely different.
Though the recent amendments made in the provisions of section 497 have made definite improvement in favour of persons accused of non bailable offences, it would nevertheless be correct to say that the grant of bail in such cases is generally a matter in the discretion of the authorities in question.
The classification of offences into the two categories of bailable and non bailable offences may perhaps be explained on the basis that bailable offences are generally regarded as less grave and serious than non bailable offences.
On this basis it may not be easy to explain why, for instance offences under sections 477, 477A, 475 and 506 of the Indian Penal Code should be regarded as bailable whereas offences under section 379 should be non bailable.
ever, it cannot be disputed that section 496 recognizes that a person accused of a bailable offence has a right to be enlarged on bail and that is a consideration on which Shri Purushottam, for the appellant, has very strongly relied.
Shri Purushottam has also emphasized the fact that, whereas legislature has specifically conferred power on the specified courts to cancel the bail granted to a person accused of a non bailable offence by the provisions of section 497 (5), no such power has been conferred on any court in regard to persons accused 1231 of bailable offences.
If legislature had intended to confer such a power it would have been very easy for it to add an appropriate sub section under section 496.
The omission to make such a provision is, according to Shri Parushottam, not the result of inadvertence but, is deliberate; and if that is so, it would not be legitimate or reasonable to clothe the High Courts with the power to cancel bails in such cases under section 561 A.
It is this aspect of the matter which needs careful examination in the present case.
Section 561A was added to the Code in 1923 and it purports to save the inherent power of the High Courts.
It provides that nothing in the Code shall be deemed to limit or affect the inherent power of the High Court to make such orders as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any court or otherwise to secure the ends of justice.
It appears that doubts were expressed in some judicial decisions about the existence of such inherent power in the High Courts prior to 1923.
That is why legislature enacted this section to clarify the position that the provisions of the Code were not intended to limit or affect the inherent power of the High Courts as mentioned in section 561A.
It is obvious that this inherent power can be exercised only for either of the three purposes specifically mentioned in the section.
This inherent power cannot naturally be invoked in respect of any matter covered by the specific provisions of the Code.
It cannot also be invoked if its exercise would be inconsistent with any of the specific provisions of the Code.
It is only if the matter in question is not covered by any specific provisions of the Code that section 561A can come into operation, subject further to the requirement that the exercise of such power must serve either of the three purposes mentioned in the said section.
In prescribing rules of procedure legislature undoubtedly attempts to provide for all cases that are likely to arise; but it is not possible that any legislative enactment dealing with procedure, however carefully it may be drafted, would succeed in providing for all cases that may possibly 1232 arise in future.
Lacunae are sometimes discovered in procedural law and it is to cover such lacunae and to deal with cases where such lacunae are discovered that procedural law invariably recognizes the existence of inherent power in courts.
It would be noticed that it is only the High Courts whose inherent power is recognized by section 561A; and even in regard to the High Courts ' inherent power definite salutary safeguards have been laid down as to its exercise.
It is only where the High Court is satisfied either that an order passed under the Code would be rendered ineffective or that the process of any court would be abused or that the ends of justice would riot be secured that the High Court can and must exercise its inherent power under section 561A.
There can thus be no dispute about the scope and nature of the inherent power of the High Courts and the extent of its exercise.
Now it is obvious that the primary object of criminal procedure is to ensure a fair trial of accused persons.
Every criminal trial begins with the presumption of innocence in favour of the accused ; and provisions of the Code are so framed that a criminal trial should begin with and be throughout governed by this essential presumption ; but a fair trial has naturally two objects in view; it must be fair to the accused and must also be fair to the prosecution.
The test of fairness in a criminal trial must be judged from this dual point of view.
It is therefore of the utmost importance that, in a criminal trial, witnesses should be able to give evidence without any inducement or threat either from the prosecution or the defence.
A criminal trial must never be so conducted by the prosecution as would lead to the conviction of an innocent person; similarly the progress of a criminal trial must not be obstructed by the accused so as to lead to the acquittal of a really guilty offender.
The acquittal of the innocent and the conviction of the guilty are the objects of a criminal trial and so there can be no possible doubt that, if any conduct on the part of an accused person is likely to obstruct a fair trial, there is occasion for the exercise of the inherent 1233 power of the High Courts to secure the ends of justice.
There can be no more important requirement of the ends of justice than the uninterrupted progress of a fair trial; and it is for the continuance of such a fair trial that the inherent powers of the High Courts are sought to be invoked by the prosecution in cases where it is alleged that accused persons, either by suborning or intimidating witnesses, are obstructing the smooth progress of a fair trial.
Similarly, if an accused person who is released on bail jumps bail and attempts to run to a foreign country to escape the trial, that again would be a case where the exercise of the inherent power would be justified in order to compel the accused to submit to a fair trial and not to escape its consequences by taking advantage of the fact that he has been released on bail and by absconding to another country.
In other words, if the conduct of the accused person subsequent to his release on bail puts in jeopardy the progress of a fair trial itself and if there is no other remedy which can be effectively used against the accused person, in such a case the inherent power of the High Court can be legitimately invoked.
In regard to non bailable offences there is no need to invoke such power because section 497 (5) specifically deals with such cases.
The question which we have to decide in this case is whether exercise of inherent power under section 561A against persons accused of bailable offences, who have been released on bail, is contrary to or inconsistent with the provisions of section 496 of the Code of Criminal Procedure.
Shri Purushottam contends that the provisions of section 496 are plainly inconsistent with the exercise of inherent power under section 561A against the appellant in the present case and; he argues that, despite the order which has been passed by the High (Court, he would be entitled to move the trial court for bail again and the trial court would be bound to release him on bail because the right to be released on bail recognized by section 496 is an absolute and an indefeasible right; and despite the order of the High Court, that right would still be available to the appellant.
If that be the true position, the order passed under 1234 section 561A would be rendered ineffective and that itself would show that there is a conflict between the exercise of the said power and the provisions of section 496.
Thus presented, the argument no doubt is prima facie attractive; but a close examination of the provisions of section 496 would show that there is no conflict between its provisions and the exercise of the jurisdiction under section 561A.
In dealing with this argument it is necessary to remember that, if the power under section 561 A is exercised by the High Court, the bail offered by the accused and accepted by the trial court would be cancelled and the accused would be ordered to be arrested forthwith and committed to custody.
In other words, the effect of the order passed under section 561A, just like the effect of an order passed under section 497 (5) and section 498 (2), would be not only that the bail is cancelled but that the accused is ordered to be arrested and committed to custody.
The order committing the accused to custody is a judicial order passed by a criminal court of competent jurisdiction.
His commitment to custody thereafter is not by reason of the fact that he is alleged to have committed a bailable offence at all; his commitment to custody is the result of a judicial order passed on the ground that he has forfeited his bail and that his subsequent conduct showed that, pending the trial, he cannot be allowed to be at large.
Now, where a person is committed to custody under such an order, it would not be open to him to fall back upon his rights under section 496, for section 496 would in such circumstances be inapplicable to his case.
It may be that there is no specific provision for the cancellation of the bond and the re arrest of a person accused of a bailable offence; but that does not mean that section 496 entitles such an accused person to be released on bail, even though it may be shown that he is guilty of conduct entirely subversive of a fair trial in the court.
We do not read section 496 as conferring on a person accused of a bailable offence such an unqualified, absolute and an indefeasible right to be released on bail, 1235 In this connection, it would be relevant to consider the effect of the provisions of section 498.
Under section 498(1), the High Court or the Court of Sessions may, even in the case of persons accused of bailable offences, admit such accused persons to bail or reduce the amount of A bail demanded by the prescribed authorities under section 496.
Shri Purushottam no doubt ' attempted to, argue that the operative part of the provisions of section 498(1) does not apply to persons accused of bailable offences; but in our opinion, there can be no doubt that this sub section deals with cases of persons accused of bailable as well as non bailable offences.
We have no doubt that, even in regard to persons accused of bailable offences, if the amount of bail fixed under section 496 is unreasonably high the accused person can move the High Court or the Court of Sessions for reduction of that amount.
Similarly, a person accused of a bailable offence may move the High Court or the Court of Sessions to be released on bail and the High Court or the Court of Sessions may direct either that the amount should be reduced or that the person may be admitted to bail.
If a person accused of a bailable offence is admitted to bail by an order passed by the High Court or the Court of Sessions, the provisions of sub section
(2) become applicable to his case; and under these provisions the High Court or the Court of Sessions is expressly empowered to cancel the bail granted by it and to arrest the accused and commit him to custody.
This sub section, as we have already pointed out, has been added in 1955 and now there is no doubt that legislature has conferred upon the High Court or the Court of Sessions power to cancel bail in regard to cases of persons accused of bailable offences where such persons have been admitted to bail by the High Court or the Court of Sessions under section 498(1).
The result is that with regard to a class of cases of bailable offences failing under section 498(1), even after the accused persons are admitted to bail, express power has been conferred on the High Court or the Court of Sessions to arrest them and commit them to custody.
Clearly then it cannot be said that the right of a 157 1236 person accused of a bailable offence to be released on bail cannot be forfeited even if his conduct subsequent to the grant of bail is found to be prejudicial to a fair trial.
It would also be interesting to notice that, even before section 498(2) was enacted, there was consensus of judicial opinion in favour of the view that, if accused persons were released on bail under section 498(1), their bail bond could be cancelled and they could be ordered to be arrested and committed to custody under the provisions of section 561 A of the Code [Mirza Mohammad Ibrahim vs Emperor (1), Seoti vs Rex (2 ), Bachchu Lal vs State (3), Muunshi Singh vs State (4) and The Crown Prosecutor, Madras vs Krishnan (5) ].
These decisions would show that the exercise of inherent power to cancel bail under section 561A was not regarded as inconsistent with the provisions of section 498(1) of the Code.
It is true that all these decisions referred to cases of persons charged with non bailable offences; but it is significant that the provisions of section 497(5) did not apply to these cases and the appropriate orders were passed under the purported exercise of inherent power under section 561A.
On principle then these decisions proceed on the assumption, and we think rightly, that the exercise of inherent power in that behalf was not inconsistent with the provisions of section 498 as it then stood.
It would now be relevant to enquire whether, on principle, a distinction can be made between bailable and non bailable offences in regard to the effect of the prejudicial conduct of accused persons subsequent to their release on bail.
As we have already observed, if a fair trial is the main objective of the criminal procedure, any threat to the continuance of a fair trial must be immediately arrested and the smooth progress of a fair trial must be ensured; and this can be done, if necessary, by the exercise of inherent power.
The classification of offences into bailable and non bailable on which are based the different provisions as to the grant of bail would not, in our opinion, have any (1) A.I.R. 1932All.534.
(2) A.I. R. 1948 All.
(3) A.I.R. 1951 All.
(4) A.I.R. 1952 All. 39.
(5)I.L.R. 1237 material bearing in dealing with the effect of the sub sequent conduct of accused persons on the continuance of a fair trial itself.
If an accused person, by his conduct, puts the fair trial into jeopardy, it would be the primary and paramount duty of criminal courts to ensure that the risk to the fair trial is removed and criminal courts are allowed to proceed with the trial, smoothly and without any interruption or obstruction ; and this would be equally true in cases of both bailable as well as non bailable offences.
We, therefore, feel no difficulty in holding that, if, by his subsequent conduct, a person accused of a bailable offence forfeits his right to be released on bail, that forfeiture must be made effective by invoking the inherent power of the High Court under section 561A. Omission of legislature to make a specific provision in that behalf is clearly due to oversight or inadvertence and cannot be regarded as deliberate.
If the appellant 's contention is sound, it would lead to fantastic results.
The argument is that a person accused of a bailable offence has such an unqualified right to be released on bail that even if he does his worst to obstruct or to defeat a fair trial, his bail bond cannot be cancelled and a threat to a fair trial cannot be arrested or prevented.
Indeed Shree Purushottam went the length of suggesting that in such a case the impugned subsequent conduct of the accused may give rise to some other charges under the Indian Penal Code, but it cannot justify his re arrest.
Fortunately that does not appear to be the true legal position if the relevant provisions of the Code in regard to the grant of bail are considered as a whole along with the provisions of section 561A of the Code.
It now remains to consider the decision of the Privy Council in Lala Jairam Das & Others vs King Emperor (1), because Shri Purushottam ' has very strongly relied on some of the observations made in that case.
According to that decision, the provisions of the Code of Criminal Procedure confer no power on High Courts to grant bail to a person who has been convicted and sentenced to imprisonment and to whom His Majesty (1) (1945) L.R. 72 I.A. 120,132.
1238 in Council has given special leave to appeal against his sentence and conviction.
Divergent views had been expressed by the High Courts in this country on the question as to the High Courts ' power to grant bail to convicted persons who had been given special leave to appeal to the Privy Council; these views and the scheme of the Code in regard to the grant of bail were examined by Lord Russel of Killowen who delivered the judgment of the Board in Lala Jairam Das 's case (1).
The decision has thus no application to the facts before us; but Shri Purushottam relies on certain observations made in the judgment.
It has been observed in that judgment that " their Lordships take the view that Ch.
XXXIX of the Code together with section 426 is, and was intend to contain, a complete and exhaustive statement of the powers of a High Court in India to grant bail, and excludes the existence of any additional inherent power in a High Court relating to the subject of bail ".
The judgment further shows their Lordships ' opinion, like the High Court of Justice in England, High Courts in India would not have inherent power to grant bail to a convicted person.
It would be clear from the judgment that their Lordships were not called upon to consider the question about the inherent power of the High Courts to cancel bail under section 561A.
That point did not obviously arise in the case before them.
Even so, in dealing with the question as to whether inherent power could be exercised for granting bail to a convicted person, their Lordships did refer to section 561A of the Code and they pointed out that such a power ,,cannot be properly Attributed to the High Courts because it would, if exercised, interrupt the serving of the sentence; and, besides it would, in the event of the appeal being unsuccessful, result in defeating the ends of justice.
It was also pointed out that if the bail was allowed in such a case, the exercise of the inherent power would result in an alteration by the High Court of its judgment which is prohibited by section 369 of the Code.
In other words, their Lordships examined the provisions of section 561A and came to the (1) (1945) L.R. 72 I.A. 120, 132, 1239 conclusion that the power to grant bail to a convicted person would not fit in :with the scheme of Chapter XXXIX of the Code read with section 561A.
In our opinion, neither this decision nor even the observations on which Shri Purushottam relied can afford any assistance in deciding the point which this appeal has raised before us.
Incidentally we may add that it was as a result of the observations made by the Privy Council in that case that section 426 of the Code was amended in 1945 and power has been conferred on appropriate courts either to suspend the sentence or to grant bail as mentioned in the several subsections of section 426.
That is how section 426(2A) and (2B) now deal with the subject of bail even though the main section is a part of Chapter XXXI which deals with appeals, references and revisions.
We must accordingly hold that the view taken by the Bombay High Court about its inherent power to act in this case under section 561 A is right and must be confirmed.
It is hardly necessary to add that the inherent power conferred on High Courts under section 561A has to be exercised sparingly., carefully and with caution and only where such exercise is justified "by the tests specifically laid down in the section itself.
After all, procedure, whether criminal or civil, must serve the higher purpose of justice; and it is only when the ends of justice are put in jeopardy by the conduct of the accused that the inherent power can and should be exercised in cases like the present.
The result is that the appeal fails and must be dismissed.
Appeal dismissed.
[/INST]% The State Government by Circular dated July 23,1957 directed revision of the existing pay scales of various categories of subordinate staff including Teachers in the Education Department.
Paragraph 3 of the said circular provided for revision of pay scales of Teachers and placed them into two distinct categories, Category A and Category B and laid down the requirements of academic qualification with respect to each of them.
Category B was further sub divided into two groups viz: Group I Matric with Basic training (including Junior Teachers).
Group II Junior School Teachers (including Assistant Mistresses with BA/Inter/Matric plus JAV training).
On more occasions than one, this Court intervened on behalf of those Teachers who had improved or acquired higher academic qualifications and were denied higher scales of pay, and issued directions for extending the benefit of para 3 of the aforesaid Circular.
In compliance with the directions of this Court in Avtar Singh vs Manmohan Singh & Anr., the Director of Public Instructions (Schools) 1088 by Order dated June 30, 1986 accorded sanction to payment of arrears of pay to Teachers belonging to Category B Group I, to 3600 JBT Teachers belonging to Category B Group II who had improved their educational qualifications and acquired degrees in B.A., B.T./B.A., B.Sc., B.Ed.
Similar relief was however denied to 6,000 other Teachers falling in Category B Group II on the ground that they did not have requisite professional training of JST/JAV, and were therefore not entitled to the higher grade.
In the Writ Petitions to this Court, by the Matriculate Junior Basic Trained Teachers in Government Schools placed in Category B, Group II of the Circular dated July 23, 1957 it was contended that the State Government was bound to grant the benefit of higher grade of pay to all the Teachers belonging to Category B Group II on their improving or acquiring higher educational qualifications as and from the respective dates of their passing the examination, and that it was not open to the Government on the pretext of verification of claims to confine the relief to some of the teachers and deny the same to the others who were all similarly situated and recruited in the same manner and appointed as Matriculate JBT Teachers and had improved their qualifications by acquiring degrees in B.A., B.T. etc., and that the so called professional training i.e. JST/JAV could not be made a condition pre requisite to the grant of higher pay.
These petitions were contested by the State Government by contending that the petitioners were not entitled to higher pay merely on their acquiring higher educational qualifications as they did not stand the eligibility test on verification of their claims, and that according to paragraph 3 of the Circular, all Teachers according to their qualifications were placed into two broad categories for purposes of revision of pay,Category A consisting of B.A./B.Sc./B.Com./B.Sc.
(Agriculture) and BT, and Category B of whom Group I was 'Matric with basic training (including JBT) '.
On the question: whether JBT Teachers falling under Category B Group II were not entitled to the higher pay merely on their acquiring higher Educational Qualifications of B.A., B.T./B.A., B.Ed.
but that gaining professional experience of JST/JAV training was essential.
Allowing the Writ Petitions, ^ HELD: 1.
Graduate Teachers form a class by themselves and cannot be subjected to the further requirement of having JST/JAV 1089 training.
The words 'plus JAV training ' clearly qualify the work 'Matric ' and relate only two Matriculate JBT Teachers.
Such a classification for revision of pay satisfies the touchstone of Article 14, and would render the action of the State Government in seeking to discriminate between Graduate Teachers with JST/JAV training and Graduate Teachers with or without such training, impermissible as the attempt is to create a class within a class without any rational basis.
[1095D F] 2.
It is regrettable that despite clear pronouncements made by this Court as well as the High Court in a long line of decisions there is no redressal of the wrong done to JBT Teachers belonging to Category B Group II although they had acquired B.A., B.T./B.A., B.Ed. qualifications.
[1095F G] 3.
The petitioners who are Teachers placed in Category B Group II, are entitled to higher pay on acquiring or improving their academic qualifications.
The respondents are directed to give them the higher scale of pay as admissible to Teachers in Category B Group I with effect from the respective dates of their acquiring the qualification.
[1097B C] State of Punjab & Anr.
vs Kirpal Singh Bhatia & Ors.
,[1976] 1 SCR 529; State of Punjab & Ors.
vs Labh Singh Garcha & Ors., (C.A. Nos. 926 27/77 decided on August 7, 1979); and Avtar Singh vs Manmohan Singh & Anr., (C.A. No. 3790/83 decided on September 14, 1984, referred to.
</s>
|
<s>[INST] Summarize the judgementWrit Petition No. 146 of 1979 (Under Article 32 of the Constitution) R. Jethmalani and Mrs. K. Hingorani for the Petitioner.
U. R. Lalit.
J. L. Jain and M. N. Shroff for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
, This petition is directed against the validity of an order of detention dated 31st November, 1978 made by the first respondent who is the Secretary to the Government of Maharashtra, Home Department in exercise of the power conferred under sub section (I) of section 3 of the (hereinafter referred to as the Act).
The petitioner has urged several grounds before us but it is not necessary to refer to theme since there is one ground which is in our opinion sufficient to dispose of the petition in favour of the petitioner.
To appreciate this ground, it is necessary to state a few facts.
On 13th November, 1978, an order was made by the 1st respondent in exercise of the power conferred on him under sub section (1) old section 3 of the Act directing the detention of the petitioner.
Pursuant to the order of detention, the petitioner was arrested and he was immediately served with the grounds of detention which were embodied in a communication dated 13th November, 1978 addressed by the 1st respondent to the petitioner.
The grounds of detention were quite elaborate and they alleged various smuggling activities against the petitioner and several statements and documents were referred to and relied upon in support of those allegations.
The petitioner, by his 1009 advocate 's letter dated 25th November, 1978, requested the 1st respondent to furnish copies of the statements and documents referred to and relied upon in the grounds of detention and stated that he required the same for the purpose of enabling him to make a representation against the order of detention.
It seems that a copy of this letter was also sent by the petitioner to the Collector of Customs.
The Assistant Secretary to the Government of Maharashtra, Home Department, informed the petitioner 's advocate by his letter dated 27th November, 1978 that copies of the relevant documents and statements required by the petitioner for the purpose of making a representation against the order of detention may be obtained from the Collector of Customs.
The petitioner thereupon addressed his advocate 's letter dated 2nd December, 1978 to the Collector of Customs requesting him Lo furnish copies of the relevant documents and statements.
The Assistant Collector of Customs, however, replied by his letter dated 6th December, 1978 stating that copies of the relevant documents and statements would be supplied after a show cause notice under the Customs Act, 1926 was issued to the petitioner.
The petitioner was thus unable to get copies of the relevant documents and statements from the Collector of Customs.
The petitioner obviously could not wait for making a representation since the period of thirty days within which a representation must be made was expiring and he, therefore, sent a representation dated 4/9th December, 1978 to the Home Secretary and it was received by the Home Department on 12th December 1978.
The Asstt.
Secretary, Home Department, by his letter dated 22nd December, 1978, acknowledged that the representation of the petitioner was received on 12th December, 1978 and intimated that the issue regarding the supply of copies of relevant documents and statements to the petitioner was under consideration of the Government and after this issue was decided, the representation of the petitioner would be considered and a suitable reply would be given.
Now it appears from the affidavit in reply filed by the 1st respondent that the case of the petitioner was in the meanwhile referred to the Advisory Board and since the meeting the Advisory Board was fixed on 20th December, 1978, the representation of the petitioner was forwarded to the Advisory Board for its consideration.
The Advisory Board reported to the 1st respondent that in its opinion there was sufficient cause for the detenion of the petitioner and this report was received by the 1st respondent on 6th January, 1979.
The 1st respondent, after considering the report of the Advisory Board made an order dated 15th January, 1979 confirming the detention of the petitioner.
1010 The petitioner on these facts contended that the order confirming the detention of the petitioner was passed by the 1st respondent without considering the representation of the petitioner and the.
detention of the petitioner was, therefore, unlawful as being in con travention of Article 22(S) of the Constitution.
This contention has in our opinion great force and it must result in invalidation of the detention of the petitioner.
It is now settled law that the power to preventively detain a person cannot be exercised except in accordance with the constitutional safegudards provided in clauses (4) and (S) of Article 22 and if any order of detention is made in violation of such safeguards, it would be liable to be struck down as invalid.
It is immaterial whether these constitutional safeguards are incorporated rated in the law authorising preventive detention, because even if they are not, they would be deemed to be part of the law as a super imposition of the Constitution which is the supreme law of the land and they must be obeyed on pain of invalidation of the order of detention.
The 1st respondent was, therefore, bound to observe these constitutional safeguards provided inter alia in clauses (4) and (5) of Article 22 in detaining the petitioner.
We are concerned in this case only with a complaint of violation of the provisions of clause (5) of Article 22 and that clause reads as follows: "When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, com municate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
" This Court explained the true meaning and import of this clause in Khudiram Das vs The State of West Bengal(l): "The constitutional imperatives enacted in this article are twofold: (1) the detaining authority must, as soon as may be, that is, as soon as practicable after the detention, com municate to the detenu the grounds on which the order of detention has been made, and (2) the detaining authority must afford the detenu the earliest opportunity of making a representation against the order of detention.
These are the barest minimum safeguards which must be observed before an executive authority can be permitted to preventively detain a person and thereby drown his right of personal liberty in the name of public good and social security.
(1) A. I. R. 1975 section C. 550 1011 It will, therefore, be seen that one of the basic requirements of clause (5) of Article 22 is that the authority making the order of detention must afford the detenu the earliest opportunity of making a representation against the order of detention.
Now this requirement would become illusory unless there is a corresponding obligation on the detaining authority to consider the representation of the detenu as early as possible.
It could never have been the intention of the constitution makers that the detenu should be given the earliest opportunity of making a representation against the order of detention but the detaining authority should be free not to consider the representation before confirming the order of detention.
That would render the safeguard enacted by he constitution makers meaningless and futile.
There can, therefore, be no doubt that the constitutional imperative enacted in clause (S) of article 22 requiring the earliest opportunity to be afforded to the detenu to make a representation carries with it by necessary implication a constitutional obligation on the detaining authority to consider the representation as early as possible before making an order confirming the detention.
The detaining authority must consider the representation of the detenu and come to its own conclusion whether it is necessary to detain him.
If the detaining authority takes the view, on considering the representation of the detenu, that it is not necessary to detain him, it would be wholly unnecessary for it to place the case of the detenu before the Advisory Board.
The requirement of obtaining opinion E; of the Advisory Board is an additional safeguard over and above the safeguard afforded to the, detenu of Making a representation against the order of detention.
The opinion of the Advisory Board even if given after consideration of the representation is no substitute for the consideration of the representation by the detaining authority.
This Court pointed out in Khairul Haque vs The State of West Bengal(1).
"It is implicit in the language of Article 22 that the appropriate Government, while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation.
It has to consider the representation on its own without being influenced by any such view of the Board.
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 Sk.
Abdul Karim vs State of West Bengal (AIR 1969 SC lO28) (supra), the obligation of the appropriate Government under article 22(5) (1) W. P. 245 of 1969, dec.
On Sept. 10, 1969.
1012 is to consider the representation made by the detenu as expeditiously as possible.
The consideration by the Government of such representation has to be, as aforesaid, independent of any opinion which may be expressed 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 implicity 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.
" There are thus two distinct safeguards provided to a detenu; one is that his case must be referred to an Advisory Board for its opinion if it is sought to detain him for a longer period than three months and the other is he should be afforded the earliest opportunity of making a representation against the order of detention and such representation should be considered by the detaining authority as early as possible before any order is made confirming the detention.
Neither safeguard is dependent on the other and both have to be observed by the detaining authority.
It is no answer for the detaining authority to say that the representation of the detenu was sent by it to the Advisory Board and the Advisory Board has considered the representation and then made a report expressing itself in favour of detention.
Even if the Advisory Board has glade a report stating that in its opinion there is sufficient cause for the detention, the State Government is not bound by such opinion and it may still on considering the representation of the detenu or otherwise, decline to confirm the order of detention and release the detenu.
The detaining authority is, therefore, bound to consider the representation of the detenu on its own and keeping in view all the facts and circumstances relating to the case, come to its own decision whether to confirm the order of detention or to release the detenu.
Here in the present case, the representation of the petitioner was received by the Home Department on 12th December, 1978 and it was immediately forwarded to the Advisory Board because the meeting of the Advisory Board was fixed on 20th December, 1978.
The report of the Advisory Board stating that in its opinion there was sufficient cause for the detention of the petitioner was received by the 1st respondent on 6th January, 1979 and on the basis of this report, 1013 the 1st respondent confirmed the order of detention on 15th January, 1979.
There is nothing on the record to show that the 1st respondent considered the representation of the petitioner before making the order confirming the detention of the petitioner.
We do not find anywhere in the affidavit of the 1st respondent in reply to the petition any statement that he considered the representation of the petitioner before making the order of confirmation dated 15th January, 1979.
On the contrary, there is a positive statement in paragraph 16 of this affidavit that the detention order was confirmed after consideration of the report of the Advisory Board which was of the opinion that the detention should be continued.
We called upon the learned advocate appearing on behalf of the 1st respondent to place before us the file relating to the detention C. Of the petitioner and when this file was shown, we found that there was an endorsement made on 12th March, 1979 which showed that it was only on that date that the representation of the patitioner was considered by the 1st respondent and rejected.
This is also borne out by the letter dated 12th March, 1979 addressed by the Deputy Secretary, Home Department to the petitioner stating that the representation was considered by the "Advisory Board/Government" and his request for release from detention could not be granted.
It is, therefore, amply clear from the record that the representation of the petitioner was not considered by the 1st respondent before he confirmed the order of detention.
The 1st respondent thus failed to comply with the constitutional obligation imposed upon him under clause (5) of E: article 22.
The subsequent consideration and rejection of the representation could not cure the invalidity of the order of confirmation.
The detention of the petitioner must, therefore, be held to be illegal and void These were the reasons for which we made our order dated 11th April, 1979 quashing and setting aside the detention of the petitioner and directing that the petitioner be set at liberty forthwith.
[/INST]^ HELD: (Per Sarkaria, J.) The records of this case be submitted to the Hon 'ble Chief Justice for C constituting a larger Bench which would resolve the doubts, difficulties and inconsistencies pointed out by Kailasam J. in his order, particularly in its last paragraph.
(Per Kailasam, J.) 1.
Before the amendment of Section 367(5) of the Code of Criminal Procedure by the Criminal Procedure Code (Amendment) Act 1955 (Act 26 of 1955) was introduced, the normal sentence for an offence of murder was death and the lesser sentence was the exception.
After the introduction of the amendment it was not obligatory for the court to state the reasons as to why the sentence of death was not passed.
By the amendment the discretion of the court in deciding whether to impose a sentence of death or imprisonment for life became wider.
The court was bound to exercise its judicial discretion in awarding one or the other of the sentences.
By the introduction of Section 354(3) of the Code of Criminal Procedure 1973, the normal sentence is the lesser sentence of imprisonment for life and if the sentence of death is to be awarded, special reasons will have to be recorded.
In other words, the court, before imposing a sentence of death, should be satisfied that the offence is of such a nature that the extreme penalty is called for.
[1203A C] 2.
In a number of decisions, this court has reiterated the position that under section 354(3) of the 1973 Code, the court is required to state the reasons for the sentence awarded and in the case of sentence of death special reasons are required to be stated.
[1203D] Balwant Singh vs State of Punjab [1976] 2 S.C.R. 684; Ambaram vs The State of Madhya Pradesh ; and Sarveshwar Prasad Sharma vs Slate of Madhya Pradesh [1978] I S.C.R. 560 referred to.
In Jagmohan Singh vs State of U.P. ; in which the constitutional validity of imposition of death sentence was challenged, this Court held that the deprivation of life is constitutionally permissible if that is done according to the procedure established by law and that it cannot be held that capital sentence is per se unreasonable and not in the public interest.
It was also held that the Judges are invested with very wide discretion in the matter of fixing the degree of punishment and that discretion in the matter of sentence is liable 20 409SCI/79 1194 to be corrected by superior courts, that exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused.
[1204C D] 4.
Section 367(5) of the Criminal Procedure Code which came into force on April 1, 1974, after the judgment in Jagmohan Singh 's case, provides that the judgment shall state the special reasons where a sentence of death is award ed for an offence punishable with death or in the alternative with imprisonments life or imprisonment for a term of years.
The requirement that courts should state the special reasons for awarding the death sentence would indicate that the normal sentence for an offence punishable either with death or with imprisonment for life is imprisonment for life and that if the court considered that sentence of death is appropriate on the particular facts of the case it should give special reasons.
[1204 G H] 5.
But in Rajendra Prasad vs State of U.P. ; , the majority of a Division Bench of this Court held that "special reasons" necessary for imposing the death penalty must relate not to the crime as such but to the criminal.
The death sentence can be awarded only in certain restricted categories where a crime holds out a durable And continuing threat to social security in the setting of a developing country and poses a grave peril to society 's survival and when an economic offender intentionally mixes poison in drugs and knowingly and intentionally causes death for the sake of private profit and so on.
The decision is in many respects contrary to the law laid down by the Constitution Bench of this Court in Jagmohan Singh 's case.
The court in this case has proceeded to make law as regards the conditions that are necessary for imposition of a sentence of death under section 302 I.P.C. and to canalisation of sentencing discretion and has embarked on evolving working rules on punishment bearing in mind the enlightened flexibility of social sensibility.
In doing so the Court has exceeded its power conferred on it by law.
Courts have no power to legislate and to frame rules to guide the infliction of death penalty.
[1205C F] 6.
So far as the enacted law is concerned, the duty of the court is to interpret and construe the provisions of the enactment.
Courts must take it absolutely for granted that the Legislature has said what it meant and meant what it has said.
Judges are not at liberty to add or to take from or modify the letter of the law simply because they have reason to believe the true sentence legis is not completely or correctly expressed by it.
Though the courts are free to interpret, they are not free to overlook or disregard the constitution and the laws. [1207B D] 7.
It is for the court to administer the law as it stands.
In awarding sentence or death, the court has to take into consideration the various aspects regarding a crime and the reason for committing the crime and pass the appropriate sentence, and if it is death sentence, to give reasons as required by the Code of Criminal Procedure.
If in deciding a case on particular facts a principle is stated, it would be binding as a precedent.
If courts resort to rule making, it will not be binding as a precedent.
If the courts are to embark on rule making the question arises whether the responsibility can be undertaken by a bench of three Judges with majority of 2: 1.
There is no machinery by which the court could ascertain the views of the various cross sections of the society, which is a pre requisite before any law making is resorted to.
1195 Rajendra Prasad 's ease the court embarked on framing rules prescribing conditions for the imposition of death sentence.
The view of the majority that in awarding a sentence the criminal is more important than the crime is not warranted by the law as it stands today.
The general principles laid down in Rajendra Prasad 's case are not the ratio decidendi of the case.
The enunciation of the reasons or the principle on which a question before a court has been decided is alone binding as a precedent.
The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi ascertained on a consideration of the judgment in relation to the subject matter of the decision which alone bas the force of law and which, when it is clear what It was, is binding.
Statements which are not necessary to the decision, which go beyond the occasion and lay down a rule that is unnecessary for the purpose in hand have no binding authority on another court, though they may have merely persuasive efficacy.
Decisions upon matters of facts are not binding on any other court [1207G H; 1202D F] Tribhuvandas vs Ratilal ; = 70 Bom.
L. R. 73; Amritsar Municipality vs Hazara Singh A.I.R. ; and Quinn vs Leatham 1901 A.C. 495 at p. 506; referred to.
In Rajendra Prasad 's case the conclusion of the majority was that as nothing on record suggested that the accused was beyond redemption and since the record did not hint that such an attempt was made inside the prison there was no special reason to award death sentence.
The utmost to which this case can be considered as an authority is that if in similar circumstances when a person stabs two persons several times it would not furnish special reasons for inflicting the death penalty.
In the second case (Kunjukunju) the majority was of the view that the test should be whether the accused was a social security risk altogether beyond salvage by therapeutic life sentence was neither in accordance with the requirements of the Code of Criminal Procedure nor law laid down by the Constitution Bench.
Therefore, it cannot be followed as a precedent.
Similarly, in the third case (Dubey 's case) also the majority view that it would be illegal to award capital punishment without considering the correctional possibilities inside the prison and that the accused being young and of malleable age and other circumstances bearing on the offender called for the lesser sentence is not in conformity with the decisions of this Court or the requirements of the law.
[1213H; 1214A H] 9.
In the instant case the appellant was released after undergoing a term of imprisonment for the murder of his wife.
After release he lived with his cousin.
When his cousin 's son and wife objected to his stay with the family he inflicted a fatal injury on the son and two daughters of his cousin when they were asleep and caused grievous injury on another daughter The courts below came to the conclusion that the appellant acted in a very cruel manner.
They have rightly characterised the offence as heinous and held that the only appropriate sentence was the extreme penalty of death.
The trial court and the High Court were right in their conclusions.
[1215 C E] [Rajendra Prasad 's case cannot be treated as a binding precedent yet as it is a decision of a division bench of this Court.
The papers were directed to be placed before the Hon 'ble the Chief Justice for constituting a larger bench to decide the case.]
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<s>[INST] Summarize the judgementn No. 128 of 1958.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
K.M. Munshi, R. J. Joshi, G.K. Munshi, T.S.N. Diwanji, J.B. Dadachanji, S.N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioner.
M. C. Setalvad, Attorney General of India, C.K. Daphtary, Solicitor General of India, H.N. Sanyal, Additional Solictor General of India, B. Sen and R. H. Dhebar, for the respondent.
I N. Shroff, for the intervener.
January 9 Sinha.
C.J., delivered his own Judgment.
The Judgment of Sarkar, Das Gupta and Mudholkar, JJ., was delivered by Das Gupta, J. Ayyangar J. delivered a separate Judgment.
500 SINHA, C. J.
By this petition under article 32 of the Constitution, the petitioner, who is the 51st Dai ul Mutlaq and head of the Dawoodi Bohra Community challenges the constitutionality of the Bombay Prevention of Excommunication Act, 1949 (Bombay Act XLII of 1949) (hereinafter referred to as the Act) on the ground that the provisions of the Act infringe articles 25 and 26 of the Constitution.
The sole respondent in this case is the State of Bombay.
The petition is founded on the following allegations.
The Dawoodi Bohra Community consist of Muslims of the Shia sect, holding in common with all members of that sect the belief that there is one God, that Mohammed is His Prophet to whom He revealed the Holy Koran; that Ali, the son in law of Mohammed, was the Wasi (executor) of the Prophet, and that the said Ali succeeded the Prophet by Nas e Jali.
The Dawoodi Bohras believe that the said Ali was succeeded by a line of Imams, each of whom in turn was appointed by Nas e Jali by his immediate predecessor.
The Shia sect itself became divided into two sub sects, known respectively as Ismailis and Isna Asharia.
The Dawoodi Bohras belong to the former sect, and believe that owing to persecution Imam Type (the 21st Imam) went into seclusion and that an Iman from his line appear, it being their belief that an Iman always exists although at times he may be invisible to his believers, while in seclusion; that owing to the impending seclusion of the 21st Imam (Imam Tyeb) his predecessor, the 20th Imam, directed his Hujjat (a dignitary ranking next to an Imam), one Hurra tul Malaka, to appoint a Dai, a Mazoon (a dignitary next to a Dai) and a Mukasir (a dignitary ranking next to a Mazoon) to carry on the Dawal (mission) of the Imam so long as the Imam should remain in seclusion, and to take and receive from the faithful an oath of allegiance.
The Dais are 501 known as Dai ul Mutlaq.
The petitioner, as the Head Priest of the community of Dawoodi Bohras, is the vice gerent of Imam on Earth in seclusion.
The petitioner is a citizen of India.
As Dai ul Mutlaq and the vicegerent of Imam on Earth in seclusion, the Dai has not only civil powers as head of the sect and as trustee of the property, but also ecclesiastical powers as religious leader of the community.
It is the right and privilege of the petitioner as Dai ul Muntlaq to regulate the exercise of religious rights in places where such rights and ceremonies are carried out and in which religious exercises are performed.
In his capacity as the Dai ul Mutlaq, that is to say, as religious leader as well as trustee of the property of the community, one of his duties is to manage the properties which are all under his directions and control.
He has also the power of excommunication.
This power of excommunication is not an absolute, arbitrary and untrammelled power, but has to be exercised according to the usage and tenets of the community.
Save in exceptional circumstances, expulsion from the community can be effected only at a meeting of the Jamat, after the person concerned has given due warning of the fault complained of and an opportunity of mending, and after a public statement of the grounds of expulsion.
The result of excommunication properly and legally effected involves exclusion from the exercise of religious rights in places under the trusteeship of the Dai ul Mustlaq.
The petitioner claims that as the head of the Dawoodi Bohra community and as Dai ul Mutlaq, he has the right and power, in a proper case and subject to the conditions of legal exercise of that power, to excommunicate a member of the Dawoodi Bohra community, and this power of excommunication is an integral part of the religious faith and belief of the Dawoodi Bohra community.
The petitioner further affirms that the exercise of the right of 502 excommunication is a matter of religion, and that, in any event, the right is an incident of the management of the affairs of the Dawoodi Bohra community in matters of religion.
He also asserts that the Dawoodi Bohra community constitutes a religious denomination within the meaning of article 26 of the Constitution; the said right of the petitioner to excommunicate a member of the community, for reasons of which the petitioner is the sole judge in the exercise of his position as the religious head, is a guaranteed right under articles 25 and 26 of the Constitution.
The Bombay Legislature enacted the Act, which came into force on November 1, 1949.
The petitioner asserts that the Act violates his right and power, as Dai ul Mutlaq and religious leader of the Dawoodi Bohra community, to excommunicate such members of the community as he may think fit and proper to do; the said right of excommunication and the exercise of that right by the petitioner in the manner aforesaid are matters of religion within the meaning of article 26(b) of the Constitution.
It is submitted by the petitioner that the said Act violates or infringes both the articles 25 and 26 of the Constitution, and to that extent, after the coming into force of the Constitution, has become void under article 13 of the Constitution.
The petitioner claims that notwithstanding the provisions of the Act, he, as the religious leader and Dai ul Mutlaq of the community, is entitled to excommunicate any member of the Dawoodi Bohra community for an offence, which according to his religious sense justifies expulsion; and insofar as the Act interferes with the said right of the petitioner, it is ultra vires the Legislature.
The Act is also challenged on the ground of legislative incompetence of the then Legislature of Bombay, inasmuch as it is contended that such a power is not contained in any of the entries in the Seventh Schedule of the Government of India Act, 1935.
503 One Tayebhai Moosaji Koicha (Mandivala) instituted a suit, being suit No. 1262 of 1949, in the High Court of Judicature at Bombay, praying inter alia, for a declaration that certain orders of excommunication passed by the petitioner against him prior to the enactment of the Act were void and illegal and of no effect, and that the plaintiff continued to remain a member of the Dawoodi Bohra community.
The said suit was heard by J.C. Shah, J., who, by his judgment dated February 21, 1952, held that the Act was not inconsistent with article 26 of the Constitution, and was not ultra vires the Legislature of the Province of Bombay.
The petitioner, being dissatisfied with the judgment of the learned Judge, preferred an appeal that came up for hearing before the Court of Appeal, composed of Chagla, C. J., and Bhagwati J.
By its judgment dated August 26, 1952, the Court of Appeal upheld the judgment of the learned single Judge, though on different grounds.
The petitioner obtained leave from the High Court to appeal to this Court, and ultimately filed the appeal, being Civil Appeal No. 99 of 1954.
During the pendency of the appeal, the plaintiff respondent aforesaid died and an application made on behalf of his heirs for being brought on the record was not granted by the High Court of Bombay.
This Court dismissed the said appeal on the ground that the plaintiff having died, the cause of action did not survive.
The petitioner further alleges that parties inimical to him and to the Dawoodi Community have written scurrilous articles challenging and defying the position, power or authority of the petitioner as the religious head of the community; the challenge to the petitioner 's position and his power to excommunicate as the head of the Dawoodi Bohra community is violative of the petitioner 's guaranteed rights under articles 25 and 26 of the Constitution.
It is, therefore, claimed that it 504 is incumbent upon the respondent, in its public character, to forbear from enforcing the provisions of the Act against the petitioner.
By the petitioner 's attorney 's letter, annexure B to the petition, dated July 18, 1958, the petitioner pointed out to the respondent the unconstitutionality of the Act and requested the latter to desist from enforcing the provisions of the Act against the petitioner or against the Dawoodi Bohra community.
In the premises, a writ of Mandamus or a writ in the nature of Mandamus or other appropriate writ, direction or order under article 32 of the Constitution was prayed for against the respondent restraining it, its officers, servants and agents from enforcing the provisions of the Act.
The answer of the State of Bombay, the sole respondent, is contained in the affidavit sworn to by Shri V.N. Kalghatgi, Assistant Secretary to the Government of Bombay, Home Department, to the effect that the petitioner not having taken any proceedings to excommunicate any member of the community had no cause of action or right to institute the proceedings under article 32 of the Constitution; that it was not admitted that the Dai ul Mutlaq, as the head of the community, has civil powers, including the power to excommunicate any member of the community; that, alternatively, such power is not in conformity with the policy of the State, as defined in the Constitution; that the petitioner, as the head of the community may have the right to regulate religious rights at appropriate places and occasions, but those rights do not include the right to excommunicate any person and to deprive him of his civil rights and privileges; and that, in any event, after the coming into effect of the impugned Act, the petitioner has no such rights of excommunication; that it was denied that the right to excommunicate springs from or has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community that, at 505 any rate, it was denied that the right to excommunicate was an essential part of the religion of the community; that, alternatively, assuming that it was part of a religious practice, it runs counter to public order, morality and health.
It was also asserted that the impugned Act was a valid piece of legislation enacted by a competent legislature and within the limits of article 25 and 26 of the Constitution; and that the right to manage its own affairs vested in a religious community is not an absolute or untrammelled right but subject to a regulation in the interest of public order, morality and health.
It was denied that the alleged right of the petitioner to excommunicate a member of the community is guaranteed by articles 25 and 26 of the Constitution.
In the premises, it was denied that the petitioner had any right to the declaration sought or the relief claimed that the provisions of the Act should not be enforced.
At a very late stage of the pendency of the proceedings in this Court, in April 1961, one Kurbanhusein Sanchawala of Bombay, made an application either for being added as a party to the Writ Petition or, alternatively, for being granted leave to intervene in the proceedings.
In his petition for intervention, he stated that he was a citizen of India and was by birth a member of the Dawoodi Bohra community and as such had been taking an active part in social activities for bettering the conditions of the members of the community.
He asserted that members of the community accepted that up to the 46th Dai ul Mutlaq there was no controversy, that each one of them had been properly nominated and appointed, but that a controversy arose as regards the propriety and validity of the appointment of the 47th Dia ul Mutlaq, which controversy continued all along until the present time so that opinion is divided amongst the members of the Dawoodi Bohra community as to the validity of appointments and 506 existence of Dai ul Mutlaq, from the 47th to the 51st Dai ul Mutlaq, including the present petitioner.
The intervener also alleged that but for the impugned Act, the petitioner would have lost no time in excommunicating him.
In the premises, he claims that he is not only a proper but necessary party to the writ Petition.
He, therefore, prayed to be added as a party respondent, or, at any rate, granted leave to intervene at the hearing of the Writ Petition.
We have to dispose of this petition because no orders have been passed until the hearing of the main case before us.
In answer to the petitioner 's claims, the intervener has raised the following grounds, namely, that the Holy Koran does not permit excommunication, which is against the spirit of Islam; that, in any event, the Dai ul Mutlaq had no right or power to excommunicate any member of the community, and alternatively, that such a right, assuming that it was there, was wholly "out of date in modern times and deserves to be abrogated and was rightly abrogated by the said Act.
" It was further asserted that the alleged right of excommunication was opposed to the universally accepted fundamentals of human rights as embodied in the "Universal Declaration of Human Rights.
" It was also asserted that the Act was passed by a competent legislature and was in consonance with the provisions of articles 25 and 26 of the Constitution.
The intervener further claims that the rights to belief, faith and worship and the right to a decent burial were basic human rights and were wholly inconsistent with the right of excommunication claimed by the petitioner, and that the practice of excommunication is opposed to public order and morality; that the practice of excommunication was a secular activity associated with religious practice and that the abolition of the said practice is within the saving cl. 2(a) of article 25 of the Constitution.
It was also asserted that, under the Mohamadan Law, properties attached to 507 institutions for religious and charitable purposes vested in the Almighty God and not in the petitioner, and that all the members of the Dawoodi Bohra community had the right to establish and maintain such institutions, in consonance with article 26 of the Constitution; that is to say that article 26 guarantees the right of the denomination as a whole and not an individual like the petitioner.
It was also asserted that the provisions of the Act prohibiting excommunication was in furtherance of public order and morality and was just and reasonable restriction on a secular aspect of a religious practice.
The petitioner challenged the right of the intervener either to intervene or to be added as the party respondent.
In his rejoinder to the petition for intervention, the petitioner further alleged that the practice of excommunication was essential to the purity of religious denominations because it could be secured only by removal of persons who were unsuitable for membership of the community.
It was, therefore, asserted that those who did not accept the headship of the Dal ul Mutlaq, including the petitioner, must go out of the community and anyone openly defying the authority of the Dai ul Mutlaq was liable to be excommunicated from the membership of the community, entailing loss of rights and privileges belonging to such members.
It was, therefore, claimed that the practice of excommunication was, and is, an essential and integral part of the religion and religious belief, faith and tenets of Dawoodi Bohra community, which have been guaranteed by article 26 of the Constitution.
It has been urged on behalf of the petitioner, in support of the petition, that the Dawoodi Bohra community, of which the petitioner is the religious head, as also a trustee in respect of the property belonging to the community, is a religious denomination within the meaning of article 26 of the Constitution; that as such a religious denomination it is 508 entitled to ensure its continuity by maintaining the bond of religious unity and discipline, which would secure the continued acceptance by its adherents of certain essential tenets, doctrines and practices; the right to such continuity involves the right to enforce discipline, if necessary by taking the extreme step of excommunication; that the petitioner as the religious head of the denomination is invested with certain powers, including the right to excommunicate dissidents, which power is a matter of religion within the meaning of article 26(b) of the Constitution that the impugned Act, insofar as it takes away the power to enforce religious discipline and thus compels the denomination to accept dissidents as having full rights as a member of the community, including the right to use the properties and funds of the community dedicated to religious use, violates the fundamental rights of the petitioner guaranteed under article 26.
In this connection, reliance was placed on the decision of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), which, it is contended, has laid down that the guarantee under the Constitution not only protects the freedom of opinion, but also acts done in pursuance of such religious opinion, and that it is the denomination itself which has a right to determine what are essential parts of its religion, as protected by the provisions of articles 25 and 26 of the Constitution.
It was further contended that the right to worship in the mosque belonging to the community and of burial in the graveyard dedicated to the community were religious rights which could not be enjoyed by a person who had been rightly excommunicated.
Insofar as the Act took away the right of the petitioner as the head of the community to excommunicate a particular member of the community and thus to deprive him of the use of the funds and property belonging to the commu 509 nity for religious purposes, had the effect of depriving the petitioner of his right as the religious head to regulate the right to the use of funds and property dedicated to religious uses of the community.
It has also been contended that religious reform, if that is the intention of the impugned Act, is outside the ambit of article 25(2) (b) of the Constitution.
The learned Attorney General for the respondent contended on the other hand, that the right to excommunicate, which has been rendered invalid by the impugned Act, was not a matter of religion within the meaning of article 26(b) of the Constitution; that what the Act really intended was to put a stop to the practice indulged in by a caste or a denomination to deprive its members of their civil rights as such members, as distinguished from matters of religion, which were within the protection of article 25 and 26.
Alternatively, it was also argued that even assuming that excommunication was concerned with matters of religion, the Act would not be void because it was a matter of reform in the interest of public welfare.
It was also argued that there was no evidence on the record to show, that excommunication was an essential matter of religion.
The right to worship at a particular place or the right of burial in a particular burial ground were questions of civil nature, a dispute in respect of which was within the cognizance of the Civil Courts.
The legislation in question, in its real aspects, was a matter of social welfare and social reform and not within the prohibitions of article 25(1) or article 26.
Excommunication involving deprivation of rights of worship or burial and the like were not matters of religion within the meaning of article 26(b), and finally, article 26(b) was controlled by article 25(2) (b) of the Constitution, and, therefore, even if excommunication touched certain religious matters, the Act, insofar as it had abolished it, was in consonance with modern notions of human dignity 510 and individual liberty of action even in matters of religious opinion and faith and practice.
Shri Shroff, appearing for the intervener, attempted to reopen the question whether the petitioner as Dai ul Mutlaq, assuming that he had been properly elected as such, had the power to excommunicate, in spite of the decision of their Lordships of the Judicial Committee of the Privy Council in Hasan Ali vs Mansoor Ali (1).
He also supported the provisions of the impugned Act on the ground that they were in furtherance of public order.
As we are not here directly concerned with the question whether or not the petitioner as the head of the religious community had the power to excommunicate, we did not hear Mr. Shroff at any length with reference to that question.
We shall proceed to determine the controversy in this case on the assumption that the petitioner had that power.
We are only directly concerned with the questions whether the provisions of the Act, insofar as they have rendered invalid the practice of excommunication, are unconstitutional as infringing article 26(b), and enacted by a legislature which was not competent to do so, as contended on behalf of the petitioner.
We will, therefore, confine our attention to those questions.
Keeping in view the limited scope of the controversy, we have first to determine the ambit and effect of the impugned Act.
The Bombay Prevention of Excommunication Act (Bombay Act XLII of 1949) is an Act to prohibit excommunication in the province of Bombay.
Its preamble, which shortly states the background of the legislation, is in these terms: "Whereas it has come to the notice of Government that the practice prevailing in certain communities of excommunicating its members is often followed in a manner which results in the deprivation of legitimate rights and privileges of its members; 511 And whereas in keeping with the spirit of changing times and in the public interest it is expedient to stop the practice; it is hereby enacted is follows".
The definition of "Community" as given in section 2(a) would include the Dawoodi Bohra community, because admittedly its members are knit together by reason of certain common religious doctrines.
and admittedly its members belong to the same religion or religious creed of a section of the Shia community of Muslims.
The term 'community" includes a caste or a sub caste also.
"Excommunication" has been defined by section 2 (b) as meaning "the expulsion of a person from any community of which he is member depriving him of rights and privileges which are legally enforceable by a suit of civil nature. ", and the explanation to the definition makes it clear that the rights and privileges within the meaning of the definition include the right to office or property or to worship in any religious place or a right of burial or cremation, notwithstanding the fact that the determination of such right depends entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
By section 3, excommunication of a member of a community has been declared to be invalid and of no effect, notwithstanding any law, custom or usage to the contrary.
Any act of excommunication, or any act in furtherance of excommunication, of any member of a community has been made a penal offence liable to a punishment, on conviction, of fine which may extend to one thousand rupees.
The explanation has made it clear that any person who has voted in favour of a decision of excommunication at a meeting of a body or an association of a particular denomination is deemed to have committed the offence made punishable by section 4, as aforesaid.
Sections 5 and 6 lay down the procedure for the trial of an offence under the Act, the limit of time 512 within which the prosecution must be launched and the necessity of previous sanction of the authority indicated therein.
These, in short, are the provisions of the impugned Act.
It will be noticed that the Act is a culmination of the history of social reform which began more than a century ago with the enactment of section 9 of Regulation VII of 1832 of the Bengal Code, which provided, inter alia, that the laws of Hindus and Muslims shall not be permitted to operate to deprive the parties of any property to which, but for the operation of such laws, they would have been entitled.
Those provisions were subsequently incorporated in the India Act (XXI of 1850) known as the Caste Disabilities Removal Act which provided that a person shall not be deprived of his rights or property by reason of his or her renouncing or exclusion from the communion of any religion or being deprived of caste, and that any such forfeiture shall not be enforced as the law in the Courts.
The impugned Act, thus, has given full effect to modern notions of individual freedom to choose one 's way of life and to do away with all those undue and outmoded interferences with liberty of conscience, faith and belief.
It is also aimed at ensuring human dignity and removing all those restrictions which prevent a person from living his own life so long as he did not interfere with similar rights of others.
The legislature had to take the logical final step of creating a new offence by laying down that nobody had the right to deprive others of their civil rights simply because the latter did not conform to a particular pattern of conduct.
The Act, in substance, has added a new offence to the penal law of the country by penalising any action which has the effect of depriving a person of his human dignity and rights appurtenant thereto.
It also adds to the provisions of the Criminal Procedure Code and has insisted upon the previous sanction of the prescribed 513 authority as a condition precedent to launching a prosecution for an alleged offence against the provisions of the Act.
In my opinion, therefore, the enactment, in pith and substance, would come within Entries 1 & 2 of List III of the Concurrent Legislative List of the Constitution Act of 1935.
It is true that "excommunication" does not, in terms, figure as one of the entries in any one of the three lists.
The legislative competence of the Bombay Legislature to enact the Act has not been seriously challenged before us, and, therefore, no particular argument was addressed to us to show that the legislation in question could not be within the purview of Entries 1 & 2 of List III aforesaid.
What was seriously challenged before us was the constitutionality of the Act, in the light of the Constitution with particular reference to articles 25 & 26, and I shall presently deal with that aspect of the controversy.
But before I do that, it is convenient to set out the background of the litigation culminating in the present proceedings.
The first reported case in relation to some aspects of Shia Imami Ismailis is that of the Advocate General ex relation Dave Muhammad vs Muhammad vs Husen Huseni (1).
That was a suit commenced before the coming into existence of the Bombay High Court, on the Equity Side of the late Supreme Court, instituted by an information and bill, filed by the relators and plaintiffs, representing a minority of the Khoja community, against the defendants representing the majority of that community.
The prayer in the action was that an account be taken of all property belonging to or held in trust for the Khoja community of Bombay in the hands of the treasurer and the accountant, respectively called Mukhi and Kamaria, and other cognate reliefs not relevant to the present controversy.
In that case, which was heard on the Original side by Arnould J., judgment was delivered in November 1866, after a 514 prolonged hearing.
In that case, the learned Judge went into a detailed history of the several sects amongst Muslims, including the Shia Imami Ismailis, with particular reference to the Aga Khan and his relation with the Jamat of the Khojas of Bombay.
In that case it was laid down that there was no public property impressed with a trust, either express or implied, for the benefit of the whole Khoja community and that Aga Khan, as the spiritual head of the Khojas was entitled to determine on religious grounds who shall or shall not remain members of the Khoja community.
In that case, the learned Judge, with reference to authoritative texts, went into the detailed history of the two sects of the Sunnis and Shias.
He discussed the origin of the Ismailis as an offshoot of the Shias, and traced the hereditary succession of the unrevealed Imams in unbroken line down to Agha Khan.
Except for its historical aspect, the case does not deal with any matter relevant to the present controversy.
The next reported case which was brought to our notice is the case of the Advocate General of Bombay vs Yusufalli Ebrahim (1).
That was a case directly in relation to the Dawoodi Bohra community, with which we are concerned in this case.
In that case, there was a dispute as regards a mosque and a tomb, and was heard by Marten J., on the Original side in 1921.
We are not concerned with the details of the controversy in that case.
But the learned Judge has noticed the history of this community, with particular reference to the position of the Dai ul Mutlaq, and how the differences between the majority of the community and the minority arose on the question of the regularity of the succession of the 47th Dai in 1840.
The learned Judge has pointed out that the powers of the Dai are at least thrice delegated, 515 namely, by God to Prophet Mohammad, by the latter to the Imam, and by the Imam to the Dai ul Mutlaq.
The more directly in point is the litigation which was concluded by the judgment of their Lordships of the Judicial Committee of the privy Council in the case of Hasanali vs Mansoorali (1).
In that case, the powers of the Dai ul Mutlaq to excommunicate were directly in controversy.
The petitioner was the first defendant in that action, which had been commenced in October, 1925, and was decided by the judgment of the Subordinate Judge of Burhanpur, dated January 2, 1931.
That decision was reversed by the Judicial Commissioner of Central Provinces & Berar (later the High Court at Nagpur) by his judgment dated October 25, 1934.
That judgment was taken on appeal to the Privy Council and the judgment of the Privy Council very succinctly traces the history of the Dawoodi Bohra community until we come to the 51st Dai, who was the first defendant in that action, and is the petitioner before us.
In that case, certain orders of excommunication were under challenge.
As a result of those orders of excommunication, the plaintiffs had been obstructed in, and prevented from, entering the property in suit for the purposes of worship, burial and resting in the rest house.
In that case, their Lordships did not uphold the claim of the Dai ul Mutlaq that he had unrestricted power of excommunication, though they found that he could be regarded as Dai ul Mutlaq.
As regards the power to excommunicate, it was held that though the power was there, it was not absolute, arbitrary and untrammelled; and then their Lordships laid down the conditions for the valid exercise of that power.
The effect of a valid excommunication in their Lordships ' view, was exclusion from the exercise of religious rights in places under the trusteeship of the head of the community, because the Dai was not only a religious 516 leader but also a trustee of the property of the community.
After examining the evidence in that case, their Lordships held that the persons alleged to have been excommunicated had not been validly expelled from the community.
The judgment of the Privy Council was given on December 1, 1947.
Within two years of that judgment the impugned Act was passed, and soon after a suit on the Original side of the Bombay High Court was commenced (being suit No. 1262 of 1949).
That was a suit by a member of the Dawoodi Bohra community, who had been excommunicated by the petitioner, functioning as the Dai ul Mutlaq, by two orders of excommunication, one passed in 1934 and the other in 1948, soon after the judgment of the Privy Council.
The suit was, inter alia, for a declaration that the orders of excommunication were void in view of the Act.
A number of issues were raised at the trial, which was heard by Shah J. Two questions, by way of preliminary issues, with which we are immediately concerned in the present proceedings, were raised before the learned Judge of the Bombay High Court, namely: (1) Was the Act within the legislative competence of the Legislature of the Province of Bombay ? (2) Whether after the coming into force of the Constitution, the Act was invalid in view of articles 25 and 26 of the Constitution? The learned Judge, after an elaborate examination of the Constitution Act of 1935, came to the conclusion that the Bombay Legislature was competent to enact the Act, and that it was not unconstitutional even after the coming into effect of the Constitution because it was not inconsistent with the provisions of articles 25 and 26.
An appeal was taken to the Court of Appeal, which was heard by Chagla C. J. and Bhagwati J.
The Court of 517 Appeal upheld the decision of Shah J.
The matter was brought up on appeal to this Court in Civil Appeal 99 of 1954.
During the pendency of the appeal in this Court, the plaintiff died and it was held, without deciding the merits of the controversy, that the suit giving rise to the appeal in this Court had abated by reason of the fact that the plaintiff had died and the cause of action being personal to him was also dead.
The Order of this Court dismissing the appeal as not maintainable is dated November 27, 1957.
This Writ Petition was filed on August 18, 1958 by the petitioner as the 51st Dai ul Mutlaq and head of the Dawoodi Bohra community, for a declaration that the Act was void so far as the petitioner and the Dawoodi Bohra community were concerned, and that a writ of mandamus or a writ in the nature of mandamus or other appropriate write direction or order under article 32 of the Constitution be issued restraining the respondent, its officers, servants and agents from enforcing the provisions of the Act, against the petitioner or the Dawoodi Bohra community, or in any manner interfering with the right of the petitioner, as the religious leader and Dai ul Mutlaq of the Dawoodi Bohra community, to excommunicate any member of the community for an offence which the petitioner, in the exercise of his religious sense as the religious head of the community may determine as justifying such as expulsion.
It is not disputed that the petitioner is the head of the Dawoodi Bohra community or that the Dawoodi Bohra community is a religious denomination within the meaning of article 26 of the Constitution.
It is not even disputed by the State, the only respondent in the case, that the petitioner as the head of the community had the right, as found by the Privy Council in the case of Hasanali vs Mansoorali(1), to excommunicate a particular member of the community for reasons and in the 518 manner indicated in the judgment of their Lordships of the Privy Council.
But what is contended is that, as a result of the enactment in question, excommunication has been completely banned by the Legislature, which was competent to do so, and that the ban in no way infringes articles 25 and 26 of the Constitution.
I have already indicated my considered opinion that the Bombay Legislature was competent to enact the Act.
It now remains to consider the main point in controversy, which was, as a matter of fact, the only point urged in support of the petition, namely, that the Act is void in so far as it is repugnant to the guaranteed rights under articles 25 and 26 of the Constitution.
article 25 guarantees the right to every person, whether citizen or non citizen, the freedom of conscience and the right freely to profess, practise and propagate religion.
But this guaranteed right is not an absolute one.
It is subject to (1) public order, morality and health, (2) the other provisions of Part III of the Constitution, (3) any existing law regulating or restricting an economic, financial, political or other secular activity which may be associated with religious practice, (4) a law providing for social welfare and reform, and (5) any law that may be made by the State regulating or restricting the activities aforesaid or providing for social welfare and reform.
I have omitted reference to the provisions of Explanations I and II and other parts of article 25 which are not material to our present purpose.
It is noteworthy that the right guaranteed by article 25 is an individual right as distinguished from the right of an organised body like a religious denomination or any section thereof, dealt with by article 26.
Hence, every member of the community has the right, so long as he does not in any way interfere with the corresponding rights of others, to profess, practise and propagate his religion, and everyone is guaranteed his freedom of conscience.
The 519 question naturally arises: Can an individual be compelled to have a particular belief on pain of a penalty, like excommunication? One is entitled to believe or not to believe a particular tenet or to follow or not to follow a particular practice in the matters of religion.
No one can, therefore, be compelled, against his own judgment and belief, to hold any particular creed or follow a set of religious practices.
The Constitution has left every person free in the matter of his relation to his Creator, if he believes in one.
It is, thus, clear that a person is left completely free to worship God according to the dictates of his conscience, and that his right to worship as he pleased is unfettered so long as it does not come into conflict with any restraints, as aforesaid, imposed by the State in the interest of public order, etc.
A person is not liable to answer for the verity of his religious views, and he cannot be questioned as to his religious beliefs, by the State or by any other person.
Thus, though his religious beliefs are entirely his own and his freedom to hold those beliefs is absolute, he has not the absolute right to act in any way he pleased in exercise of his religious beliefs.
He has been guaranteed the right to practise and propagate his religion subject to the limitations aforesaid.
His right to practise his religion must also be subject to the criminal laws of the country, validly passed with reference to actions which the Legislature has declared to be of a penal character.
Laws made by a competent legislature in the interest of public order and the like, restricting religious practices, would come within the regulating power of the State.
For example, there may be religious practices of sacrifice of human beings, or sacrifice of animals in a way deleterious to the well being of the community at large.
It is open to the State to intervene, by legislation, to restrict or to regulate to the extent of completely stopping such deleterious practices.
It must, therefore, be held 520 that though the freedom of conscience is guaranteed to every individual so that he may hold any beliefs he likes, his actions in pursuance of those beliefs may be liable to restrictions in the interest of the community at large, as may be determined by common consent, that is to say, by a competent legislature.
It was on such humanitarian grounds, and for the purpose of social reform, that so called religious practices like immolating a widow at the pyre of her deceased husband, or of dedicating a virgin girl of tender years to a god to function as a devadasi, or of ostracising a person from all social contacts and religious communion on account of his having eaten forbidden food or taboo, were stopped by legislation.
But it has been contended on behalf of the petitioner that the right guaranteed, under article 25, to freedom of conscience and the freedom to profess, practise and propagate religion is available not only to an individual but to the community at large, acting through its religious head; the petitioner, as such a religious head has, therefore, the right to excommunicate, according to the tenets of his religion, any person who goes against the beliefs and practice connected with those beliefs.
The right of the petitioner to excommunicate is, therefore, a fundamental right, which cannot be affected by the impugned Act.
In this connection, reference was made to the following observations in the leading judgment of this Court, bearing upon the interpretations of articles 25 and 26 (vide The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt) (1): "A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and 521 these forms and observances might extent even to matters of food and dress.
The guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression 'practice of religion ' in Article 25.
" On the strength of those observations, it is contended on behalf of the petitioner that this practice of ex communication is a part of the religion of the community with which we are concerned in the present controversy, article 26, in no uncertain terms, has guaranteed the right to every religious denomination or a section thereof "to manage its own affairs in matters of religion" (article 26(b)).
Now what are matters of religion and what are not is not an easy question to decide.
It must vary in each individual case according to the tenets of the religious denomination concerned.
The expression "matters of religion" in Art 26(b) and "activities associated with religious practice" do not cover exactly the same ground.
What are exactly matters of religion are completely outside State interference, subject of course to public order, morality and health.
But activities associated with religious practices may have many ramifications and varieties economic, financial, political and other as recognised by article 25(2)(a).
Such activities, as are contemplated by the clause aforesaid cover a field much wider than that covered by either article 25(1) or article 26(b).
Those provisions have, therefore, to be so construed as to create no conflict between them.
We have, therefore, to classify practices into such as are essentially and purely of a religious character, and those which are not essentially such.
But it has been contended on behalf of the petitioner that it is for the religious denomination itself to determine what are essentially reli 522 gious practices and what are not.
In this connection, reliance is placed on the following observations of this Court in the leading case, aforesaid, of The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1): "As we have already indicated, freedom of religion in our Constitution is not confined to religious beliefs only; it extends to religious practices as well subject to the restrictions which the Constitution itself has laid down.
Under article 26(b), therefore, a religious denomination or organisation enjoys complete autonomy in the matter of deciding as to what rites and ceremonies are essential according to the tenets of the religion they hold and no outside authority has any jurisdiction to interfere with their decision in such matters.
" It should be noted that the complete autonomy which a religious denomination enjoys under article 26(b) is in 'matters of religion ', which has been interpreted as including rites and ceremonies which are essential according to the tenets of the religion.
Now, article 26(b) itself would seem to indicate that a religious denomination has to deal not only with matters of religion, but other matters connected with religion, like laying down rules and regulations for the conduct of its members and the penalties attached to infringement of those rules, managing property owned and possessed by the religious community, etc., etc.
We have therefore, to draw a line of demarcation between practices consisting of rites and ceremonies connected with the particular kind of worship, which is the tenet of the religious community, and practices in other matters which may touch the religious institutions at several points, but which are not intimately concerned with rites and ceremonies the performance of which is an 523 essential part of the religion.
In this connection, the following observations of this Court in The Durgah Committee, Ajmer vs Syed Hussain Ali (1) which were made with reference to the earlier decisions of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (2) and in Sri Venkataramana Devaru vs The State of Mysore (3), that "matters of religion" in article 26(b) include even practices which are regarded by the community as part of its religion, may be noted: "Whilst we are dealing with this point it may not be out of place incidentally to strike a note of caution and observe that in order that the practices in question should be treated as a part of religion they must be regarded by the said religion as its essential and integral part; otherwise even purely secular practices which are not an essential or an integral part of religion are apt to be clothed with a religious form and may make a claim for being treated as religious practices within the meaning of article 26.
Similarly, even practices though religious may have sprung from merely superstitious beliefs and may in that sense be extraneous and unessential accretions to religion itself.
Unless such practices are found to constitute an essential and integral part of a religion their claim for the protection under article 26 may have to be carefully scrutinised; in other words, the protection must be confined to such religious practices as are an essential and an integral part of it and no other.
" But then it is contended that a religious denomination is a quasi personality, which has to ensure its continuity and has, therefore, to lay down rules for observance by members of its community, and, in order to maintain proper and strict 524 discipline, has to lay down sanctions; the right to excommunicate a recusant member is an illustration of that sanction.
In this connection, it was contended that the Privy Council had laid down in the case of Hasanali vs Mansoorali (1) that the power of excommunication was a religious power exercisable by the Dai.
In my opinion, those passages in the judgment of the Privy Council do not establish the proposition that the right which the Privy Council found inhered in the Dai was a purely religious right.
That it was not a purely religious right becomes clear from the judgment of the Judicial Committee of the Privy Council, which laid down the appropriate procedure and the manner of expulsion, which had to be according to justice, equity and good conscience, and that it was justiciable.
A matter which is purely religious could not come within the purview of the Courts.
That conclusion is further strengthened by the consideration that the effect of the excommunication or expulsion from the community is that the expelled person is excluded from the exercise of rights in connection not only with places of worship but also from burying the dead in the community burial ground and other rights to property belonging to the community, which are all disputes of a civil nature and are not purely religious matters.
In the case before their Lordships of the Privy Council, their Lordships enquired into the regularity of the proceedings resulting in the excommunication challenged in that case, and they held that the plaintiff had not been validly expelled.
It cannot, therefore, be asserted that the Privy Council held the matter of excommunication as a purely religious one.
If it were so, the Courts would be out of the controversy.
The same argument was advanced in another form by contending that excommunication is not a social question and that, therefore, article 25(2)(b) could not be invoked in aid of holding the Act to be constitutional.
In this connection, it has to be 525 borne in mind that the Dai ul Mutlaq is not only the head of the religious community but also the trustee of the property of the community in which the community as a whole is interested.
Even a theological head has got to perform acts which are not wholly religious but may be said to be quasi religious or matters which are connected with religious practices, though not purely religious.
Actions of the Dai ul Mutlaq in the purely religious aspect are not a concern of the courts, but his actions touching the civil rights of the members of the community are justiciable and not outside the pale of interference by the legislature or the judiciary.
I am not called upon to decide, nor am I competent to do so, as to what are the religious matters in which the Dai ul Mutlaq functions according to his religious sense.
I am only concerned with the civil aspect of the controversy relating to the constitutionality of the Act, and I have to determine only that controversy.
It has further been argued on behalf of the petitioner that an excommunicated person has not the right to say his prayers in the mosque or to bury his dead in the community burial ground or to the use of other communal property.
Those may be the result of excommunication, but I am concerned with the question whether the Legislature was competent and constitutionally justified in enacting the law declaring excommunication to be void.
As already indicated, I am not concerned in this case with the purely religious aspect of excommunication.
I am only concerned with the civil rights of the members of the community, which rights they will continue to enjoy as such members if excommunication was held to be invalid in accordance with the provision of the Act.
Hence, though the Act may have its repercussions on the religious aspect of excommunication, in so far as it protects the civil rights of the members of the community 526 it has not gone beyond the provisions of article 25(2)(b) of the constitution.
Then it is argued that the guaranteed right of a religious denomination to manage its own affairs in matters of religion (article 26(b) is subject only to public order, morality and health and is not subject to legislation contemplated by article 25(2)(b).
This very argument was advanced in the case of Shri Venkataramana Devaru vs The State of Mysore(1).
At page 916 this argument has been specifically dealt with and negatived.
This Court observed as follows: "The answer to this contention is that it is impossible to read any such limitation into the language of Art.25(2)(b).
It applies in terms to all religious institutions of a public character without qualification or reserve.
As already stated, public institutions would mean not merely temples dedicated to the public as a whole but also those founded for the benefit of sections thereof, and denominational temples would be comprised therein.
The language of the Article being plain and unambiguous, it is not open to us to read into it limitations which are not there, based on a priori reasoning as to the probable intention of the Legislature.
Such intention can be gathered only from the words actually used in the statute; and in a Court of law, what is unexpressed has the same value as what is unintended.
We must therefore hold that denominational institutions are within article 25(2)(b).
" In that case also, as in the present case, reference was made to the earlier decision of this Court in 527 The Commissioner, Hindu Religious endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), but the latter decision had explained the legal position with reference to the earlier decision, and after examining the arguments for and against the proposition at pages 916 918, it has been distinctly laid down that article 26 (b) must be read subject to article 25 (2) (b) of the Constitution.
It has further been contended that a person who has been excommunicated as a result of his non conformity to religious practices is not entitled to use the communal mosque or the communal burial ground or other communal property, thus showing that for all practical purposes he was no more to be treated as a member of the community, and is thus an outcast.
Another result of excommunication is that no other member of the community can have any contacts, social or religious, with the person who has been excommunicated.
All that is true.
But the Act is intended to do away with all that mischief of treating a human being as a pariah, and of depriving him of his human dignity and of his sight to follow the dictates of his own conscience.
The Act is, thus, aimed at fulfilment of the individual liberty of conscience guaranteed by article 25 (1) of the Constitution, and not in derogation of it.
In so far as the Act has any repercussions on the right of the petitioner, as trustee of communal property, to deal with such property, the Act could come under the protection of article 26 (d), in the sense that his right to administer the property is not questioned, but he has to administer the property in accordance with law.
The law, in the present instance, tells the petitioner not to withhold the civil rights of a member of the community to a communal property.
But as against this it is argued on behalf of the petitioner that his right to excommunicate is so bound up with religion that it is protected by cl.
(b) of article 26, and is thus completely out of the 528 regulation of law, in accordance with the provisions of cl.
(d) of that Article.
But, I am not satisfied on the pleadings and on the evidence placed before us that the right of excommunication is a purely religious matter.
As already pointed out, the indications are all to the contrary, particularly the judgment to the Privy Council in the case of Hasanali vs Mansoorali (1) on which great reliance was placed on behalf of the petitioner.
On the social aspect of excommunication, one is inclined to think that the position of an excommunicated person becomes that of an untouchable in his community, and if that is so, the Act in declaring such practices to be void has only carried out the strict injunction of article 17 of the Constitution, by which untouchability has been abolished and its practice in any form forbidden.
The Article further provides that the enforcement of any disability arising out of untouchability shall be an offence punishable in accordance with law.
The Act, in this sense, is its logical corollary and must, therefore, be upheld.
In my opinion, it has not been established that the Act has been passed by a legislature which was not competent to legislate on the subject, or that it infringes any of the provisions of the Constitution.
This petition must, therefore, fail.
DAS GUPTA, J.
In our opinion this petition should succeed.
The petitioner is the head of the Dawoodi Bohras who form one of the several sub sects of the Shia sect of Musalmans.
Dawoodi Bohras believe that, since the 21st Imam went to seclusion, the rights, power and authority of the Imam have been rightfully exercised by the Dai ul Imam as the vice regent of the Imam in seclusion.
One of such rights is the exercise of disciplinary powers including the right to excommunicate any 529 member of the Dawoodi Bohra community.
The existence of such a right in the Dai ul Mutlaq who is for the sake of convenience often mentioned as the Dai was questioned before the courts in a case which went up to the Privy Council.
But since the decision of the Privy Council in that case, viz., Hasanali vs Mansoorali (1) that question may be taken to have been finally settled, and it is no longer open to dispute that the Dai, as the head of the Dawoodi Bohra community has the right to excommunicate any member of the community.
The claim of the present petitioner to be the 51st Dai ul Mutlaq of the community was also upheld in that case and is no longer in dispute.
The Privy Council had also to consider in that case the question whether this power to excommunicate could be exercised by the Dai in any manner he liked and held after consideration of the previous cases of excommunication and also a document composed about 1200 A.D. that normally members of the community can be expelled "only at a meeting of the Jamat after being given due warning of the fault complained of and an opportunity of amendment, and after a public statement of the grounds of expulsion.
" Speaking about the effect of excommunication their Lordships said: "Excommunication. . necessarily involve exclusion from the exercise of religious rights in places under the trusteeship of the head of the community in which religious exercises are performed.
" The present petitioner, it may be mentioned, was a party to that litigation.
This decision was given on December, 1, 1947; shortly after that, the Bombay Legislature it may be mentioned that there is a large concentration of Dawoodi Bohras in the State of Bombay stepped in to prevent, as mentioned in the preamble, the practice of excommunication "which 530 results in the deprivation of legitimate rights and privileges of" members of certain religious communities and enacted the Bombay Act No. XLII of 1949.
It is a short Act of six sections.
Section 3 the main operative section invalidates all excommunication of members of any religious community.
Excommunication is defined in section 2 to mean "the expulsion of a person from any community of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of a civil nature by him or on his behalf as such member".
The explanation to the definition to this section makes it clear that a right to office or property or to worship in any religious place or a right to burial or cremation is included as a right legally enforceable by suit even though the determination of such right may depend entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
Section 4 makes a person who does any act which amounts to excommunication or is in furtherance of the excommunication liable to punishment which may extend to one thousand rupees.
Faced with the position that the legislation wholly destroys his right of excommunicating any member of the Dawoodi Bohra community, the Dai has presented this petition under article 32 of the Constitution.
He contends that the Act violates the fundamental right of the Dawoodi Bohras, including himself, freely to practise religion according to their own faith and practice a right guaranteed by article 25 of the Constitution, and further that it violates the right of the Dawoodi Bohra community to manage its own affairs in matters of religion guaranteed by article 26.
Therefore, says he, the Act is void and prays for a declaration that the Act is void and the 531 issue of an appropriate writ restraining the respondent, the State of Bombay, its officers, servants and agents from enforcing the provisions of the Act against the petitioner and/or any other member of the Dawoodi Bohra community.
It may be mentioned that in the petition the legislative competence of the Bombay legislature to enact the Bombay Prevention of excommunication 1949 was also challenged.
This, however was not pressed at the time of the hearing.
The respondent contends that neither the right guaranteed under article 25 nor that under article 26(b) is contravened by the impugned Act.
Briefly stated, the respondent 's case is that the right and privilege of the petitioner as Dai ul Mutlaq to regulate the exercise of religious rights do not include the right to excommunicate any person so as to deprive him of his civil rights and privileges.
It was denied that the petitioner 's power to excommunicate was an essential part of the religion of the Dawoodi Bohra community and that the right has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community.
It was also denied that the right to excommunicate is the religious practice and it was further pleaded that assuming that it was a religious practice, it was certainly not a part of religion of the Dawoodi Bohra community.
The same points were urged on behalf of the intervener, except that the learned counsel for the intervener wanted to reopen the question whether the petitioner as the head of the Dawoodi Bohra community had the power to excommunicate.
As already stated, however, this question is hardly open to dispute in the face of the decision of the Privy Council in Hasanali vs Mansoorali (1) and the point was not pressed.
The content of articles 25 and 26 of the Constitution came up for consideration before this Court 532 in the Commissioner, Hindu Religious Endowments Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Matt (1); Mahant Jagannath Ramanuj Das vs The State of Orissa (2); Sri Venkatamana Devaru vs The State of Mysore (3); Durgah Committee, Ajmer vs Syed Hussain Ali (4) and several other cases and the main principles underlying these provisions have by these decisions been placed beyond controversy.
The first is that the protection of these articles is not limited to matters of doctrine or belief they extend also to acts done in pursuance of religion and therefore contain a guarantee for rituals and observances, ceremonies and modes of worship which are integral parts of religion.
The second is that what constitutes an essential part of a religious or religious practice has to be decided by the courts with reference to the doctrine of a particular religion and include practices which are regarded by the community as a part of its religion.
Before however we can give a proper answer to the two questions raised, viz., (i) Has the impugned Act interfered with a right freely to practise religion and (ii) Has it interfered with the right of the Dawoodi Bohra Community to manage its own affairs in matters of religion; it is necessary to examine first the place of excommunication in the life of a religious community.
Much valuable information about this is furnished by an article in the Encyclopaedia of the Social Sciences from the pen of Prof. Hazeltine.
"Excommunication", says Prof. Hazeltine, in one or another of the several different meanings of the term has always and in all civilizations been one of the principal means of maintaining discipline within religious organizations and hence of preserving and strengthening their solidarity.
" Druids in old Britain are said to have claimed the power to exclude offenders from sacrifice.
The early Chiristian Church exercised 533 this power very largely and expelled and excluded from the Christian association, those members who proved to be unworthy of its aims or infringed its rules of governance.
During the middle ages the Pope used this power frequently to secure the observance of what was considered the proper religious rights and practices of Christianity by excommunicating even the kings of some European countries when they introduced or tried to introduce different forms of divine worship.
The power was often used not perhaps always fairly and justly, as a weapon in the struggle for the principle that the Church was above the State.
Impartial historians have recognised, however, that many of the instances of excommunication were for the purpose of securing the adherence to the orthodox creed and doctrine of Christianity as pronounced by the Catholic Church.
(Vide The Catholic Encyclopedia, Vol.
V, articles on England and Excommunication).
Turning to the Canon law we find that excommunication may be inflicted as a punishment for a number of crimes, the most serious of these being, heresy, apostasy or schism.
Canon 1325, section 2 defines a heretic to be a man who while remaining nominally a Christian, pertinaciously denies or doubts any one of the truths which must be believed de fide divina et catholica; if he falls away entirely from the Christian faith, he is an apostate; finally if he rejects the authority of the Supreme Pontiff or refuses communion with the members of the Church who are subject to him, he is a schismatic.
(Vide Canon Law by Bouscaren and Ellis).
Among the Muslims also the right of excommunication appears to have been practised from the earliest times.
The Prophet and the Imam, had this right; and it is not disputed that the Dais have also in the past exercised it on a number of 534 occasions.
There can be little doubt that heresy or apostasy was a crime for which excommunication was in force among the Dawoodi Bohras also.
It may be pointed out in this connection that excommunication in the case of Hasanali vs Mansoorali (1) which was upheld by the Privy Council) was based on the failure to comply with the tenets and traditions of the Dawoodi Bohra community and certain other faults.
According to the petitioner it is "an integral part of the religion and religious faith and belief of the Dawoodi Bohra community" that excommunication should be pronounced by him in suitable cases.
It was urged that even if this right to excommunicate is considered to be a religious practice as distinct from religious faith such religious practice is also a part of the religion of the Dawoodi Bohra community.
It does appear to be a fact that unquestioning faith in the Dai as the head of community is part of the creed of the Dawoodi Bohras.
It is unnecessary to trace the historical reason for this extraordinary position of the Dai as it does not appear to be seriously disputed that the Dai is considered to be the vice regent of Imam so long as the rightful Imam continues in seclusion.
Mention must be made in this connection of the Mishak which every Dawoodi Bohra takes at the time of his initiation, This includes among other things, an oath of unquestioning faith in and loyalty to the Dai.
It is urged therefore that faith in the existence of the disciplinary power of the Dai including his power to excommunicate forms one of the religious tenets of this community.
The argument that article 25 has been contravened by the impugned Act is based mainly on this contention and the further contention that in any case excommunication is a religious practice in this community.
As regards article 26(b) the argument is that excommunication among the 535 Dawoodi Bohras forms such an integral part of the management of the community by the religious head that interference with that right cannot but amount to an interference with the right of the community to the manage its own affairs in matters of religion.
Let us consider first whether the impugned Act contravenes the provisions of article 26 (b).
It is unnecessary for the purpose of the present case to enter into the difficult question whether every case of excommunication by the Dai on whatever grounds inflicted is a matter of religion.
What appears however to be clear is that where an excommunication is itself based on religious grounds such as lapse from the orthodox religious creed or doctrine (similar to what is considered heresy, apostasy or schism under the Canon Law) or breach of some practice considered as an essential part of the religion by the Dawoodi Bohras in general, excommunication cannot but be held to be for the purpose of maintaining the strength of the religion.
It necessarily follows that the exercise of this power of excommunication on religious grounds forms part of the management by the community, through its religious head, "of its own affairs in matters of religion.
" The impugned Act makes even such excommunications invalid and takes away the power of the Dai as the head of the community to excommunicate even on religious grounds.
It therefore, clearly interferes with the right of the Dawoodi Bohra community under cl.
(b) of article 26 of the Constitution.
That excommunication of a member of a community will affect many of his civil rights is undoubtedly true.
This particular religious denomination is possessed of properties and the necessary consequence of excommunication will be that the excommunicated member will lose his rights of enjoyment of such property.
It might be thought undesirable that the head of a religious community 536 would have the power to take away in this manner the civil rights of any person.
The right given under article 26 (b) has not however been made subject to preservation of civil rights.
The express limitation in article 26 itself is that this right under the several clauses of the article will exist subject to public order, morality and health.
It has been held by this Court in Sri Venkataramana Devaru vs The State of Mysore (1) that the right under article 26(b) is subject further to cl. 2 of article 25 of the Constitution.
We shall presently consider whether these limitations on the rights of a religious community to manage its own affairs in matters of religion can come to the help of the impugned Act.
It is clear however that apart from these limitations the Constitution has not imposed any limit on the right of a religious community to manage its own affairs in matters of religion.
The fact that civil rights of a person are affected by the exercise of this fundamental right under article 26(b) is therefore of no consequence.
Nor is it possible to say that excommunication is prejudicial to public order, morality and health.
Though there was a statement in paragraph 10 of the respondent 's counter affidavit that "the religious practice, which runs counter to the public order, morality and health must give way before the good of the people of the State", the learned Attorney General did not advance any argument in support of this plea.
It remains to consider whether the impugned Act comes within the saving provisions embodied in cl. 2 of article 25.
The clause is in these words: "Nothing in this Article shall affect the operation of any existing law or prevent the State from making any law 537 (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus." Quite clearly, the impugned Act cannot be regarded as a law regulating or restricting any economic, financial, political or other secular activity.
Indeed that was not even suggested on behalf of the respondent State.
It was faintly suggested however that the Act should be considered to be a law "providing for social welfare and reform.
" The mere fact that certain civil rights which might be lost by members of the Dawoodi Bohra community as a result of excommunication even though made on religious grounds and that the Act prevents such loss, does not offer sufficient basis for a conclusion that it is a law "providing for social welfare and reform.
" The barring of excommunication on grounds other than religious grounds, say on the breach of some obnoxious social rule or practice might be a measure of social reform and a law which bars such excommunication merely might conceivably come within the saving provisions of cl. 2(b) of article 25.
But barring of excommunication on religious grounds pure and simple, cannot however be considered to promote social welfare and reform and consequently the law in so far as it invalidates excommunication on religious grounds and takes away the Dai 's power to impose such excommunication cannot reasonably be considered to be a measure of social welfare and reform.
As the Act invalidates excommunication on any ground whatsoever, including religious grounds, it must be held to be in clear violation of the right of the Dawoodi Bohra community under article 26(b) of the Constitution.
538 It is unnecessary to consider the other attack on the basis of article 25 of the Constitution.
Our conclusion is that the Act is void being in violation of article 26 of the Constitution.
The contrary view taken by the Bombay High Court in Taher Saifuddin vs Tyebbhai Moosaji (1) is not correct.
We would, therefore, allow the petition, declare the Act to be void and direct the issue of a writ in the nature of mandamus on the respondent, the State of Bombay, not to enforce the provisions of the Act.
The petitioner will get his costs.
AYYANGAR, J. I agree that the petition should succeed and I generally concur in the reasoning of Das Gupta J., by which he has reached this conclusion.
In view, however, of the importance of the case I consider it proper to state in my own words the grounds for my concurrence.
It was not in dispute that the Dawoodi Bohras who form a sub sect of the Shia sect of Muslims is a "religious denomination" within the opening words of article 26 of the Constitution.
There are a few further matters which were not in controversy on the basis of which the contentions urged in support of the petition have to be viewed.
These might now be briefly stated: (1) It was the accepted tenet of the Dawoodi Bohra faith that God always had and still has a representative on earth through whom His commands are conveyed to His people.
That representative was the Imam.
The Dai was the representative of the Imam and conveyed God 's message to His people.
The powers of the Dai were approximated to those of the Imam.
When the Imam came out of seclusion, the powers of the Dai would cease.
The chain of intercession with the Almighty was as follows: The Dai the Imam 539 the Holy Prophet and the one God (See Per Marten J. in Advocate General of Bombay vs Yusufalli Ebrahim (1).
(2) The position and status of the petitioner as the Dai ul Mutlaq was not contested since the same had been upheld by the Privy council the decision reported as Hasanali vs Mansoorali (2).
(3) It was not in dispute that subject to certain limitations and to the observance of particular formalities which were pointed out by the Privy Council in the decision just referred to, that the Dai ul Mutlaq has the power of excommunication and indeed, as observed by Lord Porter in that judgment, "the right of excommunication by a Dai ul Mutlaq was not so strenuously contested as were the limits within which it is confined." (4) The Dai ul Mutlaq was not merely a religious leader the religious head of the denomination but was the trustee of the property of the community.
(5) The previous history of the community shows that excommunicated persons were deprived of the exercise of religious rights.
It was contended before the Privy Council that the effect of an excommunication was in the nature merely of social ostracism but this was rejected and it was held to have a larger effect as involving an exclusion from the right to the enjoyment of property dedicated for the benefit of the denomination and of worship in places of worship similarly dedicated or set apart.
The validity of Bombay Act 42 of 1949 (which I shall hereafter refer to as the impugned Act) has to be judged in the light of these admitted premises.
Articles 25 and 26, which are urged as violated by the impugned Act run: 540 "25.
(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion.
(2) Nothing in this article shall affect operation of any existing law or prevent the State from making any law (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.
Explanation I. The wearing and carrying of kirpans shall be deemed to be included in the profession of the Sikh religion.
Explanation II In sub clause (b) of clause (2), the reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion, and the reference to Hindu religious institutions shall be construed accordingly.
Subject to public order, morality and health, every religious denomination or any section thereof shall have the right (a) to establish and maintain institutions for religious and charitable purposes; (b) to manage its own affairs in matters of religion; (c) to own and acquire movable and immovable property; and (d) to administer such property in accordance with law.
" 541 I would add that these Articles embody the principle of religious toleration that has been the characteristic feature of Indian civilization from the start of history.
the instances and periods when this feature was absent being merely temporary aberrations.
Besides, they serve to emphasize the secular nature of Indian Democracy which the founding fathers considered should be the very basis of the Constitution.
I now proceed to the details of the provisions of the impugned Act which are stated to infringe the rights guaranteed by these two Articles.
The preamble to the impugned Act recites: "Whereas it has come to the notice of Government that the practice prevailing in certain communities of excommunicating its members is often followed in a manner which results in the deprivation of legitimate rights and privileges of its members; And whereas in keeping with the spirit of changing times and in the public interest, it is expedient to stop the practice; it is hereby enacted as follows : " Section 3 is the operative provision which enacts: "3.
Notwithstanding anything contained in any law, custom or usage for the time being in force to the contrary, no excommunication of a member of any community shall be valid and shall be of any effect.
" Section 4 penalises any person who does "any act which amounts to or is in furtherance of the excommunication" and subjects him to criminal 542 proceedings as regards which provision is made in sections 5 and 6.
Section 2 contains two definitions: (1) of the word "community" which would include the religious denomination of Dawoodi Bohras, and (2) of "excommunication" as meaning: "the expulsion of a person from any community of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of civil nature by him or on his behalf as such member; Explanation.
For the purposes of clause a right legally enforceable by a suit of civil nature shall include the right to office or property or to worship in any religious place or a right of burial or cremation, notwithstanding the fact that the determination of such right depends entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
" The question to consider is whether a law which penalises excommunication by a religious denomination or by its head whether or not the excommunication be for non conformity to the basic essentials of the religion of that denomination and effects the nullification of such excommunication as regards the rights of the person excommunicated would or would not infringe the rights guaranteed by articles 25 and 26.
First as to article 25, as regards cl (1) it was not in dispute that the guarantee under it protected not merely freedom to entertain religious beliefs but also acts done in pursuance of that religion, this being made clear by the use of the expression 543 "practice of religion".
No doubt, the right to freedom of conscience and the right to profess, practise and propagate religion are all subject to "public order, morality or health and to the other provisions of this Part" but it was not suggested that (subject to an argument about the matter being a measure of social reform) the practice of excommunication offended public order, morality or health or any other part of the Constitution.
Here is a religious denomination within Art.26.
The Dai ul Mutlaq is its spiritual leader, the religious head of the denomination and in accordance with the tenets of that denomination he had invested in him the power to excommunicate dissidents.
Pausing here, it is necessary to examine the rational basis of the excommunication of persons who dissent from the fundamental tenets of a faith.
The identity of a religious denomination consists in the identity of its doctrines, creeds and tenets and these are intended to ensure the unity of the faith which its adherents profess and the identity of the religious views are the bonds of the union which binds them together as one community.
As Smith B. said in Dill vs Watson (1) in a passage quoted by Lord Halsbury in Free Church of Scotland vs Overtoun (2) "In the absence of conformity to essentials, the denomination would not be an entity cemented into solidity by harmonious uniformity of opinion, it would be a mere incongruous heap of, as it were, grains of sand, thrown together without being united, each of these intellectual and isolated grains differing from every other, and the whole forming a but nominally united while really unconnected mass; fraught with nothing but internal dissimilitude, and mutual and reciprocal contradiction and dissension.
" 544 A denomination within article 26 and persons who are members of that denomination are under in article 25 entitled to ensure the continuity of the denomination and such continuity is possible only may by maintaining the bond of religious discipline which would secure the continued adherence of its members to certain essentials like faith, doctrine, tenets and practices.
The right to such continued existence involves the right to maintain discipline by taking suitable action inter alia of excommunicating those who deny the fundamental bases of the religion.
The consequences of the exercise of that power vested in the denomination or in its head a power which is essential for maintaing the existence and unity of denomination must necessarily be the exclusion of the person excommunicated from participation in the religious life of the denomination, which would include the use of places of worship or consecrated places for burial dedicated for the use of the members of the denomination and which are vested in the religious head as a trustee for the denomination.
The learned Attorney General who appeared for the respondent submitted three points: (1) Assuming that excommunication was part of the religious practice of the denomination, still there was no averment in the petition that the civil results flowing from excommunication in the shape of exclusion from the beneficial use of denominational property was itself a matter of religion.
In other words, there was no pleading that the deprivation of the civil rights of a person excommunicated was a matter of religion or of religious practice.
(2) The "excommunication" defined by the Act deals with rights of civil nature as distinguished from religious or social rights or obligations and a law dealing with the civil consequence of an excommunication does not violate the freedom protected by article 25 or article 26.
(3) Even on the basis that the civil consequences of an excommunication are a matter of religion, still it is a 545 measure of social reform and as such the legislation would be saved by the words in article 25(2)(b).
I am unable to accept any of these contentions as correct.
(1) First I do not agree that the pleadings do not sufficiently raise the point that if excommunication was part of the "practice of a religion" the consequences that flow therefrom were not also part of the "practice of religion".
The position of the Dai as the religious head of the denomination not being disputed and his power to excommunicate also not being in dispute and it also being admitted that places of worship and burial grounds were dedicated for the use of the members of the denomination, it appears to me that the consequence of the deprivation of the use of these properties by persons excommunicated would be logical and would flow from the order of excommunication.
It could not be contested that the consequence of a valid order of excommunication was that the person excommunicated would cease to be entitled to the benefits of the trusts created or founded for the denomination or to the beneficial use or enjoyment of denominational property.
If the property belongs to a community and if a person by excommunication ceased to be a member of that community, it is a little difficult to see how his right to the enjoyment of the denominational property could be divorced from the religious practice which resulted in his ceasing to be a member of the community.
When once it conceded that the right guaranteed by article 25 (1) is not confined to freedom of conscience in the sense of the right to hold a belief and to propagate that belief, but includes the right to the practice of religion, the consequences of that practice must also bear the same complexion and be the subject of a like guarantee.
(2) I shall reserve for later consideration the point about the legislation being saved as a matter 546 of social reform under article 25(2)(b), and continue to deal with the argument that the impugned enactment was valid since it dealt only with the consequences on the civil rights, of persons excommunicated.
It has, however, to be pointed out that though in the definition of "excommunication" under section 2(b) of the impugned Act the consequences on the civil rights of the excommunicated persons is set out, that is for the purpose of defining an "excommunication".
What I desire to point out is that it is not as if the impugned enactment saves only the civil consequences of an excommunication not interfering with other consequences of an excommunication falling within the definition.
Taking the case of the Dawoodi Bohra community, if the Dai excommunicated a person on the ground of forswearing the basic tenets of that religious community the Dai would be committing an offence under section 4, because the consequences according to the law of that religious denomination would be the exclusion from civil rights of the excommunicated person.
The learned Attorney General is therefore not right in the submission that the Act is concerned only with the civil rights of the excommunicated person.
On the other hand, it would be correct to say that the Act is concerned with excommunications which might have religious significance but which also operate to deprive persons of their civil rights.
Article 26 confers on every religious denomination two rights which are relevant in the present context, by cl.
(b) "to manage its own affairs in matters of religion" and by the last clause cl.
(d) "to administer such property" which the denomination owns or has acquired (vide cl.
(c) (d) "in accordance with law.
" In considering the scope of article 26 one has to bear in mind two basic postulates: First that a religious denomination is possessed of property which is dedicated for definite uses and which under article 26 (d) the religious 547 denomination has the right to administer.
From this it would follow that subject to any law grounded on public order, morality or health the limitations with which article 26 opens, the denomination has a right to have the property used for the purposes for which it was dedicated.
So far as the present case is concerned, the management of the property and the right and the duty to ensure the proper application of that property is admitedly vested in the Dai as the religious head of the denomination.
Article 26 (d) speaks of the administration of the property being in accordance with law and the learned Attorney General suggested that a valid law could be enacted which would permit the diversion of those funds to purposes which the legislature in its wisdom thought it fit to appropriate.
I feel wholly unable to accept this argument.
A law which provides for or permits the diversion of the property for the use of persons who have been excluded from the denomination would not be "a law" contemplated by article 26(d).
Leaving aside for the moment the right of excommunicated persons to the enjoyment of property dedicated for the use of a denomination let me take the case of a person who has renounced that religion, and in passing it might be observed that even in cases of an apostate according to the principles governing the Dawoodi Bohra denomination there is no ipso facto loss of rights, only apostasy is a ground for excommunication which however could take place without service of notice or an enquiry.
It could not be contended that an apostate would be entitled to the beneficial use of property, dedicated to the Dawoodi Bohra community be it the mosque where worship goes on or other types of property like consecrated burial grounds etc.
It would be obvious that if the Dai permitted the use of the property by an apostate without excommunicating him he would be committing a dereliction of his duty as the supreme head 548 of the religion in fact an act of sacrilege besides being guilty of a breach of trust.
I consider that it hardly needs any argument to show that if a law permitted or enjoined the use of the property belonging to the denomination by an apostate it would be a wholly unauthorised diversion which would be a violation of article 26(d) and also of article 26(c), not to speak of article 25(1).
The other postulate is the position of the Dai as the head of the religious denomination and as the medium through which spiritual grace is brought to the community and that this is the central part of the religion as well as one of the principal articles of that faith.
Any denial of this position is virtually tantamount to a denial of the very foundation of the faith of the religious denomination.
The attack on the constitutionality of the Act has to be judged on the basis of these two fundamental points.
The practice of excommunication is of ancient origin.
History records the existence of that practice from Pagan times and Aeschyles records "The exclusion from purification with holy water of an offender whose hands were defiled with bloodshed.
" Later the Druids are said to have claimed the right of excluding offenders from sacrifice.
Such customary exclusions are stated to have obtained in primitive semitic tribes but it is hardly necessary to deal in detail with this point, because so far as the Muslims, and particularly among the religious denomination with which this petition is concerned, enough material has been set out in the judgment of the Privy Council already referred.
Pausing here, it might be mentioned that excommunication might bear two aspects: (1) as a punishment for crimes which the religious community justifies putting one out of its fold.
In this connection it may be pointed out that in a theocratic State the punitive aspect of excommunication 549 might get emphasized and might almost take the form of a general administration by religious dignitaries of ordinary civil law.
But there is another aspect which is of real relevance to the point now under consideration.
From this point of view excommunication might be defined as the judicial exclusion from the right and privileges of the religious community to whom the offender belongs.
Here it is not so much as a punishment that excommunication is inflicted but is used as a measure of discipline for the maintenance of the integrity of the community, for in the ultimate analysis the binding force which holds together a religious community and imparts to it a unity which makes it a denomination is a common faith, common belief and a belief in a common creed, doctrines and dogma.
A community has a right to insist that those who claim to be within its fold are those who believe in the essentials of its creed and that one who asserts that he is a member of the denomination does not, at least, openly denounce the essentials of the creed, for if everyone were at liberty to deny these essentials, the community as a group would soon cease to exist.
It is in this sense that it is a matter of the very life of a denomination that it exercises discipline over its members for the purpose of preserving unity of faith, at least so far as the basic creed or doctrines are concerned.
The impugned enactment by depriving the head of the power and the right to excommunicate and penalising the exercise of the power, strikes at the very life of the community by rendering it impotent to protect itself against dissidents and schismatics.
It is thus a violation of the right to practice religion guaranteed by article 25(1) and is also violative of article 26 in that it interfers with the rights of the Dai as the trustee of the property of the denomination to so administer it as to exclude dissidents and excommunicated persons from the beneficial use of such property.
550 It is admitted however in the present case that the Dai as the head of the denomination has vested in him the power, subject to the procedural requirements indicated in the judgment of the Privy Council, to excommunicate such of the members of the community as do not adhere to the basic essentials of the faith and in particular those who repudiate him as the head of the denomination and as a medium through which the community derives spiritual satisfaction or efficiency mediately from the God head.
It might be that if the enactment had confined itself to dealing with excommunication as a punishment for secular offences merely and not as an instrument for the self preservation of a religious denomination the position would have been different and in such an event the question as to whether articles 25 and 26 would be sufficient to render such legislation unconstitutional might require serious consideration.
That is not the position here.
The Act is not confined in its operation to the eventualities just now mentioned but even excommunication with a view to the preservation of the identity of the community and to pervent what might be schism in the denomination is also brought within the mischief of the enactment.
It is not possible, in the definition of excommunication which the Act carries, to read down the Act so as to confine excommunication as a punishment of offences which are unrelated to the practice of the religion which do not touch and concern the very existence of the faith of the denomination as such.
Such an exclusion cannot be achieved except by rewriting the section.
The next question is whether the impugned enactment could be sustained as a measure of social welfare and reform under article 25 (2) (b).
The learned Attorney General is, no doubt, right in his submission that on the decision of this Court in the 551 Mulki Temple case (Venkataramana Devaru vs State of Mysore(1), the right guaranteed under article 26(b) is subject to a law protected by article 25(2)(b) The question then before the Court related to the validity of a law which threw open all public temples, even those belonging to "a religious denomination" to "every community of Hindus including 'untouchable ' " and it was held that, notwithstanding that the exclusion of these communities from worship in such a temple was an essential part of the "practice of religion" of the denomination, the constitutionality of the law was saved by the second part of the provision in article 25(2)(b) reading: "the throwing open of Hindu religious institutions of a public character to all classes and section of Hindus".
The learned Attorney General sought support from this ruling for the proposition that article 25(2)(b) could be invoked to protect the validity of a law which was "a measure of social welfare and reform" notwithstanding that it involved an abrogation of the whole or part of the essentials of a religious belief or of a religious practice.
I feel unable to accept the deduction as flowing from the Mulki Temple case.
That decision proceeded on two bases : (1) As regards the position of "untouchables", article 17 had made express provision stating: " 'Untouchability ' is abolished and its practice in any form is forbidden.
The enforcement of any disability arising out of 'Untouchability ' shall be an offence punishable in accordance with law." and that had to be recognised as a limitation on the rights of religious denominations however basic and essential the practice of the exclusion of untouchables might be in its tenets or creed.
(2) There was a special saving as regards laws providing for "throwing open of public Hindu Religious Institu 552 tions to all classes and sections of Hindus" in article 25(2)(b), and effect had to be given to the wide language in which this provision was couched.
In the face of the language used, no distinction could be drawn between beliefs that were basic to a religion, or religious practices that were considered to be essential by a religious sect, on the one hand, and on the other beliefs and practices that did not form the core of a religion or of the practices of that religion.
The phraseology employed cut across and effaced these distinctions.
But very different considerations arise when one has to deal with legislation which is claimed to be merely a measure "providing for social welfare and reform".
To start with, it has to be admitted that this phrase is as contrasted with the second portion of article 25(2)(b), far from precise and is flexible in its content.
In this connection it has to be borne in mind that limitations imposed on religious practices on the ground of public order, morality or health have already been saved by the opening words of article 25(1) and the saving would cover beliefs and practices even though considered essential or vital by those professing the religion.
I consider that in the context in which the phrase occurs, it is intended to save the validity only of those laws which do not invade the basic and essential practices of religion which are guaranteed by the operative portion of article 25(1) for two reasons: (1) To read the saving as covering even the basic essential practices of religion, would in effect nullify and render meaningless the entire guarantee of religious freedom a freedom not merely to profess, but to practice religion, for very few pieces of legislation for abrogating religious practices could fail to be subsumed under the caption of "a provision for social welfare or reform".
(2) If the phrase just quoted was intended to have such a wide operation as cutting at even the essentials guaranteed by article 25(1), there 553 would have been no need for the special provision as to "throwing open of Hindu religious institutions" to all classes and sections of Hindus since the legislation contemplated by this provision would be par excellence one of social reform.
In my view by the phrase "laws providing for social welfare and reform" it was not intended to enable the legislature to "reform", a religion out of existence or identity.
Article 25 (2)(a) having provided for legislation dealing with "economic, financial, political or secular activity which may be associated with religious practices", the succeeding clause proceeds to deal with other activities of religious groups and these also must be those which are associated with religion.
Just as the activities referred to in article 25(2)(a) are obviously not of the essence of the religion, similarly the saving in article 25(2)(b) is not intended to cover the basic essentials of the creed of a religion which is protected by article 25(1).
Coming back to the facts of the present petition, the position of the Dai ul Mutlaq, is an essential part of the creed of the Dawoodi Bohra sect.
Faith in his spiritual mission and in the efficacy of his ministration is one of the bonds that hold the community together as a unit.
The power of excommunication is vested in him for the purpose of enforcing discipline and keep the denomination together as an entity.
The purity of the fellowship is secured by the removal of persons who had rendered themselves unfit and unsuitable for membership of the sect.
The power of excommunication for the purpose of ensuring the preservation of the community, has therefore a prime significance in the religious life of every member of the group.
A legislation which penalises this power even when exercised for the purpose above indicated cannot be sustained as a measure of social welfare or social reform without eviscerating the 554 guarantee under article 25(1) and rendering the protection illusory.
In my view the petitioner is entitled to the relief that he seeks and the petition will accordingly be allowed.
BY COURT: In accordance with the majority view of this Court, the petition is allowed.
The petitioner is entitled to his costs.
Petition allowed.
[/INST]section 3 of the Bombay Prevention of Excommunication Act, 1949 (Bom.
42 of 1949), it is provided that "Notwithstanding anything contained in any law, custom or usage for the time being in force, to the contrary, no excommunication of member of any community shall be valid and shall be of any effect.
" The preamble to the Act state, inter alia, that in keeping with the changing times and in the public interest, it was expedient to stop the practice of excommunication prevalent in certain communities and the definition of the word "community" contained in section 2 of the Act included the included the religious denomination of Dawoodi Bohras.
The petitioner, who was the religious head of the Dawoodi Bohra community and trustee of its property, challenged the constitutional validity of the Act on the ground that it violated its fundamental rights guaranteed by articles 25 and 26 of the Constitution.
Reliance was placed on behalf of the petitioner on the decision of Judicial Committee of the Privy Council in Hasan Ali vs Mansoor Ali, (1947) L. R. 75 I.A. 1, to which he was a party, as recognising his right as the 51st Dai ul Mutlaq of the community to excommunicate any of its members under prescribed limits.
^ Held, (Per Sarkar, Das Gupta and Mudholkar, JJ., Sinha, C. J., dissenting), that the impugned Act violated articles 25 and 26 of the Constitution and was, therefore, void.
It was evident from the religious faith and tenets of the Dawoodi Bohra community that the exercise of the power of excommunication by its religious head on religious grounds formed part of the management of its affairs in matters of religion and the impugned Act in making even such excommunication invalid infringed the right of the community under article 26(b) of the Constitution.
Hasan Ali vs Mansoorali, (1947) L. R. 75 I. A. 1, referred to.
497 It is well settled that that articles 25 and 26 of the Constitution protect not merely religious doctrines and beliefs but also acts done in pursuance of religion and thus guarantee rituals and observances, ceremonies and modes of worship which are integral parts of religion.
What is essential part of a religion or what its religious practice has to be judged in the light of its doctrine and such practices as are regarded by the community as a part of its religion must also be included in them.
Commissioner of Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shrur Mutt, ; , Mahant Jagannath Ramanuj Das vs The State of Orissa, [1954] S.C.R. 1046, Sri Venkataramana Devaru vs State of Mysore, ; and Durgah Committee, Ajmer vs Syed Hussain Ali; , , relied on.
The fundamental right under article 26(b) is not subjected to preservation of civil rights and its only limitations are those expressly mentioned by the Article itself i.e. public order, morality and health and those mentioned by cl. 2 of article 25 as has been held by this court.
The fact that in the instant case civil rights of an excommunicated person would be affected by the exercise of the fundamental right under article 26(b) can, therefore, be of no consequence nor could it be said that excommunication was prejudicial to public order, morality and health.
The impugned Act did not fall within article 25(2)(a) nor could it be said to be a law "providing for social welfare and reform" within the meaning of article 25(2)(b) of the Constitution.
It barred excommunication even on religious grounds and could not be said to promote social welfare and reform even though it sought to prevent consequent loss of civil rights.
Sri Venkataramana Devaru vs State of Mysore, ; , referred to.
Taher Saifuddin vs Tyebbhai Moosaji, A. I. R. , disapproved.
Per Sinha, C. J.
It was not correct to say that the Privy Council in Hasanali vs Mansoorali, held that the right of the Dai ul Mutlaq to excommunicate a member of the community was a purely religious matter.
The Dai was not merely the head of a religious community but also the trustee of its property.
While his actions in the purely religious aspect could be no concern of the Courts, those touching the civil rights of the members of the community were justiciable and liable to interference by the legislature and the judiciary.
498 The impugned Act, therefore, in seeking to protect the civil rights of the members of the community was within the saving provisions of article 25(2) (b) of the constitution since the right of a religious denomination under article 26(b) was subject to legislation under article 25(2)(b) of the Constitution.
Sri Venkataramana Devaru vs State of Mysore, ; , relied on.
The Commissioner of Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shrur Mutt, ; , considered.
The Durgah Committee, Ajmer vs Syed Hussain Ali, ; , referred to.
Case law discussed.
The Act had for its purpose the fulfilment of individual liberty of conscience guaranteed by Art 25(1) and sought to implement article 17 of the Constitution in attempting to save an excommunicated person from virtually becoming an untouchable in his community and its constitutional validity could not, therefore, be questioned.
Held, further, that the Act in pith and substance fell within Entries 1 and 2 of List III of the Legislative Lists of the Constitution Act of 1935, and there could be no doubt as to the competency of the Legislature in enacting it.
Per Ayyangar, J. The right of Dai ul Mutlaq to exercise the right of excommunication against a member of the denomination as recognised by the Privy Council in Hasanali vs Mansoorali, could not be in doubt.
A denomination under article 26 and its members under article 25 have the right to ensure its existence by maintaining discipline and ensuring adherence to its tenets and practices by such suitable action as excommunication of those who denied the fundamental bases of the religion.
The consequence of such action must necessarily involve the exclusion of an excommunicated person from participation in the religious life of the denomination including the use of places of worship or burial grounds dedicated for the use of the members and vested in the religious head as trustee for the denomination.
Dill vs Watson, (1836) 3 Jones Rep. (Ir. exhibit) 48 and Free Church of Scotland vs Overtoun, , referred to.
It was not correct to say, in view of the definition of the word 'excommunication ' contained in the Act., that it merely sought to save the civil rights of an excommunicated person and had no concern with excommunication on religious 499 grounds entailing, under the laws of the denomination, deprivation of civil rights.
The impugned Act by depriving the Dai of the right to excommunicate and making its exercise a penal offence struck at the very life of the denomination and rendered it impotent to protect itself against dissidents and schismatics and thereby contravened article 25 and 26 of the Constitution.
The impugned Act cannot also to sustained as a measure of social welfare and reform under article 25(2)(b) or under article 17 of the Constitution.
Venkatarama Devaru vs State of Mysore, ; , distinguished.
The expression "laws providing for social welfare and reform" in article 25(2)(1) of the Constitution was not intended to enable the legislature to "reform" a religion out of existence or identity.
The activities referred to in article 25(2)(a) are obviously not of the essence of the religion nor was article 25(2)(b) intended to cover the essentials of a religion which are protected by article 25(1).
Faith in the Dai ul Mutlaq being an essential part of the creed of the denomination that held it together, the impugned Act clearly contravened article 25(1) of the Constitution by taking away his power of excommunicate by which he kept the denomination together and maintained the purity of its fellowship.
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<s>[INST] Summarize the judgementCivil Appeal No. 548 of 1958.
Appeal by Special Leave from the judgment and order dated March 27, 1957, of the Patna High Court in Misc.
Judicial Case No. 315 of 1956.
B. Sen, P. W. Sahasrabudhe and A. C. Ratnaparkhi.
for the Appellant K. L. Hathi and R. H. Dhebar, for Respondent No. 1.
N. C. Chatterjee and section N. Mukerji, for Respondent No. 2. 1961.
October 9.
The Judgment of the Court was delivered by SARKAR, J.
on September 25, 1947, the appellant was appointed by respondent No. 2, the Tata Iron and Steel Co., Ltd. (hereafter called the Company) as the Chief Labour officer of its collieries of which it appears to have a few, and he worked 33 under the Company till the latter terminated his services by a notice dated December 5,1955.
On such discharge, the appellant , claiming to be a Welfare Officer of a mine within r.74(2) of the Mines Rules 1955, which rule we shall later ser out, filed an appeal before respondent No.1, the Chief Inspector of Mines in India, under that rule questioning the validity of his discharged by the Company.
The Chief Inspector held that the appellant was not a Welfare Officer within that rule and refused to entertain his appeal.
The appellant then moved the High Court at Patna under article 226 of the Constitution for an appropriate writ directing the chief inspector to decide the appeal.
The High Court dismissed the appellant 's petition agreeing substantially with the view taken by the Chief Inspector.
The appellant has now appealed to this Court against the judgment of the High Court.
The Mines Rules; 1955 were framed under the , and came into force on July 2, 1956.
We are principally concerned with the proviso for.
74(2) but this has to be read with r.72.
The relevant portions of these rules are set out below.
Rule 72.
(1) In every mine wherein 500 or more persons are ordinarily employed there shall be appointed at least one Welfare Officer: Provided that if the number of persons ordinarily employed exceeds 2000, there shall be appointed additional Welfare Officer on a scale of one for every 2000 persons or fraction thereof (2) No person shall as a Welfare Officer of a mine unless he possesses (Here certain qualifications are specified) Provided that in case of a person already in service as a Welfare Officer in a mine the 34 above qualifications may, with the approval of the Chief Inspector be relaxed.
(3). . . . . (4) A written notice of ever y such appointment. . and of the date thereof shall be sent by the owner, agent or manager t o the Chief Inspector within 7 days from the date of such appointment. . .
Rule 73.
Duties of Welfare officers: . . . . . . . . . . (Here certain duties are prescribed) Rule 74.
(1). . . . . . . (2) The condition of service of a Welfare Officer shall be the same as of other members of the staff of corresponding status in the mine; Provided that in the case of discharge or dismissal, the Welfare Officer, shall have a right of appeal to the Chief Inspector whose decision thereon shall be final and binding upon the owner, agent or manager of the mine as the case may be.
The Chief Inspector mentioned in these Rules is the Chief Inspector of Mines in India.
If the appellant was not a Welfare officer within the proviso to r. 74(2) as the company contends, then, of course, no appeal by him lay under it.
He would then clearly not be entitled to the writ he asked.
The question therefore is whether the appellant was a Welfare Officer within the rule and is really one of construction of it.
We desire now to point out certain facts as to which there is no controversy.
First, both the Act and the Rules came into force long after the appellant had been appointed by the Company.
Secondly no relaxation of qualifications had been sought from or granted by the Chief Inspector with respect to 35 The appellant under the proviso to sub r.
(2) of r. 72 after the Rules came in to force.
Thirdly, no notice as contemplated in r. 72(4) had been given concerning the appellant.
It appears that the Chief Inspector found that the appellant "was performing duties akin to those of Welfare officers contemplated by rule 73 and he was qualified to work as a Welfare officer.
" We propose to deal with this appeal on the basis of these findings.
Dealing with the contention noticed by the Chief Inspector and the High Court that a Welfare Officer under r. 74(2) is one who is appointed after the Rules came into force, Mr. Sen for the appellant said that a person like the appellant who had the requisite qualifications and was discharging the duties prescribed for a Welfare officer from before the Rules came into force, would be a Welfare officer within them.
He pointed out that the proviso to sub r.
(2) of r. 72 clearly contemplated the continuance of the service of such a person as a Welfare officer with relaxation where such was necessary and was granted.
He also said that sub r.
(4) of r. 72 was inapplicable to Such a person because he had been appointed long ago and because the proviso to r. 72(2) indicated that its application was not intended.
We do not think it necessary to pronounce on this question in the present case.
In our view, the appeal must fail even if Mr. Sen 's contention is right and that for another reason .
We observe that the Rules do not define the term "Welfare officer".
But we think it is beyond doubt and indeed the contrary has not been contended that the Welfare officer mentioned in the proviso to r. 74(2) is the same officer as is mentioned in sub r (1) of r. 72.
Now it is, in our view, perfectly plain that the Welfare officer contemplated by r. 72(1) is such an officer of one mine.
The rule says that there shall be at least one Welfare officer for every mine employing between 500 and 2000 persons and this makes any other view impossible 36 As we understood Mr. Sen, he also accepted that the Welfare officer contemplated is one appointed in respect of one mine.
Now, the appellant was on his own case, the Welfare Officer of several mines of the Company and not of one of such mines only.
Therefore, we think that he was not a Welfare officer within r. 72(1) and hence not within the proviso to r. 74(2).
But Mr. Sen contends that the appellant might be considered as having been severally and independently appointed the Welfare officer of each of the Company 's several collieries in his charge.
We think that would be an impossible view to take.
One appointment cannot be treated as several appointments and it is not in dispute that the appellant had only one appointment for all the Company 's collieries.
We think that this appeal fails and we dismiss it with costs.
Appeal dismissed.
[/INST]The , and the Minimum Wages Rules, framed thereunder, laid down the principle that the Government should provide for a day of 1 est to the workers for every period of 7 days and also to make provisions for making some payment in connection therewith.
The dispute between the workers and employers of the present case related to (a) arrears of wages for Sunday, the "weekly off" day on which no work was done and (b) arrears of wages for work 37 done on Sundays which should have been given as a weekly off day but was not so given and no compensatory day was given in lieu thereof as contemplated under the Minimum Wages Rules.
As regards arrears of wages for Sundays on which no work was done the workmen 's case was that they were entitled to payment for each such Sunday amounts equal to their average daily wages during the preceding week, that for the work done on Sundays without the compensatory "off day" they were entitled to three times the ordinary rate.
The respondent 's case was that on a proper interpretation of r. 23 of the Minimum (Wages Central) Rules, 1960, the Workmen were not entitled to payment for Sundays on which no work was done and that in any case they had been constructively paid for Sundays inasmuch as the daily wages were fixed at I/26th of the monthly wages.
The Industrial Tribunal rejected all the claims of the workmen.
On appeal by special leave.
^ Held, that contravention of r. 23 of the Minimum Wages Rules was punishable under the but the Industrial Tribunal had no authority to impose penalty in the shape of making the employer pay in respect of work done on Sundays something more than what he would have otherwise to pay.
Neither the nor the Rules contain any provision for such additional payment over and above what would be payable for over time work as such.
The workmen therefore cannot get three times the ordinary rate.
The phrase "for which" in r. 23 referred to the weekly holiday whether it was on a Sunday or on any other day of the week as permitted under the Rules.
No distinction was made between the holiday on the first day of the week and holiday on one of the five days immediately before or after the said day.
The scheme was for one holiday in the week and it was for that holiday that payment was provided.
Trustees of the Port of Bombay vs Authority under the Payment of Wages Act, (1957) I L.L.J. 627, A. C. C. vs Labour Inspector, (1960) 1 L. L. J. 192 and Jaswani Sugar Mills vs Sub divisional Magistrate, , approved.
The Central Government clearly intended under the Minimum Wages Rules that for work on a holiday something more than what was actually paid for six days of the week should be paid.
This could not be defeated by a statement that in form six days wages were paid, but in fact and in substance seven days wages were paid.
The plea of constructive payment must fail.
The argument that r. 23 did not apply to the workmen of the present case after the introduction of the piece rate scheme introduced in this case must be rejected 38
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<s>[INST] Summarize the judgementTION: Criminal Appeal No. 627 of 1988.
From the Judgment and Order dated 10.6.1988 of the Bombay High Court in Criminal Writ Petition No. 257 of 1988.
R.K.Garg and P.N.Gupta for the Appellant.
Kuldip Singh, Additional Solicitor General, Arun Madan and P.Parmeshwaran for the Respondents.
PG NO 1033 The Judgment of the Court was delivered by RAY, J.
Special leave granted.
Arguments heard.
This appeal on special leave is against the judgment dated 10th June, 1988 made by High Court of Allahabad dismissing Criminal Writ Petition No. 257 of 1988 instituted by the detenu.
The facts giving rise to this appeal are that on August 25, 1987 the house of the appellant was searched by the officers of the Enforcement Directorate under Section 37 of Foreign Exchange Regulation Act, 1973 and they seized currency notes of Re. 1 lakh and four bank drafts amounting to Rs.30,000, bank pass book and loose sheets Nos.
1 to 44 as per item No. 2 in panchnama dated August 25, 1987.
The statement of detenu was recorded and he was arrested on the same day.
On August 26, 1987 the detenu made an application in the Court of Addl.
Chief Metropolitan Magistrate, 8th Court at Esplanade retracting his statement.
The Magistrate made an order thereon that " Taken on record".
An application for bail was moved on September 15, 1987 and an order had been made on that day releasing him on bail of Re. 1 lakh with a condition imposed that he would attend Enforcement Department Office every day between 11 a.m. to 2 pUll.
until further order.
The detenu filed an application on September 22, 1987 for variation of the said conditional order and the condition was varied by the Magistrate by directing that the detenu may attend the Enforcement Department as and which required.
The Enforcement Directorate sent a letter directing the detenu to collect his passport deposit during the time of questioning.
The passport however.
remained with the Enforcement Department.
Thereafter.
on February 9. 1988 the impugned order of detention of the detenu in Central Prison, Bombay was made by the responded No. 1, the Joint Secretary, Government of India.
The order of detention was served on the detenu on February 19, 1988 and the grounds of detention were furnished to him.
A Criminal Writ Petition No. 257 of 1980 was filed before High Court, Bombay for quashing the said detention order on the grounds inter alia that certain vital documents such as the application dated September 21, 1987 for variation of the condition ot bail as well as the order passed by the Chief Metropolitan Magistrate varying the condition, the application dated August 26, 1987 retracting the statement by the detenu filed before the Magistrate and non consideration of the same, as well as the non supply of the copies of Bank pass books and loose papers seized from the residence of detenu and mentioned in panchnama dated PG NO 1034 August 25, 1987 which were placed before the detaining authority etc.
vitiated the subjective satisfaction of the detaining authority on consequently the order of detention is illegal and bad.
A Rule Nisi was issued.
A return was filed by the respondent No. 1 wherein the detaining authority denied the allegations and stated that all vital and material documents which had been considered in forming his subjective satisfaction and mentioned in the grounds have been supplied to him and as such the impugned order of detention is not illegal and bad.
The criminal writ petition was, therefore, dismissed.
Aggrieved by the judgment of the High Court, the instant appeal on special leave has been filed.
It was firstly contended on behalf of the appellant that the application for bail and the order dated September 15, 1987 by the Metropolitan Magistrate granting conditional bail of Re. 1 lakh with one surety of like amount though placed before the detaining authority, the application for variation of the condition and the order made thereon by the Magistrate on September 21, 1987 was not produced before the detaining authority.
This is a vital document and non consideration of the same by the detaining authority results in the order being illegal.
The decision in Ashadevi wife of Gopal Ghermal Mehta (detenu) vs K. Shiveraj, Addl.
Chief Secretary to the Government of Gujarat & Anr.
, ; was cited at the bar.
In this case it has been observed by this Court thai documents which are vital and necessary for formation of subjective satisfaction,which is the pre requisite for making an order of detention having not been placed before the detaining authority before making the detention order.
the order of detention will get vitiated.
The detention was to prevent the detenu from indulging in Hawala business i.e. making various payments to various persons in this country on receiving instructions from Rafiq from Dubai.
The application for variation if condition of bail and the order passed by the Metropolitan Magistrate varying the condition of bail is, in our opinion, not a vital and material documents in as much as the granting of bail by the Magistrate enabled the detention come out and carry on his business activities as before.
Condition imposed by the Magistrate directing the detenu to appear before the office of the Enforcement Department every day between 11 a.m. to 2 p.m. has been varied to the extent that the accused to attend Enforcement Department as and when required".
The condition imposed by the Magistrate has no relation to the activities carried on by the detenu and PG NO 1035 as such the High Court after considering all the circumstances held that the order varying the condition of bail was not a relevant document and failure to produce the document before the detaining authority before arriving at his subjective satisfaction had not vitiated the order.
We agree with the same.
The judgment delivered by the High Court, Bombay in Criminal Writ Petition No. 1304 of 1987 entitled Arvindbhai Purshottambhai Patel vs R. C. Iyer and Ors., on February 25.
1988 was referred to us.
In this case the detenu was arrested for smuggling prohibited articles and the detenu was prosecuted for smuggling.
He was granted bail by Magistrate on certain condition.
Subsequently that order was varied.
The initial order granting bail was placed before the detaining authority, but the subsequent order of variation was not placed.
It was held by the Division Bench of the High Court that the order of modification might have influenced the detaining authority in forming his subjective satisfaction and as such the non placement of the same would vitiate the order.
That was a case of smuggling of prohibited articles and the condition in the bail was that he would not leave the shores of the country and so he could not have indulged in smuggling activities pending decision of the case.
This condition was relaxed by the subsequent order.
In that context it was observed by the Court that the order of variation is a material document which might affect the formation of subjective satisfaction before passing the order of detention and the failure to place that document vitiated the detention order.
This observation was made in the facts of that case.
This case has no relevance in the facts of this case as we have held that in the present case the order of Variation is not a relevant and vital document.
It has been submitted that the detenu made an application on August 26,1987 in the Court of Addl.
Chief Metropolitan Magistrate.
8th Court.
Esplanade retracting his statement whereon an order was made that "taken on record".
This application was not placed before the detaining authority and this has vitiated the detention order as this vital document was not considered before arriving at the subjective satisfaction by the detaining authority.
It may be convenient to mention that in the counter affidavit to the writ petition the respondent No. 1 has stated in para 5 that the application dated August 26, 1987 and the order passed thereon was not placed before him as the Sponsoring Authority did not know about the said application dated August 26, 1987 and the order thereon.
The Enforcement Directorate was not aware of the said application and the order thereon.
In any case, the respondent No. 1 has already stated that the retraction letter of detenu dated September PG NO 1036 20,1987 and the reply of the Directorate of Enforcement to the said letter of the detenu dated August 26,1987 was placed before the detaining authority.
This submission, therefore, has no merit as the detaining authority knew about the retraction statement and the order made thereon before making the order of detention.
It has been contended that the Enforcement Department in course of search of the house of detenu on August 25, 1987 attached bank drafts and cheques, bank pass books of State Bank of India, Kandivali Branch, New India Co operative Bank and Bank of Baroda, Dahisar, loose sheets bunched together and marked `C ' containing pages 1 to 44 and seized under panchnama but did not place before the detaining authority and if placed copies of those documents were not given to the detenu.
It has been submitted that the failure to supply these documents infringed his fundamental right to make an effective representation and so the impugned order is required to be quashed.
In reply to this submission the detaining authority filed a return stating that all documents mentioned in panchnama were placed before him.
But only relevant and vital documents were taken into consideration for reaching subjective satisfaction.
These documents have been referred to in the grounds of detention and copies of all the said documents have been furnished to the detenu.
It has been strenuously contended on behalf of the appellant that Bank pass books and some pages out of 1 to 44 of the loose sheets bunched together and referred to in the Panchnama were not given to him and so he could not make an effective representation.
This has infringed his right.
In support of his sub mission the decision of this Court in Ashok Kumar vs Union of India and Ors., [ ; (to which one of us is a party) has been cited at the bar.
There is no dispute that all the documents which were considered by the detaining authority in reaching his subjective satisfaction and referred to in the grounds of detention have been furnished to the detenu.
It is not necessary to furnish copies of all the documents including the bank pass books which are not material and relevant for reaching the subjective satisfaction of the detaining authority merely because they were mentioned in the panchnama.
Moreover, no application had been made before the detaining authority for giving the detenu the copies of the bank pass books necessary for making an effective representation against the order of detention.
In Ashok Kumar 's case (supra) wherein this Court held that the order of detention had been vitiated due to non supply of bank pass books of the detenu and his wife seized in course of search of some houses wherefrom foreign currency as well PG NO 1037 as primary gold with foreign makings were recovered, as it was held that these documents were vital and material documents.
The detenu in that case made an application for furnishing him the bank pass books in order to enable him to make an effective representation against the order of detention stating that the houses from which the alleged foreign currency as well as primary gold with foreign markings had been recovered did not belong to or owned by the detenu.
In that background this Court held that non supply of the bank pass books infringed the detenu 's right to make an effective representation.
In the instant case as we have said hereinbefore that the bank pass books are not vital and material documents in reaching subjective satisfaction of the detaining authority and as such the failure to furnish the bank pass books to the detenu has not infringed any right of the appellant and the order of detention cannot be questioned as illegal or vitiated on that score.
No other points have been urged before us.
For the reasons aforesaid we dismiss the appeal.
There will be no order as to costs.
R.S.S. Appeal dismissed .
[/INST]Rule X(2) of the Rules regulating the appointments of Housemen and House Surgeons at the hospitals attached to the Government Medical Colleges in the State of Maharashtra provides that the Government may sanction supernumerary posts to allow spouses of Government servants on transfer to undertake studies, if standing high in merit, from another college.
The appellant married to a Government Medical Officer working in the State of Maharashtra after having passed M.B.B.S. examination and completing one year internship from a college situated in the State of Andhra Pradesh.
On her application, the Government of Maharashtra in exercise of its power under rule X(2) created a Housepost in Obstetrics and Gynaecology w.e.f. July l5.
1986 specifically and categorically stating that the supernumerary Housepost was created to enable the appellant to complete her post graduate studies at Dr. V.M. Medical College, Solapur, respondent No. 2.
The appellant joined the Housepost and duly completed the same.
However, she was refused admission in the M.D. Course by respondent No.2 inasmuch as she was not even issued an application form.
Being aggrieved, she filed a writ petition in the High Court challenging the legality of the action of the respondent refusing to admit her in the said post graduate M.D. Course.
The High Court dismissed the writ petition holding, inter alia, that no inference could be drawn that everybody who completed the house job was entitled to get admission to the post graduate cousre ipso facto and that granting of registration for house job would not amount to admission to the post graduate course in a Medical College.
Hence this appeal by special leave.
Allowing the appeal, PG NO 959 PG NO 960 HELD: (l) All the seats in the post graduate degree course for Obstetrics and Gynaecology are not reserved for the candidates passing the M.B.B.S. examination from the said Dr. V.M. Medical College.
It is not disputed that certain percentage of seats are reserved for the students of the College.
But, no application form was issued to the appellant and accordingly, the question of not admitting the appellant on the ground of institutional preference or institutional reservation of seats does not arise.
[964F G] (2) The State of Maharashtra is entitled to refuse to admit any student passing the M.B.B.S. examination from any Medical College in the State of Andhra Pradesh as that State has not reciprocated in the matter of admission to post graduate degree courses in Medical Colleges of that State.
[964G H] (3) The State of Maharashtra after considering all facts and circumstances including the high merit of the appellant specifically created a supernumerary Housepost for the appellant.
After creating the supernumerary Housepost specifically for the appellant so as to enable her to become eligible for the post graduate degree course, the respondents are not at all justified in refusing her even an application form and in not considering her case for admission in the post graduate degree course on the ground of failure of reciprocity by the Andhra Pradesh State.
It was, therefore, unreasonable and unjust for the respondents to refuse admission to the appellant on a ground which is not at all tenable in the facts and circumstances of the cases.
[965C F] (4) Normally the Supreme Court does ot interfere in the matter of admission of students in an educational institution.
Even if it interferes.
it generally directs the authorities concerned to consider the question of admission in accordance with the rules of the institution.
But, in the peculiar facts and circumstances of the case, particularly the fact that the appellant had to lose two years of her academic career for no fault of hers, it is directed that the respondents shall issue to her an application form for admission in the post graduate M.D. Course in Obstetrics and Gynaecology and that alter the submission of the application form and compliance with other formalities by the appellant, she shall be admitted in the post graduate course in Obstetrics and Gynaecology in Dr. V.M. Medical College, Solapur, in the 1989 session, provided she is not otherwise unfit.
[966B D]
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<s>[INST] Summarize the judgementvil Appeal No. 1945 and 1946 of 1989.
From the Judgment and Order dated 11.12.1984 of the Punjab and Haryana High Court in C.R. No. 1794 and 1795 of 1985.
Dr. L.M. Singhvi and Y.P. Rao for the Appellant.
G.L. Sanghi, J.P. Gupta and S.K. Agarwal for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
882 This appeal arises from the decision of the High Court of Punjab & Haryana, dated 11th December, 1984 dismissing the Civil Revision filed by the appellant.
It appears that there was a contract entered into by the parties on or about 15th May, 1979 which provided that the appellant would give to the respondent paddy to convert these into rice after lifting paddy from the godown of the appellant.
There was an agreement between ' the parties for shelling of paddy into rice, after lifting the paddy from the godown of the appel lant, at the rate of 70% of the paddy.
The shelling charge was Rs.2.20 per quintal.
The learned Subordinate Judge, First Class, directed on or about 17th March, 1980 appoint ment of an arbitrator on an application by the respondent.
On 22nd January, 1982, the arbitrator gave his award.
The arbitrator did not allow the claims of the appellant as claimed as per the terms of the agreement.
The arbitrator allowed certain claims.
It is necessary, in view of the contentions that have been raised, to refer to the award of the arbitrator.
After setting out the history the arbitrator dealt with the various contentions.
It is not necessary to refer to all the contentions and points urged before the arbitrator and upon which he has made his award.
It is sufficient if the relevant portions are dealt with.
The arbitrator, inter alia, dealt with a claim of Rs. 55,060.29 which had claimed as penalty at Rs.2 per qtl.
for not lift ing the balance of the paddy weighing 2765 3093 mts.
The arbitrator noted that he had held that there was justifica tion for the millers, millers being respondent herein, not to lift the paddy.
Assuming, however, the arbitrator noted, that if it was decided that the millers were at fault in not lifting this paddy, the arbitrator expressed the opinion that the appellant could not recover the amount claimed by way of penalty.
He expressed the view that in order to enable the appellant to claim the amount, it had to be shown that the actual losses were suffered by the Corporation.
Otherwise, it could not be claimed as pre estimated damages.
Otherwise, it would only be penalty which could not be recovered.
No evidence had been led for how many days the bags of the paddy remained in the godowns of the Corpora tion, the arbitrator noted, and what losses were incurred for getting it shelled from other quarters.
The arbitrator referred to the affidavit of one Mr. M.S. Rawat, Asstt.
Manager, that the Corporation had to get the unlifted paddy shelled by transporting to other centre as well as getting the same shelled at heavy additional expenditure.
The arbi trator noted that there was not an iota of evidence on that point.
So no actual losses stated to have been suffered by the Corporation and no proof thereof was there.
The arbitra tor further noted that an amount by way of penalty could be permitted if some losses were proved.
He, accordingly, dismissed the claim of the appellant for Rs. 55,090.19.
883 The next claim dealt with by the arbitrator was the claim of Rs.3,23,856.08 claimed by the Corporation as the cost of non delivery of 137 39549 tonnes of rice at the rate of Rs. 165 per qtl.
of paddy.
The claim of the appellant was based on the basis that the appellant had converted the undelivered rice into paddy by multiplying it with 100/70 and it came to 123,87.11 tonnes.
The arbitrator dealt with this question as follows: "At the rate of Rs. 165 per qtl.
its price works at Rs.3,23,856.08.
According to provi sions of clause g(i) of the Contract, in the event of failure to supply rice within pre scribed specification, the millers are liable to pay to the Corporation for the quantities of rice short supplied at the penal rate of 11/2 times the economic cost of the concerned variety of the paddy equivalent to the short ages.
In the contract no definition of 'Eco nomic Cost ' is furnished nor is the expression any where defined in any law.
However, Shri Pritam Singh in the statement attached to the affidavit work it out at Rs. 110 per qtl.
The procurement price of paddy is Rs.85 per qtl.
as shown therein.
He has added to it market fee and other charges including cost of gunny Rs.2 and interest charges at Re. 1.
Under the above clause of the contract, the Corporation has added 50% penalty and thus has claimed the price at Rs. 165 per qtl.
I do not think that the Corporation is enti tled to such a fantastic rate particularly when the expression 'economic rate ' has not been defined.
Even if the statement of Shri Pritam Singh is accepted the maximum price of the rice at that time should be Rs. 100 per qtl.
exclusive of gunny bag and interest charges to which in my opinion the Corporation is not entitled.
The market rate did not exceed that amount at that time.
So the calcu lated at this rate the price of the undeliv ered rice will come to Rs.1,96,277.00.
to which the Corporation is entitled.
I may add here that the above amount has been allowed to the Corporation besides from the evidence on the record I believe that the rice was short delivered.
When the paddy had been accepted by the millers unconditionally and without any reservation, they were bound to give to the Corporation 70% of the yield.
As they did not do it, so they are liable to pay the price of the undelivered rice.
884 I have already stated above that the rice after shelling to be , delivered to the Corpo ration under clause g(i)of the contract had to conform to the specification laid down by the Punjab Government under the Punjab Rice Pro curement Price Control Order, 1968 issued on the 22nd October, 1968, as amended from time to time.
The Corporation states that the rice accepted by them was done subject to the quality rice which was permissible under clause g(ii) of the contract.
This has been duly proved from the evidence placed on the record by the Corporation.
Even Shri Anil Kumar, a partner of the millers firm admitted that they received an analysis report in respect of the rice which was accepted by the Corporation to continue that the Corporation was mentioned and that they did not appeal against the cut, though there was a provision in the said order to do so.
It, therefore, means that the quality cut was admitted to have been correctly assessed under the said Punjab Rice Order and to that the millers submitted.
This item is, therefore, allowed.
" The respondent filed an application under section 14 of the Arbitration Act, 1948 (hereinafter referred to as 'the Act ') for filing of the award and prayed for making the award the rule of the court.
The appellant on 25th May, 1982 filed objections under sections 30 and 33 of the Act.
The learned Subordinate Judge, First ClasS, on 2nd December, 1982 found that the award was liable to be set aside and modified the award and passed a decree in favour of the appellant for the amount.
On 2nd March, 1984, the Additional District Judge allowed the appeal by respondent and reversed the Subordinate Judge 's order.
Aggrieved thereby, the appellant went in revision before the High Court.
The High Court on 11th December, 1984 dis missed the revision petition.
Aggrieved thereby, the appel lant has come up before this Court.
It is, therefore, neces sary to decide whether the High Court was right.
As mentioned hereinbefore, the learned Subordinate Judge had modified the award and passed a decree in favour of the appellant for the amount.
The learned Additional District Judge, however, allowed the appeal of the respondent and reversed the decision of the learned Subordinate Judge.
The High Court did not interfere with that decision because the High Court did not find any ground to interfere.
The 885 question therefore is, whether the learned Additional Dis trict Judge in the first appeal was right in holding that the award was not liable to be corrected in the manner done by the learned Subordinate Judge.
The jurisdiction to inter fere by the Court of law of an award made by the arbitrator chosen by the parties is circumscribed.
In India, there is a long history of arbitration.
Arbitration is a mode of set tlement of disputes evolved by the society for adjudication and settlement of the disputes and the differences between the parties apart from the courts of law.
Arbitration has a tradition; it has a purpose.
Arbitration, that is a refer ence of any particular dispute by consent of the parties to one or more persons chosen by the parties with or without an umpire and an award enforceable by the sovereign power were generally unknown to ancient India.
Hindus recognised deci sions of Panchayats or bodies consisting of wealthy, influ ential and elderly men of the Community and entrusted them with the power of management of their religions and social functions.
The sanction against disobedience to their deci sion was excommunication, or ostracism and exclusion from all religions and social functions of the community.
An agreement to abide by the decision of a Panchayat and its decision with regard to the line of boundary was held not to be conclusive, since a reference to arbitration and award properly so called did not exist.
See the observations in Mukkudduns of Kimkunwady vs Inamdar Brahmins of Soorpai, See also Bachawat 's Law of Arbitration at page 1.
When power came to the East India Company, they framed Regulations in exercise of the power vested in them by the British Government Some of these Regulations were touching arbitration.
Bachawat gives description of the evolution of the .
Therefore, arbitration as a mode for settlement of disputes between the parties, has a tradi tion in India.
It has a social purpose to fulfil today.
It has great urgency today when there has been an explosion of litigations in the courts of law established by the sover eign power.
New rights created, or awareness of these rights, the erosion of faith in the intrinsic sense of fairness of men, intolerant and uncompromising attitudes are all the factors which block our courts.
The courts are full of litigations, which are pending for long time.
Therefore, it should be the endeavour of those who are interested in the administration of justice to help settlement by arbitra tion, if possible.
It has also a social efficacy being the decision by the consent of the parties.
It has greater scope of acceptance today when there is a certain erosion of faith in view of the failure to appreciating the functions of the courts of law.
It has also the advantage of not only quick ness of decision but of simplicity of procedure.
But in proceedings of arbitra 886 lion there must be adherence to justice, equity, law and fair play in actions.
However, the proceedings of arbitra tion must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the dispute and create confidence of the people for whose benefit these processes are resorted to.
It is, therefore, the function of courts of law to oversee that the arbitrators act within the norms of justice.
Once they do so and the award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator.
It is in this perspective that one should view the scope and limit of correction by the court of an award made by the arbitrator.
We should make the law of arbitration simple, less technical and more responsible to the actual realities of the situation, but must be responsive to the cannons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties, but by creating a sense that justice appears to have been done.
Sections 30 and 33 of the Act provide for the grounds on which an award of the arbitrator can be set aside.
These were mainly, until recent changes made by statutory laws in England, in consonance with the English principles of Common Law as adopted in India.
So far as the material of the present purpose is concerned, an award of the arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the Act.
It is necessary to find whether the arbitrator has misconducted himself or the proceedings legally in the sense whether the arbitrator has gone contrary to the terms of reference between the parties or whether the arbitrator has committed any error of law apparent on the face of the award.
It is necessary to empha sise that these are grounds for setting aside the award but these are separate and distinct grounds.
Halsbury 's Laws of England, Vol.
2 4th Edn., para 623 reiterates that an arbi trator 's award may be set aside for error of law appearing on the face of it.
Though this jurisdiction is not to be lightly exercised.
The award can also be set aside if, inter alia, the arbitrator has misconducted himself or the pro ceedings.
It is difficult to give an exhaustive definition what may amount to a misconduct on the part of the arbitra tor.
This is discussed in Halsbury 's Laws of England (supra).
It is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or law, and whether or not his findings of fact are supported by evidence.
See the observations of Russell on Arbitration, 20th Edn., page 422.
In the instant case, the arbitrator has chosen to make a speaking 887 award, that is to say, he has given reasons for his conclu sion.
Whether he is obliged to give such reasons or not is another matter but since the arbitrator has chosen to give the reasons, unless it is demonstrated to this Court that such reasons are erroneous as such as propositions of law or a view which the arbitrator has taken is a view which it could not possibly be sustained on any view of the matter, then the challenge to the award of the arbitrator cannot be sustained.
As has been emphasised in M/s Sudarsan Trading Co. vs The Government of Kerala & Anr., [1989] 1 Jt.
Today SC 339 that an award could be set aside if the arbitrator has misconducted himself or the proceedings or has proceeded beyond jurisdiction.
It could also be set aside where there are errors apparent on the face of the award.
But these are separate and distinct grounds.
In case of errors apparent on the face of the award, it can only be set aside if in the award there is any proposition of law which is apparent on the face of the award, namely, in the award itself or any document incorporated in the award.
See the observations of the Judicial Committee in Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., L 1922 IA 324.
Dr. L.M. Singhvi, learned counsel for the appellant, urged before us that the arbitrator was wrong in not award ing 50% of the added penalty as claimed by the appellant, as mentioned hereinabove.
The appellant had claimed the price of Rs. 165 per qtl.
The arbitrator was of the view that the expression 'Economic Rate ' had not been defined.
It is true that the expression 'Economic Rate ' has not been used, but the expression 'Economic Cost ' has been used.
The arbitrator has noted that the market rate did not exceed that amount at the time.
The amount of Rs. 100 per qtl.
is mentioned of such a rate as the arbitrator had noted, could only be pre estimated damages but this was not so according to the arbitrator.
The arbitrator had construed the effect of clause g(i) of the contract as mentioned hereinbefore.
It cannot be said that such a construction is a construction which is not conceivable or possible.
If that is the position assuming even for the argument that there was some mistake in the construction, such a mistake is not amenable to be connected in respect of the award by the court.
This was a fair order after considering all the records.
The conclusion arrived at by the arbitrator is a plausible conclusion.
The court has, in our opinion, no jurisdiction to interfere or modify the award in the manner sought for by the appellant and in the manner done by the learned Subordinate Judge in the first instance in this case.
In that view of the matter, the learned Additional District Judge was justified in correcting the 888 order of the learned Subordinate Judge and the High Court was also justified in not interfering with the order of the Additional District Judge.
The award on the aspects can vassed before us by Dr. L.M. Singhvi is a plausible con struction of clause g(i) of the contract.
It cannot, in our opinion, be interfered with either on the ground that there was error apparent on the face of the award or on the ground that the arbitrator has misconducted himself in not giving the effect to the penal rate as contemplated under clause g(i) of the contract referred to hereinbefore in the award.
Dr. Singhvi sought to urge that as per the terms of the contract the arbitrator was obliged to award penal rate in terms of clause g(i) of the contract.
The arbitrator has apparently not done so.
He has given reason why he has not done so.
It was submitted that he was wrong in not doing so.
We do not agree.
The arbitrator has discussed the effect of clause g(i).
He has noted that unless there was evidence about which incidentally there was none, this amount could not be treated as a pre estimate of damage.
If that be so then it was penalty.
It was not recoverable.
Reasons may not be apparent, latent was there.
Dr. Singhvi 's objection therefore cannot be accepted.
Dr. Singhvi drew our attention to the observations of this Court in M/s Sudersan Trading Co., (supra) at page 352 of the report where it was stated that if it was apparent from the award that a legal proposition which formed its basis was erroneous, the award was liable to be set aside.
Dr. Singhvi sought to urge that when the arbitrator observed that "Corporation is not entitled to recover such a claim particularly when the 'Economic Rate ' has not been defined", this, according to the statement of Dr. Singhvi, the arbi trator was mistaking the law, such a mistake of law is apparent on the face if it.
It has to be borne in mind, however, that wrong statement or conclusion of law, assuming even that it was a wrong statement of law, was not wrong statement of the proposition of law which was the basis for decision in this award.
Error of law as such is not to be presumed, if there is legal proposition which is the basis of the award and which is erroneous as observed in Champsey Bhara & Co, (supra), then only the award can be set aside.
There was no proposition of law; there was a legal deduction of law arrived at to say that the provisions of clause g(i) of the contract would be penal rate and such penal rate cannot be sustainable without evidence of the damages suf fered to that extent.
We are of the opinion that the arbi trator had taken a view which is plausible view.
Beyond this, the court has nothing to examine.
It is not necessary for a court to examine the merits of the award with refer ence to the materials produced before the arbitrator.
The Court cannot sit in appeal over the 889 views of the arbitrator by re examining and re assessing the materials.
See the observations of this Court in Puri Con struction Pvt. Ltd. vs Union of India, In the aforesaid view of the matter, it appears to us that the learned Additional District Judge was right in the view it took and the High Court, therefore, was justified in dismissing the revision.
The appeal, therefore, fails and is accordingly dismissed.
No order as to costs.
Special leave granted.
In view of the fact that the facts of this appeal are more or less identical to the Appeal arising out of S.L.P. (C) No. 3392 of 1985, this appeal is also dismissed.
No order as to costs.
Y.L. Appeals dis missed.
[/INST]The Respondent entered into a contract with the appel lant Food Corporation of India on or about May 1979 whereun der the appellantCorporation was to give to the Respondent Paddy for being shelled/ converted into rice at the rate of 70% of the Paddy.
The Paddy was to be lifted from the go downs of the appellant.
The shelling charge was fixed at Rs.2/20 p. per quintal.
Some dispute having arisen between the parties, the Respondent moved an application before the Subordinate Judge for appointment of an arbitrator and the Sub Judge appointed the arbitrator who gave his award on 22nd January 1982.
In the award the arbitrator did not allow some of the claims made by the appellant, in particular, a claim of Rs.55,060/29 p which was claimed as a penalty Rs.2 per quintal for not lifting the balance of Paddy.
The arbitrator in disallowing the claim on that count, took the view that the appellant has to prove the actual losses suffered by it which the appellant failed to prove.
Another claim not allowed by the arbitrator related to Rs.3,23,856/08.
p. in respect of the cost of non delivery of 137 39548 tonnes of rice @ Rs. 165 per quintal.
The Respondent made an application section 14 of the Arbi tration Act, 1940 to make the award a rule of the Court.
The appellant filed the objections u/s 30 and 33 of the Act.
The Subordinate Judge, First Class, on 2nd December, 1982, found that the award was liable to be set aside and accordingly modified the award and passed a decree in favour of the appellant for the amount.
On 2nd March, 1984, the Addl.
Distt.
Judge, on appeal by the Respondent, reversed the order passed by the Subordinate Judge.
He held that the award was not liable to be corrected/interfered with in the manner done by the Sub Judge.
Aggrieved by the said order the appellant went in revision to the High Court.
The High Court on 11.12.84 dismissed the revision petition.
Hence this appeal by the appellant Corporation.
881 Dismissing the appeal, this Court, HELD: That the arbitrator has chosen to make a speaking award in the instant case, that is he has given reasons for his conclusions.
Since the arbitrator has chosen to give reasons, unless it is demonstrated to this Court that such reasons are erroneous as such as propositions of law or a view which the arbitrator has taken is a view which it could not possibly be sustained in any view of the matter, then the challenge to the award of the arbitrator cannot be sustained.
[886H; 887A B] Even assuming that there was some mistake, such a mis take is not amenable to be corrected in respect of the award by the Court.
This was a fair order passed after considering all the records.
The conclusion arrived at by the arbitrator is a plausible conclusion.
The Court has no jurisdiction to interfere or modify the award in the manner sought for by the appellant.
[887G H] The Addl.
Distt.
Judge was justified in correcting the order of the Subordinate Judge and the High Court was also justified in not interfering with the order of the Addl.
Distt.
Judge.
[887H; 888A] Mukkudduns of Kimkunwady vs Inamdar Brahmins of Soorpai, ; M/s. Sudarsan Trading Co. vs The Government of Kerala & Anr., [1989] 1 Jt.
Today SC 339; Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., L 1922 IA 324, followed.
Puri Construction Pvt. Ltd. vs Union of India, , referred to.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 3607 11 of 1988.
From the Judgment and Order dated 12.7.1988 of the Calcutta High Court in F.M.A.T. Nos. 2301, 2326 and 2327 of 1986.
Tapas Ray, Dr. Shankar Ghosh, B. Dutta, H.K. Puri, S.K. Nandy, Sushil Kr.
Jain and R.K. Joshi for the Appellants.
G.L. Sanghi, N.R. Chowdhary, Som Nath Chatterjee for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
These appeals involve for decision a common question, relating to fixation of seniority of certain Sub Assistant Engineers appointed ad hoc temporary Assistant Engineers for a specified period in the P.W.D. and the Irrigation and Waterways Department of the Government of West Bengal, vis a vis the direct recruits in the cadre of Assistant Engineers appointed regularly according to rules in these departments prior to the regularisation of the ad hoc appointees.
The question was raised by the ad hoc appointees who were regularised subsequently, by filing writ petitions in the Calcutta High Court claiming revision of their seniority, reckoned from the date of their initial ad hoc appointment.
These writ petitions were dismissed by a Single Bench of the High Court but the writ appeals were allowed by a division bench, resulting in grant of the relief claimed by the ad hoc appointees.
It is these judgments, involving the common question of the merit of the claim of the ad hoc appointees for seniority, reckoned from the date of their initial ad hoc appointment, in he facts and circumstances of the case, which are challenged in these appeals.
925 Civil Appeal No. 3607 of 1988 is by the State of West Bengal while Civil Appeal No. 3610 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the P.W.D. Civil Appeal No. 3608 of 1988 is by the State of West Bengal while Civil Appeal No. 3611 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the Irrigation and Waterways Department.
Civil Appeal No. 3609 of 1988 is a similar matter, also relating to the Irrigation and Water ways Department.
The material facts are only a few, and may be stated with reference to the P.W.D., pointing out the minor difference on facts between the ad hoc appointments made in the PWD and Irrigation and Waterways Department, which are not significant on the conclusion reached.
In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India, the Governor of West Bengal made Rules by Notification No. 94 dated 20th August, 1959 for the regulation of recruitment to the Engineering Services under the Department of Works and Buildings of the Government of West Bengal.
In the present case, we are concerned with the cadre of Assistant Engineers, for which the relevant rules are : "Rule 4: There will be an examination held by the Public Service Commission, West Bengal, for recruitment to posts of Assistant Engineer.
A certain proportion of such posts as may be determined by the Works and Buildings Depart ment from time to time, will be filled up by candidates, in order of merit, who will be given a higher initial pay of Rs. 325 per month in the time scale of pay for Assistant Engineers.
In order to be eligible for such higher initial pay a candidate must secure 66 per cent or above of the total marks in the said examination.
Rule 9: Recruitment to the permanent posts of Assistant Engineer shall be made as follows 926 (a)Forty per cent of vacancies by direct recruitment on the results of a competitive examination to be conducted by the Public Service Commission, West Bengal as mentioned in rule 4 supra: Qualifications : (i)A degree in Civil Engineering of a recognised University or any other qualification in Civil Engineering exempting a candidate from appearing in Sections A and B of Associate Membership Examination of the Institute of Engineers (India).
(ii)One year 's post graduate practical training or study or research or practica l engineering experience.
(iii)Age not more than 27 years on the 1st August of the year in which the recruitment examination is held.
The age limit shall in the case of candidates who have been in the employ of the Central or the State Government or of the Damodar Valley Corporation or any other statutory body recognised for the purpose by the Government and are not out of such employment for more than a year on the said date be releasable to the extent of the actual period spent (continuously) in such employment.
This relaxation of age limit will not be permitted to a candidate who had already appeared in the examination thrice.
No candidate will be allowed to take more than three chances.
Departmental candidates are ' eligible to apply provided they fulfill the requisite qualifications.
(b)Forty per cent by selection from amongst directly recruited temporary Assistant Engineers who have rendered two years satisfactory service, selection wing made by the Public Service Commission, West Bengal.
927 (c)Twenty per cent by promotion of confirmed Overseer Estimators.
Rule 10 Recruitment to temporary posts of Assistant Engineer shall be made as follows . (a) Eighty per cent of the vacancies are to be filled by direct recruitment on the results of a competitive examination referred to in rule 9(a) above.
(b) Twenty percent by promotion of confirmed Overseer Estimators.
Rule 11 Notwithstanding anything contained in these rules the Governor may in case of emergency fill up vacancies in the posts of Assistant Engineer both permanent and temporary by advertisement and interview, through the Public Service Commission, West Bengal.
Rule 12 An Overseer Estimator shall not be promoted as a temporary Assistant Engineer unless he has rendered 10 years services.
To be eligible fo r promotion he must pass a written and oral examination which will be conducted by the Public Service Commission, West Bengal, and will be of the same standard as Professional Examination referred to in Chapter VI of the Service (Training and Examination) Rules, West Bengal, Overseer Estimators who have been confirmed in their posts and have tendered 8 years ' service including temporary service in that post shall be eligible to sit for such examination, a panel of Overseer Estimator fit for promotion as temporary Assistant Engineers shall be maintained in consultation with the Public Service Commission, West Bengal.
" Under these Rules, recruitment to the permanent posts of Assistant Engineers was required to be made under Rule 9, while Rule 10 governed 928 recruitment to the temporary posts of Assistant Engineers.
Rule 11 provided for emergency appointment by advertisement and interview through the Public Service Commission.
It is clear from these Rules that appointments to all the posts, permanent and temporary were to be made according to the prescribed procedure, on the basis of a competitive examination conducted by the Public Service Commission; and even the appointments made in an emergency governed by Rule 11 were to be made 'by advertisement and interview through the Public Service Commission '.
Any appointment to a permanent or temporary post of Assistant Engineer, which was not made in accordance with Rule 9 or 10 or 11 was, therefore, not in accordance with these Rules.
The writ petitioners in all these matters were duly appointed Sub Assistant Engineers who were earlier called Overseer Estimators as described in the Rules, and though initially diploma holders, having obtained the prescribed degree, were eligible for appointment as Assistant Engineers.
The writ petitioners (respondents in these appeals) were appointed temporary Assistant Engineers on ad hoc basis, initially for a period of six months in the PWD between.
1974 to 1976 and in the Irrigation and Waterways Department between 1972 to 1978.
According to writ petitioners themselves, their claim for seniority is based on direct recruitment to the post of Assistant Engineer, and not as promotee from the next below cadre of Sub Assistant Engineers in the promotion quota specified for them, in the Rules.
It is, therefore, the claim of the writ petitioners for seniority from the date of their initial ad hoc appointment, as direct recruits, and not as promotees in the promotion quota, which has to be considered.
The ad hoc appointment of all the writ petitioners was in identical terms and, therefore, it is sufficient to refer merely to the relevant part of one such notification dated 10th May, 1974, as illustrative of the nature of their ad hoc appointment.
The relevant part of the notification is as under "The Governor is pleased to appoint the following Sub Assistant Engineers of the P.W.D. now posted in the Directorates/offices mentioned against each as tempy.
Assistan t Engineers in the West Bengal Service of Engineers under the P.W. Department, on ad hoc basis, for a period of 6 (six) months with effect from the dates of joining or until further orders whichever is earlier.
929 4.
The appointment is purely on ad hoc basis and he will have to revert to the post of S.A.E. if he is not selected for regular appointment as Assistant Engineer through the P.S.C." The initial ad hoc appointment was extended periodically, on the same terms, during the entire period upto 26.2.1980.
During this period, several opportunities were given to these persons to appear before the Public Service Commission to satisfy the condition attached to their ad hoc appointment, but none of the writ petitioners complied with the requirement, declining throughout to appear before the Public Service Commission.
Strangely, the State Government requested the Public Service Commission to permit regularisation of the services of these ad hoc, appointees as Assistant Engineers, without being selected for regular appointment by the Public Service Commission, but the Public Service Commission firmly turned down that request.
The PSC 's letters dated 4.5.1978, 10.10.1979 and 22.11.1979 contain such refusal.
The Government, even then, took the decision on 26th February, 1980 to regularise these persons as Assistant Engineers, and, consequently, took three simultaneous steps on 26.2.1980: the requirement in the rules of consultation with the P.S.C. was dispensed with, for them; they were absorbed as temporary Assistant Engineers; and rule under Article 309 was made, providing for their seniority as temporary Assistant Engineers, with effect from the same date i.e. 26.2.1980.
This rule clearly provided, that all persons appointed regularly in accordance with rules, prior to 26.2.1980, as Assistant Engineers would rank above the ad hoc appointees so absorbed with effect from 26.2.1980.
This decision of the Government has also been implemented.
Surprisingly, the grievance, even then, of the writ petitioners is, that their seniority should be reckoned not only from 26.2.1980, as has been done, but from the date of their initial ad hoc appointment made temporarily in the above manner, notwithstanding the conditions attached to that appointment under the rules, and their failure to fulfill the same.
It is sufficient to refer to certain portions of the PSC 's reply dated 4th May, 1978 to the State Government 's proposal for regularisation of ad 930 hoc appointments, reiterating the strong objection of PSC that 'the appointments had been ab initio irregular, illegal and unconstitutional. ' Relevant extract from the reply is as under: "2.
It appears that the cases of 27 of 36 ad hoc appointments of Assistant Engineer (29 in the Civil Branch and 7 in the Electrical Branch) under the Public Works Department as made between May, 1974 and June, 1975 were earlier reported to the Commission in January, 1975.
The Commission informed Government that the appointments had been ab initio irregular, illegal and unconstitutional and requested Government to make regular recruitment to the posts after advertisement (vide Secretary 's D.O. No. 370 PSC dated the 8th March, 1975).
The Commission also brought the irregularity to the notice of the Chief Secretary whose reply in this regard was as follows (vide Chief Secretary 's letter No. 938/75 CS dated the 22nd August, 1975 issued by Public Works (Estt.) Department : '.
The ad hoc appointments in question were made by the Public Works Department in the exigencies of public service pending recruitment of Assistant Engineers through the Public Service Commission, West Bengal and on the express condition that the concerned of ficers would have 'lo revert if they failed to be selected by the Public Service Commission for appointment as Assistant Engineers.
" 3.It appears that of the 29 ad hoc Assistant Engineers (Civil) only 3 applied in response to the Commission 's subsequent advertisement.
None of them however appeared at the preliminary written test held by the Com mission in that connection.
As regards the 7 posts of Assistant Engineers (Electrical) it appears that all the 7 ad hoc appointees applied in response to the Commission 's advertisements issued in 1975 but that none of them was able to obtain even the pass mark at the interviews.
In the above context it is not clear how Government can 931 now sponsor a proposal for regularisation of the appointment of these ad hoc appointees.
" In this reply it was finally said that the illegality of these ad hoc appointments could not be cured.
It was after the strong stand taken by the PSC, that the State Government took the aforesaid action on 26.2.1980 to dispense with the requirement of consultation with the PSC, and regularise appointments of ad hoc appointees with effect from 26.2.1980.
The Rules for seniority made by the notification dated 26.2.1980 issued in exercise of the power conferred by the proviso to Article 309 of the Constitution, are as under "1.
These rules may be called the Seniority Rules for the Assistant Engineers recruited in the Public Works Department otherwise than through the Public Service Commission, West Bengal during the period from May 1974 t o June,1976. 2.
The Assistant Engineers under Public Works Department who were recruited otherwise than through the Public Service Commission, West Bengal during the period from May 1974 to June 1976 and who were excluded from the purview of the Public Service Commission, West Bengal under this department notification No. 1299 F dated 26.2.1982, shall be deemed to be junior to any Assistant Engineer who was selected by the Public Service Commission, West Bengal and was appointed on a date prior to 26th February, 1980.
The inter seniority in respect of the Assistant Engineers who are covered by the said notification shall be determined on the basis of select list, if any.
In the absence of any such select list the inter se seniority should be determined on the basis of their length of service as Assistant Engineer in the Public Works Department." (emphasis supplied) These ad hoc appointees having obtained the benefit of regularisation with effect from 26.2.1980 without being selected by the PSC, and being given the benefit of seniority from the date of their regularisation on 932 26.2.1980, have challenged the Government 's action and claimed seniority with effect from the date of their initial ad hoc appointment, of this nature.
It may, here be mentioned, that in case of the ad hoc appointees in the Irrigation and Waterways Department, even a rule for seniority being given to them from 26.2.1980 was not made, as was done for the ad hoc appointees in the P.W.D., and yet they have also been given the same benefit.
They make the same grievance, inspite of this.
On behalf of the appellants, State of West Bengal and the direct recruits aggrieved by the judgment of the Division Bench of the High Court, it has been urged that the claim of the writ petitioners (respondents in these appeals) for seniority being given to the, retrospectively from the date of their initial ad hoc appointment, made contrary to the rules, in spite of their regularisation being made expressly from 26.2.1980, is wholly untenable and against the decisions of this Court, particularly the constitution bench decision in Direct Recruit Class II Engineering Officer 's Association and Ors.
vs State of Maharashtra and Ors.
, ; = ; On this basis, it was submitted that the Division Bench of the High Court committed an error in reversing the judgment of the Single Bench, by which the writ petitions had been dismissed.
In reply Shri G.L. Sanghi appearing for the writ petitioners (respondents in all these appeals) submitted, that the initial ad hoc appointment of the writ petitioners was made by a mode permissible under the rules; that appointment was made in relaxation of ' the rules by the Government which is implicit in the action taken; the initial ad hoc appointment must, therefore, be equated with a regular appointment made under the rules; and on this equation there is no justification for discrimination between the initial ad hoc appointees and regular appointees coming in by direct recruitment thereafter in accordance with rules.
It was submitted that the initial ad hoc appointment being, therefore, in the nature of regular appointment, made during an emergency, after selection by a Committee consisting of five Chief Engineers, these persons are entitled to count their entire service including the ad hoc period prior to 26.2.1980, for the purpose of their seniority.
Shri Sanghi relied on the decisions of this Court in A. Janardhana vs Union of India and Ors.[1983] 2 SCR 936 and Narender Chadha Ors.
vs Union of India and Ors. ; to support his submission.
Shri Sanghi further submitted, that the case of the writ petitioners fell squarely within the ambit of conclusion (B) of the summary 933 in Maharashtra Engineers case (in para 44 of the SCR = para 47 of SCC.
The question, therefore, is whether Shri Sanghi is right in his submission that this case falls within the ambit of the said conclusion (B) in Maharashtra Engineers case.
The submission of the other side is that this case falls, not within conclusion (B) but the corollary mentioned in con clusion (A), of that decision.
Conclusions (A) and (B), which alone are material, are as under : "(A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirmation.
The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such post cannot be taken into account for considering the seniority.
(B)If the initial appointment is not made by following the procedure laid down by the rules but the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules, the period of officiating service will be counted.
" It is not necessary to deal at length with the decisions of this court in A. Janardhana and Narender Chadha in view of the later constitution bench judgment in Maharashtra Engineers ' case, wherein all the relevant earlier decisions have been considered before summarising the conclusions (in para 44 of SCR = para 47 of SCC).
We may, however, briefly refer to the decisions in A. Janardhana and Narender Chadha, since Shri Sanghi has strongly relied on them.
It may be mentioned that both these decisions related to inter se seniority of direct recruits and promotees, the two channels for appointment to the posts, where there was a quota prescribed for the two channels leading to rota for confirmation, and the seniority was based on the date of confirmation, according to rules.
The dispute arose as a result of promotions being made in excess of the promotees quota, in the case of the surplus promotees.
It 934 was in that context, that the question of taking into account longer period of continuous officiation for the purpose of fixing inter se seniority of direct recruits and promotees, came up for consideration.
Those cases are clearly distinguishable.
In the present case, there is no dispute between promotees and direct recruits, the claim of the writ petitioners being based only as direct recruits in the cadre of Assistant Engineers, and not as promotees from the lower cadre of Sub Assistant Engineers to which they had earlier belonged.
The present is, therefore not a case of a dispute relating to the surplus promotees, who were given promotion regularly in accordance with rules, but in excess of the quota fixed for them under the rules.
In the present case, all the writ petitioners are persons who were given ad hoc temporary appointments for a fixed period, which was extended from time to time till their regularisation on 26.2.1980, and that too by relaxation of the condition of selection by the Public Service Commission, which was an express condition of their ad hoc appointment and a requirement for regular appointment under the Rules.
Assuming the relaxation made in their case by the State Government on 26.2.1980 to be valid, as the same is not disputed before us, they could be treated as regularly appointed only with effect from 26.2.1980 when the relaxation was given to them, and an order was made simultaneously absorbing them in the cadre of Assistant Engineers, also framing a rule at the same time under Article 309 providing for fixation of their seniority only from that date.
Accordingly, there is no foundation for the claim that they could be treated at par with the direct recruits, regularly appointed prior to 26.2.1980.
The admitted facts, which are the foundation of the claim of the writ petitioners, are sufficient to negative their claim.
It is obvious that prior to the steps taken by the State Government on 26.2.1980 for their regularisation in this manner, there was no basis on which the writ petitioners could claim to be regularly appointed as Assistant Engineers; and, therefore, the manner in which they were regularised, including the mode of fixation of their seniority with effect from 26.2.1980, is decisive of the nature of their regular appointment.
This alone is sufficient to negative their further claim.
They can make no grievance to any part of that exercise, made only for their benefit.
The constitution bench in Maharashtra Engineers ' case, while dealing with Narender Chadha, emphasised the unusual fact that the promotees in question had worked continuously for long periods of nearly fifteen to 935 twenty years on the posts without being reverted, and then proceeded to state the principle thus : "We, therefore, confirm the principle of counting towards seniority the period of continuous officiation following an appointment made in accordance with the rules prescribed for regular substantive appointments in the service. ' The constitution bench having dealt with Narendra Chadha in this manner, to indicate the above principle, that decision can not be construed to apply to cases where the initial appointment was not according to rules.
We shall now deal with conclusions (A) and (B) of the constitution bench in the Maharashtra Engineers ' case, quoted above.
There can be no doubt that these two conclusions have to be read harmoniously, and conclusion (B) can not cover cases which are expressly excluded by conclusion (A).
We may, therefore, first refer to conclusion (A).
It is clear from conclusion (A) that to enable seniority to be counted from the date of initial appointment and not according to the date of confirmation, the incumbent of the post has to be initially appointed ,according to rules '.
The corollary set out in conclusion (A), then is, that 'where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such posts cannot be taken into account for considering the seniority.
Thus, the corollary in conclusion (A) expressly excludes the category of cases where the initial appointment is only ad hoc and not according to rules, being made only as a stop gap arrangement.
The case of the writ petitioners squarely falls within this corollary in conclusion (A), which says that the officiation in such posts cannot be taken into account for counting the seniority.
This being the obvious inference from conclusion (A), the question is whether the present case can also fall within conclusion (B) which deals with cases in which period of officiating service will be counted for seniority.
We have no doubt that conclusion (B) cannot include, within its ambit, those cases which are expressly covered by the corollary in conclusion (A), since the two conclusions cannot be read in conflict with each other.
936 The question therefore, is of the category which would be covered by conclusion (B) excluding therefrom the cases covered by the corollary in conclusion (A).
In our opinion the conclusion (B) was added to cover a different kind of situation, wherein the appointments are otherwise regular, except for the deficiency of certain procedural requirements laid down by the rules.
This is clear from the opening words of the conclusion (B), namely, 'if the initial appointment is not made by following the procedure laid down by the rules ' and the later expression 'till the regularisation of his service in accordance with the rules '.
We read conclusion (B), and it must be so read to re councile with conclusion (A), to cover the cases where the initial appointment is made against an existing vacancy, not limited to a fixed period of time or purpose by the appointment order itself, and is made subject to the deficiency in the procedural requirements prescribed by the rules for adjudging suitability of the appointee for the post being cured at the time of regularisation, the appointee being eligible and qualified in every manner for a regular appointment on the date of initial appointment in such cases.
Decision about the nature of the appointment, for determining whether it falls in this category, has to be made on the basis of the terms of the initial appointment itself and the provisions in the rules.
In such cases, the deficiency in the procedural requirements laid down by the rules has to be cured at the first available opportunity, without any default of the employee, and the appointee must continue in the post uninterruptedly till the regularisation of his service, in accordance with the rules.
In such cases, the appointee is not to blame for the deficiency in the procedural requirements under the rules at the time of his initial appointment, and the appointment not being limited to a fixed period of time is intended to be a regular appointment, subject to the remaining procedural requirements of the rules being fulfilled at the earliest.
In such cases also, if there be any delay in curing the defects on account of any fault of the appointee, the appointee would not get the full benefit of the earlier period on account of his default, the benefit being confined only to the period for which he is not to blame.
This category of cases is different from those covered by the corollary in conclusion (A) which relates to appointment only on ad hoc basis as a stop gap arrangement and not according to rules.
It is, therefore, not correct to say, that the present cases can fall within the ambit of conclusion (B), even though they are squarely covered by the corollary in conclusion (A).
937 In view of the above, it is clear that the claim of the writ petitioners (respondents in all these appeals) for treating their entire period of 'service prior to 26.2.1980 as regular service for the purpose of seniority, and fixation of their seniority accordingly, is untenable.
The submission of Shri Sanghi that their initial ad hoc appointment must be treated as having been made in accordance with the rules since the selection by an alternative mode, namely, by a committee of five Chief Engineers was resorted to on account of the emergency, cannot be accepted.
Rule 11 of the 1959 Rules provides for appointments to be made during emergency, and lays down that such appointments during emergency can be made only 'by advertisement and interview, through the Public Service Commission, West Bengal. ' Admittedly, this express requirement in Rule 11 was not followed or fulfilled subsequently, and, therefore, the initial ad hoc appointments cannot be treated to have been made according to the applicable rules.
These ad hoc appointments were clearly not in accordance with the rules, and were made only as a stop gap arrangement for fixed period, as expressly stated in the appointment order itself.
Thus, there is no escape from the conclusion that the present cases fall squarely within the ambit of the corollary in conclusion (A), of Maharashtra Engineers case and, therefore, the period of ad hoc service of writ petitioners (respondents) on the post of Assistant Engineer prior to 26.2.1980, cannot be counted for reckoning their seniority.
Consequently, these appeals are allowed.
The impugned judgments of the Division Bench of the High Court, are set aside, and those of the Single Bench dismissing the writ petitions are restored.
No costs.
N.V.K. Appeals allowed.
[/INST]The appellant assessee was a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30, 1962.
The business income of the assessee was exempt under the provisions of Section 80(1) as it then stood.
During the aforesaid accounting yew, the assessee received a sum of Rs. 19 being the interest on the deposit made by it with an Electricity Distribution Company.
This deposit had to be made by the assessee as it was required by the conditions notified by the electricity company for supply of energy, and it carried interest.
It was on account of the said deposit that the sum of Rs. 19 was received by the assessee, by way of interest.
The Income tax Officer treated the amount of Rs. 19 as income from other sources, and on that basis, he levied additional surcharge, in a sum of Rs. 81,920.
The assessee appealed to the Appellate Assistant Commissioner who upheld the assessee 's contention that the said sum of Rs. 19 constituted its business income and, was therefore, exempt.
He held that the levy of surcharge was unsustainable.
The Revenue appealed to the Appellate Tribunal which held that it was 'income from business ', and accordingly dismissed the Revenue 's 997 998 appeal.
At the instance of the Revenue, the Tribunal referred the question to the High Court.
The High Court held, that the assumption made by the Appellate Assistant Commissioner and the Tribunal that the liability of surcharge was not attracted in case the said sum of Rs. 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal 's order.
It returned the reference unanswered and directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted.
In the assessee 's appeal to this Court, it was submitted that the High Court exceeded its jurisdiction in making the aforesaid direction, that the High Court widened the scope of enquiry which it was not empowered to do in a reference under Section 256 and that the matter should be sent back to the High Court for answering the question of law as stated by the Tribunal.
Dismissing the appeal, this Court, HELD : All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs. 19 is treated as income from business.
The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an er roneous assumption of law.
[1004 D F] In the instant case, the question was whether additional surcharge was leviable for the assessment year 1963 64 under the relevant Finance Act.
The assessee 's contention was that it had no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81 (1) (a), and it was submitted that the sum of Rs. 19 was also a business income and, therefore, the liability of additional surcharge did not attach to the assessee.
The I.T.O. took the view that the said sum of Rs. 19 represented income from other sources and, therefore, liability of additional surcharge was attracted.
The Appellate Assistant Commissioner upheld this contention.
The High Court, however, thought that having regard to the language of the provisions of the relevant Finance Act, the Tribunal ought to examine whether the liability to additional 999 surcharge was attracted even if the said sum of Rs. 19 was treated as income from business.
The High Court was of the opinion that this legal submission, though raised for the first time, did call for serious consideration.
This was done to arrive at a correct decision in law relating to the liability to additional surcharge.
If really, additional surcharge was chargeable according to the Finance Act even In case the said sum of Rs. 19 represented business income, the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated.
Such a course would neither be in the interest of law or justice.
That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle.
[1004 B F] C.I.T. Bombay vs Scindia Steam Navigation Ltd., 42 I.T.R. 589, relied on.[1004 H] V.R.Y.K.N. Kallappa Chettiar vs Commissioner of Income Tax, ; C.L T. vs Ogale Glass Works Ltd., 25 I.T.R. 529; Keshav Mills Co. Ltd. vs Commissioner of Income Tax, Bombay North, Ahmedabad, ; Commissioner of Income Tax, Bihar and Orissa vs Kirkend Coal Co., 74 I.T.R. 67 and Kusumben D. Mahadevia vs Commissioner of Income Tax, Bombay City , not applicable.
[1004 H]
</s>
|
<s>[INST] Summarize the judgementminal Appeals Nos.
30 34 of 1964.
Appeals by special leave from the judgment and order dated October 22, 1963 of the Allahabad High Court in Criminal Appeals Nos. 77 and 78 of 1963.
M. section K. Sastri, for the appellant (in Cr. A. No. 30 of 1964).
I. M. Lall and Ganpat Rai, for the appellants (in Cr. A. No. 31 of 1964).
V. 'Y. Sawhney, for the appellants (in Cr. A. Nos.
32 34/64).
0. P. Rana, Atiqur Pehman and C. P. Lal, for the res pondents May, 4.
The Judgment of the Court delivered by GAJENDRAGADKAR, C. J. Forty person were charged with having committed several offences the principal one of which was under section 302 read with section 149 of the Indian Penal Code.
The case against these persons was tried by the first Additional Sessions judge at Jhansi.
The other charges framed against them were under section 307 / 149, 201/ 149 & SI 1, 395, 396, 149 & 449, 1.
The learned trial Judge held that none of the char es had been proved against five of the accused persons. '.He also found that the charges under sections 395 & 396 were not proved against any of them.
In regard to the remaining charges.
he found that 35 out of 40 accused persons were guilty.
For the major offence charged under section 302/149, he sentenced 10 accused persons to death and 25 others to imprisonment for life.
He also directed that the said accused persons should undergo different terms of imprisonment for the remaining offences; but for the purpose of the present appeals, it is unnecessary to refer to them.
136 After the learned trial Judge pronounced his judgment on the 31st December 1962, the 35 accused persons who had been convicted by him preferred three appeals between them before the Allababad High Court, whereas the sentences of death imposed on 10 accused persons by the learned trial Judge were submitted to the said High Court for confirmation.
The High Court has held that 7 out of the 35 appellants before it were not proved to have committed any of the offences, and so, they were ordered to be acquitted.
In regard to the remaining 28 appellants, the High Court has confirmed the orders of conviction and sentence imposed on them by the trial Court.
In the result, the reference made to the High Court for confirmation of the sentences of death imposed on the 10 accused persons by the trial Court was allowed.
It is against this decision of the High Court that the present five appeals have been brought to this Court by special leave, and the number of accused persons who have brought these appeals before us is 16.
Before dealing with the points raised in these appeals, it is necessary to set out very briefly the relevant facts on which the prosecution case against the appellants and their co accused substantially rests.
The incident which has given rise to the present criminal proceedings took place on the 29th November, 1961 in village Bilati Khet in the district of Jhansi at about 8 a.m. It is clear that this village is cursed with keen rivalry and enmity between two factionsOne group was led by Gayadin who and four other members of his family were murdered on the said date.
All these murders were committed, according to the prosecution, by the members of the rival faction amongst whom are included the present appellants before us.
Criminal proceedings have continued between the parties for several years almost without interruption.
The rival group was led by Laxmi Prasad alias Laxmi Narain who is one of the appellants in this Court.
In the last election of the village Panchayat Laxmi Prasad succeeded as Pradhan of the village and defeated the candidate set up by Gayadin.
On the 28th November, 1961, a boundary dispute led to an incident between the members of the two groups.
This dispute related to two fields one of which belonged to Gayadin and 137 the other to Laxmi Prasad.
Attempts were made to settle this dispute by arbitration, but they failed.
It appears that Laxmi Prasad and the members of his group did not agree to submit to any arbitration and they left the meeting called for the purpose threatening that they would see that the matter in dispute between them was settled the next day.
It is on this grim note that the incident of the 28th November ended.
On the 29th November in the early morning, Bahoran, one of the sons of Gayadin, had gone out to ease himself.
He was then carrying a pharsa.
In the field he met Laxmi Prasad who attacked him with a lathi.
Bahoran retaliated this attack with his own pharsa and in the scuffle the nose of Laxmi Prasad was injured and it began to bleed; in fact, a part of the nose was actually cut.
Infuriated by this injury, Laxmi Prasad went to his house and collected the whole crowd belonging to his faction.
Bahoran eased himself and returned to his house.
Soon there after he washed his hands and went to the north where his father, brothers and other relations were warming themselves by fire.
At that stage, Ram Prasad and Dayaram rushed to the scene and informed them that Laxmi Prasad and his companions were all armed with guns, spears, swords, gandasas and lathis and were proceeding to the house of Gayadin determined to kill all the members of Gayadin 's family.
On receiving this alarming information, Gavadin and his friends and relatives thought of proceeding towards the house of Gayadin.
About that time, Laxmi Prasad and his companions reached near the house of Gayadin whereon Laxmi Prasad fired a gun.
Bhagwati was carrying a large quantity of cartridges in the folds of his dhoti and was instigating Laxmi Prasad to fire at everyone sitting near the fire to the north of the house and to exterminate the family of Gayadin.
On hearing this, everyone of the group sitting near the fire rushed into the house and closed the doors.
The assailants then broke open the doors of the house and entered the sehan of Gayadin.
Inside the house the assailants pursued Gayadin on the upper storey and killed him there.
Brindaban, Radha Saran and Dayaram were hiding in different rooms of the house; the doors of these rooms 138 were broken open and all the three of them were shot dead.
Bahoran and Shiroman Singh, both sons of Gayadin, escaped through the tiled roof into the cattleshed of Harbans which is situated towards the south east of Gayadin 's house.
Shiroman concealed himself in the godown while Bahoran concealed himself in the room in the upper storey where chaff had been stored.
After killing Gayadin, Brindaban, Radha Saran and Dayaram, the assailants mercilessly dragged the bodies of the victims out of the house of Gayadin and began their search for Bahoran and other male inmates of the house.
When the dead bodies were thus being dragged, Gori Dulaiya wife of Gayadin rushed after the assailants and implored them not to take the dead bodies away.
One of the assailants, however, struck her with a stick and she was forced to retrace her steps.
The dead bodies were then dragged towards the east of the house.
On reaching the cattleshed of Harbans, the assailants broke open the outer door of the house and entered into it.
They then injured Harbans and managed to discover Shiroman Singh who was promptly killed.
The five dead bodies were then taken into the field of Bhagwati.
In the field two big piles of cowdung cakes were prepared.
On one of the piles the bodies of Gayadin, Brindaban, Radha Saran and Davaram were placed and on the other Shiroman Singh 's body was put.
Kerosene oil was sprinkled on the bodies and fire was set to them.
That, in brief, is the story of the gruesome murders which have given rise to the present proceedings.
When the assailants had left the house of Gayadin dragging the dead bodies with them.
Rahoran came out of hi,, hiding place and rushed to the Police Station Krichh and lodged the First Information Report at about 11 o 'clock.
In this report,. .he gave all the material details in regard to the commission.of the offence and named the 35 persons as the assailants. .In fact, the first committal order passed on the 31st March,. .1962 in the present proceedings referred to 35 assailants.
Later.
five more persons were added to the list of assailants by the committal order made on the 14th May, 1962.
On receiving the first information report, the police party rushed to the scene of occurrence on cycles and they put off the burning fire and took out the half burnt 139 bodies of the five murdered persons.
These bodies were identified aid were sent for post mortem examination.
The injured persons Harbans, Ram Prasad, Mansa Ram and Smt.
Gori Dulaiya were sent for medical examination.
Post mortem examination was then held on the dead bodies and statements of witnesses were recorded in the course of investigation.
That led to the several charges framed against 40 persons and ultimately their trial in the Court of the First Additional Sessions Judge at Jhansi.
The case for the prosecution is sought to be established by the testimony of 12 eye witnesses.
All the accused persons denied that they had anything to do with the offences charged.
Their main contention was that a false case had been made against them and it was attempted to be supported by evidence of witnesses who were hostile to them and who had no regard for cruth.
The trial Judge, in substance.
rejected the defence plea and accepted the prosecution evi dence.
except in the case of five accused persons.
In appeal, several contentions were raised on behalf of the appellants, but they were rejected and in the result, the findings of the trial Court against the appellants were confirmed.
The High Court, however, reversed the conclusion of the trial Court in respect of 7 accused persons with whose cases we are not concerned in the present appeals.
The 12 persons who gave direct evidence against the appellants and their co accused persons are: Bahoran P.W. 1; Basanti Lal P.W.2; Rameshwar Dayal P.W.3; Prabhu Dayal P.W.5; Pancham P.W.6: Swarup Singh P.W.14; Kasturi P.W.15; Thakur Das P.W.16.
Shyamlal P.W.17; Harbans P.W.18; Dropadi P.W.19; and Kishori Lal P.W.20.
The High Court has critically examined the evidence given by these witnesses and has held that the evidence of Bahoran and Prabhu Dayal may be left out of account as it appeared to the High Court that the said evidence suffered from material infirmities.
The evidence given by the remaining 10 witnesses has, however, been accepted by the High Court as substantially true and correct.
Jr. dealing with this oral evidence, the High Court took into account the fact that most of these witnesses belonged to the faction of Gayadin and must, therefore, be regarded 140 as partisan.
It also considered another feature which characterised the evidence of all the witnesses and that was that they gave their account of the incident substantially in similar terms and did not assign particular parts in respect of overt acts to any of the assailants except Laxmi Prasad accused No. 1.
The approach adopted by the High Court shows that it decided to confirm the conviction of the accused persons against whom four or more witnesses gave a consistent account, and it is by the application of this test that 7 accused persons have been acquitted.
As to the sentence, the High Court realised that 10 persons had been ordered to be hanged and that it could not be said about all of them, except Laxmi Prasad, that they had actually fired a gun and caused the death of any of the five victims.
Even so, the High Court held that since they all formed members of the unlawful assembly the common object of which was to exterminate the male members of the family of Gayadin, they were all equally guilty of murder under s.302,/149, I.P.C. and it would not, therefore, be unreasonable to impose the penalty of death on such of the assailants is were shown to have carried guns in their hands on that occasion.
That is how the High Court upheld the orders of conviction passed against 28 persons who had brought their cases before it in appeal and confirmed the sentences of death imposed on I 0 of them.
In these appeals, Mr. Sawhney who has addressed the principal argument before us on behalf of the appellants, has urged that the High Court has failed in discharging its duty properly when it dealt with the appeals brought before it by the appellants and decided to confirm the sentences of death imposed on 10 of the accused persons.
In support of this argument, Mr. Sawhney has relied upon the decision of this Court in the case of Jumman & Ors.
vs The State of Punjab.
(1) In that case, this Court has emphasised the fact that the mandatory requirement prescribed by s.374 of the Code of Criminal Procedure shows that in dealing with reference for confirmation of death sentence imposed by the Sessions Judge, the High Court has to consider the entire case for itself before deciding whether the sentence of death (1) A.T.R. I957 S.C. 469 141 should be confirmed or not.
Section 374 provides that the sentence of death shall not be executed unless it is confirmed by the High Court.
In other words, the sentence of death imposed by the Court of Sessions is not effective until and unless it is confirmed by the High Court.
It is only when the High Court confirms the sentence of death that it is capable of execution.
That is why this Court emphasised the solemnity of the Proceedings brought before the High Court under s.374, and it pointed out that under s.375, the High Court is given the power to admit additional evidence if it thinks necessary to do so.
Proceedings brought before the High Court for confirmation of a death sentence give a right to the condemned prisoner to be heard on the merits and to require the High Court to consider the matter for itself without being influenced by the conclusions recorded by the Court of Sessions.
The conclusions of the High Court on the merits in such proceedings must be independent,.
and so, the High Court inevitably has to go into the whole of the evidence.
consider all the pros and cons of the case and satisfy itself that the offence charged under section 302, I.P.C. is established beyond reasonable doubt and the sentence of death submitted to it for its confirmation is fully justified.
Mr. Sawhney contends that this essential requirement of s.374 has not been complied with by the High Court when it dealt with the appeals brought before it in the present proceedings.
He also adds that since 10 persons have been ordered to be hanged, that itself is a reason why this Court should examine the evidence for itself and not hold that the appellants are concluded by concurrent findings of fact recorded by the Court below.
We are not impressed by this argument.
It is perfectly true that, in a murder trial when an accused person stands charged with the commission of an offence punishable under s.302, he stands the risk of being subjected to the highest penalty prescribed by the Indian Penal Code; and naturally judicial approach in dealing with such cases has to be cautious, circumspect and careful.
In dealing with such appeals or reference proceedings where the question of con firming a death sentence is involved, the High Court has also 142 to deal with the matter carefully and to examine all relevant and material circumstances before upholding the conviction and confirming the sentence of death.
All arguments urged by the appellants and all material infirmities pressed before the High Court on their behalf must be scrupulously examined and considered be fore a final decision is reached.
The fact that 10. persons had been ordered to be hanged by the trial Judge necessarily imposed a more serious and onerous res ponsibility on the High Court in dealing with the present appeals.
We have carefully considered the judgment delivered by the High Court in these appeals and we are satisfied that the criticism made by Mr. Sawhney that the High Court did not bestow due care and attention on the points involved in the case, cannot be regarded as well founded, The judgment shows that the arguments which were urged on behalf of the appellants, have been carefully examined, the evidence given by the respective witnesses has been accurately summarised and the infirmities in the said evidence closely scrutinised.
The relevance of the argument of the admitted enmity between the two factions of the village has been taken into account and the common features of the evidence tendered by the witnesses have not been overlooked.
After taking into account all the points which were urged before the High Court the High Court adopted what it thought to be a safe test before acting on direct evidence.
It has held that unless at least four witnesses are shown to have given a consistent account against any of the appellants.
the case against them cannot be said to have been proved beyond reasonable doubt.
Having regard to the manner in which the High Court has dealt with the appeals brought before it, we are not prepared to hold that the general criticism made by Mr. Sawhney against the judgment of the High Court can be accepted.
In this connection, Mr. Sawhney strongly relied on the fact that the High Court has not considered one important point in favour of the defence, and that is in to the failure of the prosecution to tender three material witnesses whose names had been shown in the witness list in the calendar sent by the committing Magistrate to the trial Judge.
These witnesses are: Ram Prasad, Mansa Ram and 143 Rani Dulhan.
It appears that this contention was raised by the defence before the Trial Court and had been rejected by it.
The Government counsel appearing for the prosecution had made an application to the trial Court expressing his inability to examine the three witnesses for the reason that Ram Prasad and Mansa Ram had been won over by the defence and Rani Dulhan, the widow of one of the victims, was suffering from such mental shock that she was unable to depose coherently.
After this application was made and granted, the learned trial Judge did not insist upon the prosecution examining the three said witnesses.
Then followed three other applications by the defence (Nos. 247B, 248B and 249B) in which it was urged that the said three witnesses should be examined under s.540, Cr.
The learned trial Judge rejected these applications, and so, the case concluded without the said three witnesses giving evidence before the trial Court.
In rejecting the applica tions made by the defence, the learned Judge has carefully examined the validity of the defence contention that the evidence given by the said witnesses before the Committing Magistrate showed that they were material witnesses and the plea raised by them that the absence of their evidence would cause prejudice to the defence, and has held that the evidence which the said three witnesses may give was not essential for a just decision of the case and that it was unreasonable to suggest that the prosecution had an oblique moive in supressing their evidence.
This part of the judg ment clearly shows that all relevant aspects of the matter were examined by the trial Judge before he refused to exercise his powers under s.540, Cr.
It is obvious that this contention was not urged before the High Court, and so, we find no discussion of the point in the judgment of the High Court.
We are not prepared to accept Mr. Sawhney 's argument that even if this point was not raised by the appellants before the High Court, they are entitled to ask us to consider that point having regard to the fact that 10 persons have been ordered to be hanged.
It may be conceded that if a point of fact which plainly arises on the record, or a point of law which is relevant and material and can be argued with 144 out any further evidence being taken, was urged before the trial Court and after it was rejected by it was not repeated before the High Court, it may, in a proper case, be permis sible to the appellants to ask this Court to consider that point in an appeal under article 136 of the Constitution; afterall in criminal proceedings of this character where sentences of death are imposed on the appellants, it may not be appropriate to refuse to consider relevant and material pleas of fact and law only on the ground that they were not urged before the High Court.
If it is shown that the pleas were actually urged before the High Court and had not been considered by it, then, of course, the party is entitled as a matter of right to obtain a decision on those pleas from this Court.
But even otherwise no hard and fast rule can be laid down prohibiting such pleas being raised in appeals under article 136.
In the present case, however, we are satisfied that there is no substance in the contention which Mr. Sawhney seeks to raise before us.
It is not unknown that where serious offences like the present are committed and a large number of accused persons are tried, attempts are made either to terrorise or win over prosecution witnesses, and if the prosecutor honestly and bonafide believes that some of his witnesses have been won over, it would be unreasonable to insist that he must tender such witnesses before the Court.
It is undoubtedly the duty of the prosecution to lay before the Court all material evidence available to it which is necessary for unfolding its case; but it would be unsound to lay down is a general rule that every witness must be exa mined even though his evidence may not be very material or even if it is known that he has been won over or terrorised.
In such a case, it is always open to the defence to examine such witnesses is their witnesses and the Court can also call such witnesses in the box in the interest of justice under s.540, Cr.
As we have already seen, the defence did not examine these witnesses and the Court, after due deliberation, refused to exercise its power under s.540, Cr.
That is one aspect of the matter which we have to take into account.
145 The other aspect of the matter is that the trial Court has found that the evidence which these witnesses would have given was not essential for a just decision of the case.
What these witnesses might have said in the Sessions Court was judged by the trial Court in the light of their previous statements already recorded, and that is a finding which is purely one of fact.
If this finding was not challenged by the appellants before the High Court, we do not see how they can claim to argue before us now that the said finding is erroneous.
Besides, so far as Rani Dulhan is concerned, it seems to us utterly unreasonable to insist that before per mitting the prosecutor not to examine her, evidence should have been led to show that she was suffering from such mental shock that she was unable to give a coherent account of the tragic events that happened on that fateful morning.
One has merely to recall the fact that five male members of her family were butchered to death by the assailants to realise that the prosecutor 's statement that she was mentally unbalanced must be true.
Then, as to Ram Prasad and Mansa Ram having been won over by the defence, that again is a matter on which the trial Court appears to have been satisfied; otherwise it would have readily acceded to the request of the defence to exercise its powers under section 540.
We are inclined to think that it is because this part of the defence contention was felt to be inarguable that the Advocate for the appellants did not raise this point before the Court.
Therefore, we are not prepared to allow Mr. Sawhney to take us through the evidence in the case on the ground that one important contention raised by the defence has not been examined by the High Court.
Mr. Sawhney has then argued that where witnesses giving evidence in a murder trial like the present are shown to belong to the faction of victims, their evidence should not be accepted, because they are prone to involve falsely mem bers of the rival faction out of enmity and partisan feeling.
There is no doubt that when a criminal Court has to appreciate evidence given by witnesses who are partisan or interested, it has to be very careful in weighing such evidence.
51 S.C. IO 146 Whether or not there are discrepancies in the evidence; whether or not the evidence strikes the Court as genuine; whether or not the story disclosed by the evidence is prob able, are all matters which must be taken into account.
But it would, we think, be unreasonable to contend that evidence given by witnesses should be discarded only on the ground that it is evidence of partisan or interested witnesses.
Often enough, where factions prevail in villages and murders are committed as a result of enmity between such factions, criminal Courts have to deal with evidence of a partisan type.
The mechanical rejection of such evidence on the sole ground that it is partisan would invariably lead to failure of justice.
No hard and fast rule can be laid down as to how much evidence should be appreciated.
Judicial approach has to be cautious in dealing with such evidence; but the plea that such evidence should be rejected because it is partisan cannot be accepted as correct.
Then it is urged that the evidence given by the witnesses conforms to the same uniform pattern and since no specific part is assigned to all the assailants, that evidence should not have been accepted.
This criticism again is not well founded.
Where a crowd of assailants who are members of an unlawful assembly proceeds to commit an offence of murder in pursuance of the common object of the unlawful assembly, it is often not possible for witnesses to describe accurately the part played by each one of the assailants.
Besides, if a large crowd of persons armed with weapons assaults the intended victims, it may not be necessary that all of them have to take part in the actual assault.
In the present case, for instance, several weapons were carried by different members of the unlawful assembly, but it appears that the guns were used and that was enough to kill 5 per sons.
In such a case, it would be unreasonable to contend that because the other weapons carried by the members of the unlawful assembly were not used, the story in regard to the said weapons itself should be rejected.
Appreciation of evidence in such a complex case is no doubt a difficult task: but criminal courts have to do their best in dealing with such cases and it is their duty to sift the evidence carefully and decide which part of it is true and which is not.
In the 147 present case, the High Court has in fact refused to act upon the, evidence of Bahoran and Prabhu Dayal, because it appeared to the High Court that the evidence of these two witnesses suffered from serious infirmities.
Mr. Sawhney also urged that the test applied by the High Court in convicting the appellants is mechanical.
He argues that under the Indian Evidence Act, trustworthy evidence given by a single witness would be enough to convict an accused person, whereas evidence given by half a dozen witnesses which is not trustworthy would not be enough to sustain the conviction.
That, no doubt is true; but where a criminal court has to deal with evidence pertaining to the commission of an offence involving a large number of offenders and a large number of victims, it is usual to adopt the test that the conviction could be sustained only if it is supported by two or three or more witnesses who give a consistent account of the incident.
In a sense, the test may be described as mechanical; but it is difficult to see how it can be treated as irrational or unreasonable.
Therefore, we do not think that any grievance can be made by the appellants against the adoption of this test.
If at all the prosecution may be entitled to say that the seven accused persons were acquitted because their cases did not satisfy the mechanical test of four witnesses, and if the said test had not been applied, they might as well have been convicted.
It is, no doubt, the quality of the evidence that matters and not the number of witnesses who give such evidence.
But, sometimes it is useful to adopt a test like the one which the High Court has adopted in dealing with the present case.
Mr. Sawhney then attempted to argue that the High Court failed to give effect to the principles enunciated by this Court in the case of Baladin vs State of Uttar Pradesh( ').
In that case, it was observed by Sinha, J., who spoke for the Court, that it is well settled that mere presence in an assembly does not make a person, who is present, a number of an unlawful assembly unless it is shown that he had done something or omitted to do something which would make him a member of an unlawful assembly, or unless the case falls under s.142, I.P.C. The argument is (1) A.I.R. 1956 S.C. 181 148 that evidence adduced by the prosecution in the present case does not assign any specific part to most of the accused persons in relation to any overt act, and so, the High Court was in error in holding that the appellants were members of an unlawful assembly.
The observation of which Mr. Sawhney relies, prima facie, does seem to support his contention; but, with respect, we ought to add that the said observation cannot be read as laying down a general proposition of law that unless an overt act is proved against a person who is alleged to be a member of an unlawful assembly, it cannot be said that he is a member of such an unlawful assembly.
In appreciating the effect of the relevant observation on which Mr. Sawhney has built his argument, we must bear in mind the facts which were found in that case.
It appears that in the case of Baladin(1), the members of the family of the appellants and other residents of the village had assembled together; some of them shared the common object of the unlawful assembly, while others were merely passive wit nesses.
Dealing with such an assembly, this Court observed that the presence of a person in an assembly of that kind would not necessarily show that he was a member of an un lawful assembly.
What has to be proved against a person who is alleged to be a member of an unlawful assembly is that he was one of the persons constituting the assembly ,and he entertained along with the other members of the assembly the common object as defined by s.141, I.P.C. Section 142 provides that whoever, being aware of facts which render any assembly an unlawful assembly, intentionally joins that assembly, or continues in it, is said to be a member of an unlawful assembly.
In other words, an assembly of five or more persons actuated by, and entertaining one or more of the common objects specified by the five clauses of section 141, is an unlawful assembly.
The crucial question to determine in such a case is whether the assembly consisted of five or more persons and whether the said persons entertained one or more of the common objects as specified by section 141.
While determining this question, it becomes relevant. to consider whether the assembly consisted of some persons. .who were merely passive witnesses and had (1) A.I.R. 1956 S.C. 181 I49 joined the assembly as a matter of idle curiosity without intending to entertain the common object of the assembly.
It is in that context that the observations made by this Court in the case of Baladin(1) assume significance; otherwise, in law, it would not be correct to say that before a person is held to be a member of an unlawful assembly, it must be shown that he had committed some illegal overt act or had been guilty of some illegal omission in pursuance of the common object of the assembly.
In fact, s.149 makes it clear that if an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence.
is a member of the same assembly, is guilty of that offence; and that emphatically brings out the principle that the punishment prescribed by s.149 is in a sense vicarious and does not always proceed on the basis that the offence has been actually committed by every member of the unlawful assembly.
Therefore, we are satisfied that the observations made in the case of Baladin(l) must be read in the context of the special facts of that case and cannot be treated as laying down an unqualified proposition of law such as Mr. Sawhney suggests.
In this case, the High Court has carefully examined the evidence and has made a finding that the whole group of persons who constituted the assembly were members of the faction of Laxmi Prasad and they assembled together, armed with several weapons, because they entertained a common object in pursuance of which the five murders were committed on that day.
Therefore, there is no substance in the argument that the conclusion of the High Court that the appellants are guilty of the offences charged is not sup ported by the principles of law enunciated by this Court in the case of Baladin(1).
It is thus clear that the general grounds of attack urged before us by Mr. Sawhney in challenging the validity of the conclusions recorded by the High Court fail, and so, there (1) A.I.R.
I956 S.C. 181 150 would be no occasion or justification for this Court to con sider the evidence for itself.
That leaves one question still to be considered and that has relation to the sentence of death imposed on 10 persons.
Mr. Sawhney argues that in confirming the sentences of death imposed by the trial Court on 10 accused persons in this case, the High Court has adopted a mechanical rule.
The High Court has held that the 10 persons who carried fire arms should be ordered to be hanged, whereas others who have also been convicted under section 302/149, should be sentenced to imprisonment for life.
It is true that except for Laxmi Prasad, the charge under section 302/149 rests against the other accused persons on the ground that five murders have been committed by some members of the unlawfui assembly of which they were members, and the argument is that unless it is shown that a particular accused person has himself committed the murder of one or the other of the victims, the sentence of death should not be imposed on him.
In other words, the contention is that if a person is found guilty of murder under section 302/149 and it is not shown that he himself committed the murder in question, he is not liable to be sentenced to death.
In support of this argument, Mr. Sawhney has relied on certain observations made by Bose J. who spoke for the Court in Dalip Singh vs State of Punjab( ').
In that case, what this Court observed was that the power to. enhance a sentence from transportation to death should very. rarely be exercised and only for the stron gest reasons; and. it was added that it is not enough for the appellate court to. say or think that if left to itself it would have awarded the. greater penalty because the discretion does ,not belong to the. appellate court but to the trial Judge, and the only ground on which the appellate court can interfere is that the discretion has been improperly exercised.
These observations have no relevance in the present case, because we are not dealing With a case where the High Court has enhanced the sentence imposed by the trial Judge at all.
In fact, both the trial Court and the High Court are agreed that the sentences of death imposed on 10 persons are justi fied by the circumstances of the case and by the requirements (1) (1954] S.C.R. 145 151 of justice.
As a mere proposition of law, it should be difficult to accept the argument that the sentence of death can be legitimately imposed only where an accused person is found to have committed the murder himself.
Whether or not sentences of death should be imposed on persons who are found to be guilty not because they themselves committed the murder, but because they were members of an unlawful assembly and the offence of murder was committed by one or more of the members of such an assembly in pursuance of the common object of that assembly, is a matter which had to be decided on the facts and circumstances of each case.
In the present case, it is clear that the whole group of persons belonged to Laxmi Prasad 's faction, joined together armed with deadly weapons and they were inspired by the common object of exterminating the male members in the family of Gayadin, 10 of these persons were armed with fire arms and the others with several other deadly weapons, and evidence shows that five murders by shooting were committed by the members of this unlawful assesmbly.
The conduct of the members of the unlawful assembly both before and after the commission of the offence has been considered by the courts below and it has been held that in order to suppress such fantastic criminal conduct on the part of villagers it is necessary to impose the sentences of death on 10 members of the unlawful assembly who were armed with firearms.
It cannot be said that discretion in the matter has been improperly exercised either by the trial Court or by the High Court.
Therefore we see no reason to accept the argument urged by Mr. Sawhney that the test adopted by the High Court in dealing with the question of sentence is mechanical and unreasonable.
There are, however, three cases in which we think we ought to interfere.
These are the, case of accused No. 9 Ram Saran who is aged 18; accused No. II Asha Ram who is aged 23 and accused No. 16 Deo prasad who is aged 24, Ram Saran and Asha Ram are the sons of Bhagwati who is accused No. 2.
Both of them have been sentenced to death.
Similarly, Deo prasad has also been sentenced to death.
Having regard to the circumstances under which the unlawful assembly came to be formed, we are satisfied that these 152 young men must have joined the unlawful assembly under pressure and influence of the elders of their respective families.
The list of accused persons shows that the unlaw ful assembly was constituted by members of different families and having regard to the manner in which these factions ordinarily conduct themselves in villages, it would not be unreasonable to hold that these three young men must have been compelled to join the unlawful assembly that morning by their elders, and so, we think that the ends of justice would be met if the sentences of death imposed on them are modified into sentences of life imprisonment.
Accordingly, we confirm the orders of conviction and sentence passed against all the appellants except accused Nos. 9, 11 and 16 in whose cases the sentences are altered to those of imprisonment for life.
In the result, the appeals are dismissed, subject to the said modification.
Appeals dismissed.
[/INST]Income tax was assessed upon the total income in the hands of the respondent assessee, an association of several persons combined together for the purpose of purchase of coal and its supply to customers for domestic purposes and other small scale industries.
The assessee claimed that it should not be assessed to tax as an association of persons, but the proportion of the income in the hands of each members of the association might be assessed to tax instead.
The Income tax Officer refused this request and an appeal to the Appellate Assistant Commissioner was dismissed.
The Income tax Appellate Tribunal, on a further appeal.
held that though the Income tax Officer had power to assess income of the association of persons as such or in the alternative on the individual members thereof in respect of their proportionate share in the income, the tribunal had no power under the Act to direct the Income tax Officer to exercise his power in one way or other.
On a 86 reference, the High Court held that the Appellate Tribunal had power to set aside the Income tax Officer 's assessment against the association and to give consequential and ancillary 'directions to the said officer to assess individuals.
HELD: (i) Section 3 of the Income tax Act impliedly gives an option to an appropriate authority to assess the total income of either the association of persons or the members of such association individually.
Commissioner of Income tax vs Reddy Mallaram, followed.
(ii) Such an assessee has a right to appeal under section 30 of the Act against the order of the Income tax Officer assessing the association of persons instead of the members individually.
(iii) The Appellate Tribunal has jurisdiction to give directions to the appropriate authority to cancel the assessment made on the association of persons and to give appropriate directions to the authority concerned to make fresh assessment on the members of that associations individually.
The phraseology used both in section 31 and section 33 does not restrict the powers of the Appellate Assistant Commissioner or the Appellate Tribunal; both have the power of such direction.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1527 of 1974.
Appeal by Special Leave from the Judgment & Order dated the 14th December, 1973 of the Delhi High Court in Civil Writ No. 1678 of 1967.
F. section Nariman, Addl.
Gen. of India, D. N. Mukherjee and R. N. Sahthey, for the Appellants.
N. A. Palkhiala, Ravinder Narain, J. B. Dadachanji, O. C. Mathur, K. J. John and K. R. Jhaveri, for the Respondent.
419 The Judgment of the, Court was delivered by Goswami, J.
This appeal is by special leave from the judgment of the Delhi High Court in a writ application there under article, 226 of the Constitution.
The respondent manufactures various other items hot rolled finished steel products in rectangular cross section of thickness varying between 1.7 mm and 6.55 mm and width varying between 16.2 mm and 311.2 mm and rolled in coils which it supplies to the, Indian Tube Company Limited at Jamshedpur for making tubes and also to others.
This article is subjected to Central Excise Duty under the (hereinafter called the Act).
The dispute between the respondent and the appellants is that while the former describes the said manufactured product as strip the appellants classify it as skelp.
This difference in classifying the product differently results in fiscal misfortune to the respondent since skelp is subjected to a higher Central Excise Duty than strip.
It may be stated that during the period from April 24, 1962 to February 28, 1964, the respondent described its product as skelp and it was subjected then to a lower rate of,duty From February 19, 1964, the respondent claimed that the aforesaid product be classified as strip since there.
had been a levy of higher duty for skelp.
The Assistant Collector, Central Excise, Jamshedpur, who is the primary taxing authority, the Collector of Central Excise, Patna, in appeal, and the Central Government in revision rejected the contention of the respondent by successive orders, each authority upon its own test of the definition of the product as skelp.
That led to the successful writ application of the respondent in the High Court resulting in this appeal.
In the forefront of his argument the learned Additional Solicitor General for the appellants relying upon two decisions of this Court, namely, The Collector of Customs, Madras vs K. Ganga Setty(1) and V. V. Iyer of Bombay vs Jasjit Singh, Collector of Customs and Another,(2) submitted that "it is primarily for the taxing authorities to determine the heads or entry under which any particular commodity fell; but that if in doing so, these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was preverse then it was a case in which the Court was competent to interfere.
In other worlds, if there were two constructions which an entry could reasonably bear, and, one of them which was in favour of Revenue was adopted, the Court has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the Court as the better one to adopt '.
On the other hand with equal emphasis Mr. Palkhivala for the respondent submitted that an assessment without the application of an identifiable test is nothing but perverse and arbitrary.
He submits that in the present case there was no identifiable test before the taxing authorities by which the (1) ; (2) 420 product of the, respondent could be held to be skelp and not strip subjecting the respondent to a heavier duty.
According to the learned counsel there is no difference.
between sklep and strip, the two items being interchangeable.
It may be, noted for our purpose that under section 3 of the Act Central excise Duties are leviable on all excisable goods which are produced or manufactured in India at the rates set out in the First Schedule.
Item No. 26AA in that Schedule relates to iron and steel products and mentions in sub item (iii) therein flats, skelp and strips showing the rate of duty in the third column.
Under rule 8 of the Central Excise Rules, 1944, made under section 37 of the Act, the Central Government may from time to time by notification in the official gazette exempt, subject to such conditions as may be specified in the notification, any excisable goods from whole or any part of the duty leviable on such goods.
In exercise of the power under this rule the Central Government has made such exemptions in the rates of duty as have made it higher on skelp than on strip.
Before we proceed further we may notice how the various Excise authorities dealt with the matter at different.stages.
The first order is that of the Assistant Collector of Central Excise, Jamshedpur, which was on June 17, 1964.
According to him "skelp is the name used in reference to a plate of wrought iron or steel used for making pipe or tubing by rolling the skelp into shape and lap welding or brevetting ,edges together and strip is a term used to describe a flat rolled product of smaller cross section than sheet or bar." He accordingly adopted the definition given in Marymen 's Dictionary of Metallurgy.
The order of the Collector of Central Excise in appeal made on October 24/29, 1964, shows that the authority noted the definition of strip as follows : "Hot or cold rolled finished steel product in rectangular cross section of thickness below 5 mm and of width below 800 mm and supplied, in straight length".
This definition is substantially in.
conformity with the one given by the Indian Standards Institution (ISI).
The appellate authority held that "since the products have not satisfied the above specifications, they have been correctly, classified as 'skelp ' by.
the Assistant Collec tor.
Then comes the order in revision of the Central Government of August 18, 1967.
Inter alia it was held that "the product does have bevel edge, .; peculiar to skelp and not found in strips.
Under the circumstances, there is no doubt whatever that the product in question is correctly classified as skelp".
From the above three orders it is clear that the authorities were not at all certain about a uniform definition of 'skelp ' distinguishing it from 'strip.
Extensive arguments were advanced at the bar with regard to the definitions of there two words.
We may, therefore, look 421 at the various definitions to which our attention has been drawn.
Since the appellants largely upon the definitions given by the Indian Standards Institution, "an expert body", we will first note these definitions.
The ISI 's definitions of strip and skelp as given in IS 1956 1962 (amended upto July 1968) are as follows Upto 1965 the ISI gave, no description of strip.
It had defined skelp in 1962 as follows: Skelp.
"Hot rolled narrow strip with rolled (square, slightly round or beveled) edge.
Strip .
A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edge.
(a) Narrow strip strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form.
(b) Wide Strip Strip of width 600 mm above and supplied in coil form only.
" Upto 1965 the ISI gave no description of strip.
It had defined skelp in 1962 as follows "Hot rolled.
strip with square or slightly beveled edges, used for making welded tubes".
In 1968 the ISI 's definition of skelp stands as follows "Hot rolled narrow strip with rolled (square, slightly round or beveled edge.
,, Strip was defined by the ISI for the first time in 1965 as follows: "Coiled Strip A hot or cold rolled flat product, rolled in rectangular cross section and supplied in coil form.
Strip A hot or cold rolled flat product, rolled in rectangular cross section thickness below 5 mm and of width below 600mm and supplied in straight lengths".
The ISI 's definition of strip given in 1968 is as follows "A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edges.
(a) Narrow strip Strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form.
(b) Wide strip Strip of width 600 mm and above and supplied in coil form only".
Annexure 'J ' submitted by the respondent along 'with its rejoinder affidavit in the High Court at page 101 of the record, gives various 422 definitions of skelp taken.
from various dictionaries and treatises such as Hornor J. G. Dictionary of Terms, page 323, year 1952; Brandt D.J.C. Manufacture of Iron & Steel, pages 318 and 319, year 1953; Henderson J.C. Metallurgical Dictionary, page 192, year 1953; Backert A.O.L. A.B.C. of Iron & Steel, page 1912, year 1925 5th edition; Chamber 's Technical Dictionary, year 1967.
Similarly definition of strip is also given from these Dictionaries and books.
It is also pointed out that there is no category of skelp mentioned in Brussels Nomenclature.
British Standards 2094, Part 4; 1954, defines skelp as follows : "Hot rolled strip with square or slightly bevelled edges used for making welded tubes".
Chamber 's Technical Dictionary Revised Edition (Reprinted 1954) defines skelp as follows "Skelp (P. 775) Mild steel strip from which tubes are made by drawing through a bell at welding temperature, to produce lap welded or butt welded tubes".
We may not add to the list but are satisfied that there are a large number of definitions out of which one can be picked up to satisfy the definition of skelp according to some authority and another definition to fit in with the concept of strip according to another authority Since the duties on strip and skelp are not the same, it is absolutely necessary to define the word skelp so that there can be no doubt or confusion in the mind of either of the taxing authority or of the tax payer with regard to the tax liability qua skelp as opposed to strip.
Since, however.
there is no statutory definition of this controversial item different tests have naturally been resorted to by the different authorities and the same variation is discernible even in the affidavits of the appellants submitted before the High Court.
The short question, therefore, that arises for consideration is whether in the above background the High Court was right in interfering with the orders under article 226 of the Constitution.
It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp.
That undoubtedly would require some evidence be taken at the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip.
In the mass of documents filed before us and the extensive arguments addressed at the bar with regard to the definitions 'culled from various dictionaries, handbooks and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests.
A particular type, of strip may according to certain definitions.
be skelp and according to others not Skelp.
however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding contro 423 versy as in this case unless the, matter is beyond doubt in view of the popular meaning, or meaning ascribed to the term in commercial parlance.
In absence of any clear criterion to determine what is skelp.
and not strip, no useful purpose would be served by even remanding, the matter to the Excise authorities for a decision after taking necessary evidence.
It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip of skelp it may be possible for the authorities.
to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test.
This is, however, not possible in this ' case in view of the fact that there is no identifiable standard.
The best way is to define the product for the purpose of excise duty in approximate terms demarcating clearly the distinction between.
the two terms.
The absence of any identifiable standard would, therefore, naturally give rise, to the scope for arbitrary assessment at the hands of different authorities.
Whether this has happened in this case, as. ' complained by the respondent citing the instance of the Hindustan Steel Company, Rourkela, it is not necessary for us to pursue in this,, appeal.
We are, therefore, unable to hold that the High Court has.
gone wrong in granting the reliefs prayed for.
The appellants strenuously emphasized upon the test relied upon in the Revisional order as to skelp having bevelled edges which, according to them, is peculiar to skelp and not to strip.
But this does not bear scrutiny as on the counter affidavit of the Union of India in the High Court at page 57 of this record it shows that "as regards tested Hot rolled Strips the edges are never looked into, they can be bevelled, square or have Mill edge" (emphasis added).
This is an admission of the appellants that strips may also have bevelled edges.
The two decisions relied upon by the appellants do not come to their aid in this case since there is no identifiable standard or test to determine clearly which product can be skelp and not strip.
In Ganga Setty 's case (supra) the controversy arose with regard to whether "feed oats" fell within item 42 (fodder) or within item 32 (grain) of parti cular circular.
Dealing with the matter this Court observed as follows: ". any particular species of grain cannot be excluded merely because it is capable of being used as cattle or horse feeds.
The decision of the Customs authorities, therefore, this Court held could not be characterized as Perverse or mala fide calling for interference.
Similarly following Ganga Setty 's case (supra) in Jasjit Singh 's case (supra) the conclusion and findings of the Customs authorities were accepted a reasonable.
In both the above cases there were definite tests by which the particular article could be held to fall under one item and not under the other and the construction of the authorities 424 with regard to the scope of the particular entries was, therefore, held to be reasonable and not calling for interference by the court.
The ,question that arises in the instant case is of a completely different nature as pointed out above there being no identifiable test reasonably capable ,of distinguishing skelp from strip.
In the result the appeal fails and is dismissed with costs.
P.H.P. Appeal dismissed.
[/INST]The appellant is a tenant or Plot No. 428.
A notification was issued under Section 4 (1) of the Land Acquisition Act for setting up an industrial estate in respect of Plot No. 428 and Plot No. 436.
By a notification under Section 17 (4) the provisions of section 5A were dispensed with in the ground that provisions of section 17(1) (Urgency) were applicable.
The appellant filed a Writ Petition in Hugh Court challenging the said notification issued under section 17 (4) The Single judge dismissed the Writ Petition.
An appeal filed to the Division Bench was also dismissed.
On an appeal by Special Leave, it was contended by the appellant that there was a pucca construction on Plot No. 436 which was also notified for acquisition under the impugned notification and consequently the provisions of Section 17 (4) would not be applicable to that land as it was not arable or waste land and could not be acquired by dispensing with the enquiry under section 5A and as such, the whole notification is bad and should be quashed.
Dismissing the appeal, ^ HELD: 1.
Admittedly the appellant 's land is a waste and arable land and thus falls under section 17(1).
The person who could have taken objection to the enquiry under section 5A being dispensed: with was the owner of Plot No. 436.
He has not objected to the acquisition it is, therefore, not open to the appellant to question the validity of the notification.
If the owner of Plot No. 436 had objected to the notification different considerations might arise.
Sarjoo Prasad vs State of U.P. (AIR distinguished.
[1827E F] 2.
Section 5A should be understood in the back ground of section 4(1).
Section 4 ( I ) requires only the locality in which the land is situate, to be mentioned in the notification.
But in actual practice the survey numbers of the lands sought to be acquired are given in such notifications.
The question of notifying the locality might probably arise when all the lands in village are sought to be acquired.
Otherwise.
the word locality is a word of such indefinite import that it is difficult to conceive of any locality in any particular village being notified for acquisition.
When a locality in the sense of a village or a group of villages in notified for acquisition any person interested in any land in that locality would be entitled to be, heard under section 5A.
But where land proposed to be acquired is specifically mentioned in the notification it is only the person interested in that land who is entitled to be heard under section 5A.
That is why section 5A provides that any person interested may object to the acquisition of land or of any land in the locality as the case may be.
The latter part would apply to a case where lands in.
any locality are notified under section 4 ( 1 ) .
That is the significance of the use of the words "as the case may be.
" Any person unconnected with land cannot object to the acquisition of the land in the locality since he would not be a person interested.
[828 F H 829A C]
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<s>[INST] Summarize the judgementminal Appeal No. 191 of 1967.
Appeal by special leave from the judgment and order dated March 14, 1967 of the Rajasthan High Court in Criminal Appeal No. 720 of 1965.
B. D. Sharma, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Sikri, J.
Hari Ram, respondent, filed a complaint against Lala Ram, appellant, alleging that Lala Ram had attacked him 899 with a Kassi on June 10, 1964, at about 6 p.m.
Poonaram, who was standing there prevented the blow from falling on Hari Ram by receiving it on his hand.
The respondent, however, made a second attack and inflicted an injury on the left shoulder of Hari Ram.
Hari Ram and Poonaram got themselves examined by the Civil Assistant Surgeon of the city and the injury report was submitted alongwith the complaint.
The learned Magistrate acquitted the accused.
Hari Ram filed an application under section 417(3) of the Criminal Procedure Code for leave to appeal against the order of the Magistrate.
Leave was granted by the High Court, and thereupon Hari Ram filed the appeal.
The High Court accepted the appeal and convicted the appellant, Lala Ram, under section 324, I.P.C., and sentenced him to four months ' rigorous imprisonment.
The attention of the High Court was not drawn to the Proba tion of Offenders Act, 1958, during the hearing of the a peal but subsequent to the delivery of the judgment an application was filed under section 561 A, Cr.
P.C., read with sections 3, 4 and 6 of the Probation of Offenders Act.
It was alleged in the application that the appellant was 20 years old and the High Court should have given him the benefit of the Probation of the Offenders Act.
The High Court did not accede to this application.
The appellant having obtained special leave from this Court, the appeal is now before us.
The main contention of law which arises before us is whether the appeal to the High Court was filed within limitation.
The application for leave to appeal to the High Court under section 417 (3) against the order of acquittal of the Magistrate, dated August 31, 1965, was filed on November 1, 1965.
It was claimed by the applicant that two days were necessary for obtaining the certified copy of the order of the Magistrate and the applicant was entitled to deduct these two days taken for obtaining the certified copy of the order of the Magistrate.
There is no doubt that the application would be in time, if these two days are deducted.
But the learned counsel for the appellant contends that section 12(2) of the Indian Limitation Act is not attracted to applications under section 417(3), Cr.
P.C. Section 417(3) and (4) read as follows "417.
(1) Subject to the provisions of sub section (5), the, State Government may, in any ease, direct the Public Prosecutor to present an appeal to the High Court from an original or appellate order of acquittal passed by any Court other than a, High Court.
(3) If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on L5SupCI/70 12 900 an application made to it by the complainant in this behalf, grants special leave to appeal from the order of acquittal, the complainant may present such an appeal to the High Court.
(4) No application under sub section (3) for the grant of special leave to appeal from an order of acquittal shall be entertained by the High Court after the expiry of sixty days from the date of that order of acquittal.
It is contended that the period of 60 days mentioned in s.417(4) is not a period of limitation within the meaning of s.12(2) of the Limitation Act.
Section 12(2) of the Limitation Act reads as follows : "12(2) In computing the period of limitation for an ,appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the, time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.
" The learned counsel says that what s.417(4) provides is a prohibition and it bars the jurisdiction of the High Court to deal with the application if a period of 60 days has expired from the date of the order of acquittal.
In our opinion there is no force in these contentions.
In Kaushalya Rani vs Gopal Singh(1) this Court, while dealing with the question whether s.5 of the Limitation Act applies to applications under s.417(3) described this period of 60 days ment ioned in s.417(3) as follows: "In that sense, this rule of 60 days bar is a special law, that is to say, a rule of limitation which is specially provided for in the Code itself, which does not ordinarily provide for a period of limitation for appeals or applications.
" This Court further observed "Once it is held that the special rule of limitation laid down in sub section
(4) of section 417 of the Co de is a especial law ' of limitation, governing appeals by private prosecutors, there is no difficulty in coming to the con clusion that s.5 of the Limitation Act is wholly out of the way, in view of s.29 (2) (b) of the Limitation Act." (1) ; 987.
901 This Court approved the judgment of the Full Bench of the Bombay High Court in Anjanabai vs Yashwantrao Dauletrao Dudhe(l).
The Full Bench of the Bombay High Court had observed in Anjanabai 's case "Sub section (4) prescribes a period of limitation for such an application.
It states that no such application shall be entertained by the High Court after the expiry of sixty days from the date of the order of acquittal.
This period of limitation is prescribed not for all appeals under the Criminal Procedure Code, or even for all appeals from the orders of acquittal.
It is prescribed only for applications for special leave to appeal from orders of acquittal.
It is therefore a special provision for a special subject and is consequently a special law within the meaning of s.29(2) of the Limitation Act.
" It is quite clear that the Full Bench of the Bombay High Court and this Court proceeded on the assumption that s.417(4) of the Criminal Procedure Code prescribes a period of limitation.
The learned counsel, however, contends that there was no discussion of this aspect.
Be that as it may, it seems to us that s.417 (4) itself prescribes a period of limitation for an application to be made under s.417(3).
It was not necessary for the legislature to have amended the Limitation Act and to have inserted an article dealing with applications under s.417(3), Cr.
P.C.; it was open to it to prescribe a period of limitation in the Code itself.
The learned counsel also suggests that the word "entertain" which occurs in s.417 (4) means "to deal with or hear" and in this connection he relies on the judgment of this Court in Lakshmi Rattan Engineering Works vs Asstt.
Commissioner Sales Tax (2).
It seems to us that in this context "entertain" means "file or received by the Court" and it has no reference to the actual hearing of the application for leave to appeal; otherwise the result would be that in many cases applications for leave to appeal would be barred because the applications have not been put up for hearing before the High Court within 60 days of the order of acquittal.
In the result we hold that the application under s.417(3) to the High Court was within time.
The learned counsel then contends that the High Court should not have interfered with the order of acquittal passed by the Magistrate.
He has taken us through the evidence of Poonaram who was injured and the statement of P.W. 3, Ananda, who was present and who seems to be an independent witness.
We agree (1) I.L.R. [1961]Bom.135, '137.
(2) ; 902 with the High Court that the Magistrate was not entitled to reject the evidence of the eye witnessess.
No reason has been shown to us why we should interfere with the finding of fact arrived at by the High Court.
The learned counsel further contends that no offence was committed because the accused had a right of private defence of property.
Assuming that he had a right of private defence of property he had ample opportunity of having recourse to the authorities and there was no need for the appellant to have taken the law into his own hands.
The only question that remains now is the question whether the benefit of s.6 of the Probation of Offenders Act should be extended to the appellant.
In spite of opportunity being given no good proof has been furnished to establish that the appellant was at the relevant time under the age of 21 years.
For the aforesaid reasons the appeal fails and is dismissed.
R.K.P.S. Appeal dismissed.
[/INST]An application for leave to appeal to the High Court under section 417(3) Code of Criminal Procedure against an order of acquittal by a Magistrate dated August 31, 1965 was filed on November 1, 1965.
It was claimed that two days were necessary for obtaining the certified copy of the order of the Magistrate.
The application would be in time if these two days were deducted.
The High Court accepted the appeal and convicted the appellant.
In appeal to this Court against his conviction the appellant contended that the period of 60 days mentioned in section 417(4) was not a period of limitation within the meaning of section 12 of the Limitation Act and that the sub section barred the jurisdiction of the High Court to deal with the application if a period of 60 days had expired from the date of the order of acquittal.
HELD : The application under section 417(3) to the High Court was within time.
Section 417(4) itself prescribes a period of limitation; it was open to the legislature to prescribe a period of limitation in the code itself.
In the context of section 417(4) the word "entertain" means "file or receive by the court" and it has no reference to the actual hearing of the application for leave to appeal; otherwise the result would be that in many cases applications for leave to appeal would be barred because the applications have not been put up for hearing before the High Court within sixty days of the order of acquittal.
[901 D F] Kaushalya Rani vs Gopal Singh, , 987, Anjanabai vs Yeshwantrao Daplatrao Dudhe, I.L.R. (1961) Bom.
135, 137 and Lakshmi Rattan Engineering Works vs Asstt.
Commissioner Sales Tax; , , referred to.
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<s>[INST] Summarize the judgementAppeal No. 1787 of 1966.
Appeal from the judgment and decree dated May 18, 1964 of the Kerala High Court in Appeal Suit No. 591 of 1963.
125 D. Narsaraju and A. section Nambiar, for the appellants.
W.S. Badingay, R. Mahalingier and Ganpat Rai, for respondents Nos. 1 and 2.
The Judgment of the Court was delivered by Ray, J.
This is an appeal from the judgment dated 18 May, 1964 of the High Court of Kerala allowing the appeal in part and allowing declaration to the effect that the plaintiffs are next in the line of succession to V.L. Lazar and T.V. John respectively and that they are entitled to claim an appointment as trustees.
The High Court, however, concluded by saying that such appointment could be made in a properly framed suit under section 92 of the Code of Civil Procedure.
Counsel for the appellants contended that the High Court was in error in making the declaration particularly when the High Court said that such appointment could be made only in a properly framed suit under section 92 of the Code.
In order to appreciate the matters in controversy it is necessary to refer to a few facts and the frame of the suit.
The plaintiffs filed this suit in 1961 for a declaration that defendants numbered 4 to 9 were "trespassers" on the trust and that all acts and proceedings of defendants numbered 1 to 9 done since the resignation of T.V. John and V.L. Lazar in respect of the administration of the trust are invalid and void; that the plaintiffs be appointed as trustees; that defendants numbered 10 to 11 be declared to be, and to have always been, lawful trustees and for injunction restraining defendants numbered 4 to 9 from interfering with the trust; that an enquiry be made into their administration and accounts, recovery of properties and funds misused, wasted, disbursed or appropriated, and that defendant numbered 1 to 3 be declared to be unfit to continue as trustees.
There was a deed of settlement dated 20 December, 1953 executed by a Christian T.V. Kochuvareed called "Thattil Kochuvareed Educational and Charitable Trust".
Apart from the settlor, V.L. Lazar father of the first plaintiff and T.V. John father of the second plaintiff and defendants numbered 1 to 3, 10 and 11 were trustees.
On 27 May, 1957 V.L. Lazar resigned from the trusteeship.
On 12 March, 1960 T.V. John followed suit.
The settlor and the rest of the trustees appointed six more trustees being defendants numbered 4 to 9 inclusive.
The settlor Kochuvareed died on 26 July, 1961.
On 28 November, 1961 respondents numbered 1 and 2 namely, John son of V.L. Lazar and Varghese son of T.V. John the 126 plaintiffs filed suit O.S. No. 115 of 1961 claiming, inter alia, that the plaintiffs be appointed as trustees.
At the trial two preliminary issues were framed: Whether the suit was maintainable due to want of compliance with section 92 of the Code of Civil Procedure and whether the Court had jurisdiction to try this suit relating to trust.
The trial Court came to the conclusion that the suit was within the mischief of non compliance with the provisions of section 92 of the Code of Civil Procedure.
The trial Court on 12 March, 1962 dismissed the suit and held that the suit had to be instituted after obtaining sanction under section 92 of the Code.
The plaintiffs filed an appeal.
On appeal the High Court on 20 August, 1962 allowed the appeal in part and set aside the dismissal of the suit in so far as it related to prayer 'e ' and remanded the suit to the trial Court for trial in respect of that claim.
The trial Court on remand by judgment dated 23 August, 1963 held that the suit as flamed was maintainable and the plaintiffs were entitled to be declared as rightful trustees but the second plaintiff would have to exercise rights as trustee only on attaining majority.
Prayer 'e ' in the plaint was as follows : "That plaintiffs be appointed to their rightful place as trustees and the second plaintiff being a minor now, be permitted to exercise his rights and safeguard his interests until he attains majority, through his 'Next Friend, namely his father".
The appellants, viz., defendants numbered 4 to 9 preferred an appeal.
The High Court on 18 May, 1964 allowed the appeal in part and altered the declaration to the effect that the plaintiffs were next in the line of succession and that they were entitled to claim appointment as trustees, but such appointment could be only in a properly framed suit.
Counsel for the appellants contended that prayer 'e ' was within the mischief of section 92 of the Code of Civil Procedure.
It was further said that the plaintiffs (respondents 1 and 2) filed a fresh suit O.S. No. 1 of 1965 in the District Court, Trichur under section 92 of the Code of Civil Procedure praying, inter alia, for reliefs of removal of defendants numbered 4 to 9 and appointment of the plaintiffs as trustees in place of their respective fathers who resigned from such office and for other reliefs.
Counsel for the appellants contended that the finding in the present appeal that the plaintiffs were entitled to a declaration for appointment would constitute res judicata unless the same finding was set aside and 127 the matter was kept entirely open in the new suit filed by respondents 1 and 2.
Counsel for the respondents contended that the decision of the High Court could be upheld because all that it said was that the plaintiffs were entitled to a right and the question of appointment would be canvassed in the suit.
This contention is unacceptable because a suit for a bare declaration of right without further relief for possession and other reliefs as the facts and circumstances would require is not supportable.
The provisions of section 92 of the Code of Civil Procedure indicate, inter alia, that a suit for appointment of new trustees is competent only after compliance with the provisions of section 92 of the Code.
The plaintiffs, namely, respondents 1 and 2 in the present case, alleged that defendants numbered 4 to 9 were strangers and "trespassers" in relation to the trust, and that the other defendants illegally introduced defendants numbered 4 to 9 into the Board of Trustees.
The plaintiffs further alleged that defendants numbered 1 to 9 were guilty of waste and misappropriation.
The plaintiffs further alleged that they had exclusive right to be appointed trustees.
Section 92 of the Code of Civil Procedure prohibits a plaintiff from obtaining relief of appointment of new trustees without the compliance with the provision of the said section of the Code.
The only question is whether prayer 'e ' in the plaint can be said to be one for appointment of new trustees.
The plaintiffs asked for appointment.
It was said by counsel for the respondents that the plaintiffs under the deed of trust could be appointed trustees.
Reliance was placed on clause (6) of the deed of trust which, inter alia, stated that in the case of a vacancy, the remaining trustees were to appoint a new trustee.
It, therefore, follows that even under clause (6) of the deed of trust it would be an appointment of new trustees.
The trustees in the present case did not appoint new trustees.
The plaintiffs, therefore, came to court.
The reason why the plaintiffs sought the aid of the Court is the appointment of trustees.
It is only because the other trustees did not appoint a new trustee that the plaintiffs took recourse to the institution of the suit for the appointment of trustees.
Further, unless the defendants are removed there cannot be an appointment of new trustees.
We are, therefore, of opion that prayer 'e ' in the present case, viz. the plaintiffs be appointed as trustees falls within the provisions of section 92 of the Code.
If as we held that the appointment of new trustees falls within section 92 of the Code can it yet be said that the plaintiffs will be entitled to a bare declaration of their right to be appointed.
In the first place, it will be granting them the right to be appointed 128 which itself is the foundation of appointment.
If the appointment fails within the vice of section 92 any decision giving them the right "to be appointed will be prejudging the question and will be an impediment as far as the defendants are concerned in questioning the right of the plaintiffs to be appointed as trustees.
Secondly, it is well settled that if any matter is directly prohibited, the same cannot be achieved indirectly.
The appointment of new trustees is prohibited ' in the absence of the compliance with the provisions of section 92 of the Code.
If a right is granted to the plaintiffs to be appointed as trustees it will amount to an indirect way of giving the plaintiffs the relief of the right to be appointed.
It will be particularly so because the right will be res inclusa and will, therefore, be res judicata.
The right will not be open to be questioned in subsequent proceedings.
Thirdly, if the appointment of new trustees cannot be proceeded with in the absence of compliance with the provisions of section 92 of the Code and when a suit has been instituted by the plaintiffs for the self same reliefs after compliance with section 92 of the Code it is all the more necessary that the entire question of appointment which presupposes as its foundation the right to be appointed should be gone into the newly instituted suit in 1965 to which reference is made earlier.
Fourthly, a bare declaration of right will be within the mischief of section 42 of the and section 34 of the .
We are, therefore, of opinion that the judgment of the High Court giving the plaintiffs the right to be appointed trustees should be set aside.
It is made clear that contentions of the rival parties in the newly instituted suit are left open.
The finding of the High Court and the: declaration granted by the High Court are both set aside.
The suit is, therefore, dismissed.
For these reasons, the appeal is accepted and is allowed.
The appellants will be entitled to costs.
V.P.S. Appeal allowed.
[/INST]By a deed of settlement, the settlor appointed besides himself, the father of the first plaintiff, the father of the second plaintiff, and defendants 1 to 3 and 10 and 11, as.
trustees of an Educational and Charitable Trust.
On the resignation of the fathers of the two plaintiffs, the remaining trustees appointed defendants 4 to 9 as trustees.
The plaintiffs flied a suit making allegations against defendants 1 to 9 and claimed that they should be appointed as trustees.
The High Court, in 'appeal, gave a declaration to the effect that the plaintiffs were; next in the line of succession, that they were entitled to claim appointment as trustees, but that such appointment could be made only in a properly framed suit after complying with the requirements of section 92, Civil Procedure Code.
The plaintiffs thereupon filed a fresh suit under section 92, C.P.C.
Meanwhile, the defendants in the ,earlier suit filed an appeal against the judgment of the High Court, to this Court.
HELD: The suit was for appointment of the plaintiffs as trustees and fell within the provisions of section 92, C.P.C.
Therefore, the judgment of the High Court giving the plaintiffs the right to be appointed as trustees, when the provisions of the section were not complied with, should be set aside.
[127 H; 128 E] (a) If the appointment fell within the vice of section 92 any decision giving the plaintiffs the right to be appointed will be prejudging the question and would be an impediment as far as the defendants are concerned, in questioning, in the second suit, the right of the plaintiffs to be appointed as trustees.
[128 A B] (b) If the right to be appointed as trustees were to be granted 10 the plaintiffs in the absence of compliance with the provisions of the section, it would amount to an indirect way of giving what was directly prohibited.
[128 B] (c) If the declaration were 'allowed to stand it would operate as res judicata and it would not be open to the defendants to question it in the subsequent proceedings.
flied for the same relief after compliance with the section.
[128 B C] (d) A hare declaration of the right without consequential relief will be within the mischief of section 42 of the or section 34 of the .
[128 D E]
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<s>[INST] Summarize the judgementvil Appeal No. 536 of 1962.
Appeal from the judgment and decree dated March 26.
1958, of the High Court at Patna in First Appeal No. 340 of .1951.
147 Niren De, Additional Solicitor General, N.D. Karkhanis and B.R.G.K. Achar, for the appellant.
Bishan Narain, P. D. Himmatsinghka section Murthy and B.P. Maheshwari, for the respondent.
The judgment of the Court was delivered by Wanchoo, J.
This is an appeal on a certificate granted by the Patna High Court.
The respondent sued the Union of India as representing G.I.P. Railway, Bombay and E.I.R. Calcutta for recovery of damages for non delivery of 31 bales of piece goods, out of 60 bales which had been consigned to Baidyanathdham from Wadibundar.
This consignment was loaded in wagon No. 9643 on December 1. 1947.
It is not in dispute that the consignment reached Mughalsarai on the morning of December 9, 1947 by 192 On goods train.
After reaching Mughalsarai, the wagon was kept in the marshaling yard till December 12, 1947.
It wag sent to Baidyanadham by 214 On goods train from Mughalsarai at 6 40 p.m. on December 12, 1947 and eventually reached Baidyanathdham on December 21, 1947.
The respondent who was the consignee presented the railway receipt on the same day for delivery of the consignment.
Thereupon the railway delivered 29 bales only to the respondent and the remaining 31 bales were said to be missing and were never delivered.
Consequently on August 311948, notice was g:yen under section 80 of the Civil Procedure Code and this was followed by the suit out of which the present appeal has arisen on November 20, 1948.
The consignment had been booked under risk note form Z which for all practical purposes is in the same terms as risk note form B.
The respondent claimed damages for non delivery on the ground that the non delivery was due to the misconduct of the servants of the railway, and the claim was for a sum of Rs. 36,461/12/ .
The suit was resisted by the appellant and a number of defences were taken.
In the present appeal we are only concerned with two defences.
It was first contended that the suit was barred by section 77 of the Indian Railways Act, No. IX of 1890, (hereinafter referred to as the Act), inasmuch as notice required therein was not given by the respondent.
Secondly it was contended that the consignment was sent under risk note form Z and under the terms of that risk note the railway was absolved from all responsibility for loss, destruction or deterioration of goods consigned thereunder from any cause whatsoever except upon proof of misconduct of the railway of its servants.
and that the burden of proving such misconduct subject to certain exceptions was on the respondent and that the respondent had failed to discharge that burden.
Further in compliance with the terms of the risk note, the railway made a disclosure in the written statement as to how the consignment was dealt with throughout the period it was in its possession or control.
The case of the railway in this connection was that there was a theft in the running train between Mughalsarai and 148 Buxar on December 12, 1947 and that was how part of the con signment was lost.
As the loss was not due to any misconduct on the part of the railway or its servants and as the respondent had not discharged the burden which lay on him after the railway had given evidence of how the consignment had been dealt with, there was no liability on the railway.
On the first point, the trial court held On the basis of certain decisions of the Patna High Court that no notice under section 77 was necessary in a case of non delivery which was held to be different from loss.
On the second point relating to the responsibility of the railway on the ' basis of risk note form Z, the trial court held that it had not been proved that the loss was due to misconduct of the railway or its servants.
It therefore dismissed the suit.
Then followed an appeal by the respondent to the High Court.
The High Court apparently upheld the finding of the trial court on the question of notice under s.77.
But on the second point the High Court was of opinion that there was a breach of the condition of disclosure provided in risk note Z under which the consignment had been booked, and therefore the appellant could not take advantage of the risk note at all and the liability of the railway must be assessed on the footing of a simple bailee.
It therefore went on to consider the liability of the railway as a simple bailee and held on the ' evidence that the railway did not take proper care of the wagon at Mughalsarai and that in all probability the seals and rivets of the wagon had been allowed to be broken there and all arrangements had been completed as to how the goods would be removed from the wagon when the train would leave that station and this could only be done either by or in collusion with the servants of the railway at Mughalsarai.
In this view of the matter the High Court allowed the appeal and decreed the suit with costs As the judgment was one of reversal and the amount involved was over rupees twenty thousand, the High Court granted a certificate.
and that is how the matter has come up before us.
We .shall first deal with the question of the notice.
We are in this case concerned with the Act as it was in 1947 before its amendment by Central Act 56 of 1949 and Central Act No. 39 of 1961 and all references in this judgment must be read as applying to the Act as it was in 1947.
Now section 77 inter alia provides that a person shall not be entitled to compensation for the loss, destruction or deterioration of animals or goods delivered to be carried ' by railway, unless his claim to compensation has been preferred in writing by him or on his behalf to the railway administration within six months from the date of the delivery of the animals or goods for carriage by railway.
There was a conflict between the High Courts on the question whether non delivery of goods carried by railway amounted to less within the meaning of section 77.
Some High Courts (including the Patna High Court) held that a case of non delivery was distinct from a case of loss and no notice under section 77 was necessary .in the case of non delivery.
Other High Courts however took a contrary view and held that a case of non delivery also was a case of loss.
This conflict has now been resolved by the decision of this Court in Governor General in Council vs Musaddilal (1) and the view taken by the Patna High Court has been overruled.
This Court has held that failure to deliver goods is the consequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction, and therefore notice under section 77 is necessary in the case of non delivery which arises from the loss of goods.
Therefore notice under section 77 was necessary in the present case.
It is true that the respondent stated in the plaint in conformity with 'the view of the Patna High Court prevalent in Bihar that no notice under s.77 was necessary as it was a case of non delivery.
But we find in actual fact that a notice was given by the respondent to the railway on April 10, 1948 to the Chief Commercial Manager, E.I.R. in which it was stated that 60 bales of cloth were booked for the respondent but only 29 bales had been delivered and the balance of 31 bales had not been delivered.
Therefore the respondent gave notice that if the bales were not delivered to him within a fortnight, he would file a suit for the recovery of Rs. 36,461/12/ , and the details as to how the amount was arrived at were given in this notice.
It is true that the notice was not specifically stated to be a notice under section 77 of the Act but it gave all the particulars necessary in a notice under that section.
This notice or letter was sent within six months of the booking of the consignment.
A similar case came up before this Court in Jetmull Bhojraj vs The Darjeeling Himalayan Railway Co. Ltd.(2) and this Court held that the letter to the railway in that case was sufficient notice for the .purpose of section 77 of the Act. 'Following that decision we hold that the letter in the present case which is even more explicit is sufficient notice for the purpose of S: 77 of the Act.
We may add that the learned Additional Solicitor General did not challenge this in view of the decision in Jetmull Bhojraj 's case(2).
This brings us to the second question raised in the appeal.
We have already indicated that the High Court held that as the burden of disclosure which was on the railway had not been discharged there vas a breach of one of the terms of the risk note Z and therefore the risk note did not apply at all and the responsibility of the railway had to be assessed under ' section 72 (1) of the Act.
This view of the law has been contested on behalf of the appellant and it is urged that after the risk note is executed either in form Z or in form B, the responsibility of the railway must be judged in accordance with the risk note even if there is some breach of the condition as to disclosure.
It may be mentioned that risk note form Z and risk note form B are exactly similar in their terms insolar as the responsibility of the railway is concerned for risk note 150 form B applies to individual consignment while form Z is executed by a party who has usually to send goods by railway in large numbers.
Risk note form Z is general in its nature and applies to all consignments that a party may send after its execution.
It is proved that the consignment in this case was covered by risk note form Z.
The main advantage that a consignor gets by sending a consignment under from Z or form B is a specially reduced rate as compared t3 the ordinary rate at which goods are carried by the railway and it is because of this specially reduced rate that the burden is thrown on the consignor in a suit for damages to prove misconduct on the part of the railway or its servants in the case of loss etc.of the goods, subject to one exception.
On the other hand the argument on behalf of the respondent is that the view taken by the Patna High Court is right and it is the duty of the railway administration under the risk note, as soon as there is non delivery and a claim is made on the railway for compensation, to disclose how the consignment was dealt with throughout while it was in its possession or control and that its failure to do so results immediately in breach of the contract with the result that the responsibility of the railway has to be judged solely on the basis of section 72 (1) of the Act ignoring the risk note altogether.
Section 72 (1) defines the responsibility of the railway administration for the loss, destruction or deterioration of animals or goods delivered to the administration to be carried by railway to be the same as that of a bailee under sections 152 and 161 of the , subject to other provisions of the Act.
Sub section (2) of section 72 provides that an agreement purporting to limit the responsibility under section 72 (1) can be made subject to two conditions, namely, (i) that it is in writing signed by or on behalf of the person sending or delivering to the railway administration the animals or goods, and (ii) that it is in a form approved by the Governor General.
Sub section (3) of section 72 provides that nothing in the common law of England or in the Carriers Act 1865 regarding the responsibility of common carriers with respect to carriage of animals or goods shall affect the responsibility as in this section defined of the railway administration.
So the responsibility of the railway for loss etc. is the same as that of a bailee under the Indian Contract Act.
But this responsibility can be limited as provided in section 72 (2).
For the purpose of limiting this responsibility risk notes form B and form Z have been approved by the Governor General and where goods are booked under these risk notes the liability is limited in the manner provided thereunder.
It is therefore necessary to set out the relevant terms of the risk note, for the decision of this case will turn on the provisions of the risk note itself.
The risk note whether it is in form B or form Z provides that where goods are carried at owner 's risk on specially reduced rates, the owner agrees or undertakes to hold the railway administration 151 "harmless and free from all responsibility for any loss, deterioration or destruction of or damage to all or any of such consignment from any cause whatever, except upon proof that such loss, destruction, deterioration or damage arose from the misconduct on the part of the railway administration or its servants".
"thus risk notes B and Z provide for complete immunity of the railway except upon proof of misconduct.
But to this immunity there is a proviso and it is the construction of the proviso that arises in the present appeal.
The proviso is in these terms: "Provided that in the following cases: (a) Non delivery of the whole of a consignment packed in accordance with the instruction laid .down in the tariff or where there are no instructions, protected otherwise than by paper or other packing readily removable by hand and fully addressed, where such non delivery is not due to accidents to train or to fire; (b) . . . "The railway administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control, and if necessary, to give evidence thereof before the consignor is called upon to prove misconduct, but, if misconduct on the part of the railway administration or its servants cannot be fairly inferred from such evidence, the burden of proving such misconduct shall lie upon the consignor".
It is not in dispute that the present case comes under cl(a) of the risk note.
An exactly similar provision in risk note form B came up for consideration before the Privy Council in Surat Cotton Spinning & Weaving Mills vs Secretary Of State for India in Council, ( ') and the law on the subject was laid down thus at pp.181 182: "The first portion of the proviso provides that the Rail way Administration shall be bound to disclose to the consignor 'how the consignment was dealt with through out the time it was in its possession or control, and, if necessary to give evidence thereof, before the consignor is called upon to prove misconduct '.
In their Lordships ' opinion, this obligation arises at once upon the occurrence of either of cases (a) or (b), and is not confined to the stage of litigation.
Clearly one object of the provision is to obviate, if possible, the necessity for litigation.
On the other hand, the closing words of the obligation clearly apply to the litigious stage.
As to the extent of the disclosure, it is confined to the period during which the (1) [1927] L.P LXIV: 152 consignment was within the possession or control of the Railway Administration; it does not relate, for instance, to the period after the goods have been the fatuously removed from the premises.
On the other hand, it does envisage a precise statement of how the consignment was dealt with by the Administration or its servants.
The character of what is requisite may vary according to the circumstances of different cases, but, if the consignor is not satisfied that the disclosure has been adequate, the dispute must be judicially, decided.
As to the accuracy or truth of the information given, if the consignor is doubtful or unsatisfied, and considers that these should be established by evidence, their Lordships are of opinion that evidence before a Court of law is contemplated, and that as was properly done in the present suit, the Railway Administration should submit their evidence first at the trial.
"At the close of the evidence for the Administration two questions may be said.to arise, which it is important to keep distinct.
The first question is not a mere question of.procedure, but iS whether they have discharged their obligation of disclosure, ' and, in regard to this, their Lordships are of opinion that the terms of the Risk Note require a step in procedure, which may be said to :be Unfamiliar in the practice of the Court; if the consignor is not satisfied with the ' disclosure made their Lordships are clearly of opinion that is for him tO say so, and to call on the Administration to fulfill their obligation .Under the contract, and that the Administration should then have the opportunity to meet the demands of the consignor before their case is closed; any question as to whether the consignor 's demands go beyond the obligation should be then determined by the Court.
If the Administration fails to take the opportunity to satisfy the demands of the consignor so far as endorsed by the Court, they will be in breach of their contractual obligation of disclosure.
"The other question which may be said to arise at this stage is whether misconduct may be fairly inferred from the evidence of the Administration; if so, the consignor is absolved from his original burden of proof.
But, in this case, the decision of the Court may be given when the evidence of both sides has been completed.
It is clearly for the Administration to decide for themselves whether they have adduced all the evidence which they consider desirable in avoidance of such fair "inference of misconduct".
They will doubtless keep in mind the provisions of s.114 of the Indian Evidence Act".
With respect we are of opinion that this exposition of the law relating to risk note B applies also to risk note Z and we accept it 153 as correct.
Thus the responsibility of the railway.
administration to disclose to the consignor how the consignment was dealt with thrOughOut the time it Was in its possession or control arises at once under the agreement in either of the cases (a) or (b) and is not confined to the stage of litigation.
But we are not prepared to accept the contention on behalf of the respondent that this responsibility to make full disclosure arises immediately the claim is made by the consignor and if the railway immediately on such claim being made does not disclose all the facts to the consignor, there is immediately a breach of this term of the contract contained in the risk note.
It is true that the railway is bound to disclose to the consignor how the Consignment was dealt with throughout the time it was in its possession even before any litigation starts; but we are of opinion that such disclosure is necessary only where the consignor specifically asks the railway to make :the disclosure.
If no such disclosure is asked for, the administration need not make it before the ' litigation.
In the present case there is ' no proof that any disclosure was asked for in this behalf by the consignor at any time before the, suit was filed.
Therefore if the railway did not disclose how the consignment was dealt with throughout before the suit was filed, it cannot be said to have committed breach of this term of the contract.
The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants.
if the disclosure is asked for before the litigation commences and is not given or the disclosure is given but it is not considered to be sufficient by the consignor, the dispute has to be judicially decided and it is for the court then to say if a suit is brought whether there has been Ia breach of this term ' of the contract.
After this, comes the stage where the consignor or the consignee ' being dissatisfied brings a suit for compensation.
At that stage evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation to the Consignor or which might have been made in the written statement in reply to the suit.
When the railway administration has given its evidence in proof of the disclosure and the plaintiff is not satisfied with the disclosure made in the evidence, the plaintiff is entitled to ask the court to call upon the railway to fulfil its obligation under the contract and the railway should then .have the opportunity of meeting the demands of the plaintiff before its case is closed.
Thus in addition to the evidence that the railway may adduce on its own and in doing so the railway has necessarily to keep in mind the provisions of section 114 of the Indian Evidence Act, the plaintiff can and should draw the attention of the court if he feels that full disclosure has not been made.
, In .that case he can ask the court to require the railway to make further disclosure and should tell the court what further disclosure he wants.
It is then for the court to decide whether the further disclosure .desired by the plaintiff should be made by the railway, and if the court decides that such further disclosure 154 should be made the railway has to make such further disclosure as the court orders it to make on the request of the plaintiff.
If the railway fails to take the opportunity so given to satisfy the demands of the plaintiff, endorsed by the court, the railway would be in breach of its contractual obligation of disclosure.
It is at this stage therefore that the railway can be truly said to be in breach of its contractual obligation of disclosure, and that breach arises because the railway failed to disclose matters which the court on the request of the plaintiff asks it to disclose.
The question then is what is the effect of this breach.
It is remarkable that the Privy Council did not lay down that as soon as the breach is made as above the risk note comes to an end and the responsibility of the railway is that of a bailee under section 72 (l) of the Act.
In the observations already quoted, the Privy Council has gone on to say that after this stage is over, the question may arise whether misconduct may be fairly inferred from the evidence of the railway.
It seems to us therefore that even if there is a breach of the term as to full disclosure it does not bring the contract to an end and throw the responsibility on the railway as if the case was a simple case of responsibility under section 72(1) of the Act; the case is thus not assimilated to a case where the goods are carried at the ordinary rates at railway risk.
The reason for this seems to be that the goods have already been carried at the reduced rates and the consignor has taken advantage of that term in the contract.
Therefore, even though there may be a breach of the term as to complete disclosure by the railway the consignor cannot fall back on the ordinary responsibility of the railway under section 72 (1) of the Act as if the goods had been carried at railway 's risk at ordinary rates, for he has derived the advantage of the goods having been carried at a specially reduced rates.
The risk note would in our opinion continue to apply and the court would still have to decide whether misconduct can be fairly inferred from the evidence of the railway, with this difference that where the railway has been in breach of its obligation to make full disclosure misconduct may be more readily inferred and section 114 of the Indian Evidence Act more readily applied.
But we do not think that the conditions in the risk note can be completely ignored simply because there has been a breach of the condition of complete disclosure.
The view of the Patna High Court that as soon as there is breach of the condition relating to complete disclosure the risk note can be completely ignored and the responsibility of the railway judged purely on the basis of section 72 (1) as if the goods were carried at the ordinary rates on railway 's risk cannot therefore be accepted as correct.
We may point out that in Surat Cotton Spinning and Weaving Mills Limited 's case, (I) the plaintiffs wanted the guard of the train to be examined and he was undoubtedly a material witness.
Even so the witness was not examined by the railway.
Finally therefore the Privy council allowed the appeal with these observations at p. 189: "While their Lordships would be inclined to hold that the respondent, by his failure to submit the evidence of Rohead, was in breach of his contractual obligation to give the evidence necessary for disclosure of how the consignment was dealt with, they are clearly of opinion that the failure to submit the evidence of Rohead, in the circumstances of this case, entitles the court to presume, in terms of section 114 (g) of the Evidence Act, that "Rohead 's evidence, if produced, would be unfavorable to the respondent, and that, in consequence, misconduct by complicity in the theft of some servant, or servants of the respondent may be fairly inferred from the respondent 's evidence".
These observations show that even though there may be a breach of the obligation to give full disclosure that does not mean that the risk note form Z or form B can be ignored and the responsibility of the railway fixed on the basis of section 72 (1) as a simple bailee.
If that was the effect of the breach, the Privy Council would not have come to the conclusion after applying section 114 (g) of the Evidence Act in the case of Rohead that misconduct by complicity in the theft of some servant or servants of the railway may be fairly inferred from the railway 's evidence.
The appeal was allowed by the Privy Council after coming to the conclusion that misconduct by the servant or servants of the railway might be fairly inferred from the evidence including the presumption under section 114(g) of the Evidence Act.
It seems to us clear therefore that even if there is a breach of the obligation to make full disclosure in the sense that the railway does not produce the evidence desired by the plaintiff in the suit even though the request of the plaintiff is endorsed by the court, the effect of such breach is not that the risk note is completely out of the way, the 'reason for this as we have already indicated being that the consignor has already taken advantage of the reduced rates and therefore cannot be allowed to ignore the risk note altogether.
But where there is a breach by the railway of the obligation to make full disclosure the court may more readily infer misconduct on the part of the railway or its servants or more readily presume under section 114 (g) of the Evidence Act against the railway.
This in our opinion is the effect of the decision of the Privy Council in Surat Cotton Spinning and Weaving 'Mills Limited 's case(1).
As we have already said we are in respectful agreement with the law as laid down there.
So far as the present appeal is concerned, there was no de by the consignor for disclosure before the suit.
Even after the suit was filed there was no statement by the respondent at any (1) [1937] L.R. 64 I.A. 176.
156 stage that the disclosure made by the appellant in the evidence was in any way inadequate.
The respondent never told the court after the evidence of the railway was over that he was not satisfied with the disclosure and that the railway be asked to make further disclosure by producing such further evidence as the respondent wanted.
In these circumstances it cannot be said in the present case that there was any breach by the railway of its responsibility to make full disclosure.
In the circumstances we are of opinion that the risk note would still apply and the court would have to decide whether misconduct on the part of the railway can be fairly inferred from the evidence produced by it.
If the court cannot fairly infer misconduct from the evidence adduced by the railway, the burden will be on the respondent to prove misconduct.
that burden, if it arises, has clearly not been discharged for the respondent led no evidence on his behalf to discharge the burden.
We therefore turn to the evidence to see whether from the evidence produced by the railway a fair inference of misconduct of the railway or its servants can be drawn on the facts of this case.
It is not in dispute in this case that the wagon containing the consignment arrived intact at Mughalsarai on December 9, 1947.
Besides there is evidence of Damodar Prasad Sharma, Assistant Trains Clerk, Mughalsarai, P.W. 14, who had the duty to receive trains at the relevant time that 192 Dn. goods train was received by him on line No. 4 and that there were two watchmen on duty on that line for examining the goods train and they kept notes of the same.
He also produced the entry relating to the arrival of the train and there is nothing in the entry to show anything untoward with.this wagon when the train arrived at Mughalsarai.
His evidence also shows that the train was sent to the marshaling yard on December 11, 1947.
Finally there is the evidence of Chatterji (P.W. 8) who is also an Assistant Trains Clerk.
It was his duty to make notes with respect to goods trains which left Mughalsarai.
He stated that this wagon was sent by train No. 214 on December 12, 1947 in the evening.
He also stated that the wagon was in good condition and produced the entry relating to this wagon.
It appears however from his evidence that rivets and seals are examined by the watch and ward staff and they keep record of it.
Apparently therefore he did not actually inspect the wagon before it left though he says that it was in good condition.
The relevance of his evidence however is only this that in his register showing the dispatch of trains there is no entry to the effect that there was any thing wrong with this wagon when it was dispatched.
The most important evidence however is of the guard of the train, Ram Prasad Ram (P.W. 2).
He stated that before the train started from Mughalsarai he patrolled both sides of it and the place from where the train started was well lighted and watch and ward staff also patrolled the area.
He also stated that the rivets and seals of all the wagons in the train were checked at Mughal sarai and there was apparently nothing wrong with them.
Now if 157 the evidence of the guard is believed it would show that the wagon containing the consignment was intact at Mughalsarai upto the time 214 goods train including this wagon left Mughalsarai.
If so there would be no reason to hold that anything was done to the wagon before the train left Mughalsarai.
It may be mentioned that the trial court accepted the evidence of the guard while the High Court was not prepared to believe it.
On a careful consideration of the evidence of the guard we see no reason why his evidence should not be believed.
It is obviously the duty of the guard to see that the train was all right, when he took charge of it.
It appears that in discharge of his duty the guard patrolled the train on both sides and looked at rivets and seals to see that they were intact.
It is, however, urged that the guard 's evidence does not show that the seals which he found intact were the original seals of Wadibundar and the possibility is not ruled out that the original seals might have been tampered with and new seals put in while the train was in the marshaling yard at Mughalsarai for two days, as the evidence of the watch and ward staff had not been produced.
It would perhaps have been better if the evidence of the watch and ward staff had been produced by the railway; but if the evidence of the guard is believed that the seals and rivets were intact when the train left Mughalsarai, the evidence of the watch and ward staff is ' not necessary.
It is true that the guard does not say that the seals were the original seals of Wadibundar but it appears from the evidence of Jagannath Prasad (P.W. 9) who was the Assistant Station Master at Dildarnagar that he found when the train arrived there that the northern flapdoors of the wagon were open while southern flapdoors were intact with the original seals.
This evidence suggests that the original seals could not have been tampered with when the train left Mughalsarai and that the guard 's evidence that seals and rivets were intact shows that nothing had happened to the wagon while it was at Mughalsarai.
Further it is also in evidence that there is ample light in the marshalling yard at Mughalsarai and that watch and ward staff is posted there as well.
So the chances of tampering with the seals and rivets in the marshalling yard in the circumstances are remote.
As such the evidence of the guard that the seals and rivets were intact when he left with the train on the evening of December 12, would apparently exclude the possibility that there was any tampering with the wagon before it left Mughalsarai.
It is true that on the last day when the evidence for the railway was recorded and the guard had been recalled for further cross examination it was suggested to him that the railway servants at Mughalsarai had removed the bales and were responsible for the theft.
He however denied that.
But it is remarkable that if the respondent was dissatisfied with the evidence of the guard which was to the effect that the wagon was all right when he left Mughalsarai with the train on December 12, it did not ask the court to order the railway to produce the evidence of the watch and ward staff with respect to this wagon while it was in the marshalling yard at Mughalsarai.
The respondent could ask for such disclosure.
If the court L/B(D)2SCI 12 158 had accepted the request and the railway had failed to produce the evidence of the watch and ward staff it may have been possible to use section 114 of the Evidence Act and hold that the watch and ward staff having not been produced their evidence, if produced, would have gone against the railway.
But in the absence of any demand by the respondent for the production of the watch and ward staff which he could ask for, we see no reason why the statement of the guard to the effect that seals and rivets of the wagon were intact when he left Mughalsarai with the train should not be accepted.
In the absence of any demand by the respondent for the production of watch and ward staff his mere suggestion that the railway servants at Mughalsarai might have committed the theft cannot be accepted.
There is the further evidence of the guard as to what happened between Mughalsarai and Buxar.
It appears between these two stations the train stops only at Dildarnagar.
The evidence of the guard however is that the train suddenly stopped between the warner and home signals before it reached Dildarnagar.
He therefore got down to find out what the trouble was.
He found that the hosepipe between two wagons had got disconnected and this resulted in the stoppage of the train.
The evidence further is that the hosepipe was intact when the train started from Mughalsarai.
He made a note of this in his rough memo book which was produced.
It is noted by him that the northern flap door of this wagon was open.
He reconnected the hosepipe and went up to Dildarnagar.
There he reported the matter to the station staff.
His further evidence is that there were three escorts with the train and that they were guarding the train when the train was standing between the warner and the home signals before it reached Dildarnagar.
Nothing untoward was reported to him by these escorts.
It was at this stop between the two signals that the guard noticed that the rivets and seals of this wagon on one side had been broken.
The case of the railway is that there was theft in the running train between Mughalsarai and Buxar and that is how part of the consignment was lost.
The evidence of the guard does suggest that something happened between Mughalsarai and Dildarnagar and then between Dildarnagar and Buxar.
In addition to this the evidence of the station staff at Dildarnagar is that the flapdoors of this wagon were found open when the train arrived at Dildarnagar.
The contents were not checked at Dildarnagar as there was no arrangement for checking at that station.
The wagon was resealed at Dildarnagar, and the fact was noted in the station master 's diary.
It may be mentioned that the evidence of the station staff was that the wagon was resealed though the guard says that it was riveted also at Dildarnagar.
The entry in the guard 's rough memo however is only that the wagon was resealed.
The guard certainly says that it was rivetted also at Dildarnagar but that is not supported by the station staff and the entry in the guard 's rough memo.
It seems that the statement of the guard may be due to some error on his 159 part.
That may also explain why, when the train arrived at Buxar, the flapdoor again was found open, for it had not been rivitted at Dildarnagar.
Then the evidence of the Buxar station staff is that the northern flapdoors of this wagon were open when the train arrived at Buxar.
It was then resealed and rivetted and was detached for checking.
The checking took place on December 14th at Buxar.
It was then found that one side had the original seals of Wadibun dar while the other side had the seals of Buxar.
On checking the wagon, 27 bales were found intact, covering of one bale was torn and one bale was found loose and slack.
This evidence asto what happened between Mughalsarai and Buxar thus makes it probable that there was theft in the running train between Mughalsarai and Buxar and that may account for the loss of part of the consignment.
It is however contended on behalf of the respondent that no evidence was produced from Mughalsarai asto what happened while the wagon was in the marshalling yard and that the seal book which is kept at every railway station containing entries of resealing when a wagon is resealed was not produced from Mughalsarai and an adverse inference should be drawn from this non production.
We are however of opinion that the evidence of the guard to the effect that the seals were intact when he left Mughalsarai with the train is sufficient to show that the wagon was in tact with the original seals when it left Mughalsarai and there fore it is not possible to draw any adverse inference from the non production of the watch and ward staff or the seal book of Mughalsarai in the circumstances of this case.
It would have been a different matter if the respondent had asked for the production of the seal book as well as the evidence of the watch and ward staff.
But the respondent contented itself merely with the suggestion that a theft might have taken place at Mughalsarai which was denied by the guard and did not ask the court to order the railway to produce this evidence.
In these circumstances in the face of the evidence of the guard and the fact that one seal on the southernside of the door was of the original station.
we do not think that it is possible to draw an adverse inference against the railway on the ground that the evidence of the watch and ward staff and the seal book at Mughalsarai were not produced.
The seal book would have been of value only if the wagon had been resealed at Mughalsarai but there is in our opinion no reason to think that the wagon had been resealed at Mughalsarai after the evidence of the guard that he found the seals and rivets intact when he left Mughalsarai with the train.
On a careful consideration of the evidence therefore we are of opinion that a fair inference cannot be drawn from the evidence of the railway that there was misconduct by the railway or its servants at Mughalsarai during the time when the wagon was there.
If the evidence of the guard is accepted, and we do accept it, there can be no doubt that the loss of the goods took place be case of theft in the running train between Mughalsarai and 160 Buxar.
There is no evidence on behalf of the respondent to prove misconduct and as misconduct cannot fairly be inferred from the evidence produced on behalf of the railway, the suit must fail.
We therefore allow the appeal, set aside the judgment and decree of the High Court and restore that of the Additional Subordinate Judge.
In the circumstances of this case we order parties to bear their own costs throughout.
Appeal allowed.
[/INST]The respondent Association was a mutual insurance concern carrying on miscellaneous insurance business.
The objects of the Association included provision of help anywhere in the world in respect of expenses of accommodation and treatment in nursing homes for members and their dependents.
The members were required to pay a monthly premium.
In the assessments for the assessment years 1949 50 to 1953 54 the Income tax Officer taxed the reserves for payment of income tax which had been debited to the profit and loss account.
The Appellate Assistant Commissioner as well as the Appellate Tribunal upheld the Income tax Officer 's order.
The questions arising in the proceedings were; (1) whether the balance of profits of a mutual insurance concern were included in the definition of the word 'income ' and if so (2) whether reserves for income tax could be taxed.
At the instance of the respondent a reference was made to the High Court.
That Court held that the surplus, miscalled profit, arising to the company from the miscellaneous insurance transactions of mutual character was not assessable under the Indian Income tax Act and that in any event, the assessee was entitled to deduct the reserves.
The Revenue appealed to this Court with certificate.
HELD: (i) In section 2(6C), the Legislature has evinced a clear intention to include the balance of profits under r. 6 within the meaning of the word 'income ' in 6. 3 of the Indian Income Tax Act, and accordingly such balance of profits is taxable.
[639B C] Ayrshire Employers Mutual Insurance Association Ltd. vs Commissioner of Inland Revenue, , distinguished.
"Profits." in r. 6 cannot be said to mean "taxable profits".
Rule 6 refers to 'balance of profits ' as disclosed in the accounts submitted to the.
Superintendent of Insurance.
The Superintendent of Insurance is not concerned with taxable profits.
What he is concerned with is the balance of profits under the Insurance Act.
[638E F] Nor can the term 'profits ' in r. 6 be interpreted in the narrow sense of including only profits from investments and other activities of a mutual insurance company.
Rule 6 deals with "balance of profits" as a composite thing.
It is impossible to dissect this composite thing.
[639A B] Bombay Mutual Life Assurance Society Ltd. vs Commissioner of Income tax, Bombay City, , affirmed.
(ii) The Insurance Act makes detailed provisions to ensure the true valuation of assets and the determination of the true "balance of profits" of an insurance business and r. 6 should be construed in the light of this background.
[639G H] 633 Pandyan Insurance Company Ltd. Madurai vs The Commissioner Income tax, Madras, ; , referred to.
Examining r. 6 in the light of this background.
the intention of the rule seems to be that the.
balance of profits as disclosed by the accounts submitted to.
the Superintendent of Insurance and accepted by him would be binding on the Income Tax Officer, except that the Income Tax Officer would be entitled to exclude expenditur.e other than expenditure permissible under the provisions of section 10 of the Act.
In the present case it was common ground between the parties that the reserves which were added to the balance of profits were not expenditure.
The High Court rightly held that the reserve for income tax could not be taxed.
[639H 640B]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1333 (N) of 1967.
3 05 From the Judgment and Decree dated the 25th November, 1966 of the Delhi High Court in Regular First Appeals Nos.
89 D and 104 D of 1956.
V. section Desai, Ravinder Bana, O. P. Rana and Uma Mehta, for the appellants.
B. Sen, Suresh Sethi, R. K. Maheshwari and B. P. Maheshwari, for the respondent.
The Judgment of the Court was delivered by MATHEW, J.
This appeal by certificate is directed against the Decree of the High Court of Delhi dated November 25, 1966, passed in Regular First Appeals No 89 D of 1956 and No. 104 D of 1956, both arising from Suit No. 282 of 1954 instituted by the plaintiff appellant for a declaration that he continued to be the General Manager of the Fire Insurance Company in question and that the purported termination of his services was inoperative, and claiming a sum of Rs. 37,352.30 from the defendant on account of his arrears of pay, etc., or in the alternative, for a sum of Rs. 1,63,820/ as money due to him by way of bonus, gratuity, etc., as detailed in the plaint.
The respondent Company had filed a suit against the appellant for the recovery of Rs. 1,10,000/ being Suit NO. 306 of 1954 in which the Company was granted a decree for Rs. 5,759/9/6 with proportionate costs.
First Appeal No. 88 D of 1956 before the High Court was the appeal by the Company against the rejection of the rest of its claim in Suit No. 306 of 1954.
We are not concerned with that appeal.
Regular First Appeal No. 89 D of 1956 was the Company 's appeal against the award of decree for Rs. 73,936/15/9 passed in favour of the appellant.
Regular First Appeal No. 104 D of 1956 was the appellant 's appeal against the rejection of his other claims in his suit.
The High Court dismissed First Appeals No. 88 D of 1956 and 104 D, of 1956 but partially allowed First Appeal No. 89 D of 1956.
The appellant was appointed as the Secretary of the respondentCompany on October 16, 1942.
His pay was fixed at Rs. 1,000/p.m. free of income tax.
Later on, he was promoted as the General Manager of the Company.
On November 21, 1953, the appellant sent an application for leave to the Chairman of the Board of Directors but no reply ' was received by him.
He thereafter sent another application for 8 months ' leave on the 16th of December, 1953.
On December 17, 1953, the appellant received a telegram from the Chair man of the Board of Directors stating that the services of the appellant had been terminated by the Company and that he should stop attending the office.
A registered letter to the same effect from the Chairman was also received by him.
The allegation of the appellant in the plaint was that his services had not been validly terminated by the respondent Company and that he still continued.
as the General Manager of the Company and was 30 6 entitled to recover the sum already mentioned from the respondent.
In the alternative, the appellant claimed, among other things, 18 months ' salary as due to him on the basis that he was entitled to 18 months ' notice before terminating his services.
In the written statement, the respondent Company contended that the Chairman validly terminated the services of the appellant on December 17, 1953 in pursuance to a resolution passed by the Board of Directors on the 16th, and that subsequently, that resolution and the action of the Chairman terminating the services had been confirmed by a meeting of the Board of Directors held on December 23, 1953, and, therefore, the services of the appellant were validly termi nated.
The respondent Company also contended that the appellant was in no event etitled to 18 months ' notice as claimed by him but only to one month 's notice and, therefore, he was entitled to get only one month 's salary in lieu of notice under that.
The trial court found that the meeting of the Board of Directors held on December 16, 1953 was valid, that the services of the appellant were validly terminated by telegram and letter of the Chairman dated December 17, 1953 addressed to the appellant, that even if it be assumed that the meeting of the Board of Directors held on December 16, 1953 was irregular, the resolution of the Board of Directors terminating the services of the appellant on the 16th and the action of the Chairman in actually terminating the services were ratified by the Board of Directors_ by its resolution of December 23, 1953, and, therefore, the services of the appellant were legally and validly termi nated.
it further held that the rules framed by the Company, namely, exhibits D 3 and D 4 would govern the appellant and that he was entitled, under clause (6) of exhibit D 3 only to one month 's notice for terminating his services although the Court found that if the appellant was not bound by the rules, he would have been entitled to 12 months ' notice before the termination of his services.
The findings of the trial court in these respects were confirmed in appeal by the High Court.
In this appeal only two points were argued by counsel for the appellant : (1) that the services of the appellant were not validly terminated and, therefore, he was entitled to a declaration that be continued to be the General Manager of the Company and to claim the amount specified in the plaint; and (2) that, in any event, the appellant was entitled to 12 months ' notice before his services were terminated and as only one month 's notice was given, he was entitled to 11 months ' pay in addition to what was awarded under this head.
As regards the first point, it was said that the meeting of the Board of Directors dated December 16, 1953 was not properly convened for the reason that notice of the meeting was not given to all the Directors.
The trial court found that one of the Directors, viz., Mr. B. P. Khaitan, was not given notice of the meeting of the Board of Directors held on December 16, 1953, and that he was not present at the meeting when the resolution to terminate the services of the appellant was passed.
307 Now, it cannot be disputed that notice to all the Directors of a meeting of the Board of Directors was essential for the validity of any resolution passed at the meeting and that as, admittedly, no notice was given to Mr. Khaitan, one of the Directors of the Company, the resolution passed terminating the services of the appellant was invalid.
Article 109 of the Articles of Association of the Company provides as follows : "109.
When meeting to be convened A Director may at any time summon meeting of the Directors by serving every Director with at least 72 hours ' notice in writing, through the officer of the Company authorized to receive such notice who shall arrange to convene the meeting".
In Hasbury 's Laws of England, Vol. 9, p. 46, it has been stated that it is essential that notice of the meeting and of the business to be transacted should be given to all persons entitled to participate and that if a member whom it is reasonably possible to summon is not summoned, the meeting will not be duly convened, even though the omission is accidental or due to the fact that the member has informed the officer whose duty it is to serve notice that he need not serve notice on him.
In Volume 6 at p. 315 article 626, it is stated that a meeting of the directors is not duly convened unless due notice has been given to all the directors, and the business put through at a meeting not duly convened is invalid.
To put it in other words, as the meeting of the Board of Directors held on December 16, 1953, was invalid, so the resolution to terminate the services of the plaintiff was inoperative.
Then, the question for consideration is, what is the effect of the confirmation of the minutes of the meeting of the Board of Directors held on December 16, 1953 and the action of the Chairman in terminating the services of the appellant by his telegram and letter dated December 17, 1953, in pursuance to the invalid resolution of the Board of Directors to terminate his services, in the meeting of the Board of Directors held on December 23, 1953 ? The agenda of the meeting of the Board of Directors held on December 23, 1953 shows that one item of business was the confirmation of the minutes of the meeting of the Directors held on December 16, 1953.
The confirmation of the minutes of the meeting of the Directors held on December 16, 1953, would not in any way show that the Board of Directors adopted the resolution to terminate the services of the appellant passed on December 16, 1953.
It only shows that the Board passed the minutes of the proceedings of the meeting held on December 16, 1953.
But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the services of the appellant by his telegram and letter dated December 17, 1953, would show that the Board ratified the action of the Chairman.
Even if it be assumed that the, telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 308 16, 1953 to terminate his services, it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors.
The point is that even assuming that the Chairman was not legally authorised to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because, he purported to act in pursuance of the invalid resolution.
Therefore, it was open to a regularly constituted meeting of the Board of Directors to ratify that action which, though unauthorised, was done on behalf of the Company.
Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17, 1953.
The appellant was not entitled to the declaration prayed for by him and the trial court as well as the High Court was right in dismissing the claim.
The second point for consideration is whether the appellant was entitled to 18 months ' notice before his services were terminated as claimed by him.
The trial Court found that the rules of the Company, viz., exhibits D 3 and D 4 were binding on the appellant and that rule 6 of exhibit D 3 which provides for one month 's notice in case of termination of services of all employees would apply to the appellant as well.
The High Court confirmed that finding.
The rules expressly purport to bind all the employees of the respondent Company.
There, is no reason to hold that the appellant was not an employee of the respondent Company.
Besides, the appellant himself has relied upon these rules for the purpose of computation of the amount due to him on account of bonus, provident fund, etc.
In these circumstances it is idle to contend that the rules did not bind him.
In this view, it is quite unnecessary to consider the question whether, apart from the rules, one month 's notice was reasonable in the circumstances of the case.
There is no merit in this appeal.
We dismiss it but in the circumstances we make no order as to costs.
G.C. Appeal dismissed.
[/INST]The appellant was appointed Secretary of the respondent company in 1942.
Later he was promoted as General Manager.
By a resolution dated December 16, 1953 the Board of Directors of the company decided to terminate the services ,of the appellant.
By a telegram and a letter dated December 17, 1953 addressed to the appellant the Chairman of the Board of Directors terminated the services of the appellant.
Subsequently at a meeting held on December 23, 1953 the Board of Directors confirmed the minutes of the meeting held on December 16, 1953 and the action of the Chairman in terminating the services of the appellant by his letter and telegram dated December 17, 1953.
The appellant filed a suit challenging his dismissal and also claimed that he was entitled to 18 months ' notice before termination of his services.
The trial Court and the High Court ,decided against the appellant.
In appeal by certificate to this Court the questions for consideration were : (i) whether the termination of the appellant 's service was valid and (ii) whether the appellant was bound by the company 's rules which ,provided for termination of the service of employees after one month 's notice.
Dismissing the appeal, HELD : (i) Notice to all the Directors of a meeting of the Board of Directors was essential for the validity of any resolution passed at the meeting.
As admittedly no notice was given of the meeting on December 16, 1953 to one of the Directors, the resolution passed terminating the services of the appellant was 'invalid.
[307 D E] But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the, services of the appellant by his telegram and letter dated December 17, 1953, would show that the Board ratified the action of the Chairman.
Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 16, 1953 to terminate his services, it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors.
Even assuming that the Chairman was not legally authorised to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because he purported to act in pursuance of the invalid resolution.
Therefore it was open to a regularly constituted meeting of the Board of Directors to ratify that action which, though unauthorised, was done on behalf of the company.
Ratification would always relate back to the date of the act ratified and so it must be held that the services 'of the appellant were validly terminated on December 17.
1953, [307 G 308 C] (ii) The rules which provided for one month 's notice in case of termination of services of all employees would apply to the appellant as well.
The rules expressly purported to bind all the employees of the respondent company.
There was no reason to hold that the appellant was not an employee of the respondent company.
The appellant had himself relied on the rules.
It was therefore idle to contend that the rules did not bind him.
The contention of the appellant that he was entitled to 18 months ' notice must be rejected.
[308 D E]
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<s>[INST] Summarize the judgementriminal Appeal No. 65N of 1968.
Appeal by special leave from the judgment and order, dated October 5, 1967 of the Allahabad High Court, Lucknow Bench in Criminal Revision No. 152 of 1966.
A.S.R. Chari, R.K. Garg, R.A. Gupta and S.C. Agarwal, for the appellant.
H.R. Khanna and O.P. Rana, for the respondent.
188 The Judgment of the Court was delivered by Mitter, J.
In this appeal by special leave the appellant challenges his conviction under section 3 of the Railway Stores (Unlawful Possession) Act, 1955.
The Act is a measure providing for punishment of persons in unlawful possession of railway stores who cannot satisfactorily account how they came by the same.
By section 2 "railway stores" are defined to mean any article (a) which is the property of any railway administration, and (b) which is used or intended to be used in the construction, operation or maintenance of a railway.
Section 3 defines the offence as also the measure of punishment therefore.
It reads: "If any person is found, or is proved to have been in possession of any article of railway stores reasonably suspected of being stolen or unlawfully obtained, and cannot account satisfactorily how he came by the same, he shall be punishable with imprisonment for a term which may extend to five years, or with fine, or with both.
" Before anyone can be charged with the offence under section 3 it must be shown that he was in possession of railway stores which by the definition of section does not include all articles which are ' the property of a railway administration but only those which are used or intended to be used in the construction, operation or maintenance of a railway.
Mere unlawful possession of the property of any railway administration is not an offence.
The prosecution must also prove that the articles were being actually used or were intended to be used for by the railway.
Thus any article which is the property of a railway administration but which has been discarded or rejected for further use would be outside the definition of railway stores.
Railway stores may be new or old and an offence may be committed in respect of stores of either kind.
If the railway administration has no further use of them be they new or old as in the case where they have become unserviceable or outmoded no person can be charged with an offence under section 3 in respect thereof.
It is only when the articles satisfy the definition of railway stores that the prosecution can be successfully launched against a person in unlawful possession thereof.
Even in such a case.
the prosecution must first adduce evidence to show that there was cause for reasonable suspicion of the stores being stolen or obtained unlawfully.
It is only when the burden in respect of this is discharged by the prosecution that the onus shifts to the accused to account satisfactorily of his possession of the same.
He may, for instance, show that he had purchased the property in open market where goods of this 189 kind are usually sold or that he had bought them from someone bona fide in the belief that the vendor had lawfully obtained the The facts in this case are as follows.
On the strength of some information received on 28th July, 1964 that some stolen railway property was being sent out of Lucknow through a motor transport agency, a Sub Inspector attached to the Railway Protection Force along with another Sub Inspector of Police searched the premises of the motor transport company at Lucknow the same night.
The search which took place in the presence of the appellant and the manager of the transport company revealed that a large number of parts of railway machinery (railway engines) bearing railway marks were contained in 23 bags of metal scrap booked the same day by the appellant for consignment to Jullunder.
The usual formality of preparing a recovery memo and the sealing of goods in bags in the presence of witnesses was gone through.
One Jaswant Singh, described as an expert of railway machinery parts and Foreman and Chief Inspector of N.E. Kotwali Chowk, Lucknow, examined the goods said to be railway stores and kept in 11 bags and made a report to the effect that they were all railway stores being parts of a railway engine.
It was the case for the prosecution that the appellant failed to offer any satisfactory explanation of his possession of the goods.
On the strength of the evidence adduced and principally on the report of Jaswant Singh along with his oral testimony the Magistrate found him guilty and sentenced him to imprisonment for two years.
The conviction was maintained by the Sessions Judge and the High Court.
The report made by Jaswant Singh shows that he had examined the material which he classified under 38 heads and described the same as unauctionable property.
Against each item he put a remark either "O" or "N", 'O ' signifying old goods and 'N ' meaning new ones.
The report seems to suggest that the goods being unauctionable a third party could not lawfully obtain possession of the same.
Curiously in his testimony before the court although he said that he had prepared ' the report and signed the same he made no statement to the effect that the contents of the report were correct.
His definite averment was: "Railway engine is auctioned in the market.
I cannot say if these articles were auctioned in the market.
I cannot say if these articles were auctioned Or not." In his cross examination he repeated the same averment in 'different words but only added that he had examined the articles 1Sup.
C.I./70 14 and they were parts of an engine and that railway articles were mixed with other goods in the bags.
From his deposition it is not possible to spell out any averment to the effect that the items mentioned in his report were used or intended to be used in the construction, operation or maintenance of a railway.
In our view there was no evidence before the courts to prove that the articles seized were railway stores within the meaning of section 2 of the Act.
Our attention was drawn to the case of Moyalal Rostagir vs The State(1) wherein it was held that in order to prove that the articles were railway stores it was necessary to establish that the articles in question were not only the property belonging to a railway administration but they were used or intended to be used for the construction or operation of a railway.
Counsel for the respondent however cited a decision of the Orissa High Court in Udaya Dalai vs The State(2).
The material seized in that case were tie bars and iron sleepers which were brand new.
According to the learned Judge of the Orissa High Court: " . section 2 of the Act does not require the prosecution to prove that the incriminating articles belonging to a particular railway.
From the evidence of P.W. 5 it can be reasonably inferred that as the seized articles were found to conform to the specifications of the Indian Railway Standards they held that they belonged to any of the railways in India.
His further evidence that they were 'brand new ' is also sufficient to show that they were intended to be used in the construction, operation or maintenance of the railway.
" In our view although the prosecution is not called upon to prove that the goods belong to any particular railway administration it has to establish that the articles were the property of a railway administration.
Evidence to the effect that the goods conformed to the Railway Standards fails short of such proof.
In most cases the burden of proof in this respect may be discharged by leading evidence about the identifying marks on the goods or some, peculiarity of the goods not to be found in cases of non railway goods.
Again the mere description of the goods as new would not fulfil the requirements of section 2(b).
Some evidence will have to be led to the effect that the goods of the kind were being actually used by a railway administration and that the goods were in a serviceable condition.
In the case of goods which had not been put to use evidence would have to be led to establish that they had been manufactured for such us,.
(1) (2) 30 Cuttack Law Tims, 275.
191 The evidence 'in the case before us did not establish that goods were railway stores within the meaning of section 2 of the Act and as such the question of punishment under section 3 did not arise.
The appeal will there be allowed and the bail bond of the appellant directed to be cancelled.
V.P.S. Appeal allowed.
[/INST]The appellant, the author of a short story and the printer and publisher of the story were convicted under section 292 I.P.C. on a charge of obscenity.
Setting aside the conviction this Court, HELD: It is the duty of the Court to consider the article, story or book by taking an overall view of the entire work and to determine whether the obscene passages are so likely to deprave and corrupt those whose minds are open to such influences and in whose hands the book is likely to fall; and in doing so the influence of the book on the social morality of our contemporary society cannot be overlooked.
Even so as the question of obscenity may have to be judged in the light of the claim that the work has a predominant literary merit, it may be necessary if it is at all required, to rely to a certain extent on the evidence and views of leading litterateurs on that aspect.
[82 D; 83 E G] To insist that the standard would always be for the writer to see that the adolescent ought not to be brought into contact with sex or that if they read any references to sex in what is written, whether that is the dominant theme or not, they would be affected, would be to require the authors to write books only for the adolescent and not for the adults What has to be seen is that whether a class, not an isolated case, into whose hands the book, article or story falls suffer in their moral outlook or become depraved by reading it or might have impure or lecherous thoughts aroused in their minds.
The charge of obscenity must, therefore, be judged from this aspect.
[88 D, G H] Ranjit D '.
Udeshi vs State of Maharashtra ; followed.
Applying the above tests the story read as a whole did not amount to its being pornography nor did it pander to the prurient interest.
[87 A B]
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<s>[INST] Summarize the judgementAppeal No.123 of 1957.
Appeal from the judgment and order dated May 12, 1955, of the Punjab High Court in Civil Reference No. 17/1953.
A. V. Viswanatha Sastri, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
C.K. Daphtary, Solicitor General of India, R. Ganapathy Iyer and D. Gupta, for the respondent.
April 26.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Punjab made on a reference under section 66(1) of the Indian Income tax Act which was answered in favour of the Commissioner of Income tax.
The appellant is the assessee a Hindu undivided family with Sheel Chandra as its Karta and the respondent is the Commissioner of Income tax.
The appeal relates to the assessment year 1951 52.
The appellant, a Hindu undivided family, consisted of Sheel Chandra and his Younger brother.
Their father, Adishwar La], upto his death on April 16, 1950, was the Treasurer of several branches of the Central Bank of India (which in the judgment will be referred to as the Bank).
During his father 's lifetime Sheel Chandra was employed as an Overseer in the Bank on a salary of Rs. 400 a month.
Sheel Chandra was appointed Treasurer of the Bank at Delhi and sixteen 671 other branches of the Bank.
As Treasurer he furnished security to the Bank of certain properties of the Hindu undivided family, which consisted of title deeds of immovable properties in Chandni Chowk, Delhi, and Government of India securities of the value of Rs. 75,000.
The Hindu undivided family owns considerable property.
Its income from house property alone is Rs. 50,000 per annum and it owns stocks, shares and Government securities also of considerable value.
As Treasurer Sheel Chandra received in the year of account from the Bank a sum of Rs. 23,286 and the question for decision is whether this sum is the individual income of Sheel Chandra as salary or it is part of the income of the Hindu undivided family.
The Income tax Authorities held this sum to be the latter and taxed it as such.
The Income tax Appellate Tribunal in upholding this view held that on a proper construction of the written agreement between Sheel Chandra and the Bank, the emoluments received by the Treasurer were profits and gains of business and it further held that as the security furnished by Sheel Chandra came out of the joint family proper.
ties, the emoluments could not be said to have been earned without detriment to the family property and therefore were part of the income of the Hindu undivided family.
At the instance of the appellant the Tribunal referred under section 66(1) the following two questions to the High Court: (1)" Whether in the facts and circumstances of the case and on a true construction of the agreement between the Central Bank of India and Sheel Chandra the salary and other emoluments received by Sheel Chandra as Treasurer of the said Bank are assessable under the head ' salary ' or under the head 'Profits and gains of business '." (2)" Whether in the facts and circumstances of the case, Sheel Chandra 's emoluments as Treasurer of the Central Bank of India Ltd. were rightly assessed in the hands of the Hindu undivided family of which he is the Karta".
Both questions were answered against the appellant.
On a consideration of the various clauses of the agreement between Sheel Chandra and the Bank, the 672 High Court held that the relationship between them was not one of master and servant but that of an employer and independent contractor and therefore the emoluments received by Sheel Chandra as Treasurer were not salary but profits and gains of business.
As to the second question the High Court was of the opinion that the emoluments were the income of the Hindu undivided family because Sheel Chandra was :not appointed Treasurer on account of any personal qualification but he was appointed because (a) his father was a Treasurer of the Bank before him and (b) he had furnished substantial security which was part of the property of the Hindu undivided family.
Against this judgment and order the appellant has come in appeal to this Court.
The nature of the employment of Sheel Chandra has to be gathered from the agreement dated September 19, 1950, between him and the Bank.
It shows that on his application for appointment as a Treasurer at Delhi and sixteen other branches of the Bank, the Bank appointed him Treasurer for those branches and he could ' by mutual agreement, be appointed at other branches in the Punjab, U. P. and Rajasthan.
The appointment took effect from April 16, 1950.
Sheel Chandra undertook to perform the duties and be responsible as Treasurer of the various branches of the Bank and was required to engage and employ subordinate staff called the Cash Department Staff such as Head Cashiers, Potdars, Guaranteed Peons, Godown Keepers, Assistant Godown Keepers, Chowkidars and Clerks and other persons necessary for the efficient working of the said offices.
He had the power to " control, dismiss and change" this Staff at his pleasure but he could not engage or transfer any member of the Staff except with the approval of the Bank and had to dismiss any such member if so required by the Managing Director of the Bank or Agent of the Office.
The Treasurer and the Cash Department Staff were to do and be responsible for all work in connection with receipts and payments of monies and bad to do ouch other work as was customarily done by cashiers 673 and shroffs of Banks.
The Treasurer was also responsible for the correctness and genuineness of all hundies and cheques bearing signatures and endorsements in vernacular and for genuineness of all signatures and writings in any language or character or any securities, voucher deeds, documents and writings which the Treasurer or the Cash Department Staff dealt with and in case of any loss or damage arising out of any forged signatures and endorsements on any document accepted or dealt with by the Cash Department Staff as correct and genuine, the Treasurer was responsible to make good the loss.
He was also required, when asked by the Bank, to engage the necessary staff, to look after the goods pledged with the Bank and he was responsible for the good conduct of such staff.
It was also his duty to make enquiries and report upon the identity, credit and solvency of persons dealing with the Bank and was liable for any loss arising out of any wilful misrepresentation or negligence in the enquiry or report made by him or his representative in any matter arising in the course of employment.
He or his representative were also required, when asked, to give reliable information in regard to hundi business but he was not responsible for any damage or loss arising therefrom.
He also undertook when required by the Officers of the Bank to value and give correct certificate in regard to the genuineness, fineness and weight of bullion and gold ornaments and other valuables pledged with the Bank.
He was responsible for any loss to the Bank in case of any wilful misrepresentation or negligence in regard to this branch of his duty.
He further undertook to supply to the Bank as many persons as were required at the various branches of the Bank which the Bank opened in future.
He undertook responsibility for the safe custody of the monies and ornaments and other valuables kept with or pledged with the Bank as also for the bills of exchange, promissory notes, hundies or other securities.
Besides this he was required to satisfy the Agent or the Manager of the branch that all the monies of the Bank and other valuable securities which had not been duly 674 used and accounted for were intact and in their proper places.
Sheel Chandra was paid a salary of Rs. 1,750 per mensem for all the branches he was employed in.
Besides this he was paid certain sums of money for guaranteeing the conduct of Godown Keepers, Assistant Godown Keepers and Chowkidars supplied by him.
If the branches or out agencies were increased he was to receive such increase in salary as might mutually be agreed upon.
On the closing of any branch there was to be a corresponding reduction in the remuneration.
The members of the Cash Department Staff were to be paid travelling allowance according to the rules of the Bank.
In addition to the remuneration above mentioned the Treasurer or his authorised representative when visiting different branches were to get actual railway fare.
The various members of the Cash Department Staff were to be paid their salary directly by the Bank but the Bank was not bound to pay more than the scale laid down by it.
The permanent members of the Cash Department Staff were to get the usual increments and benefit of Provident Fund and travelling allowance in accordance with the rules of the Bank.
The Treasurer was required to engage members of the Cash Staff on salaries laid down by the Bank and if he paid anything more than the usual Bank scale he had to pay it himself.
The Treasurer was also entitled to nominate and appoint a representative to carry on the duties undertaken by him at the various offices of the Bank but these appointments were Subject to the approval of the Bank.
The Treasurer was responsible for the acts of omission and commission and for neglect and default of his representatives and for each and every member of the Cash Department Staff.
There are various clauses in the agreement requiring the Treasurer or his representative to perform their duties efficiently, honestly and in a proper manner.
The Treasurer and the Cash Department Staff were under the control of the Bank.
They were required to make entries in the books of account which were furnished by the Bank giving full particulars of all monies received and paid 675 by them and in such manner as the Agent of the Bank might from time to time direct in writing.
The Treasurer had to carry out his duties faithfully and any communication made by the Bank to any member of the Cash Department Staff was to be considered as a communication made to the Treasurer himself and he was bound to take notice of it.
The agreement could be terminated by three calendar months ' notice in writing by either side but in the event of any breach of any condition of the agreement by the Treasurer his services could be terminated forthwith; but his liability was to continue.
There was also an arbitration clause.
Counsel for the appellant contended that the various provisions of the agreement showed that Sheel Chandra was a servant of the Bank and not an independent contractor.
He laid particular emphasis on the fact that he was appointed a Treasurer on a monthly salary and his services could be terminated forthwith in certain circumstances.
Besides this he was to carry out his duties as directed by the Bank and was to discharge his duties faithfully and if in the discharge of his duties he caused any loss to the Bank he was liable to make good the loss.
These factors, according to him, showed that he was not an independent contractor or an agent of the Bank but was a salaried servant.
The contention on behalf of the respondent on the other hand was that the agreement showed that Sheel Chandra was carrying on a business in that he was supplying cashiers and other members of the Cash Department Staff for a monetary con sideration.
He guaranteed their fidelity which was an insurance undertaken by him.
He was to get certain sums of money for supplying each member of certain classes of servants to the Bank and the agreement between the Bank and Sheel Chandra could be terminated by notice and there was an arbitration clause and he was not required to serve personally.
Undoubtedly there are some terms in the agreement which are unusual as ordinary agreements of service go but in the case of an agreement between a Bank and a Treasurer they are riot so Unusual.
There was 676 an agreement with very similar clauses in Shivanandan Sharma vs The Punjab National Bank Ltd. (1) and it was held to be an agreement of service and not of agency.
Now, the duties of Sheel Chandra under the agreement are such as are peculiar to the employment of Treasurers.
It is true that as Treasurer, Sheel Chandra had also undertaken to indemnify the Bank not only for his own default but also for the default of the members of the Cash Department Staff.
But Banks have to deal with monies, valuable securities, gold and other valuables and must necessarily employ servants whose honesty is guaranteed and it is necessary for the Bank to have some one in its employment who can perform these duties in a responsible manner and be answerable to the Bank for negligence and default in the performance of this class of work.
In the very nature of things one man cannot do all this work, not even at one branch, what to say of several branches; other people have therefore to be employed and although the persons employed in the Cash Department are servants of the Bank they do the work which Treasurers ordinarily and customarily do and consequently the Treasurer is made responsible for any damage which the Bank suffers due to the default of the Treasurer or of those employed to do the work of the Cash Department.
It is difficult to lay down any one test to distinguish the relationship of master and servant from that of art employer and independent contractor.
In many cases the test laid down is that in the case of master and servant the master can order or require what is to be done and how it is to be done but in the case of an independent contractor an employer can only say what is to be done but not how it shall be done.
But this test also does not apply to all cases, e.g., in the case of Ship 's master, a chauffeur or a reporter of a newspaper.
It was pointed out in Cassidy vs Ministry of Health (2) that in the case of contract of service " a man is employed as part of the business, and his work is done as an integral part of the business whereas under a contract for services the contractor is not (1) ; (2) , 352 3. 677 integrated into the business but is only accessory to it".
In certain cases it has been laid down that the indicia of a contract of service are (a) the master 's power of selection of the servant; (b) the payment of wages or other remunerations; (c) the master 's right to control the method of doing the work and (d) the master 's right of suspension or dismissal: Short vs J. and Henderson Ltd. (1).
Bhagwati, J., in Dharangadhara Chemical Works Ltd. vs State of Saurashtra (2) said that in all cases the correct method of approach is whether having regard to the nature of work there was due control and supervision by the employer.
We have given above the duties of the Treasurer in the present case, his obligations and the manner of control exercised over him and the staff employed by him to carry out the work of the Cash Department of the Bank.
It is no doubt true that the Treasurer guaranteed his fidelity, good faith and honesty of the persons who were employed in the Cash Department of the Bank but that was a part of the duty that he undertook and that is peculiar to the very nature of his employment.
Applying the test which was laid down by Bhagwati, J., in Dharangadhara Chemical Works Ltd. vs State of Saurashtra (2) that having regard to the nature of the work whether there was due control and supervision of the Bank over the Treasurer, the Treasurer in the instant case must be held to be a servant of the Bank.
What we have to see is the effect of the agreement as a whole and taking the various clauses together it must be held that Sheel Chandra, the Treasurer, was a servant of the Bank.
In view of this it is not necessary to discuss in detail the various cases that were cited at the bar.
K. P. Bhargava vs The Commissioner of Income Tax, U. P. (3) was the case of a Treasurer of the Central Bank of India at Agra.
There he was paid a salary of Rs. 100 and a commission for his work as a Guarantee Commission Agent but the terms of the contract were different and that was clearly a case of a Guarantee Commission Agency.
(1) , 429.
(2) ; , 160.
(3) [1954] 26 88 678 Lala Jeewan Lal vs Commissioner of Income tax(1) was also a case of commission agency and in the peculiar circumstances of that case it was held to be business within section 2(5) of the Excess Profits Tax Act.
The assessee there was paid a commission of 4 annas per cent.
on the value of the contracts secured by him.
Subsequently the commission was increased to Re.1 per cent.
and for this extra commission he agreed to reimburse the mill in case of failure of a person purchasing through him to pay the price.
Counsel for the respondent also relied on Commissioner of Income tax V. Kalu Babu Lal Chand (2) where the Managing Director 's remuneration was held to be the income of a joint family to be assessed as such in its hands.
That case is distinguishable.
There the karta of a Hindu undivided family took over a business as a going concern and carried on the business till the company was incorporated.
The shares in the name of karta and his brother were acquired with the funds of the joint family.
The company was floated with the funds of the joint family and was financed by it and the remuneration received was credited in the books of the family.
The office of the Managing Director itself was assignable.
The Articles of Association provided that the karta or his assigns or successors in business " whether under his name or any other style or firm " would be the Managing Director of the Company and he was to continue for life until removed because of fraud or dishonesty.
Thus the acquisition of business, the flotation of the Company and the appointment of the Managing Director were inseparably linked together.
The facts of that case were quite different from that of the present case which are akin to the facts in Shivanandan Sharma vs Punjab National Bank Ltd. (3).
The next question for decision is whether the salary of Sheel Chandra as Treasurer of the Bank is assessable as part of the income of Hindu undivided family of which he is the karta or as his separate income.
Both the Appellate Tribunal and the High Court were of the opinion that the emoluments as Treasurer were not acquired without any detriment and risk to the (1) (2) ; (3) ; 679 family property and therefore formed part of the income of the Hindu undivided family.
Treasurership is an employment of responsibility, trust and fidelity and personal integrity and ability and mere ability to furnish a substantial security is not the sole or even the main reason for being appointed to such a responsible post in a Bank like the Central Bank of India.
On the other hand his previous experience as an Overseer of the Bank and his being appointed on his applying for the post are indicative of personal fitness for it.
There is nothing to show that Sheel Chandra had received any particular training at the expense of the family funds or his appointment was the result of any outlay or expenditure of or detriment to the family property.
But it was argued on behalf of the respondent that because he had lodged joint family property by way of security his earnings as Treasurer became a part of the income of the Hindu undivided family for the reason that the acquisition was not without risk to the family estate.
He relied on Gokul Chand vs Firm Hukum Chand Nath Mal (1) and Commissioner of Income tax vs Kalu Babu Lal Chand (2).
In the former case a member of the joint family entered the Civil Service and that was made possible by the expenditure of family funds which enabled him to acquire the necessary qualifications and it was that fact which made his earnings part of the family income.
The following passage in that judgment at p. 168 was emphasised: " It may be said to be direct in the one case and remote in the other, but if risk of or detriment to family property is the point in both cases, there appears to be no such merit in "science", recognised by the sages of the Hindu law, as would warrant the exclusion of gains of science as such from the category of partible acquisitions".
Counsel particularly relied on the words 'risk of and contended that by reason of the family property being given in security, the risk as understood in that judgment hadarisen, because it became liable for any loss that might be incurred during the course of employment of Sheel Chandra.
The word 'risk ' in that (1) (1921) 48 I.A. 162.
(2) ; , 680 judgment must be read in the context in which it was used.
Family estate was used and expenditure was incurred for equipping one of its members to join the Indian Civil Service.
It was in that connection that the words 'risk of ' or 'detriment to ' family property were used.
The latter case, Kalu Babu Lai Chand 's case(1), has already been discussed.
The facts and circumstances of that case were different.
The cases which the Privy Council relied upon in Gokul Chand 's case (2) were all cases where joint family funds had been expended to fit a member of the joint family for the particular profession or avocation the income of which was the subject matter of dispute but the respondents were not able to refer to any decision in which it was held that the mere fact of giving joint family property in security for the good conduct of a member of the family employed in a post of trust was sufficient to make the emoluments of the post joint family property because of any detriment to family property or risk of loss.
It has not been shown that in this case there was any detriment to the family property within the meaning of the term as used in decided cases.
In our opinion the judgment of the High Court was erroneous on both questions which were referred to it and they should both have been decided in favour of the appellant.
The emoluments received by Sheel Chandra were in the nature of salary and therefore assessable under section 7 of the Income tax Act and not under section 10 of the Act as profits and gains of business and the salary was the income of the individual, i.e., Sheel Chandra and not the income of the Hindu undivided family.
We therefore allow this appeal and set aside the judgment and order of the High Court.
The appellant will have its costs in this Court as well as in the High Court.
(1) ; Appeal allowed.
(2) (1921) 48 I.A. 162.
[/INST]S was the karta of the Hindu undivided family, consisting of himself and his younger brother.
Their father was the Treasurer of a Bank till his death in 1950.
During his father 's lifetime S was employed as an overseer in the Bank on a salary of Rs. 400 a month, and, subsequently, after his father 's death he was appointed Treasurer of the Bank at Delhi and sixteen other branches of the Bank.
As Treasurer he furnished security to the Bank of certain properties of the Hindu undivided family.
The agreement dated September 19, 1950, between him and the Bank, showed that he was appointed Treasurer on a monthly salary of Rs. 1,75o and he was also paid certain sums of money for guaranteeing the conduct of the cashiers and other members of the Cash Department Staff which he was required to employ with the approval of the Bank.
He was to carry out his duties as directed by the Bank and if in the discharge of his duties he caused any loss to the Bank he was liable to make good the loss.
He was not required to serve personally, but his services could be terminated by notice.
In the year of account 1950 51 he received from the Bank a sum of RS.
23,286 as Treasurer.
The Income tax authorities considered that this sum was not the individual income of S as salary but was part of the income of the Hindu undivided family and taxed if as such on the grounds (1) that the agreement between S and the Bank showed that the relationship between them was not one of master and servant but that of an employer and independent contractor and that the emoluments received by the Treasurer were profits and gains of business, (2) that S was appointed Treasurer not on account of any personal qualification but because his father was a Treasurer of the Bank before him, and (3) that as the security furnished by S came out of the joint family properties, the emoluments could not be said to have been earned without detriment to the family property and therefore were part of the Hindu undivided family: Held, (1) That on the true construction of the agreement dated September 19, 1950 the Treasurer was a servant of the Bank.
Shivanandan Sharma vs The Punjab National Bank Ltd. ; and Dhayangadhara Chemical Works Ltd. vs State Of Saurashtra, , relied on.
(2) That in view of the fact that there was nothing to show that S had received any particular training at the expense of the 87 670 family funds or that his appointment as Treasurer was the result of any outlay or expenditure of or detriment to the family property, but on the other hand his previous experience as an overseer of the Bank was indicative of personal fitness for his appointment as Treasurer, the mere fact he had lodged joint family property by way of security would not make his earnings as Treasurer part of the income of the Hindu undivided family.
The use of the words " risk of " and " detriment to " in Gokul Chand vs Firm Hukum Chand Nath Mal, (1921) L.R. 48 I.A. 162, explained.
Commissioner of Income tax vs Kalu Babu Lal Chand, [1960] 1 S.C.R. 32o, distinguished.
Accordingly, the emoluments received by S were in the nature of salary and therefore assessable under section 7 of the Indian Income tax Act, 1922, and not under section 10 of the Act as profits and gains of business, and the salary was the income of the individual, S, and not the income of the Hindu undivided family.
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<s>[INST] Summarize the judgementCivil Appeal No. 710 of 1991.
From the Judgment and Order dated 8.5.1990 of the Delhi High Court in Civil Writ No. 3257 of 1989.
G.L. Sanghi, Harish N. Salve, H.K. Puri, Rajeev Sharma, Ravinder Nath, V.B. Saharya, P.K. Jain and Prem Malhotra for the Appellants.
Y.S. Chitale, T.S. Krishnamurthy Iyer, R.L. Jain, S.K. Tredal, Kitty Kumarmanglam, R.P. Dave and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
SLP (C) No. 12 1 11 of 1990.
Leave granted.
This appeal raises the question of the validity and interpretation of Section 14 D of the Delhi Rent Control Act, 1958 (hereinafter referred to as the "Act").
In companion matters, we have already pronounced upon the validity and interpretation of Section 14 B of the Act.
Hence, it is not necessary to discuss in this judgment the points which are common to both sections.
These points will be deemed to have been concluded by the said decision.
The only point which remains to be dealt with and is peculiar to Section 14 D is whether to claim possession of such premises under the said Section, the landlady must become a widow after the premises are let out either by herself or her husband.
Section 14 D of the Act reads as follows: "14 D. Right to recover immediate possession of premises to accrue to a widow (1) Where the landlord is a widow and the premises let out by her (2) or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
383 (2) Where the landlord referred to in sub section (1) has let out more than one premises, it shall be open to her to make an application under that sub section in respect of any one of the premises chosen by her.
The object of the Act, as stated in its preamble, is to provide for the control of rents and evictions, and of rates of hotels and lodging houses, and for the lease of vacant premises to Government, in certain areas in the Union Territory of Delhi.
The original Act came into force on February 9, 1959 having received the assent of the President on December 31, 1958.
The working of the Act disclosed certain deficiencies, inconveniences and hardships both to the landlords and the tenants.
Their associations, therefore, made representations.
Various committees and commissions also recommended amendments of certain provisions of the Act.
Considering the grievances of the landlords and the tenants as well as the recommendations of the committees/commissions, the Act was amended in 1988 with the object of (a) rationalising the law by bringing out the balance between the interests of landlords and tenants, (b) giving a boost to house building activity and maintaining the existing housing stock in a reasonable state of repairs, (c) reducing litigation between landlords and tenants and of ensuring expeditious disposal of disputes between them.
By this amendment Sections 14 B to 14 D were added.
The object of Section 14 D is obvious.
It is to assist a vulnerable and needy section of the Society to recover possession of the premises as expeditiously as Possible and without the usual trials and tribulations.
We have already held in the accompanying judgment that classified landlords such as the widow landlady under Section 14 D can apply for possession of the premises under the respective provisions even if the premises are not let for residence.
It is not necessary to repeat the said discussion in this judgment.
Section 14 D makes no distinction between the landladies who become widows before and after letting out of the premises.
It merely says that where the landlady is a widow and the premises are let out by her or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
The language of the section in that respect is very clear.
The premises might have been let out by her as a widow or they might have been let out by her husband or even by herself before she had become widow.
The legislature wanted to give a special privilege to the landlady who is a widow notwithstanding whether the premises were let out before or after she became widow.
Such conferment of special benefit on a 384 widow landlady is permissible even under the provisions of Article 15(3) of the Constitution which is an express exception to the provisions of sub clauses (1) and (2) of that Article.
It states that nothing in the said Article shall prevent the State from making any special provision for women and children.
A widow is undoubtedly a vulnerable person in our society and requires special protection.
We further see no merit in the contention that if the benefit given by Section 14 D is allowed to be availed of by widows, they may make a business of it.
There is no warrant for such apprehension.
For, in the first instance, the right to recover possession under Section 14 D can be availed of by the widow only once.
That is a sufficient guarantee against the abuse of the privilege granted by the section.
Secondly, she has to prove her bona fide need for the occupation of the premises in question for her own residence like any other landlord.
Thirdly, the provisions of Section 19 of the Act come into play in her case also, when the order for possession on the ground of bona fide requirement for occupation as residence is made in her favour.
In this view of the matter, we find no substance in this appeal and the same is dismissed with no order as to costs.
Writ Petition No. 902 of 1990 7.
In the view that we have taken above, it is not necessary to admit this writ petition.
The authorities under the Act while disposing of the applications under Section 14 D will have to abide by this decision and not by the decision of the Delhi High Court in Civil Writ No. 2686 of 1989 in the matter of Dr. P.P. Kapur vs Union of India & Ors.
which was brought to our notice and stands overruled.
R.S.S. Appeal dismissed.
[/INST]The petitioner Corporation imported certain goods.
The goods were bounded.
and could not be got released due to the ban imposed by the Income Tax authorities, under Section 132(1) of the Income Tax Act.
Subsequently after the ban was lifted, the petitioner approached the authorities for clearance of the goods, but the customs authorities demanded payment of customs duty at the enhanced rate which was prevailing at the time of clearance.
Hence the petition er filed a Writ Petition before this Court challenging the demand as arbitrary.
illegal and unconstitutional.
It was contended that though the petitioner was willing to clear the goods on payment of the then prevailing custom duty, the goods could not be cleared due to circumstances beyond its control, by the order of the Income Tax authori ties and, therefore, the authorities could not claim en hanced duty.
On behalf of the respondents it was contended that in view of Section 15(1)(b) of the , especially the expression "actually removed" used therein, the liability of the petitioner to pay the duty was the duty at the time of clearance of the goods.
Disposing of the Writ Petition, this Court, 622 HELD: 1.
Section 15(1)(b) of the clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actu ally removed from the warehouse.
Therefore, in view of the language used in Section 15(1)(b) of the Act, specially in the light of the expression 'actually removed ' the petition er was liable to pay excise duty at enhanced rate prevailing on the date the goods were cleared.
The prohibitory orders, arbitrary or not, would postpone the date of clearance, and as such would postpone the determination of the duty.
[626F; 627C] Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142, relied on.
2.1 Recourse to article 32 of the Constitution can be had if there is a breach of the fundamental rights, provided the other conditions are satisfied.
BUt in a matter where li ability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute, for which elaborate procedure is prescribed, enforcing of those provisions of the Act would not breach fundamental right and, without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of fundamental right.
Whenever a person complains and claims that there is a violation of law, it does not involve breach of fundamental right for the en forcement of which alone article 32 of the Constitution is attracted.
[627E; 628A D] Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, relied on.
2.2 In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the .
[627F] In the instant case, the petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law.
There is procedure pro vided by law for determination of the payment of customs duty.
The revenue has proceeded on that basis.
The petition er cannot seek to remove the goods without payment at that rate or without having the matter determined by the proce dure envisaged and enjoined by the law for that determina tion.
The petitioner, without seeking to take any relief within the procedure envisaged under the Act, had moved this Court for breach of funda 623 mental right.
This is not permissible and should never be entertained.
[627F H] Relief under Article 32 of the Constitution is there fore, wholly inappropriate in the facts and circumstances of the instant case.
[628B]
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<s>[INST] Summarize the judgementN: Criminal Appeal Nos. 346 and 387 of 1975.
Appeals by Special Leave from the Judgment and Order dated 6 8 75 of the Bombay High Court in Criminal Appeal No. 1005 and 1006 of 1973.
Lalit Chari, P. R. Guna, A. K. Srivastava and Vineet Kumar for the Appellant in Crl.
A. No. 387/75.
R. L. Kohli, P. P. Rao, R. C. Kohli and R. Nagarathnam for the Appellant in Crl.
A. No. 346/75.
V. section Desai, H. R. Khanna and M. N. Shroff for the Respondent in both the appeals.
The Judgment of the Court was delivered by JASWANT SINGH, J.
The above noted two criminal appeals which are directed against the common judgment and order dated August 6, 1975 of the High Court of Judicature at Bombay affirming on appeal the judgment and order dated August 6, 1973 of the Special Judge, Greater Bombay, convicting section P. Bhatnagar, appellant in the aforesaid first appeal, (hereinafter described as A 1) under section 120B read with sections 409 and 109 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act, 1947, and sentencing him to six months simple imprisonment on each of the said two courts as well as convicting A. section Krishnaswamy, appellant in the aforesaid second appeal (hereinafter described as A 2) under the aforesaid two counts but reducing his sentence from nine months ' imprisonment to six months simple imprisonment on each one of those counts, shall be disposed of by this judgment.
Briefly put the case as set up by the prosecution was: In 1964, the Indian Oil Corporation (hereinafter referred to as 'the Corporation ') which is a Government owned company, decided to purchase 13 acres and odd of a hilly tract of land situate in village Mahul in Trombay (Bombay) from the Tatas for the purpose of erecting black furnace oil storage tanks and construction of administrative buildings.
After the area was taken over by the Corporation Varandani (P. W. 20), Junior Engineer of the Corporation surveyed the land in October, 1964, under the directions of A 1 and A 2, the Engineering Manager and Senior Engineer respectively of the Engi 878 neering Department of the Marketing Division of the Corporation with a view to find out the extent of rock cutting and filling which might be required to be done for levelling the area of 7 acres out of the said tract of land.
The kacha level plan (Exh. 125) and worksheets prepared by Varandani on October 13, 1964 and November 3, 1964 respectively during the course of his aforesaid survey (which were signed by A 1 and A 2, showed that 16,80,000 cft.
of rock cutting work and 8,00,000 cft.
of filling work would have to be done to suit the purpose for which the land was acquired.
Estimate (Exh. 27) prepared by Varandani indicated that expenditure at the rate of Rs. 30/ per 100 cft.
for rock cutting and Rs. 10/ per 100 cft.
for filling would have to be incurred.
Pucca tracing (Exh. 34) of level plan (Exh. 125) and copies thereof signed by A 1 and A 2, and contour plan prepared by Varandani and approved by Engineering Manager were kept on the record.
On the basis of the survey and the estimate of expenditure made by Varandani, notice (Exh. 28) inviting tenders from experienced civil contractors for rock cutting, filling and levelling of the land in question was prepared by A 2 on February 2, 1965, and was forwarded (under his signatures) by A 1 to the Finance Department for approval on February 5, 1965.
After the approval of the Finance Department, the Public Relations Officer of the Corporation by his letter (Exh. 29) dated February 11, 1965 requested Times of India, Indian Express and Free Press to publish the tender notice (Exh. 28) wherein it was stated that the tenders which should reach the Corporation by 2.30 P.M. on March 2, 1965 would be opened at 3.00 P.M. on that date.
In response to this notice eleven firms of contractors including Ram & Co. submitted their tenders.
N. N. Desai (hereinafter described as A 4) however abstained from submitting his tender.
In the meanwhile, it was decided that instead of having stack measurement as provided in Exhibit 28, it would be desirable to have the measurements on the basis of differences between the existing and finished levels.
Accordingly, on March 5, 1965, the aforesaid eleven tenderers were asked to submit revised tenders on the basis of the amended tender notice by March 15, 1965.
Although fresh tenders were restricted to the original eleven tenderers, a tender form was issued to A 4 in response to the application made by him on March 8, 1965.
On opening the tenders on March 15, 1965, it was found that five out of the eleven original tenderers and four new ones including A 4 had submitted their tenders, that the tender of Ram & Co. whereby it had quoted Rs. 28/ per 100 cft.
for cutting work and 'nil amount for filling was the 879 lowest and that the second lowest tender was of A 4 who had quoted Rs. 26/ per 100 cft.
for cutting and Rs. 6/ per 100 cft.
for filling work.
Thus, the actual amount as per quotation of Ram & Co. was Rs. 4,70,400/ and that of A 4 was Rs. 4,84,800/ for 16,80,000 cft.
of cutting work and 8,00,000 cft.
of filling work.
On discovering that the tender of his firm was the lowest, Roshan Lal, a partner of Ram & Co. addressed communication dated March 20, 1965 to the Managing Director of the Corporation requesting him that the aforesaid job of rock cutting and filling be entrusted to his firm in view of its working experience detailed therein but handed over the same to A 1.
At or about this time, Messrs Labitos Oil Fields Limited, a British firm whom the Corporation was trying to collaborate in its project advised the Corporation that instead of three levels (steppings) which had been planned as per cantour map (Exh. 34) there should be a single level and instead of the survey being on the basis of 100 ft. spacing as done earlier by Varadani, it should be on the basis of 10 ft. spacing.
Accordingly A 1 and A 2 told Varadani (P.W. 20) and section D. Vaidya, another Assistant Engineer (hereinafter described as A 3) to make a fresh survey alongwith A 4 according to the advice of Messers Labitos Oil Fields Limited as it had been almost decided to entrust the aforesaid work to A 4.
Pursuant to the instructions of A 1 and A 2, B. N. Desai, a representative of A 4 was associated with the revised survey which was carried from March 21 to March 26, 1965.
As a result of the joint survey, kacha level plan (Exh. 22) and work sheet (Exh. 23) were prepared by A 3 under the directions of Varandani.
As a result of this survey, it was found that rock cutting and filling would have to be done to the extent of 23,30,454 cft.
and 31,500 cft.
respectively as against 16,80,000 cft.
and 8,00,000 cft.
respectively as found as a result of the earlier survey.
Notwithstanding the large variations in the cutting and filling work which required to be done as a result of the revised joint survey, the Engineering Department did not invite fresh tenders but instead prepared another comparative statement on the basis of the rates quoted by Ram & Co. and A 4 in their tenders opened on March 15, 1965 and showed therein that the tender of A 4 had turned out to be the lowest and that of Ram & Co. to be the second lowest.
On April 7, 1965, A 2 drew up tender committee proceedings (Exh. 16) as reproduced below and got them signed by A 1 in the hope that the recommendations made therein would be accepted by Srivastava, (P.W. 5) the Financial Controller and Patel, the Operation Manager of the Corporation, who were the other members of the Tender Committee, in addition to A 1 and finally by Gopal Krishan, the then Chairman of the Company : 880 "Ref.
No. ENG/ASK/Q 250 April 7, 1965.
Subject : Tender Committee proceedings for the finalisation of rock cutting, levelling of plot, taken over from M/s. Tata at Bombay.
(1) We had taken over 13.5 acres of land from M/s. Tata Power House at Trombay.
It was intended to level this plot of land and recover about 7 acres of land by cutting and levelling in order to put up our Black Storage tanks and other allied facilities.
Due to the uneven terrain, it was decided to have two steppings so that the storage tanks may be installed at a higher level and the remaining administrative blocks, were house stores etc., at a lower level.
Accordingly, Public Tenders were invited for rock cutting and filling this area on 100 cft.
basis.
(2) Subsequently, M/s.
Lobitos Oil Fields Ltd. Ellesmere Port, Wirral, Cheshire, had negotiations with us for putting up a Transformer Oil Blending Plant at this site.
The representatives of the above firm during their discussions with C. & section M. and M. E. (accused No. 1) stated, that they would like to have only plain piece of land instead of steppings as was decided by us previously.
This will entail additional cutting and minimise the quantity of filling.
(3) Our estimated quantity previously was 16,80,000 cft.
of cutting and 8,00,000 cft.
of filling.
As per the revision in the levels to be maintained at this site that the total quantity of cutting comes to 23,30,456 cft.
The quantity of filling comes to 31,500 cft.
The total estimated cost for the original work was Rs. 6,13,200/ .
A comparative statement has been drawn as per the tendered rates quoted by the various parties and the position of the first three is as follows: ____________________________________________________________ section Name of Contractor Qty.
Rate Amount Total No. %Cft.
____________________________________________________________ 1 N.N. Desai Cutting 23,30,450 26/ Sd.
605917 607807 Filing 31500 Cft.
1890 6/ 2 Ram & Co. Cutting 2330450 652526 652526 28/ Cft.
Filing 31500 Cft.
free 3 Library Construction Cutting 2330450 652526 28/ Cft.
655676 Filing 31500 Cft.
3150 ____________________________________________________________ 881 M/s. N. N. Desai, Contractor are the lowest.
The Tender Committee therefore recommends that this work may be allotted to M/s. N. N. Desai, Contractor at their quoted rate of Rs. 6,07,807/ being the lowest tenderer.
Sd/ (section P. Bhatnagar) M. E. (A. K. Srivastava) F.O. (H. B. Patel) O.M. Approved (P. A. Gopalakrishnan) Chairman.
" Contrary to the expectations of A 1 and A 2, Srivastava (P.W. 5) refused to be a party to the Tender Committee recommendations.
Ignoring not only the opposition of Srivastava and the suggestion of the Accounts Officer of the Finance Department and the Assistant Finance Controller of the Corporation made vide Exhibit 68 and Exhibit 31 respectively while processing the tender committee proceedings that in view of the fact that both the quantity and value of the work had increased substantially as a result of the revised survey, it would be fair and proper to ask all the contractors who had responded to the tender notice to re submit their quotations but also the offer made by Ram & Co. (which possessed the requisite skill and equipment) to execute the contract at the lower rates of Rs. 20/ per 100 cft.
for rock cutting and Rs. 15/ per 100 cft.
for filling as well as the flat refusal to reduce his rates given by A 4 during the negotiations conducted at the suggestion of the Accounts Department of the Corporation on April 17, 1965 with the three contractors mentioned in Exhibit 16, A 2 carried on, in pursuance of the conspiracy entered into between himself and A 1 and A 4 fresh negotiations with A 4 on or about April 20, 1965 without associating any member of the Finance Department and persuaded him to accept the lowest revised rates offered by Ram & Co. although he did not possess the requisite experience in and equipment for rock cutting and filling and by passing the Financial Controller forwarded the papers to the Operation Manager who not being conversant with the proceedings supported A 2 for entrusting the contract to A 4 at the lowest rates offered by Ram & Co. On the Tender Committee recommendations reaching him in circulation.
Srivastava put on record his bold and emphatic protest but eventually reluctantly gave his con 882 currence to the recommendations made by A 1 and the Operation Manager as is evident from the concluding sentence of the Note: "The case is recommended for acceptance of the Chairman only because the Engineering Manager has certified that he would not be able to accept any responsibility about the deadline if work is not given to Desai." Although according to A 2 's note (Exh. 33) dated April 19, 1965, the Coordinator and Sales Manager was keen to have the site developed as early as possible, the latter held up the matter for nearly three months in the vain expectation that the work would be done free of cost either by the Government of Maharashtra or the Bharat Sevak Samaj and it was not before July 15, 1967 that he gave his approval to A 1 's proposal to award the contract to A 4 whereafter accepting the said proposal the Managing Director of the Marketing Division and Chairman of the Board of Directors of the Corporation accorded sanction to the entrustment of the work to A 4.
On receipt of the sanction, A 1 forwarded the papers with his endorsement to the Financial Controller on July 29, 1965.
On July 30, 1965, work order (Exh. 19) manifesting quantity of rock cutting work as 29,30,450 cft., filling work as 90,000 cft.
and value of the work as Rs. 5,99,590/ as against the corresponding figures of 23,30,450 cft., 31,500 cft.
and Rs. 4,70,000/ respectively as specified in the final sanction which was based on the aforesaid level statement (Exh. 22) and work sheet (Exh. 23) was prepared and handed over by A 2 to A 4.
Copies of the work order were also endorsed by A 2 to the Bills Section of the Engineering Department and the Accounts Section of the Finance Department of the Corporation with the endorsement "the above has Chairman 's approval on our note of even reference dated 7th April 1965.
Please have the agreement executed.
Earnest money of unsuccessful tenderers may also please be refunded early.
" On July 30, 1965, formal contract (Exh. 74) mentioning only the number and date of the work order in the blank columns of the printed form was prepared and signed by A 4 and a representative of the Company.
The joint level statement Exhibit 22 and the work sheet Exhibit 23 in respect of the joint survey made between March 21 and 26, 1965 for ascertaining the extent of rock cutting and filling which formed the basis for invitation of tenders and the final sanction in favour of A 4 were not only left unsigned by the concerned but were actually removed from the file and were substituted by spurious level plan (Exh. 24) and its copy (Exh. 38) which were fabricated by A 3 to justify the inflated figures of rock cutting and filling work mentioned in the work order (Exh. 19) dated 883 July 29/30, 1965.
On August 19, 1965, fabricated level plans (Exhibits 24 and 38) prepared by A 3 were sent to A 4 as annexures to Exhibit 106 which ran as under: "We are enclosing herewith two prints of spot level of land area to be dressed and levelled at our Trombay plot.
The whole plot should be brought to a level of 102.00 as directed.
Please return to us a copy of the Blue Print showing spot levels duly signed as a token of acceptance of the same for payment." While A 4 retained one of the spurious plans viz. Exhibit 38 with himself, he returned the other viz. Exhibit 24 after putting his initials thereon.
Thereafter A 3 endorsed on the letter Exhibit 106 that 'the print signed by A 4 should be filed by Sukhtankar (P.W. 13) who is in charge of the filing section. ' Accordingly, Sukhtankar filed Exhibit 106 alongwith Exhibit 24 in the Bill Section.
The actual rock cutting operations commenced with effect from August 1, 1965 and on August 27, 1965, A 4 prepared and submitted the first running bill (Exhibit 51) indicating that 8,00,000 cft.
of cutting work and 80,000 cft.
of filling work had been completed.
This bill was accompanied by the certificate of A 3 reading as under : "The measurements on which column No. 3 of this bill are based were taken by me on 24 8 65 and recorded at pages of MMC No. 7201.
Certified that the quantities of work actually executed as shown in column No. 4 has actually been done and in no case less than the on account payments claimed.
" The above certificate was countersigned by A 2 on August 26, 1965.
A 2, A 3 and A 4 also signed measurement certificate (Exhibit 52) which read as follows: "We certify that the measurements given above are the actual works carried out in accordance with the drawings and specifications as indicated in the work order referred to above.
" On the basis of these certificates, the first on account running bill was passed and paid for.
Thereafter the second and third running bills and measurement certificates Exhibits 53 and 54 dated Septem 884 ber 16, 1965 and November 17, 1965 respectively claiming that the additional cutting work of 5,00,000 cft.
and 8,00,000 cft.
had been done were likewise prepared by A 4 and signed by A 3 and counter signed by A 2.
The fourth running bill and measurement certificate (Exh.
55) dated February 22, 1966 claiming that additional work to the extent of 7,00,000 cft.
had been done was prepared by A 4 and signed by A 3.
This bill which was countersigned by K. section Joshi, another Senior Engineer who was put incharge of the Project in the absence of A 2 who had been transferred to Delhi was also paid.
On November 8, 1966, one Gurunath Naik (P.W. 17) who was working as a Junior or Assistant Engineer for some time in Bombay and for the remaining period at Allahabad, Kanpur and Mugalsarai was called by A 1 and asked to see Ramrao, the then Junior Engineering Manager.
Accordingly Naik met Ramrao who directed him to go to the spot and have the level drawings.
Pursuant to this direction, Naik went to the site for spot verification and reported to Ramrao vide Exhibit 18 that excepting at one place where he got a level of 102 9 nowhere else did he get a level of 102.
Naik also reported that as against an area of 7.4 acres which had to be levelled hardly an area of 4.8 acres was attempted to be levelled.
On December 30, 1966, A 4 submitted his final bill (Exh. 56) claiming to have completed the work by August 11, 1966.
This bill bore the certificate dated December 29, 1966 of A 3 to the effect that the measurements on which column No. 3 of the bill was based was taken by him on that date, and had been recorded in the measurements of the M.B.M.C. book.
A 3 also recorded a further certificate to the effect that the work had been completed 100% according to the specifications and drawings.
This certificate of A 3 was followed by another certificate of A 4 that he accepted the above certificate and certified that the amount of payment which he received on that bill would be in full and final settlement of all his claims in respect of the work excepting the refund of his security deposit.
By this bill, A 4 claimed to have done 3,84,720 cft.
of cutting work and 18,200 cft.
of filling work in addition to the work covered by the four earlier running bills.
Thus A 4 claimed to have done 31,84,720 cft.
of rock cutting work and 98,200 cft.
of filling work.
On this bill, which bore the certificates of A 3 and A 4 was countersigned by Ramrao on December 30, 1961 and wherein it was falsely claimed by A 4 that the work was completed on August 11, 1966 although that date was also much beyond the stipulated date A 3 recorded the following note: 885 "The final bill amounts to Rs. 6,51,674/ and is in excess of work order amount by Rs. 52,084.
Since this excess is within 10% of the ordered amount, M.E. may kindly approve." Accordingly the papers were laid before A 1 who accorded the desired approval the moment the bill was laid before him and sent it for payment to the Accounts Officer ignoring the practice which required all such bills involving an excess of 10% over the sanctioned amount to be submitted to the Chairman for sanction.
On the bill coming before the Accounts Department for scrutiny, it pointed out that since the actual work exceeded the sanctioned amount by Rs. 52,084/ for which originally the approval of the Chairman was taken, the excess needed to be regularised by obtaining his sanction.
It was also pointed out that as the contractor had not completed the work within the stipulated time, the question of imposition of penalty also required to be considered.
On the pay order being returned to the Engineering Department, Ramrao, the then Deputy Engineering Manager, submitted the following reply vide Exhibit 59 dated January 12, 1967: "The work is now completed as required.
However to acquire the required level and gradient, the quantity of work has increased.
The party has now submitted their final bill for this work amounting to Rs. 6,51,674/ which is in excess by Rs. 52,084/ than the original amount of work order.
The excess is within 10% of the original estimate, M.D. is therefore requested to kindly approve the excess work done and to pass the final bill for Rs. 6,51,674/ .
As per the work order, the work was to be completed within 4 months (120 working days).
However, the Contractors could not complete this work including the disposal of the excavated stuff within this time limit due to the fact that there was no approach available to this plot.
The party has completed the work expeditiously, after the approach was given to them by M/s. Tatas.
M. D. is therefore, requested to consider this aspect and approve the time limit extension upto 11 8 1966, the date on which the party has completed the work." 886 On the matter coming back to the Finance Department, Shende (P.W. 16) pointed out that not only the quantities of rock cutting and filling work which were found as a result of the survey made between March 21 and 26, 1965 had been enormously inflated in the work order but the work claimed to have been done also exceeded the inflated figures mentioned in the work order.
He, therefore, suggested that the Department might agree to the payment of extra amount to A 4 subject to A 1 's obtaining the Board 's ratification.
Sometime before March 28, 1967, Krishnaswamy Rajam (P.W. 1), the Chief Internal Auditor, was summoned by the Managing Director and the General Manager and was asked to have a personal talk with A 3 in connection with the matter.
On P.W. 1 's questioning A 3 on March 28, 1967, the latter made confessional statement (Exh. 21) which is reproduced below for facility of reference: "Regarding rock cutting and filling at Trombay site I wish to bring to your kind attention the following: I was assigned to this job after the work was started at site by M/s N. N. Desai.
The original estimates for cutting and filling were 16,80,000 cft.
and 8,00,000 cft.
respectively.
It was later revised to 23,30,450 cft.
and 31,500 cft.
for cutting and filling.
I have got the workings for this revision with me at Ahmedabad.
(He refers to the genuine level statements and plans and worksheets Exs. 22 and 23 which were prepared by him under the directions of Varandani between 21st and 26th March, 1965).
Later on I was advised by my superiors to give a still further upward revision giving the quantities as 29,30,450 cft.
for cutting and 90,000 cft.
for filling.
The work sheets prepared by me and signed by contractor only (N. N. Desai) has no bearing to actual quantities involved.
I had merely acted as asked by my superiors in preparing worksheets accordingly which has resulted in this upward revision.
I have also given measurement certificates in this regard in line with the revised wrong quantities.
I realise now this has resulted in making excess payments to the contractor.
I beg to be excused for having done such a thing which was done solely at the instance of my superiors in Engineering Depart 887 ment.
E.M. (accused No. 1) and Dy.
E.M. are aware of this.
" Thereupon P.W. 1 put up the papers before the Managing Director and the General Manager who advised him to start investigation on particular lines.
During the course of the inquiry, A 2 told P.W. 1 that the work order which as far as he remembered was prepared by A 3 was cursorily signed by him due to heavy rush of work and that while checking the running bills submitted for payment, he normally checked the percentage of progress of work certified by the Assistant Engineer.
On further investigation made on April 1, 1967, A 3 produced the genuine level statement (Exh. 22) and the work sheet (Exh. 23) before P.W. 1 and told him that the substitution of the fabricated level statement and work sheet relating to rock cutting and filling at Trombay was done at the instance of Joshi, A 2 and A 1 and that they were aware of the same.
To the further question as to what was the basis for the work order for the figure of 29,00,000 cft.
of rock cutting and 90,000 cft.
of filling, A 3 told P.W. 1 that there was no basis for the work order and the quantities were fixed to suit sanctioned amount.
On a query being made by P.W. 1 from Ramrao regarding the final bill, he admitted that he had not personally checked the calculations and had counter signed the bill relying on the accuracy of the measurements shown in the bill which was prepared by A 3.
He further stated that he had not personally checked the calculations based on the final bill and initialled joint levels which according to him were normally done by the Assistant Engineer.
During the course of this inquiry, Murthy (P.W. 18) was deputed by A 1 and Krishnaswamy (P.W. 1) to go to the spot and find out the work which had actually been done.
Thereupon, Murthy (P.W. 18) submitted his interim report on April 6, 1967 pointing out that at only one place the level was 103.94 and elsewhere it remained much more.
By his final report (Exh. 44) dated April 20, 1967, Murthy (P.W. 18) pointed out that actually on the spot only 9,73,000 cft.
of rock cutting and 50,000 cft.
of filling had been done.
After recording the statements of A 2, A 3 and A 4, Krishnaswamy (P.W. 1) submitted a detailed report (Exh. 25) on April 8, 1967 to the Managing Director through the Financial Controller.
In his report, P.W. 1 also pointed out that contour plan/levels statement which in case of this nature are jointly signed by the contractor and the representative of the Engineering Department were not available in the instant case for inspection and that A 3 had produced a level statement alleged to have been processed by him and Varandani which was not signed by any body including A 3 's superiors.
P.W. 1 also 888 pointed out in the course of the report that the quantities of rock cutting and filling shown in the work order were 29,30,450 cft.
and 90,000 cft.
respectively and that there was an increase of 6,00,000 cft.
of rock cutting straightaway.
Krishnaswamy (P.W. 1) also mentioned in his report that according to A 3, the level statement giving the figure of 29,30,450 cft.
for cutting and 90,000 cft.
for filling had been signed by A 4.
On the report being put up before the then Financial Controller, he directed that before proceeding with the matter, it was necessary to call for the comments of A 1.
Thereupon after calling for a report from Ramrao, A 1 gave his comments vide Exhibit 178 dated April 17, 1967 wherein after doubting the competence and qualification of P.W. 1 to hold the investigation, he offered to send one of the senior engineers from Western Branch to carry out an independent survey to find out the quantity of work done by A 4 and suggested that measurements might be made by reference to the kacha level statement (Exh. 125), the work sheet (Exh. 126) and the contour plan (Exh. 34) which were checked by A 2 and approved by him and which must be with the department.
On April 18, 1967, A 1 sent for A 3 and questioned him in regard to the matter.
In the statement penned by A 3 himself, he stated that he changed the levels of drawing of Trombay plot regarding rock cutting and filling job at the instance of A 2 and KSJ (i.e. Joshi) but did not inform A 1.
On May 3, 1967, A 1 issued show cause notices to A 2 and A 3 with a view to hold departmental enquiry against them.
By his reply dated May 20, 1967 to the show cause notice, A 3 stated that he had changed the original contour plan at the instance of A 2.
On getting information on July 15, 1967 that A 4 was having some rock cutting done on the site although he had in his final bill claimed that he had fully completed the work on August 11, 1966, A 1 and A 2 visited the site along with Lakshmanan, the Operations Manager and finding that the work of rock cutting was still going on and that the claim of A 4 as certified by A 3 and countersigned by Ramrao about the work having been completed on August 11, 1966 was apparently false had the measurements of rock cutting and filling work taken by Ganapathy.
As the measurements taken by Ganpathy were on the basis of level plans prepared by Tatas in which the bench mark was 94.5 as against the bench mark of 100 for the survey in question, the Managing Director had the measurements taken by M/s R. L. Dalal & Co. The report of Dalal & Co. showed that the rock cutting work done was 9,60,000 cft.
and filling work was 1,96,000 cft.
889 On July 28, 1967, the Managing Director issued a charge sheet to A 1, A 2, A 3 and Ramrao.
In his reply (Exh.64) dated August 4, 1967 to the charge sheet, A 3 submitted that whatever he did was under the orders of A 1 and the Deputy Engineering Manager.
This time he did not mention A 2 to be responsible for anything done by him.
On the same day i.e. August 4, 1967, A 1 sent for A 3 in his cabin and questioned him in the presence of three other officers viz. Roy Chowdhary (P.W.2), who was the Deputy Financial Controller, Shriyan (P.W.23), the Assistant Engineer, and Vora, the Senior Engineer.
On this Occasion, A 3 allegedly made statement (Exh.43) absolving A 1 and throwing the entire responsibility on A 2.
While the three other officers and A 1 signed the statement (Exh.48) made by A 3, A 3 declined to sign it and fled away from the chamber on some excuse and rushed to the chamber of Krishnaswamy, Chief Internal Auditor whereupon Roy Chowdhary (P.W.2) also followed A 3 to the chamber of Krishnaswamy.
In the chamber of Krishnaswamy, A 3 resiled from the statement.
Having regard to the position adopted by A 3 in resiling from his earlier statement of that very day before A 1, Roy Chowdhary reminded him that in the morning in his presence, he had stated that it was A 2 who was responsible for asking him to change the drawing and increase the quantities.
To this question of Roy Chowdhary in the chamber of Krishnaswamy, A 3 replied in the negative and stated that A 1 called him and Joshi into his room and instructed him personally to increase the quantity.
When questioned by Roy Chowdhary as to why he did not come out with that truth in the room of A 1 in the presence of Roy Chowdhary, A 3 replied that he did not do so out of fear or A 1.
In his reply to the charge sheet, Ramrao inter alia stated that he signed the bill (Exh.56) relying on the certificate of A 3 who had been assigned to the job and added that according to the practice prevailing in the Corporation, Senior Engineers were not expected to verify the measurements.
Elaborating his explanation, he stated that just as Senior Engineer, Doraiswamy could not proceed to a BPI nor Senior Engineer Vora nor Senior Engineer Chari could proceed to an installation just to verify the billed quantities in view of the fact that there were a number of bills on each work order and so many work orders for each location.
Similarly in the Branches, Senior Engineers who were controlling the work for so many depots and installations were not expected to verify the quantities in each bill; that however, if there was a dispute with the contractor or there was some other reason to doubt the correctness of the Assistant Engineer 's certificate, the Senior 890 Engineer might either take measurements himself or get them taken by another Assistant Engineer; that subsequent to the counter signature by the Senior Engineer, the bill was passed on to the Engineering Bills Section where the bills were checked by the Accountant against sanctions, work order, rates and amounts, deductions for cement A.C. sheets or other materials supplied and security; deposit etc; that the Accountant prepared the pay order giving all these details for signature by a Senior Engineer as far as possible other than the countersigning Senior Engineer; that the bill then went to the Accounts Department where it was subjected to further detailed scrutiny before payment; that on December 30, 1966 Vaidya brought the bill for Rs.79, 674/ dated December 30, 1966 to him for counter signature; that it would have normally been put up to K. section Joshi but was brought to him as he was not available; that Vaidya was the Assistant Engineer who had handled that contract from the time of placing the work order; that the bill was for the work carried out by the Contractor subsequent to the previous 'on account bill ' 21 2 66 (nearly 10 months earlier) i.e. about 3.18 lakhs cft.
at Rs. 20/ per 100 cft.
of cutting and 18,200 cft.
of filling at Rs. 15/ per 100 cft; that he had visited Trombay number of times in connection with other works during the period commencing from August, 1966 and was aware that the Contractor had carried out approximately that much work during 1966; that the extra quantity required sanction of competent authority; that the previous bills passed showed that the major portion of the work was carried out during the period August to December, 1965 and about 7 lakhs CFT of cutting during December, 1965 to February, 1966; that A. section Krishnaswamy who placed the work order had countersigned bills upto 21 lakhs cft.
of cutting and 80,000 cft.
of filling as early as November 17, 1965 and subsequently K. section Joshi had countersigned a bill for an additional 7 lakhs cft.
of cutting and the contractor had already been paid Rs. 5.72 lakhs less security deposit; that he, therefore countersigned the bill dated December 30, 1966 and passed it on to M.E. for approval of the extra quantity of cutting; that M.E. approved on the same date and the bills was sent to Engineering Bills for scrutiny by the Accountant in respect of sanctions, work order terms etc; that he also particularly instructed that the bill should be shown to K. section Joshi before the pay order was issued since normally the bill should have gone to him for counter signature; that the Accountant carried out his instructions; that the counter signature did not denote final passing of a bill but only that it might be proceeded further and subjected to all the necessary administrative and financial checks before payment; that all the bills for the work had been certified by the Assistant Engineer incharge who was fully familiar with work and the previous bills had been counter 891 signed by colleagues of status equal to him; that he had no reasons to suspect any malpractice or mistakes and also there was no dispute with contractor; that he had exercise the normal technical checks which were the functions denoted by counter signature as per the prevailing practice and that countersignature did not imply correctness of the quantities certified by the Assistant Engineer (who alone was responsible for the correctness) in either the current or previous bills.
When the matter was thus pending, a confidential information reached Rege, the Deputy Superintendent of Police, C.B.I. (P.W. 27) who registered the case on December 27, 1967.
During the course of investigation, he visited the office of the Corporation, took charge of all the concerned documents, had the site measured by Shivashankar, Technical Examiner, Central Intelligence Service, (P.W.4) according to whom the cutting and filling work done by the contractor was to the extent of 9,61,000 cft.
and 1,50,000 cft.
respectively and after securing the requisite sanction, prosecuted A 1, A 2 and A 3 and also submitted the charge sheet against A 4 with the result that all the four accused were convicted.
In these appeals, we have had the advantage of hearing full dressed arguments of counsel on both sides who diligently prepared the case and put across their respective contentions with great ability.
We must point out at the outset that although the trial court had clearly acquitted A 1 of the charge under section 409 read with section 120 B and section 109 of the Indian Penal Code it unfortunately forgot to keep that fact in mind with the result that while concluding its judgment it held him guilty on that charge as well.
In the circumstances, it was not open to the High Court in the appeal by A 1 to go into that charge and reverse the findings arrived at by the trial court.
We will accordingly be concerned with the question of validity of A 1 's conviction under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act only but so far as A 2 is concerned, we will have to examine the validity of his conviction under all the charges.
Before examining the sufficiency or otherwise of the material bearing, on the charges against both the appellants, we consider it necessary to have a clear concept of the meaning and ambit of the phraseology "by corrupt or illegal means or by otherwise abusing his position as public servant" used in section 5(1)(d) of the Prevention of Corruption Act, 1947 (hereinafter referred to as 'the Act ') for the contravention of which the appellants have been convicted.
It will be advantageous in this connection to refer to two decisions rendered by this 892 Court in M. Narayanana Nambiar vs State of Kerala(1) and Major section K. Kale vs State of Maharashtra.(2) In the first case, Subba Rao, J. (as he then was) while construing clause (d) of sub section (1) of section 5 of the Act observed: "The pharaseology 'by otherwise abusing his position as public servant ' covers acts done otherwise than by corrupt or illegal means by an officer 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 i.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 inocuous acts will not be covered by the said clause.
The juxtaposition of the word otherwise ' with the words "corrupt or illegal means" and the dishonesty implict 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.
" Following the decision in M. Narayanan Nambiar vs State of Kerala (supra), it was held by this Court in Major section K. Kale vs State of Maharashtra (supra) that the abuse of a position in order to come within the mischief of the section must necessarily be dishonest so that it may be proved that the accused caused deliberate loss to the department.
It was further held in this case that it is for the prosecution to prove affirmatively that the accused by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other 893 person.
It would, therefore, be necessary to find out in this case as to whether the accused abused their position and acted dishonestly or with a corrupt or oblique motive in having the contract in question entrusted to A 4.
As the courts below have rested their judgments on a constellation of circumstances, it would be well to bear in mind the fundamental rule relating to the proof of guilt based on circumstantial evidence which has been settled by a long line of decisions of this Court.
The rule is to the effect that in cases depending on circumstantial evidence, there is always the danger that conjecture or suspicion may take the place of legal proof.
In such cases the mind is apt to take a pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely it is, considering such matters to cover reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
In cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypotheisis of the guilt of the accused.
Again, the circumstances should be of a conclusive nature and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far complete as not to leave any reasonable grounds for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
(See Hanumant Govind Nargundkar vs State of M.P.,(1) Palvinder Kaur vs State of Punjab(2) and Charan Singh vs State of U.P.(3).
The principle that inculpatory fact must be inconsistent with the innocence of the accused and incapable of explanation on any other hypothesis than that of guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable.
(See Govinda Reddy vs State of Mysore(4).
894 Keeping in view the aforesaid construction placed on section 5(1)(d) of the Act and the principles with regard to proof of guilt based on circumstantial evidence, let us now turn to the various circumstances which have been relied upon by the High Court in holding the appellants guilty and see whether they factually exist and if so whether they are of such a character as to be wholly incompatible with the innocence of the appellants and consistent only with their guilt.
In so doing, we purpose to divide the aforesaid circumstances under the following broad heads and deal with them seriatim: 1.
The conduct of the appellants evidencing their keenness to have the contract entrusted to A 4. 2.
Issue of work order (Exh. 19) with inflated figures relating to rock cutting and filling.
Removal of statement of level plan (Exh. 22) and work sheet (Exh. 23) from the departmental file and fabrication and substitution in their place of the fabricated ones by A 3. 4.
Despatch on August 19, 1965 of spurious level plan (Exh. 24) and its copy (Exh. 38) by A 2 to A 4 as annexures to Exhibit 106.
Counter signing of the on running bills by A 2. 6.
The initialling of the final bill by A 1.
The first circumstance relied upon by the High Court in this behalf is that though the revised tender notice was limited to the eleven contractors who had originally submitted their tenders in response to the Tender Notice (Exh. 28), the appellants improperly got a tender form issued to A 4 and entertained by the Tender Committee.
It is true that the copies of Exhibit 15 on which the prosecution has sought to rely were sent by registered post to the eleven original tenderers by the Engineering Department of the Corporation but it cannot be overlooked that there is nothing in Exhibit 15 or elshhere on the record to indicate that other contractors were precluded from submitting their tenders or that the corrigendum extending the date for submission of the tenders was neither intended to be published nor was it actually published.
It seems that the attention of the High Court was not drawn to the communication (Exh. 29) dated March 9, 1965 addressed by Ranganath, Public Relations 895 Officer, to the Advertisement Manager, Times of India and others and the corrigendum forming annexure thereto which ran as under: " INDIAN OIL CORPORATION LIMITED (MARKETING DIVISION) Clarke Road, Mahalaxmi, Bombay 34, WB, India IN REPLY PLEASE REFER TO PR 31 317 9th March, 1965 To The Advertisement Manager, The Times of India, (Bombay) The Indian Express, (Bombay) Free Press Journal, (Bombay) Dear Sir, Subject: Tender No. 249/65 Corrigendum Attached is text of an advertisement for IMMEDIATE Publication utilising the minimum possible space under Public Notice/Tenders or in its appropriate place.
We would appreciate your treating this request as URGENT.
Thanking you.
Yours faithfully, Sd/ (B. V. Ranganath) Public Relations Officer Encl: One.
Engineering Manager, H.O. with reference to their inter office memo No Eng/ASK dated 9 3 1965.
We are trying to get it published on March 10.
INDIAN OIL CORPORATION LTD.
(MARKETING DIVISION) Corrigendum to Public Tender No. 249/65 The last date for receiving this Tender has been extended to 15th March, 1965 at 2 30 P.M. and will be opened the same day at The attention of the High Court also does not seem to have been invited to the above noted endorsement at the foot of Exhibit 29.
The High Court also seems to be wrong in thinking that out of the nine contractors who submitted their tenders in response to the revised tender notice, eight were from the original nine tenders and the ninth was A 4.
A comparison of the two lists viz. the one of the original tenders and the other of those contactors who submitted their tenders in response to the revised tender notice would make it clear that five contractors appearing in the second list were fresh tenderers.
The Financial Controller 's note (Exh. 17) dated April 2, 1965 which appears to be the outcome of some personal pique itself shows that it was only on April 15, 1965 that it was agreed between the members of the Tender Committee that the grant of the contract would be confined to one the of the three lowest tenderers, one of whom was A 4.
The fact that none of the eleven officers of the Finance and the Engineering Department of the Corporation who handled the file relating to the grant of the contract in question ever raised any objection regarding the improper reception or entertainment of A 4 's tender by the Engineering Department is a proof positive of the fact that there was nothing wrong about the issue of tender form to A 4 or its entertainment by the appellants.
Thus it is clear that the first circumstance relied upon by the High Court had no factual existence and could not be pressed into service against the appellants.
The next finding of the High Court that while Ram & Co. was best fitted for entrustment of the contract in question in view of the vast experience and equipment possessed by it, A 4 did not have any such merit.
It is a matter of common knowledge that rock cutting is not a specialised job and no extra ordinary skill or experience is required for the same and that every civil construction involves some sort of rock cutting.
It is also in evidence that A 4 who was the Corporation 's old and tried contractor had previously executed 98 works including the one on the An top Hill in Bombay for the Corporation to its entire satisfication, and out of the aforesaid works many related to installations which were more complicated than rock cutting and filling.
It would also be noticed that in the notes put up 897 by them neither Srivastava (P.W. 5) nor Shivananda, Superintendent, nor Khurana, Assistant Financial Controller of the Finance Department, nor the Operation Manager ever pointed out that A14 lacked the requisite experience or competence which disentitled him to the grant of the contract.
In fact Shivananda and Khurana had suggested as an alternative to inviting fresh tenders that A 4 should be asked to reduce his rates in view of the revised figures on account of which the value of the contract had gone up considerably.
It would also be noticed that the High Court while rightly holding that Exhibit 122 was not delivered to A 1 by Roshan Lal (P.W. 19) tell into an error in observing that A 1 had a hand in suppressing it.
It seems to have escaped its notice that at the negotiations conducted on April 17, 1965 with the three lowest tenderers viz. Ram and Co., Liberty and Co., and A 4 by the Tender Committee, of which P.W. 5 was a prominent member, Roshan Lal was present and while pressing his firm 's claim to the grant of the contract he did draw the attention of the members of the Committee to the contents of Ext.
122 sent earlier by his firm to the Corporation.
This is evident from Roshan Lal 's own admission that he informed the corporation in writing as to his experience in the line and whatever he had written he had also told the concerned officers who were two or there in number.
If A 1 would have had a hand in suppressing Ext.
122 he would not have allowed it is to remain on the file.
That apart a bare perusal of report Ext.
33 which is fairly detailed is enough to show that neither A 1 nor A 2 was interested in suppressing or distorting any material fact.
There was, therefore, hardly any justification for the observation in question.
The third finding of the High Court that the appellants told Vrindani (P.W. 20) and Vaidya (A 3) that it had already been decided to entrust the contract to A 4 and in order not to loose time, a joint survey should be made, is also erroneous.
It is unbelievable that A 1 and A 2 who were pre occupied with several projects would go and tell Vrindani who was three or four steps below them and was admittedly not a member of the conspiracy nor concerned with policy matters that it had been already decided to assign the contract to A 4.
The aforesaid briefing attributed to the appellants also seems to be incredible in view of the fact that it was only on the basis of the level measurements taken by P.W. 20 and A 3 during the survey made by them between March 20 and 26, 1965 that A 4 turned out to be the lowest tenderer and at the time when the briefing is alleged to have been given the lowest tender was of Ram & Co. 898 The insinuation implicit in the fourth finding of the High Court that Exts.
16, 17, 30 33 and 123 led to the inference that A 1 was the author and architect of the proposal for acceptance of A 4 's tender, is also unwarranted.
There is nothing in these documents which can be interpreted to indicate that the appellant was actuated by any ulterior or corrupt motive or that he was guilty of any mis demeanour, irregularity or impropriety.
On the contrary the said documents particularly Exts.
16 and 33, which like an open book fairly set out all the facts and circumstances bearing upon the allotment of the contract in question including the claim thereto of Ram & Co. not only manifest, that the procedure referred to by P.W. 1 in his deposition for inviting and finalizing the tenders was meticulously followed in the present case, but also establish A 1 's bona fides.
It has also to be borne in mind that the Tender Committee which comprised of the Operation Manager and the Financial Controller in addition to A 1 had only an advisory role to play and the decision to entrust the contract to a particular contractor lay with the Chairman of the Board of Directors in consultation with the coordinator and Sales Manager who was above the Tender Committee.
That the appellant 's proposal favouring A 4 was in the interest of the corporation both from the point of view of economy as well as speedy and satisfactory execution of work and was solely inspired by his concern to avoid the sad experience which the corporation had in respect of rock cutting work at An top hill with the Kore Brothers which was a new party is evident from the following endorsement made on A 33 by H. B. Patel, Operation Manager: "In view of the urgency and our past experience with a new party at An top hill, I agree to Senior Engineer 's proposal that we give the job to M/s. N. N. Desai at the lowest tendered rates.
" The fifth finding of the High Court that the appellants had negotiations on their own with A 4 with a sinister object is also against the weight of the material on the record.
The act of the appellants in trying to ascertain from A 4 whether he was prepared to reduce his rates to the level of M/s. Ram & Co. which seems to have been taken in consultation and agreement with P.W. 5 was, in our opinion, guiltless, It would be well to remember in this connection that Shrivastava P.W. 5 himself admitted in the course of his deposition that there was practice in their corporation of asking the second lowest tenderer to match his rates with the lowest tender.
The proposal about the allotment of work in favour of A 4 was, therefore, not only consistent with the practice but was also in the interest of the corporation.
899 In view of the foregoing we are inclined to think that the conduct of the appellants in prefering A 4 to any new contractor did not savour of dishonest intention.
Re. 2: Coming to the work order (Exh. 19) containing inflated figures which is the corner stone of the prosecution case, it may be pointed out that the prosecution has not been able to produce any evidence showing the circumstances under which it was prepared.
The observation od the High Court that the work order must be the creation of not only A 2 but of A 1 as well seems to be based upon mere conjecture.
It would be noticed that the work order does not bear the signatures of A 1 and there is nothing to show that in the normal course, the work order had to come to A 1 before being issued to A 4 We cannot also in this connection afford to lose sight of the observations made by the trial court at page 279 of the Paper Book that 'it is a common ground that accused No. 1 is not concerned with the making of the order and that it is also a common ground that a work order is issued by the Engineer Incharge '.
In these circumstances, it is difficult to understand how the High Court came to the conclusion that the work order (Exh. 19) was the creation of not only A 2 but of A 1 as well.
It seems that the finding of the High Court was influenced by its finding with regard to Exhibits 16 and 33.
In view, however, of our finding with regard to Exhibits 16 and 33, the observation of the High Court that the work order was also the creation of A 1 cannot be substained.
We will, accordingly advert to the material on the record with a view only to see how far it reflects on the bonafides of A 2.
The prosecution has not led any evidence to prove that A 2 dictated or prepared the work order.
The proven facts show that according to the normal practice prevalent in the department it is not the Senior Engineer like appellant No. 2 who is incharge of the Project that prepared a work order but an assistant or Junior Engineer in charge of the work working under him.
Although Varandani has in the course of his deposition tried to suggest that the work order was prepared by A 2, his suggestion cannot be relied upon in the face of Exhibit 67 wherein he told P.W. 1 that the work order was presumably prepared by Vaidya, A 3.
It is highly improbable that on the very day of the grant of the sanction of the contract in question A 2 would take the extremely hazardous step of inflating the figures to obtain undue advantage for A 4 specially when he knew that the fraud would be at once discovered by reference to the sanction which had been transmitted to the Finance Department.
The prosecution theory that the work order giving inflated figures was not only signed but was also prepared by A 2 is also negatived 900 by the following endorsement on the copy of the work order sent to the Bills and Accounts Sections of the Engineering Department of the Corporation: "The above has Chairman 's approval on our note of even reference dated 7th April, 1965.
Please have the agreement executed.
Earnest money of unsuccessful tenderers may be refunded early.
" The above quoted endorsement completely demolished the prosecution case.
If A 2 had been the author of Exhibit 19, or had suspected that his subordinate would have dared to inflate the quantities of the work, it is inconceivable that he would have made the above quoted insertion giving the particulars of the above mentioned note meant for the Chairman 's aproval in the copy of the work order addressed to the Bills and Accounts Sections which would have furnished a valuable clue for the speedy detection of the fraud that is alleged to have been perpetrated.
Again if A 2 were really a conspirator who had falsely inflated the figures of rock cutting and filling in the work order he would have seen to it that the potential documentary evidence embodied in Exhibit 125 which showed the genuine levels on the spot was destroyed or done away with.
The fact that he did not do anything of the kind raises a strong doubt about his culpability.
Thus though it cannot be gainsaid that A 2 has been extremely negligent in not scrutinising the papers, it seems to us that he affixed his signatures in a routine manner to the work order prepared by his subordinate engineer without realizing the importance of his act placing implicit faith in the integrity of the latter.
Re. 3: There is no clear, cogent and convincing evidence to show that A 1 or A 2 or both had a hand in the removal of the level plan (Exh. 22) or the work sheet (Exh. 23) from the departmental file relating to the contract in question and substitution in their place of the faked level plan (Exh. 24) and work sheet (Exh. 38) which were admittedly fabricated by A 3.
The statements made from time to time by A 3 in this behalf being contradictory and discrepant as would be evident from the following table: ____________________________________________________________ section Date No.of Text of the statement No the Exhi bit ____________________________________________________________ 1 28 3 1967 21 The Original estimates for cutting and filling were 16,80,000 cft.
and 8,00,000 cft.
respectively.
It was later revised 23,30,450 cft.
and 31,500 cft 901 ____________________________________________________________ section Date No.of Text of the statement No the Exhi bit ____________________________________________________________ for cutting and filing.
Later on I was advised by my superior in Engg.
Dept., E and Dy.
E.M. to give a still further upward revision giving the quantities as 29,30,450 cft.
for cutting and 90,000 cft.
for filling.
2 1 4 1967 36 ASK, KSJ and SPB asked me to substi tute SHS relating to rock cutting & filling at Trombay which was resulted in larger quantities of cutting and filling and they are fully aware of it.
3 18 4 1967 39 & 41 I told R. Krishnaswamy when he called me on 29 3 1967 that A.S. Krishnaswamy and K.S. Joshi told me to change the levels of drawings of Trombay plot regarding rock cutting/filling job .
In reply to the further query of R. Krishna swamy, I told him that I did not inform M.E. about this and that he might be knowing.
5 20 5 1967 69 In addition to the statement dated 18 4 1967, I have to submit that I was asked to change the original contour, place by A.S. Krishnaswamy, Senior Engineer.
6 4 8 1967 43 Sometime in September, 1965, A.S. Krishnaswamy told me to increase the levels at random and bring the quality to about 30 lakhs cft.
I did so accordingly.
7 4 8 1967 42 The Engineering Manager called me and Shri Joshi into his room one day and instructed me personally to increase the quantity.
____________________________________________________________ the prosecution ought to have made a serious attempt to produce K. section Joshi whose testimony was essential to clear up the mystery in which the whole affair is shrouded.
The non production of K. section Joshi who appears to have been one of the main actors in the drama has left a lacuna which is very difficult to bridge.
In the present state of evidence, it is inconceivable that A 1 who admittedly had a meritorious record of service, had won commendation from the Board of Directors for designing a tank and saving considerable sums of money and who was the only Head of Department to be given three advance increments for his integrity and efficient work and who had no are to grind would be a party to the unholy conspiracy for the removal of genuine level plan and work sheet and their substitution by spurious ones simply to obtain some pecuniary advantage for A 4 who was neither his friend nor relative.
The position of A 2 is also 902 not materially different as in his case also the prosecution has not been able to show that he derived any monetary gain out of the transaction.
Re. 4 : A bare perusal of statement contained in Exhibit 43 which according to H.N. Roy Chowdhary (P.W. 2) and C. L. Shriyan (P.W. 23) was voluntarily and without any pressure made by A 3 is enough to show that it was in September, 1965 that A 3 increased the levels shown in the original drawings and brought up the quantity of rock cutting to 30 lakhs cft.
This statement totally knocks the bottom out of the prosecution case that the spurious level plan and the work sheet were despatched to A 4 on August 19, 1965 as annexures to Exhibit 106.
If the spurious plan and the work sheet came into existence in September, 1965, it is difficult to understand how they could be despatched to A 4 alongwith Exhibit 106 on August 19, 1965.
The conclusion, therefore, is irresistible that when the communication (Exh. 106) was despatched to A 4, it was not accompanied by fabricated level plan (Exh. 24) and work sheet (Exh. 38) but by the genuine ones viz. Exhibits 22 and 23 and that it was later on that the genuine ones were removed and retained by A 3 who during the course of the enquiry by R. Krishnaswamy (P.W. 1) brought them from Ahmedabad and handed them over to P.W. 1.
The ommission on the part of Shriyan who claims to be certain that A 3 got the tracings Exhibits 24 and 38 prepared by him in April/May, 1965 to contradict A 3 when he made the aforesaid statement (Exh. 43) is also intriguing and lends assurance to the correctness of our conclusion.
5: The first thing to be borne in mind with regard to the measurement certificates on the running bills is that it is the Assistant Engineer incharge of the work who is responsible for taking measurements of the actual quantities of the work executed by the contractor for entering the same in the measurement book and for recording a certificate that the measurements given in the bill are of the actual work carried out on spot in accordance with the Department 's drawings and specifications.
It has also to be remembered that A 1 had to look after the Corporation 's projects and installations all over India and A 2 had to look after and supervise a large number of the Corporation 's projects under the Western Branch which included installations at Sabarmati, Ahmedabad, Okha and Kandla in Gujarat and Sewri, Wadala and Trombay in Maharashtra and parts of Madhya Pradesh.
It cannot also be ignored that according to Ganpati (D.W. 3) when a Senior Engineer visits the site, he determines the progress of the work by visual inspection determining visually the approximate 903 quantity of the work done.
All this apart, an examination of the running bills (Exhibits 51, 53, 54, 55 and 56) shows that all of them bear the certificates as referred to and reproduced at page 11 of this judgment.
It would be noted that whereas first three of these bills bear the counter signatures of A 2, Bill (Exh. 55) bears the countersignatures of K. section Joshi, Senior Engineer and Bill (Exh.
56) bears the counter signatures of Ramrao, another Senior Engineer, who was absolved in the departmental enquiry.
Now the fact that A 2 countersigned the first three bills does not appear to be material in view of the following statement made by Ramrao vide Exhibit 107: "I had no reason to doubt Shri Vaidya 's figures.
Countersignature of a bill as per our prevailing practice is not indicative of verification but only indicates that there is no reason to doubt the correctness of the figures.
" The fact that K. section Joshi, Senior Engineer, also countersigned the bill (Exh. 55) which contains inflated figures and no action was taken against him also lends assurance to the inference that the counter signatures were appended merely as a routine by the Senior Engineers who seem to have reposed blind and unflinching faith on the honesty of their subordinates.
Now if Ramrao who countersigned the bill (Exh. 56) showing the quantity of cutting work as 31 lakhs cft.
was exonerated in the departmental enquiry and no action was taken against K. section Joshi who made the wrong endorsement in respect of the measurement on Exhibit 55 or against Vora who had prepared the note (Exh. 58) showing that the work had been completed, it is difficult to understand how A 2 could be treated differently and criminal intention attributed to him.
The finding of the High Court in respect of the third running bill (Exh. 54) that the very defence of A 2 would itself furnish the best evidence of the conspiracy involving A 1 is not correct for apart from other infirmities from which if suffer, it is well settled that the defence taken by one accused cannot in law be treated as evidence against his co accused.
Re. 6 : The finding of the High Court that A 1 signed the bill (Exh. 56) and sanctioned excess amount involved knowing full well that the bill was not true is also against weight of the evidence on the record.
It cannot in the first instance be forgotten that it was on July 29, 1965 that A 1 could have had occasion to see the figures of the work for which sanction was granted by the Chairman of the Board of Directors and the bill (Exh. 56) was put up to him on 904 December 30, 1967.
In the absence of the sanction from which the genuine figures could have been gleaned, it would not be reasonable to expect A 1 to remember the sanctioned figures after the lapse of 17 months specially when it is admitted on all hands that being the head of the Engineering Department, he had to tour extensively to supervise several projects spread all over the country and to discharge multifarious duties in connection therewith.
The bill, it would be noted was prepared by A 3 and was countersigned by no less a functionary than the Deputy Engineering Manager, Ramrao, who was next below A 1 in the hierarchy of the Department.
In the note prepared by him, it was not pointed out by A 3 that the bill had to go to the Managing Director.
The evidence in the case also shows that A 1 was not expected to meticulously scrutinize the bill but was concerned only with the initialling of the note which although it had passed through several hands did not indicate that the competent authority to grant sanction for the excess amount was the Chairman of the Board of Directors.
It will also be wrong to hold A 1 responsible for simply initialling the note contained in Exhibit 56 without examining Ramrao who approved the bill including the note and also countersigned the measurement certificate before it came to A 1.
In the circumstances, the mere initialling by A 1 of the bill alongside the note marked for him by A 2 is, therefore not a circumstance which can unmistakably be said to point to the guilt of the appellant.
An analysis of the circumstantial evidence adduced by the prosecution does not in our opinion lead to an unerring certainty that A 1 and A 2 acted with any dishonest or corrupt motive or abused their position.
In conclusion we cannot help observing that non examination by the prosecution of Ramrao, Joshi, Vora and Patel who were material witnesses for the unfolding of its case has left some yawning gaps in the evidence which we have found very difficult to bridge.
If these persons had been produce many of the points which have remained obscure and hidden up would have been cleared up.
For the foregoing reasons, we allow the appeals, set aside the convictions of the appellants and the sentences imposed upon them and acquit them of the offences with which they were charged.
P.B.R. Appeals allowed.
[/INST]The appellant idol, a juristic person, was exercising the rights, through the Shebait, Mohanta Srimati Dandi Swami, of a Darpatnidar in the land in suit.
By a lease deed (exhibit A), dated July 10, 1941, the appellant granted to the respondents a lease of the suit land for the purpose of raising and taking sand out of the land for a period of nine years ending on July 13, 1949.
Subsequently, on April 27, 1950, the appellant made a similar grant (exhibit I) for another nine years expiring on April 13, 1959, but this grant was called "licence".
The respondents did not pay the licence fee for the period 1362 (14 4 1955) to 1365 B.S.
The appellant thereupon issued notice dated March 31, 1966, terminating the 'licence ' and then filed a suit No. 37 of 1960 for ejectment of the respondent in the Court of the Munsiff, Chandernagore.
The trial court having dismissed the suit, the appellant filed a first appeal which was allowed.
In second appeal the High Court restored the decree of the trial court.
In appeal by special leave to this Court, it was contended on behalf of the appellant: (a) The transaction evidenced by the document (exhibit I) dated April 277 1950 was a 'license ' for taking away sand and not a 'lease ' of immovable property.
Therefore, the appellant intermediary will be considered to be in Khas possession of the holding on the date of vesting (April 1, 1955) through the licensee and as such.
entitled to retain it under Section 6 of the Bengal Estates Acquisition Act.
1953; (b) Section 28 of the Bengal Estates Acquisition Act, 1953 is not applicable because there was no 'mine ' in the suit land, as defined in the Central Act 67 of 1957; the sand deposits naturally exist on the surface and not below it and mere collection and removal of the sand from the surface did not constitute mining operations.
therefore, it could not be said that the suit land was comprised in a mine or appertained to a mine within the meaning of the said Section 28; (c) Even if the land was a 'mine ' or appertained to a mine, the mine was being worked by the appellant through a licensee, and as such, was being 19 'directly worked ' by the appellant intermediary within the contemplation of Section 28 of the Bengal Estates Acquisition Act, and therefore, the land would be deemed to have been leased to the appellant by the Government.
Rejecting these contentions, and dismissing the appeal, ^ HELD: A.
In ascertaining whether a document evidences a 'lease ' or a 'licence ', regard must be had to the substance of the transaction and not merely the words or the form in which it is dressed.
[26F] .
The document (exhibit I the Agreement), in the instant case reveals the following characteristics.
which show that in fact and substance, it is a 'lease" and not a 'licence ': [27E, 32C] (i) A right to "raise ' and "take out" and remove sand "lying inside" the land in dispute was granted by the plaintiff to the defendant.
The words "raise" and "take out sand" from "inside" the land are wide enough to include not only the "right to carry out all the operations" necessary for extracting sand, but also to take it away and appropriate it.
Construed in the context of the document as a whole, these words put it beyond doubt that right to carry out "mining operations" [within the definition in Cl.
(d) of section 3 of the Central Act 67 of 1957] for winning sand and to appropriate it, were granted.
[27F G] (ii) The rights were granted for a period of 9 years, commencing from April 27.
[27H] (iii) These rights were granted for a "price" fixed on yearly basis, irrespective of the quantity of sand extracted.
The "price" fixed is Rs. 66/ per annum.
This consideration is payable in the month of Chaitra every year.
In case of default, the First Party (grantee) shall not be entitled "to raise the sand next year" and the Second Party (grantor) shall have a right to recover the arrears of rent together, with interest at 12% by bringing a suit against the First Party.
[28A B] (iv) "The Second Party will be entitled to take Khas possession of land" "at the end of the stipulated period.
This condition, (contained in paragraph 4 of exhibit 1) read along with the other parts of the document necessarily implies that if the First Party continues to pay the "price", as stipulated, (a) he shall be entitled to enter into and remain in exclusive khas possession of the land for the purpose of carrying out the mining operations for the full stipulated period of 9 years and (b) the Second Party (plaintiff) will not be entitled to retake khas possession of the land and revoke the so called "licence" before the end of the said period of 9 years.
[28B D] The term "lease" occurring in the definition of "mining lease" given in cl.
(c) of section 3 of the Mines and Minerals (Regulation and Development) Act is not used in the narrow technical sense in which it is defined in section 105 of the .
A mining lease may not meticulously and strictly satisfy in all cases, all the characteristics of a "lease" as defined in the .
Nevertheless, in the accepted legal sense, it has always been regarded as a lease in this country.
[29E G] In the instant case the transaction evidenced by exhibit I not only falls within the definition of a mining lease under Act, 67 of 1957, but also partakes of 20 all the essential characteristics of a "lease" defined in section 105 of the .
[30 A B] Balakrishna Pal vs Jagannath Marwari, ILR ; approved Raj Kumar Thakur Girdhari Singh vs Megh Lal Pandey LR 44 I.A. 246; Gowan vs Christie, ; differed.
The negative definition of "immovable property" given in section 3, Para 1 of the , is not exhaustive.
Therefore, applying the definition given in section 3(26) of the General Clauses Act (X of 1897) to the expression used in the , except as modified by the definition in the first clause of section 3 every interest in immovable property or a benefit arising out of land, will be 'immovable property ' for the purpose of section 105, .
[30E G] A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a right to enjoy immovable property within the meaning of section 105, more so, when it is coupled with a right to be in its exclusive khas possession for a specified period.
The right to enjoy immovable property spoken of in section 105, means the right to enjoy the property in the manner in which that property can be enjoyed.
If the subject matter of the lease is mineral land or a sand mine, it can be enjoyed and occupied by the lessee by working it as indicated in section 108 of the which regulates the rights and liabilities, of lessors and lessees of immovable property, [30G H, 31A] Nageshwar Bux Roy vs Bengal Coal Company, [1930] LR 58 IA 29; applied.
H. V. Low & Co. Ltd. vs Joyti Prasad Singh Deo, Cal. 699; LR 58 IA 392.
differed from.
Commissioner of Income Tax, Bihar and Orissa vs Kumar Kanakhaya Narain Singh, ILR (XX) Patna 13; approved.
The true character of the transaction evidenced by the document (exhibit 1) being that of a 'lease ' and not a 'licence, ' Section 6(1)(i) of the West Bengal Estates Acquisition Act, 1953 will not cover the appellant 's case and give him a right to retain the land in dispute, even if section 28 of that Act was out of the way.
[32C D.] B.
The definition of "mining operations" and "mine", in the Central Act 67 of 1957 are very wide.
The expression "winning of mineral" in the definition of "mining operations is spacious enough to comprehend every activity by which the mineral is extracted or obtained from the earth, irrespective of whether such activity is carried out on the surface or in the bowels of the earth.
Mines and minerals need not always be sub soil and there can be minerals on the surface of the earth.
[24G] B. Dass vs State of U.P. ; , reiterated.
It is true that in the definition of "mine", the term "excavation" in the ordinary dictionary sense means "hole", "hollow" or "cavity made by digging out".
But the word "any" prefixed to "excavation" in the context of the phrase "for the purpose of searching for or obtaining mineral" gives it a 21 much more extensive connotation, so that every "excavation", be it in the shape of an open cast cavity or a sub terranean tunnelling, will fall within the definition of 'mining operations '.
The essence of 'mining operations ' is that it must be an activity for winning a mineral, whether on the surface or beneath the surface of the earth.
[24H, 25A B] In tho instant case, the land in dispute has large deposits of sand, which is a minor mineral.
The sand was admittedly being excavated and removed by the respondent lessee.
The land was, thus, at the date of vesting, "com prised in or appertained to a 'mine ' within the meaning of section 28 of the West Bengal Estates Acquisition Act, 1953.
[25B C] C.
The phrase "being directly worked by him" in section 28 of the West Bengal Estates Acquisition Act, 1953, will not take in a case where the mine was being worked through a lessee or licensee to whom the right to conduct mining operations and to take away the mineral had been granted by the intermediary in consideration of receiving a periodic rent, royalty or a like amount.
[25E F] The word "directly" means "in a direct way, without a person or thing coming between", immediately as directly responsible.
The use of the expression "directly" in the context of the word "worked", followed by the words "by him" unmistakably shows that the legislative intent was to allow only those intermediaries to retain land comprised in or appertaining to a mine, as lessees under the State, who immediately before the date of vesting, were working the mine under their immediate control, management and supervision.
[25C E] Section 28 of the West Bengal Estates Acquisition Act, 1953 denies the right to retain the land comprised in a mine or appertaining to a mine, if, at the material date, it was not being directly worked by the intermediary but through a licensee, or other agency to whom the right to conduct mining operations had been granted by the intermediary.
In that respect, the provisions of s.28 are contrary to those of section 6(1)(i), which give to an intermediary a right to retain land held by him in khas for the purpose mentioned therein through a licensee.
In this situation, according to the legislative mandate in section 27, the provisions of section 6(1) (i) must yield to those in section 28.
[26 B C] Thus, even on the assumption that the respondent was at the material date, holding the land in Khas through a licensee and fulfilling all other conditions which entitled him to retain under section 6 (1) (i), then also, the case being in conflict with section 28, the latter section would prevail over the former.
[26D & 32E]
</s>
|
<s>[INST] Summarize the judgementAppeal No. 486 of 1962.
Appeal by special leave from the judgment and decree dated September 24, 1959, of the Patna High Court in Miscellaneous judicial Case No. 318 of 1957.
A.V. Viswanatha Sastri and P. K. Chatterjee, for the appellants.
K. N. Rajagopal Sastri and R. N. Sachthey, for the respondent.
March 27.
The judgment of the Court was delivered by HIDAYATULLAH J.
This is an assessee 's appeal by special leave of this Court against an order of the High Court of Patna, answering in favour of the Department the question "whether in the circumstances of the case the amount of Rs. 51,000 being the value of high denomination notes encashed by the assessee, has been validly taxed as profits from some undisclosed business".
The original assessee, Rai Bahadur H. P. Banerjee, is dead.
His son, who was substituted in his place, also died during the pendency of the proceedings in the High Court.
The present appeal has been filed by the widow of the son and other legal representatives.
Banerjee was the owner of several collieries in the Jharia Coal fields in the State of Bihar and 555 was also a contractor for raising coal.
This matter relates to the assessment year 1946 47.
For that year, Banerjee was assessed on an income of Rs. 1,28,738.
The assessment was then re opened under section 34 of the Indian Income Tax Act, and was enhanced, but subsequently on appeal, it was reduced to a sum a little below the original assessment.
The present assessment was made on a second re opening of the case under section 34 in the following circumstances.
On January 22, 1946, Banerjee encashed high denomination notes of the value of Rs. 51,000/ .
In his application under the Ordinance which demonetized high denomination notes, Banerjee gave the reason for the possession of the notes as follows: "I am engaged in business as colliery proprie tor, contractor under Messrs. Kilburn & Co. in the name and style of H.P. Banerjee & Son and also under the State Rly.
Bokaro, Swang, Hazaribagh district in the name of Jharia Dhanbad Coal & Mica Mining Co. . .
For conducting the business and payment to labour, I have to pay every week between 30/40 thousand as I did not get payment for work done every week.
I had to keep large sum of money to meet emergency. . . .
It is neither profit nor part of profit it is very floating capital for purpose of conducing business.
It is not an excess of profit".
He stated that he had accounts with (1) Imperial Bank of India, (2) Nath Bank Ltd., jharia, and (3) Central Bank of India Ltd., Bhowanipore Branch, but added that he did not remember exactly from which Bank the notes came into his possession, as his transanctions were frequent.
The notice which was issued to him under section 34 of the Income Tax Act, was not questioned on any of the grounds which are usual in such cases.
Banerjee 's explanation 556 was not accepted.
The Income Tax Officer pointed out that although his business was large and the withdrawals from the various banks were large and frequent, he had not maintained a central account showing withdrawals from the banks and remittances made to his various businesses, and that none of the books maintained by the assessee and produced by him, contained a bank account.
The Income Tax Officer found a discrepancy of nearly Rs. 50,000 in the statements filed by the assessee.
He, accordingly, treated the high denomination notes as profits from some undisclosed source and assessed them as assessable income.
Banerjee appealed to the Appellate Assistant Commissioner and further to the Tribunal.
Both the authorities upheld the order of the Income Tax Officer.
The assessee demanded a case which was refused, but the High Court directed a statement of the case on the question already quoted.
The High Court decided the question against the assessee, and hence this appeal.
The connection of the appellants is that since the Department had issued a notice under section 34 of the Income Tax Act, it was incumbent on the department to establish that the amount in question was income which had escaped assessment.
The appellants also contend that even if the assessee was required to prove the source of the high denomination notes, he had sufficiently proved it by showing that he had large amounts on hand, which were held for convenience in high denomination notes.
The appellants thus submit that the burden, if any, upon the assessee was discharged in the case, and the evidence being unrebutted, the additional assessment could not be made.
The appellant rely upon Kanpur Steel Co., Ltd. vs C. 1.
T. (1) where, according to the appellants, the Allahabad High Court explained the nature of burden of proof in the way contended for by the appellants.
They (1) 557 claim that the Allahabad case applies to the facts here and point out that the said ruling was considered and approved by this Court in Lalchand Bhagat Ambica, Ram vs Commissioner of Income Tax, Bihar and Orissa (1).
Other cases have been cited on behalf of the department.
The cases involving the encashment of high denomination notes are quite numerous.
In some of them the explanation tendered by the tax payer has been accepted and in some it has been rejected.
The manner in which evidence brought on behalf of the tax payer should be viewed, has of course, depended on the facts of each case.
In these cases in which the assessee proved that he had on the relevant date a large sum of money sufficient to cover the number of notes encashed, this Court and the High Courts, in the absence of something which showed that the explanation was inherently improbable, accepted the explanation that the assessee held the amount or a part of it in high denomination notes.
In other words, in such cases, the assessee was held prima facie to have discharged the burden which was upon him.
Where the assessee was unable to prove that in his normal business or otherwise, he was possessed of so much cash, it was held that the assessee started under a cloud and must dispel that cloud to the reasonable satisfaction of the assessing authorities, and that if he did not, then, the Department was free to reject his explanation and to hold that the amount represented income from some undisclosed source.
The case which is strongly relied upon by the assessee is Kanpur Steel Co., Ltd. vs C. I. T.(2).
In that case, 32 notes of Rs. 1,000 were encashed.
It was claimed that they were part of the cash balance of the company which amounted to Rs. 34,000 odd.
The Income Tax Officer examined the entries regarding sales preceding the encashment of the notes and (1) (2) 568 found that those sales brought in sums under Rs. 1,000 and could not have resulted in the accumulation of so many high denomination notes.
The Tribunal then came to the conclusion that Rs. 7,000 only could have been held in high denomination notes.
On a reference, the Allahabad High Court held that the burden lay upon the Department to prove that Rs. 32,000 was suppressed income and there was no burden on the assessee to show whence he got the notes, because until demonetization, there was no idea that possession of high denomination notes would have to be explained.
The High Court also found that the explanation was fairly satisfactory, because big notes might have been received even in small transactions and change taken, and that the High Court could not make a conjecture how many notes could or could not have accumulated.
It is contended before us that the burden in such cases lies as stated by the Allahabad High Court.
On the other hand, in Manindranath Das vs Commissioner of Income Tax, Bihar & Orissa (1), the tax payer had encashed Notes of the value of Rs. 28,600, which he contended were his accumulated savings.
His explanation was accepted in respect of Rs. 15,000, because 15 notes could be traced to a bank, but was rejected in respect of the balance.
The Patna High Court pointed out that if an assessee received an amount in the year of account, it was for him to show that the amount so received did not bear the character of income, and the tax payer in the case had failed to prove this fact in respect of the remaining notes.
The Patna case finds support in A. Govindaraju Mudaliar vs Commissioner of Income Tax Hyderabad; (2), where it is laid down by this Court that if an assessee fails to prove satisfactorily the source and nature of an amount received by him during the accounting year, the Income Tax Officer is entitled to draw the inference that the (1) (2) [1958] 94 I.T.R .8.70 559 receipts are of an assessable nature.
In that case, the explanation of the assessee in respect of the amounts shown as credits for him in the account books of a firm of which he was a partner, was rejected as un true.
It was held that it was open to the Income Tax Officer and the Appellate Tribunal to hold that the amounts represented the concealed income of the assessee.
From the last two cases, it is plain that if there is receipt of an amount in the accounting year, it is incumbent in the first instance upon the assessee to show that it does not bear the character of income.
If be fails to do this, the Income Tax Officer may hold that it represents income of the assessee either from the sources he has disclosed or from some undisclosed source.
In applying this principle to the cases of encashment of high denomination notes, there is some difficulty when the assessee has books of account which are accepted and in which there is a cash balance sufficient to cover the amount of high denomination notes.
Each case must depend upon its own peculiar facts.
A few illustrative cases may be noticed, because they show some differences in the approach to the problem.
In Chunilal Ticamchand Coal Co., Ltd., vs Commissioner of Income Tax, Bihar and Orissa (1), high denomination notes of the value of Rs. 68,000 were encashed.
Evidence showed that the assessee was in the habit of keeping large sums which he kept intact for emergencies and meeting the current needs from withdrawals from the banks.
This explanation was supported by receipts and disbursement in the books of account.
The explanation was rejected as to a part because the accounts did not mention the high denomination notes and further because such notes were hardly needed to pay wages to labourers.
The Tribunal, however, held that the explanation might be true as to a part (1) 560 and accepted it in respect of Rs. 35,000, rejecting it in respect of Rs 33,000.
The Patna High Court held that the explanation which was held to be reasonable as to a part must be good for the whole, because there was no material on which it could be held that the balance constituted income from some undisclosed source to distinguish the case about the part rejected from the part accepted.
In Mehta Parikh & Co. vs Commsioner of Income Tax, Bombay, (1) high denomination notes of the value of Rs.61,000 were encashed.
The explanation was that they were part of the cash balance on hand.
The accounts disclosed that in order to sustain the explanation, it would have to be presumed that the entire balance on January 1, 1946, was held in 18 notes of Rs. 1,000 each and that all receipts up to. ' January 18,1946, when the notes were encashed, were also in High denomination notes.
The affidavits of persons who stated that they had paid amounts in Rs.1,000 notes were not accepted.
The Tribunal accepted the explanation as to Rs.31,000 only.
This Court held that if the account books were accepted and the deponents were not crossexamined on their affidavits, the rejection of the explanation as to a part proceeded only on surmise and the finding that Rs.30,000 were income from some undisclosed source was based on no evidence.
It may be pointed out that Venkatarama Ayyar J., in that case, chose to rest his decision on the second ground only, treating the decision as involving an error of law.
But in Sovachand Baid vs Commissioner of Income Tax, (2) high denomination notes of the value of Rs.2,28,000 were encashed.
The assessee stated that he had inherited that amount from his father in 1942, and produced account books from 1926 to 1942.
He did not produce earlier account books.
The Tribunal found that the books were such as could be written at any time and did not contain full dealings even between 1926 and (1) (2) , 561 1942, and there were no entries showing that any amount as such was received from business.
The Tribunal, however, held that Rs.1,28,000 only was income from some undisclosed source.
The assessee 's appeal in this Court was dismissed, because the rejection of the account books was held to be reasonable in the circumstances of the case.
This Court observed that the partial rejection of the explanation by the Tribunal must be treated as a concession rather than a reasoned conclusion.
We now come to Lalchand Bhagat 's case which is strongly relied upon, particulary, as it has cited the Allahabad case, so it is said, with omplete approval.
It is therefore, necessary to examine it closely to see if there is such an approval.
In that case, 291 high denomination notes of the value of Rs.2,91,000 were encashed.
The assessee was maintaining for a long time past two accounts: one was known as "Almirah Account", and other, "Rokar Account".
On the date the notes were encashed there was a balance of Rs.2,81,397 in the almirah account and Rs.29,284 in the rokar account.
These two amounts between them were sufficient to cover the encashed notes.
The explanation was that for the purposes of the business which was distributed in many branches, a large amount of ready cash was always kept at the head office, so that any emergency might be met.
The business of the assessee was admittedly extensive and the almirah account had also existed for several years.
Except in the previous year in which the high denomination notes were encashed, even the numbers of the high denomination notes used to be shown in the almirah account.
The explanation was rejected on the ground that those were the days of emergency and the assessee, as a grain dealer, could have secretly made money by smuggling grain, and that he had once been prosecuted, though acquitted.
It was also said that the area where he did his business was 562 notorious for smuggling and also that he had speculated in the year and might easily have made profits, though he had returned a loss from speculation.
Emphasis was also laid upon the fact that in the year of account, the numbers of the high denomination notes were written subsequently.
The Tribunal accepted the two books of account as genuine and also that there was a balance of Rs.3,10,681 with the assessee.
Before the Tribunal it was explained that in the year of account the numbers of the high denomination notes were inserted in the almirah account out of nervousness owing to the demonetization of the notes.
The Tribunal accepted the explanation with regard to Rs. 1,50,000 and rejected it with regard to Rs.1,41,000.
No reasons were given for distinguishing the good part of the explanation from the bad.
This Court examined the reasons and held that except for the insertion of the numbers of notes in the book, none of the other reasons had any probative value and that they were mere conjectures and surmises.
This court pointed out that if the explanation for the interpolations was good for the acceptance of the explanation as to Rs.1,50,000, it must be held to be good also for the balance, because there was nothing to distinguish between the two parts.
This Court, therefore, pointed out that the main question about Rs.1,41,000 was whether there was any material to justify a different conclusion in respect of that amount and pointed to the following facts.
The assessee had established the need for keeping a large sum on hand and had proved the almirah account as a genuine account.
The almirah account contained the numbers of the high denomination notes in the years previous to the year relative to the assessment.
In that year, the numbers were inserted subsequently and this was the only substantial point against the assessee.
This Court also pointed out that there were statements of banks and accounts 563 of the branches and of beparis, showing that large amounts were received by the assessee, which made up the amount in the almirah account.
Between February 6, 1945 and January 11, 1946, when the notes were encashed, sum,, above Rs. 1,000 received by the assessee aggregated to as much as rupees five lakhs.
As the almirah account was not questioned by the Tribunal at all, and out of that amount, more than half was held to be in the shape of high denomination notes, this Court posed the following question: "Was there any material on record which would legitimately lead the Tribunal to come to the conclusion that the nature of the source from which the appellant derived the remaining 141 high denomination notes of Rs. 1000 remained unexplained".
The Court, therefore, concluded "If the entries in the books of account in regard to the balance in the Rokar and the balance in the Almirah were held to be genuine logically enough there was no escape from the conclusion that the appellant had offered reasonable explanation as to the source of the 291 high denomination notes of Rs. 1000 each which it had encashed on January 19, 1946".
The case of assessee was thus accepted in toto.
This Court did not hold that the assessee need not prove anything.
As we have said earlier, the burden of proof must depend on the facts of the case.
One such fact may be the existence of a large floating cash balance on hand, and taken with other facts, may be sufficient to show that the high denomination notes constituted the whole or part of that balance.
In the Allahabad case, such a balance was proved and was accepted as to a part by the 564 Tribunal.
The High Court held that the explanation was good for the whole of the amount of the notes.
No doubt, this Court, in referring to that case, summarised the reasons, but it pointed out that it was not open to the Tribunal to make a guess as to the number of high denomination notes which could be accepted, and cited the Allahabad case and some others in that connection.
It seems to us that the correct approach to questions of this kind is this.
If I here is an entry in the account books of the assessee which shows the receipt of a sum or conversion of high denomination notes tendered for conversion by the assessee himself, it is necessary for the assessee to establish, if asked, what the source of that money is and to prove that it does not bear the nature of income.
The Department is not at this stage required to prove anything.
It can ask the assessee to bring any books of account or other documents or evidence pertinent to the explanation if one is furnished, and examine the evidence and the explanation.
If the explanation shows that the receipt was not of an income nature, the Department cannot act unreasonably and reject that explanation to hold that it was income.
If, however, the explanation is unconvincing and one which deserves to be rejected, the Department can reject it and draw the inference that the amount represents income either from the sources already disclosed by the assessee or from some undisclosed source.
The Department does not then proceed on no evidence, because the fact that there was receipt of money, is itself evidence against the assessee.
There is thus prima facie evidence against the assessee which he fails to rebut, and being unrebutted, that evidence can be used against him by holding that it was a receipt of an income nature.
The very words "an undisclosed source" show that the disclosure must come from the assessee and not form the Department.
In cases of high denomination notes, 565 where the business and the state of accounts and dealings of the assessee justify a reasonable inference that he might have for convenience kept the whole or a part of a particular sum in high denomination notes, the assessee prima facie discharges his initial burden when he proves the balance and that it might reasonably have been kept in high denomination notes.
Before the Department rejects such evidence, it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession.
The Department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof.
It is within the range of these principles that such cases have to be decided.
We do not think that the Allahabad view puts no burden upon the assessee and throws the entire burden on the Department.
The case itself does not bear this out.
If it does, then, it is not the right view.
In the present case, the assessee claimed that the high denomination notes were a part of the cash balance at the head office.
The Income Tax Officer found that at first the cash on hand was said to be Rs. 1,62,022, but on scrutiny, it was found to be wrong.
Indeed, the assessee himself corrected it before the Appellate Assistant Commissioner and stated there that the balance was Rs. 1,21,875.
Ordinarily, this would have prima facie proved that the assessee might have kept a portion of this balance in high denomination notes.
But the assessee failed to prove this balance, as books of the assessee did not contain entries in respect of banks.
Though cash used to be received from banks and sent to the various places where works were carried on and vice versa, no central account of such transfers was disclosed.
There was also no account of personal expenses of the assessee and he had failed to prove why such large sums were kept on hand in one place when at each of the places where work was carried 566 on, there were banks with which he had accounts.
The Appellate Assistant Commissioner also went into the question and found that on the same day when the high denomination notes were encashed, a sum of Rs. 45,000 was drawn by cheque.
The next remittance immediately afterwards was of Rs. 16,000 to Bokaro, but Rs. 17,000 were withdrawn a few days before to meet this expense.
A withdrawal of Rs. 8,000 was made a day later and Rs. 20,000 were withdrawn ten days later to finance the business.
It appears that the money on hand (Rs. 45,000) was not touched at all, but on January 30, 1946, a further sum of Rs. 6,000 was withdrawn and not utilized, which made up the sum of Rs. 51,000 for which the high denomination notes were encashed.
On these facts, the Tribunal came to the conclusion that the high denomination notes represented not the cash balance but some other money which remained unexplained, and the Tribunal treatted it as income from some undisclosed source.
The High Court held on the above facts and circumstances that there were materials to show that Rs. 51,000 did not form part of the cash balance, and the source of money not having been satisfactorily proved, the Department was justified in holding it to be assessable income of the assessee from some undisclosed source.
In this conclusion, the High Court was justified, regard being had to the principles we have explained above.
The argument that as this was a case under section 34 of the Income Tax Act, it cast a special burden on the Department to show that this income had escaped earlier, need not detain us.
No doubt, proceedings under section 34 can only be commenced under the conditions prescribed in the section, but when the proceedings are validly commenced, there is no difference between an ordinary assessment and an additional assessment under section 34, and the same rule 567 as to burden of proof governs the additional assessment.
In our opinion, this appeal has no substance; it fails and is dismissed with costs.
Appeal dismissed.
[/INST]The assessee had encashed 51 high denomination notes of Rs. 1,000/ each in january, 1946.
The assessee 's explanation in his application for encashment of the notes was that he was a colliery proprietor and contractor, that for conducting the business and for payment to labour which came to about Rs.30,0001 to 40,000/ every week he had to keep large sums of money to meet emergency and that the sum of Rs. 50,000/realised by encashment of the notes was neither profit nor part of profit but was floating capital for the purpose of,conducting business.
The Income tax Officer did not accept this explanation and treated this amount as profit from some undisclosed 553 source and assessed it as assessable income.
The assessee contended that the burden lay on the department to establish that the amount in question was income liable to tax and that the department had failed to establish this.
Held that the department was justified in holding that Rs. 51,000/ was assessable income of the assessee from some undisclosed source.
It was not correct that the assessce was not required to prove anything and that the burden was entirely upon the department to prove that the amount received from the encashment of high denomination notes was income.
The correct position is as follows.
If there is an entry in the account books of the assessee which shows the receipt of a sum or conversion of the notes by the assessee himself, it is necessary for the asscssee to establish, if asked, what the source of that money was and to prove that it did not bear the nature of income.
The department is not at this stage required to prove anything.
If tile business, the state of accounts and dealing of the assewsee show that be might have, for convenience, kept the whole or part of a particular sum in high denomination notes, the assessee prima facie discharges his initial burden.
If the assessee does this the department cannot act unreasonably and reject that explanation to hold that it was income.
If the explanation is unconvincing, the department can reject it and draw the inference that the amount represents income either from the source already disclosed by the assessee or from some undisclosed source.
Before the department rejects such evidence it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession.
The fact that there was receipt of money or conversion of notes is itself prima facie evidence against the assessee on which the department can Proceed in absence of good explanation.
In the present case though cash used to be received from Banks and sent to the various places where works were carried on by the asscssee and vice versa, no central account of such transfers was disclosed.
There was also no account of personal expenses of the assessee and he failed to prove why such large sums were kept at hand in one place when at each of the places where work was carried on, there were Banks with which he had accounts.
Further though this large sum was kept on hand, further cheques were drawn to meet current needs and this amount remained untouched.
Kanpur Steel Co. Ltd. vs C. I. T. , Lalchand Bhagat Ambica Ram vs Commissioner of Income tax, Bihar and Orissa, ; Mahindranath vs
Commissioner of Income tax, Bihar and Orissa, [1955] 554 27 , A. Govindarajulu Mudaliar vs Commissioner of Income tax, Hyderabad, [1958] 34 , Chunilal Ticamchand Coal Co. Ltd. vs Commissioner` of Income tax, Bihar and Orissa,[1955] , Mehta Parikh & Co. vs Commissioner of Income tax, Bombay [1956] 30 and Soyachand Baid vs Commissioner of Income tax, [1958] 34 1.
T. R. 650, referred to.
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<s>[INST] Summarize the judgementAppeal No. 73 of 1953.
Appeal by special leave against the judgment and Decree dated the 31st January, 1950, of the High Court of judicature at Madras.
(Rao and Nayudu JJ.) in Appeal No. 409 of 1946 arising out of the judgment and Decree dated the 31st January, 1946, of the Court of the Subordinate judge of Bapatla in Original Suit No. 96 of 1944.
(1) 12 Rang.
243 (P.C.) 425 B. Somayya, Senior Advocate (M. Krishna Rao, with him) for the appellant.
D. Munikaniah, Senior Advocate (K. R. Choudhury, with him) for the respondent.
December 8.
The Judgment of the Court was ,delivered by MUKHERJEA J.
This appeal is directed against a Judgment and decree of a Division Bench of the Madras High Court dated the 31st January, 1950, reversing, on appeal, those of the Surbordinate judge, Bapatla, passed in Original Suit No. 96 of 1944.
The suit, out of which the appeal arises, was commenced by the infant plaintiff, now appellant before us, represented by his maternal uncle as next friend, for recovery of possession, on partition, of a half share in the properties described in the schedule to the plaint on the allegation that they were the joint family properties of himself and his father, the defendant No. 1, in which he had an equal share with the latter.
The plaintiff is admittedly the son of defendant No. 2, who is one of the legally married wives of defendant No. 1, but the latter denied that he was the father of the plaintiff and charged the plaintiff 's mother with misconduct.
The defendant No. 3 in the suit, who is the other living wife of defendant No. 1 and has no issue of her own, is alleged to have developed ill feeling and jealousy towards the plaintiff and his mother and poisoned her husband 's mind against them, so much so, that the defendant No. 1 had actually instituted a suit in the Court of the District Munsif at Ongole questioning the legitimacy of the plaintiff.
It was because of such conduct on the part of defendant No. 1 that the present suit had to be instituted.
The defence put forward by defendant No. 1 to the claim of the plaintiff was a denial of his paternity, and the whole controversy in the suit centered round the point as to whether the plaintiff was the legitimate son of defendant No. 1 by defendant No. 2, Ms second wife.
On the admitted facts of the case, there could be no question that the operation of section 112 of the Indian Evidence Act would be attracted and the 426 plaintiff being born during the continuance of a lawful wedlock between his mother and his alleged father, a Conclusive presumption of legitimacy would arise, unless it was proved that the parties to the marriage had no access to each other at any time when he could have been begotten.
The point for determination, therefore, was, whether on the evidence adduced in the case the defendant No. 1, upon whom the burden Of proving non access admittedly lay, had succeeded in discharging that burden.
The trial court decided this point in favour of the plaintiff and against defendant No. 1 and in that view substantially allowed the plaintiff 's claim.
On an appeal being taken against this decision by defendant No. 1 to the Madras High court, the learned Judges, who heard the appeal, came to the opposite conclusion and held that from the facts and circumstances of the case an inference of non access between the husband and the wife could reasonably be drawn.
The result was that the decision of the trial court was reversed and the plaintiff 's suit dismissed.
it is the propriety of this decision of the Madras High Court that is challenged before us on behalf of the plaintiff, to whom special leave to file the appeal in forma pauperis was granted by this court.
It may be stated at the outset that the presumption which section 112 of the Indian Evidence Act contemplates is a conclusive presumption of law which can be displaced only by proof of the particular fact mentioned in the section, namely, non access between the parties to the marriage at a time when, according to the ordinary course of nature the husband could have been the father of the child.
Access and non access again connote, as has been held by the Privy Council (1), existence and non existence of opportunities for marital intercourse.
It is conceded by Mr. Somayya, who appeared on behalf of the plaintiff appellant, that non access could be established not merely by positive or direct evidence; it can be proved undoubtedly like any other physical fact by (1) Vide Karapaya vs Mayandy.
12 Rang 243.
427 evidence, either direct or circumstantial, which is relevant to the issue under the provisions of the Indian Evidence Act, though as the presumption of legitimacy is highly favoured by law it is necessary that proof of non access must be clear and satisfactory.
Mr. Somayya has also not contended seriously before us that the principle of English common law (1), according to which neither a husband nor a wife is permitted to 'give evidence of non access after marriage to bastardise a child born in lawful wedlock, applies to legitimacy proceeding in India.
No such rule is to be found anywhere in the Indian Evidence Act and it may be noted that the old common law doctrine has itself been abrogated in England by the provision of section 7 of the Matrimonial Cause Act, 1950 (2 ).
The position in law being thus made clear, the question for our consideration primarily is whether the learned judges of the High Court came to a correct decision on the facts of the case.
For this purpose, it is necessary to have a clear picture of all the material events as they transpired in evidence, and we will begin with a narrative of the earlier facts about which there is little or no controversyl.
Defendant No. 1 admittedly married three wives.
The first wife died leaving a son aged 2 or 3 years at the time of her death.
The defendant No. I then married the mother if the plaintiff and that was in or about the year 1930.
From the time of this marriage down to about 1940 the couple seemed to have lived quite happily, except that there was no issue of the marriage.
Sometime before June, 1940, the plaintiff 's mother fell ill and was sent to the Government hospital at Guntur for treatment.
Her step son, that is to say, the son of defendant No. 1, by his predeceased wife,.
who was also suffering from certain ailments, at the time, accompanied her to the hospital.
After about a month both of them returned and as defendant No. 2 was medically advised to live separately from her husband for some time she went to her father 's place (1) Vide Russel vs Russel, ; (2)Vide Re Feniot, 428 The son of defendant No. 1 came back to the house ' of his father but his illness grew worse and in June, 1940, he died.
In August, 1940, defendant No. 1 married his third wife who is defendant No. 3 in the suit.
The case of defendant No. 2 is that her husband treated her well for about a year after he married the third defendant but later on grew cold and indifferent and began to neglect her.
She made a grievance of this to her husband, but the latter told her that she might ' go away.
Thereupon the defendant No. 2 did go to her father 's place and on 19th March, 1942, she filed an application in the Court of the District Munsif at Ongole praying for leave to use her husband in forma pauperis for separate maintenance.
There were allegations in the plaint of abandonment and neglect by the husband.
The defendant No. 1 in his answer to this application, which was filed on 7th September, 1942, denied that he neglected his wife, or was in any manner indifferent to her health and comforts.
It was averred that as the petitioner did not bear him any child and the son by his first wife unfortunately died, he had no other alternative but to marry a third wife for the sake of progeny.
It was expressly stated in the counter affidavit that the second wife was living all along in what was described as the mud terraced house and was getting her supply of food and other necessary articles from her husband ; as a matter of fact, after consuming all that she required for herself she was sending the surplus, that remained, to her parents.
It appears that, before this application for leave to 'Sue as a pauper was heard by the court, there was an amicable settlement arrived at between the parties through the mediation of certain well wishers and two documents, namely Exs.
P 5 and P 6, were executed by and between the parties both on the 28th September, 1942.
Exhibit P 5 purports to be a deed of maintenance and under it the husband agreed to pay a sum of Rs. 100 per annum for food and raiment to his second wife during the period of her natural life, the payment to be made by the 30th of Magha Bahula 429 every year.
Certain properties specified in the schedule to this document were kept as security for due payment of these amounts.
The only recitals in this document were that the executant married a third wife as no son was born to him by the second wife, that thereupon the second wife instituted a suit for maintenance against him, and that under the advice of respectable friends the document was executed with the provisions contained therein.
By exhibit P 6, the other document, a residential house, known as the mud terraced house, was given to defendant No. 2 for the purpose of her residence during her lifetime.
The material portion of the document stands as follows : "You are my wife.
Due to the affection I have towards you, I have given to you the property mentioned in the schedule hereunder . and this very day delivered possession of the same to you for your residential purposes for your lifetime.
Hence from now you shall live in the said house and without powers of gift and sale the schedule property shall, after your lifetime, pass to me and my heirs.
" Within a few days after the execution of his document defendant No. 1, on 5th of October, 1942, paid a sum of Rs. 100 to his second wife as maintenance allowance for one year in terms of the maintenance deed exhibit P 5, and the defendant No. 2 acknowledged payment of this money by putting her thumb impression on a receipt which has been marked exhibit D 3 in the suit.
It may be mentioned here that the defendant No. 1 bad sometime before built another house which is described as "tiled house" or "upstair house" and he probably had the intention of removing to that house.
As a matter of fact, however, he did not remove thereto, the ostensible reason assigned being that certain religious ceremonies connected with entering into a new house could not be performed.
It is the case of defendant No. 2 that, after these documents were executed and registered at Addanki, she came back to the mud terraced house and lived there, since then, for several months along with her husband.
During this period she became enceinte and when the 430 time for confinement came, she was taken to the Bayer Hospital at Cherala where on the 16th of October, 1943, she gave birth to the plaintiff.
After delivery, she resided with her child at her father 's house and her husband came there at times to visit them.
When the infant was 7 months old, she ;took him to her husband 's place but her husband asked 'her to remain for some time more with her father.
While staying at her father 's house, she received summons of a suit instituted by her husband (being Suit No. 326 of 1944) in the Court of the District Munsif at Ongole against her praying for cancellation of the maintenance deed and the deed of settlement mentioned above on the ground that she was unchaste and had become pregnant by "immoral ways" and that the son born of her was not his son.
It was after this notice that the present suit was instituted.
As the plaintiff was admittedly born on the 16th of October, 1943, he must have been conceived sometime towards the latter part of December, 1942, or the beginning of January, 1943.
The material point for consideration, therefore, is whether the defendant No. 1 has succeeded in showing that there was no opportunity of access between him and defendant No. 2 during this period ? The defendant No. 1 expressly stated in his deposition that his second wife was a perfectly chaste woman up to the time when the documents Exs.
P 5 and P 6 were executed, and, even when she received the maintenance allowance of Rs. 100 from him in October, 1942.
His specific case is that defendant No.2 did never come to reside with him in the mud terraced house after the compromise was arrived at in the maintenance case.
Where she stayed was unknown to him and he heard that she went to Eddanapudi where she was living an immoral life with her paramour, one Cherakuri Venkanna.
This part of the story of defendant No. 1, has not been, belived by either of the courts below and may be rejected as altogether untrustworthy.
The learned judges of the High Court, although they disbelieved the specific allegation of un chastity made against defendant No. 2 by her husband 431 and did not find that &he was at Eddanapudi at the material period, yet relied on two sets of facts to be noticed presently, as establishing conclusively that defendant No. 2 did not live at the mud terraced house at any time after October, 1942, when she received the sum of Rs. 100 as maintenance allowance for one whole year from, her husband.
The learned judges found, therefore, that there was no opportunity for intercourse between defendant No. 2 and her husband at the period when the boy must have been conceived.
In the first place, the High Court takes the documents Exs.
P 5 and P 6 as amounting to a sort Of separation arrangement under which the parties agreed to live separately from each other and this, according to the learned judges, fully bears out the story of the husband that defendant No. 2 never came to reside in the mud terraced house.
The receipt of a sum of Rs. 100 by defendant No. 2 as advance payment of maintenance allowance for one year on 5th of October, 1942, indicates, according to the learned judges, a final confirmation of the separation arrangement and from this time onwards there was a definite cessation of marital relations between the parties.
The second set of circumstances relied upon by the High Court are the events which happened subsequent to 5th of October, 1940, and which fortify the theory of a sepa ration between the husband and the wife.
It is said that the story of defendant No. 2 that her husband accompanied her to the Bayer Hospital at Chirala when she went there for her confinement is incredible.
It is equally incredible that defendant No. 2 did remain in her father 's house for so long a period after delivery with the consent of her husband.
It would be an extremely unnatural conduct on the part of the husband, according to the High Court, if, as the evidence shows, he refused to recognise his own son when he was taken to him seven months after his birth and there is no explanation as to why he would file a suit for cancellation of the maintenance deed and the deed of settlement, by imputing unchastity to his wife and bastardy to his own son if the story of defendant 432 No. 2 about her previous relations with her husband was true.
In our opinion, the learned judges of the High Court approached the facts of the case from a wrong standpoint altogether and their conclusions are based for the most part upon surmises and speculations and not what was actually proved by the evidence.
There is no warrant, we think, for holding that the documents Exs.
P 5 and P 6 were in the nature of a separation agreement.
Such an inference not only goes against the tenor or the express terms of the documents but is not borne out even by the evidence of the mediators through whose mediation the documents were brought into being or of the persons who were admittedly present at the time when the documents were executed and signed the same as attesting witnesses.
Exhibit P 5, as stated already, simply mentions the fact of the third marriage of defendant No. 1 and the institution of a suit for maintenance by his second wife.
There is nothing in this document which even impliedly suggests that in consideration of receiving an allowance of Rs. 100 a year, the wife agreed to reside separately from her husband.
So far as exhibit P 6 is concerned, the gift is expressly stated to be an affec tionate gift by the husband to the wife and it clearly indicates that it was the intention of the parties that the wife should reside there, and delivery of possession of the house was given to the wife on the very same day that the document was executed.
We do not think that there is any justification for holding that these recitals were false and were not intended to be operative.
D. W. 8, who is one of the attesting witnesses to the documents and was examined on behalf of defendant No. 1, says in his deposition that the documents were read over to the executant and he executed them after consenting to the recitals.
P.W. 5, who was one of the mediators, says that defendant No. 2 used to live in the mud terraced house after compromise.
Unless there is cogent evidence to the contrary and apparently there is no such evidence in the present case we should certainly 433 presume that, the document exhibit P 6 was acted upon and that the possession of the mud terraced house was actually given to defendant No. 2 in accordance with its terms.
The High Court, in its judgment, records a rather curious finding on this point.
"It may be," ' thus the judgment runs, "that even down to exhibit D 3 one may presume that in the very house allotted to her by exhibit P 6 she lived, so that up to the date of exhibit D 3 it may be that there is no impossibility of cohabitation between the parties.
The real trouble arises with reference to the state of affairs after exhibit D 3.
We find in exhibit D 1 1 which is the plaint in O.S. No. 326 of 1944 filed by the present first defendant against the present second defendant for a cancellation of Exs.
P 5 and P 6 that he makes a definite allegation therein that from the time that the plaintiff married his third wife there has not been any bodily connection between him and the defendant.
" The learned judges, in our opinion, misdirected themselves in allowing these statements made by the husband himself in the suit instituted by him nearly two years after the material period, to influence their decision in regard to the effect of exhibit P 6.
Defendant No. 1 definitely admits that his second wife was perfectly chaste at the time when the sum of Rs. 100 was given to her on 5th of October, 1942, and the receipt exhibit D 3 was taken.
There is not a scrap of evidence to show that there was any bitterness of feelings between the parties at that time.
There could be no doubt that the feelings of the husband were changed and had become extremely bitter towards the plaintiff 's mother before he filed the suit for cancellation of the deeds in July, 1944; but the statements made by the husband in the plaint in that suit were made long after the dispute arose between the parties, no matter whatever the reason might be which gave rise to the dispute.
In our opinion, the subsequent conduct of defendant No. 1 or the statements made by him in the suit of 1944 could not be regarded as part of the res gestae and were not admissible as evidence against the plaintiff.
The ,defendant No. 1 could not certainly constitute himself an agent of the plaintiff for the purpose of making 434 admissions against the interest of the latter.
If the story.
of defendant No. 1 that the wife went to Eddanapudi and lived there an immoral life is disbelieved, as it has been disbelieved by the High Court, the conclusion becomes irresistible that she did reside at the mud terraced house as alleged by her and this is fully borne out by the terms of the document exhibit P 6.
There is no evidence of any unnatural conduct on the part of defendant No. 1 towards the plaintiffs mother at about the time when the plaintiff was conceived.
We do not consider it unreasonable, much less unnatural, if the father of defendant No. 2 alone took her to the hospital at Chirala at the time of her delivery and himself bore all the hospital expenses; nor is it a matter to be surprised at if defendant No. 2 after delivery stayed for several months with her infant child in her father 's house.
Apparently for some reason or other, the husband took up an unnatural attitude, but this was a subsequent event and whether he had really any grievance against his wife, or his unnatural behaviour was due to the instigation of his third wife, it is not necessary for us to investi gate.
On the evidence, as it stands, we are clearly of opinion that the defendant No. 1 did not succeed in proving that there was no opportunity for intercourse between him and defendant No. 2 at the time when the plaintiff was conceived.
He rested his whole case upon the allegation of unchastity of the plaintiff 's mother and of the plaintiff being born as the result of fornication.
While rejecting that story, the High Court, in our opinion, erred in holding that there was no opportunity for access between the parties at the material period, relying mainly upon what the husband himself said and did much after the estrangement of feelings took place between the parties, no matter whatever that was due to.
In our opinion, on the evidence in the record thefindings of the High Court cannot possibly stand.
The result is that the appeal 'is allowed, the judgment and decree of the High Court are set aside and those of the trial judge restored.
The plaintiff will have his costs of all the 'courts.
435 The court fees payable to the Government will come out of defendant No. 1 in this case.
We certify for two counsel and an agent in this appeal.
Appeal allowed.
[/INST]A joint Hindu family consisting of two branches owned a sugar mill.
After partition, the two kartas entered into a partnership in 1943, to carry on the business of the sugar mill.
The two partners represented the respective joint families, and the partnership deed provided that the death of any of the parties shall not dissolve the partnership and either the legal heir or the nominee of the deceased partner should take his place.
One of the kartas died in 1945 leaving as members of his branch of the family, three widows and two minor sons.
The other partner continued the business of the sugar mill in the firm name.
For the assessment year 1950 51, the assessee (respondent firm) applied for registration on the basis of the partnership agreement of 1943.
The Income tax Officer, Appellate Assistant Commissioner and the Tribunal held that there was no partnership between the members of the two families after the death of one of the kartas.
On a reference to the High Court, it was held that the partner ship business was carried on by the representatives of the two families after the dent), of one of the kartas.
In the appeal to this Court, on the question as , to whether during the assessment year 19 50 51, the assessee, was a firm within the meaning of section 16(1) of the Income tax Act, 1922, or an association of persons.
HELD: The High Court was wrong in its finding.
But, as a result ,of the concession by the appellant, that there was a partnership from 13th December 1949, when one of the minor sons had become a major, the status of the assessee was that of a firm for the assessment year 1950 51.
[498B] A joint Hindu family as such cannot be a partner of a firm, but it may through its karta enter into a partnership with the karta of another family.
[495H] Kshetra Mohan Sanyasi Charan Sadhukhan v, Commissioner of Excess Profits Tax, [19541 S.C.R. 268.
followed.
A widow, though a member of a joint family, cannot become its manager.
[495B] Commissioner of Income tax, C.P. & Berar vs Seth Lakshmi Narayan Raghunathdas, and Pandurang Dakhe vs Pandurang Gorle.
I.L.R. overruled.
Therefore, in the instant case, when one of the kartas died, the partnership had come to an end.
There was no scope for applying section 42(c) of the Partnership Act, 1932, because, the section is applicable only to a partnership with more than two partners.
In such a case.
if one of them dies, the firm is dissolved, but if there is a contract to 488 489 the contrary, the surviving partners will continue the firm.
On the other hand, if there are only two partners and one of them dies, the firm automatically comes to an end and, thereafter, there is no partnership for a third party to be introduced.
Section 31, which deals with the validity of a contract between the partners to introduce a third party into the partnership without the consent of all the existing partners, presupposes the subsistence of a partnership and does not apply to a partnership of two partners, which is dissolved by the death of one of them.
[492E H] Hansraj Manot vs Messrs, Gorak Nath Pandey, , disapproved.
Further, there was no evidence that the representatives of the two families constituted a new partnership and carried on the business of the sugar mill before 13th December 1949, when, it was conceded a new partnership had come into existence.
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<s>[INST] Summarize the judgementCIVIL Appeal No. 2609 of 1983.
Appeal by Special leave from the Judgment and order dated the 1st July, 1982 of the Bombay High Court in Appeal No. 215 of 1981.
D. V. Patel, T. U. Mehta, H. J. Zaveri for the Appellants.
As the matter brooked no delay, after granting special leave to appeal.
we proceeded to hear the appeal on merits.
When hearing was over.
we pronounced the following order and stated that the reasons would follow.
The order reads as under: "The appeal is allowed and the order made by the learned Single Judge as well as the Division Bench of the Bombay High Court rejecting the Judge 's Summons taken out by the appellants is set aside and the Judge 's Summons is granted to the extent indicated herein.
The appellants shall deposit Rs. 1,50,000 by or be fore March 1, 1983 in this Court.
Respondent No. 2 Smt.
Sabita V. Adapa shall hand over vacant and peaceful possession of the property being a shop Nos.
8/9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' and now styled as 'Ram Kutir ' situated at Station Road, Andheri, Bombay 400058 to the liquidator on or before February 28, 1983 who shall forthwith hand over possession on March 1, 1983 to the appellants, after taking a statement from the appellants that they have deposited the amount Rs. 1, 50, 000 in this Court as herein indicated.
On respondent No. 2 handing over vacant and peaceful possession of the afore mentioned shops to the liquidator by or before February 28, 1983, the liquidator shall forthwith refund to her the security deposit of Rs. 28,800 deposited by the second respondent with the liquidator.
Respondent No. 2 will be at liberty to remove all furniture and fixtures placed by her in the suit shop without Causing damage to the property.
The amount of Rs. 1, 50, 000 to be deposited by the appellants in this Court will with the consent of the appellants be disbursed according to the direction to be given by this Court to the needy and the deserving creditors of the Chit Centre Pvt. Ltd. already ordered to be wound up 660 by the High Court.
Neither the liquidator nor the creditors of Chit Centre Pvt. Ltd. have any right to claim this amount of Rs. 1,50,000 or any part thereof as it is an ex gratia payment made by the appellants for alleviating the misery if any of some of the hard hit creditors of Chit Centre Pvt. Ltd. The distribution of the aforesaid amount will be at the absolute discretion of this Court.
The appeal is allowed to the extent herein indicated with no order as to costs.
" These are the reasons.
On a winding up petition filed under the , a learned Company Judge of the Bombay High Court made an order on September 23, 1974 winding up Chit Centre Private Ltd. ( 'Company ' for short).
The Company had its office in shops bearing Nos. 8 and 9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' now known as 'Ram Kutir '.
On the winding up order being made, the official Liquidator who was appointed as Liquidator of the Company while taking possession of the assets of the Company also took possession of the office premises of the Company.
It is in this manner that the Liquidator acquired possession of shops Nos. 8 and 9, the premises involved in this appeal.
Subsequently, the Liquidator sought direction of the court on April 25, 1979 whether the premises should be let out on lease or licence or whether the furniture and fixtures in the premises should be sold ? The Court gave a direction that the premises be given on caretaker basis after obtaining a proper document on a compensation not less than Rs. 2, 250 per month.
Pursuant to this direction the Liquidator invited offers from persons willing to occupy the premises on terms and conditions laid down by the Court.
On July 2, 1980, the Liquidator sought the direction of the Court whether to accept the offer of M/s Modern Caterers represented by respondent No. 2 herein, Smt.
Sabita V. Adapa.
The Company Judge by his order dated July 3, 1980 directed the Liquidator to accept the offer as modified by the Court of the second respondent.
The Liquidator there upon entered into an agreement on July 29, 1980 with the second respondent and gave possession of the premises to the second respondent on terms and conditions set out in the agreement.
Appellants herein are the Landlords of the building of which the premises involved in this appeal formed part.
Appellants took 661 out Judge 's summons praying for a direction to the Liquidator to terminate the caretaker 's agreement entered into with the 2nd respondent under the directions of the Court, and to hand over vacant and peaceful possession of the premises to the appellants.
There were other prayers in the Judge 's summons with which we are not concerned in this appeal.
The learned Company Judge repelled the contention of the appellants that the so called caretakers ' agreement entered into by the Liquidator with the 2nd respondent was in contravention of the various provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 as amended in 1973 ( 'Rent Act ' for short) and held that in substance and in form it was a caretaker 's agreement which was permissible.
Accordingly, the learned Judge rejected the Judge 's summons in respect of both the prayers.
Appellants preferred an appeal to the Division Bench of the High Court.
The Division Bench held that appellants were not entitled to the notice in respect of the report submitted by the Liquidator for directions in respect of the premises and further observed that the appellants had no right to the present possession of the premises, more so, because the appellants had already filed a suit for eviction in the Small Causes Court at Bombay against the official Liquidator and on this short ground the appeal was dismissed.
Hence this appeal by special leave.
The Company is already ordered to be wound up by the order of the Court dated September 23, 1974.
The name of the Company clearly spells out the objects for which it was formed.
The name of the Company was Chit Centre Pvt.
Ltd. The Company had undertaken the business of floating prize chit schemes.
The nature of business in modern times is sufficiently well known and does not require elaboration.
The Company had set up an office for carrying on this business and the office was set up in premises taken on lease.
The business of the Company of floating prize chit schemes came to a stand still, the moment it was ordered to be wound up.
It is not the Liquidators ' case that he is carrying on business of the Company which is being wound up with the permission of the Court under sec.
457 of the .
457 enables the Liquidators in a winding up by the Court, with the sanction of the court, amongst others, to carry on the business of the Company so far as may be necessary for the beneficial 662 winding up of the Company.
If the floating of the schemes for prize A chits came to a stand still, the moment the Company was ordered to be wound up, there was no question of the business of the Company to be carried on by the Liquidator and that too for the beneficial winding up of the Company.
Whether to carry on the business of the Company which is ordered to be wound up is not a matter left to uncontrolled discretion of the Liquidator.
The Liquidator undoubtedly has the power under sec.
457 to carry on the business of the Company, if it is necessary for the beneficial winding up of the Company.
And this power can be exercised not at the discretion of the Liquidator but with the sanction of the court.
Reliance was placed on In re Batey; Ex parte Emmanuel(1) wherein it was observed that the power to carry on the business can only be exercised for the purpose of the beneficial winding up of the Company not because the creditors may think that the business will be a very profitable one and that the longer it is carried on the better it will, and that they will make a profit from it.
Reliance was also placed on Panchmahals Steel Ltd. vs Universal Steel Traders,(2) wherein it was held that amongst others ' the Liquidator with the sanction of the court has the power to carry on business of the Company so far as may be necessary for the beneficial winding up of the Company.
It is true that the Liquidator cannot carry on business for any other purpose except the purpose for which the power is conferred upon him, namely, for the beneficial winding up of the Company.
He cannot carry on any business on the ground that it would be beneficial to the creditors or the contributors.
The jurisdictional fact which must be ascertained and established for the exercise of the power by the Liquidator to carry on business of a Company, is that carrying on of the business of the Company is necessary for the beneficial winding up of the Company. ' However, the language of the section being unambiguous and clear, one does not need the assistance of precedents to come to a conclusion that the Liquidator with the sanction of the court can carry on the business of the Company only to the extent that such carrying on of the business is necessary for the beneficial winding up of the Company.
Let it at once be made clear that there is no order of the Court brought to our notice which accorded the Court 's sanction to the exercise of the power to carry on the business of the Company by 663 the Liquidator, and we posed a question as to which business of the Company was to be carried on by the Liquidator? The business of A floating prize chits scheme has come to a stand still, the moment the Company was ordered to be wound up.
It is not for a moment suggested that a Liquidator was to float some prize chit schemes or that a pending scheme was to be continued or perused by him.
That is not even the Liquidator 's case nor was it so contended before the learned Company Judge.
The Liquidator has adopted a contradictory posture which the learned Company Judge has unfortunately overlooked.
If the Liquidator wanted to exercise power under Sec.
457 (1) (b) to carry on business of the Company so far as necessary for its beneficial winding up, the business which was to be carried on must be the business of the Company.
Giving premises on lease, licence or under caretaker 's agreement was not the business of the Company.
If some other business of the Company was to be carried, the use of the office premises would be necessary for carrying on the business of the Company.
If possession of the premises was to be retained for carrying on the business of the Company, the Liquidator could not have sought the direction of the court to hand over possession under.
any nomenclature such as lease, licence, caretaker 's agreement or any other facade to the second respondent.
Now if the Liquidator wanted to exercise power under Sec.
457 (1) (b), he ought to have, with reference to the object clause in the Memorandum of Association of the Company, shown that giving on lease or licence or under caretaker 's agreement was part of the routine business of the Company.
Such is not the case here.
In fact, as the business has come to a grinding halt, the office premises are of no use to the Liquidator.
He has therefore, devised a scheme by which he can knock out the compensation for the use and occupation of the premises, not necessary for the use of the Company, in contravention of the Rent Act and unfortunately the Court accorded sanction of this venture of the Liquidator disregarding the relevant provisions of the .
The Company was a tenant or a lessee of the premises of which the appellants are the landlords.
The date of the commencement of the lease is not made available to us, but it is also not claimed on behalf of the Liquidator that there was lease of long duration.
If so, the Company was a statutory tenant under the Rent Act.
The statutory tenancy confers the right to be in possession but 664 if the tenant does not any more require use of the premises, the provisions of the Rent Act and especially Secs.
13 and 15 completely prohibit giving the possession of the premises on licence or on sublease.
The learned Company Judge therefore spelt out a third way of parting with the possession by the Liquidator, namely, that he may give the premises to the second respondent under a caretaker 's agreement.
This caretaker 's agreement appears to us to be an euphemism for collecting compensation which is nothing else but the charge for use and occupation of the premises exclusively by the second respondent.
Whether it is sub lease or licence does not call for decision.
For the purpose of the present proceedings it is enough for us to say that the Company and its Liquidator no more needs.
the premises for its own use.
The Liquidator does not need the use of the premises for carrying on the winding up activities of the Company because he sought direction for parting with possession.
We are not impressed by the learned Judge saving that there is some third mode of parting with possession of the premises exclusively in favour of the second respondent, namely, caretaker 's agreement which appears to us to be a facade to wriggle out of the provisions of the Rent Act.
The Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitutes.
But this does not imply that the court should lend its aid to flout the provisions of the Rent Act so as to earn money by unfair and impermissible use of the premises.
And that is what the Liquidator sought to do and the Court extended its help to the Liquidator.
This, in our opinion, is wholly impermissible.
The learned Company Judge could not have authorised the Liquidator to enter into such an agreement and therefore his order is liable to be set aside.
In the appeal before the Division Bench, this aspect was not at all examined because it h stated that this aspect was not canvassed before the Bench hearing the appeal.
The point we have examined goes to the root of the matter and, therefore, we consider it immaterial whether the point was examined at the hearing of the appeal.
The learned Company Judge could not have permitted holding on to possession of the premises, not needed for efficiently carrying on winding up proceedings.
The only course open to him was to direct the Liquidator to surrender possession to landlords and save recurring liability to pay rent.
Before we part with this judgment, we must 665 take note of one submission that was made on behalf of the respondent.
It was said that the creditors and members of the Company in liquidation have suffered huge losses and if the Liquidator would have been permitted to enter into an agreement with the second respondent, it would fetch a steady income which would have gone towards mitigating the hardships of the creditors and members of the Company.
The accounts of the Company in liquidation were not brought to our notice nor can we permit violation of law howsoever laudable the object of such act may be.
However, we must record a statement made on behalf of the appellants when the aforementioned argument was being examined by us.
It was said that the second respondent was to pay Rs. 2,500 per month as compensation under the directions of the Court.
That would have fetched the Liquidator an income of Rs. 30,000 per year and deducting the costs, expenses and taxes, the Liquidator may have been able to realise at least Rs. 25,000 per year.
The learned counsel for the appellants submitted that adopting a multiplier of six, assuming that roughly six years was the period for which the agreement would have been renewed from year to year, the appellants unconditionally offered to deposit Rs. 1,50,000 in the Court to be distributed at the discretion of this Court amongst the creditors of the Company in liquidation.
We recorded this offer in our order disposing of the appeal.
We are now informed that the amount has been deposited.
The Liquidator is accordingly directed to submit the list of the creditors of the Company with the names, addresses and claims admitted by him within 4 weeks from today when the matter will appear again on board for directions.
These are the reasons which persuaded us to allow the appeal and make the order extracted at the commencement of this judgment.
H.S.K. Appeal allowed.
[/INST]The petitioner was convicted for the offence u/s 302 I.P.C. and sentenced to life imprisonment by the Sessions Judge.
The appeal preferred by him was dismissed by the High Court of Bombay in limine.
Hence the appeal by Special leave.
Allowing the petition and directing the High Court to admit the appeal and deal with it according to law, the court ^ HELD: An appellate Court has the undoubted power to dismiss an appeal in limine, as provided under section 384 of the Code of Criminal Procedure.
But, it is a power which must be exercised sparingly and with great circumspection, more so in a case where the conviction is for murder and the sentence is one of imprisonment for life, which are serious enough matters for the High Court to warrant admission of the appeal and fair and independent consideration of the evidence by the High Court.
Summary rejection of the appeal with the laconic expression, "dismissed" is a drastic step in such cases.[653 C E] To so reject an appeal is to practically deny the right of appeal.
Except in certain cases when an accused person has pleaded guilty and in petty cases every person convicted of an offence has a right of appeal under the Code; an appeal may be both against conviction and on facts and law.
A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion.
Therefore, it is necessary to make a speaking order, while dismissing a criminal appeal.
[653 E F] Mustaq Hussain vs State of Bombay, [ ; ; Ramayya vs State of Bombay, ; ; Vishwanath Shankar Beldar vs State of Maharashtra, ; Siddanna Appa Rao vs State of Maharashtra A.I.R. 1970 S C. 977; Narayan Nathu Naik vs State of Maharashtra, A.l.
R. ; Govinda Kadutji Kadam vs State of Maharashtra, ; Shaik Mohamed Ali vs State of Maharastra, A.I.R. 1973 S.C. 43; 652 K.K. Jain vs State of Maharashtra, A.l.
R. ; Jeewan Prakash vs State of Maharashtra, A.I.R. 1973 S.C. 278; Mustaq Ahmed vs State of Maharashtra, A.I.R. 1973 S.C. 1122; Krishna Vithu Suroshe vs State of Maharashtra, A.I.R. ; Sampata Tatyada Shinde vs State of Maharashtra, A.I.R. 1974 S.C. 791; and Dagadu vs State of Maharashtra, ; reiterated.
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<s>[INST] Summarize the judgementION: Criminal Appeal No. 31 of 1961.
Appeal by special leave from the judgment and order dated October 7, 1958 of the Andhra Pradesh High Court in Criminal Appeal No. 456 of 1957.
Ram Reddy for the appellants.
Ratna Rao and K R. Choudhri, for respondent No 1.
A. Ganganatham Chetty and T.M. Sen. for respondent No.2.
October 5.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The two appellants who were granted special leave by this Court, appeal against the judgment of the High Court of Andhra Pradesh convicting them, on appeal against acquittal, of an offence under.
380 of the Indian Penal Code and sentencing them to six months ' rigorous imprisonment and a fine Rs. 500/ each, with further rigorous imprisonment for one month in default of payment of fine.
The prosecution case which had a chequered career in the High Court and the two Courts below, is as follows: In Dusi, which is a part of Bhaskararaopuram, there was a Press known as Srinivasa Printing Press at Srinivasa Ashram.
This Press existed for over 17 years.
Pappala Chinna Ramadasu (P.W.4) was admittedly a printer and for some years, the declared keeper of that Press under section 4 of the Press and Registration of Books Act, 1867.
The declarations were made in 1944 (Ex.P.4) and 1947 (Ex.
On November 21, 1955, 10 Pappala Chinna Ramadasu sold this press by a registered document (Ex.P. 1 ) to one Boddepalli Lakshminarayana for Rs 4,000/ , of which Rs.3,500/ were shown to have been paid in advance and the balance was received by Pappala Chinna Ramadasu on January 10, 1956, (Ex.P.2).
Two applications were then made on December 1, 1955, respectively by Chinna Ramadasu and Boddepalli Lakshminarayana before the Collector and District Magistrate for substituting the name of Boddepalli Lakshminarayana in place of that of Pappala Chinna Ramadasu in the declaration.
On December 6, 1955, by exhibit P.11 they were informed that they should apply under the Press and Registration of Books Act (25 of 1867).
Subsequently, on January 11, 1956, a declaration under section 4 of that Act was made by Boddepalli Lakshminarayana and was accepted (Ex.P.3).
The case of the prosecution further is that Boddepalli Lakshminarayana went to Kurnool on March 20, 1956, and in his absence, the two appellants with two others (who were prosecuted but acquitted) removed the Printing Press on the night of March 25, 1956 to Korlakota where the first appellant, Apparao, resides.
A report of the offence (Ex.
P 13), purporting to be written on March 27, 1956, was handed in at the police station house on the following day at 8 P.m.
The police took no action, and a complaint was, therefore, filed on April 4, 1956, by Boddepalli Laksminarayana.
The Judicial Second class Magistrate, Srikakulam, convicted the two appellants of an offence under 8.
380 of the Indian Penal Code, and acquitted the two others, with whom we are not concerned, and sentenced each of the appellants to imprisonment till the rising of the Court and a fine of Rs. 250/ , with simple imprisonment for one month in default.
On appeal, the Additional District and Sessions Judge, Srikakulam, set aside the conviction and acquitted them.
The complainant then obtained special leave of the High Court to file 11 appeal against this acquittal, and the High Court reversed the acquittal, as already indicated above.
In support of the prosecution case, the complainant examined four witnesses, including himself.
Pappala Chinna Ramadasu was examined as P.W.4 to prove that he had sold the Press to Boddepalli Lakshminarayana, and two other witnesses were examined to prove the removal of the Printing Press by the appellants.
The defence of the appellants was as follows: According to them, the Press originally belonged to one Govindachari, and on October 25, 1947 he transferred it to Kuna Appala Naidu by exhibit D 2.
In the registered sale deed then executed, Govindachari was joined formally by Pappala Chinna Ramadasu.
The sale was for Rs. 6,400/ and on the same day, a promissory note was executed by Kuna Appala Naidu in favour of Govindachari, which was attested by Pappala Chinna Ramadasu.
Subsequently, Appala Naidu made payments of certain amounts, and endorsements on tho promissory note showing these payments were signed by Pappala Chinna Ramadasu as a witness.
Kuna Appala Naidu was examined as D.W.1, and he stated that, the name of Pappala Chinna Ramadasu was formally included in the transfer deed, since the declaration stood in his name.
He also stated that the deed, exhibit D.2, was signed as witness by one Akkala Naidu, who died years before the present controversy started.
Kuna Appala Naidu later sold the Press to the second appellant and one Sri K. Sriramda, and the second appellant continued in possession as owner.
Pappala Chinna Ramadas continued as the printer, and his declaration as the keeper of the Press also continued.
In 1953, Pappala Chinna Ramadasu left the Press for good.
The Press was leased out by the second appellant to one Appanna, and this leave continued till 1956.
On March 19, 1956, an agreement for leave was executed in favour of the first appellant, and on March 26, 1956, a registered deed was duly 12 executed.
According to the appellants, the Press WAS removed during the day on March 27 and the lease amount was paid on the 28th.
According to them, the second appellant was the owner, in law and in fact, of the Press and the first appellant was the lessee and had removed the Press in the bona fide exercise of his right as lessee.
The appellants examined eight witnesses in support of their case.
The case of the prosecution hinged upon the evidence of Pappala Chinna Ramadasu, when confronted with exhibit D 2, he denied his signature, and stated evasively that he could not identify the signatures of Govindachari and Appala Naidu.
He admitted, however, that Appanna used to look after the Press after 1953, though he said that he used to visit the Press once in two or three months before he sold it to P.W.1, and that the correspondence used to be made in his name.
He also stated that he had purchased the Press from the Madras Type Foundry Co., for RH.
9,107/ but that the bills were lost, and he added that they were taken away along with the Press, when it was removed.
The case of the appellants rested upon the proof of the signature of Pappala Chinna Ramadasu on Es.
D 2 and additionally the proof of the signature of Akkala Naidu, beoause if Akkala Naidu signed the document in 1947 and died some four years before the present controversy started, there would be good reason to think that a document of this character could not be a fabricated one.
The appellants examined a handwriting expert, Sri B. R. Singh (D.W.8).
He stated categorically that Ex.
D 2 bore tho signature of Pappala Chimla Ramadasu.
The signature of Akkala Naidu was proved by his son, Sri Rangam.
He identified the signature of his father not only on that document but also on exhibit D 3, the promissory Dote.
He also stated that h father had died in 1951.
From this material, the Additional District and Sessions Judge, Srikakulam, found that Ex D 2 13 was not a forged document, as was suggested, but was amply proved as genuine by Pappala Chandrudu (D.W 4) and the combined evidence of Sri Rangam (D. W. 3) and Sri B. R. Singh (D. W. 8).
He therefore, held that Pappala Chinna Ramadasu had no right to sell the Pres in 1955 to Boddepalli Lakshminarayana and that his connection with the Press had effectively ceased from.
1953 even as a mere printer.
It is unnecessary to examine whether this finding or the finding given by the Judicial Second Class Magistrate, Srikakulam, who held otherwise, was the correct inference from the. facts.
The learned Judge of the High Court, who heard the appeal against the acquittal, said nothing about exhibit D 2.
According to him, the removal of the Press amounted to theft, even though the appellants removed it under a bona fide claim of right.
In this statement of the law, the learned Judge was, with respect, clearly in error.
This is what the learned Judge observed: "Further, to a charge of theft, the plea that the property was removed under a bona fide claim of right would not avail.
For example a person who bona fide believes that the fountain pen on his neighbour 's desk is his has no right in law to trespass into the neighbour 's house and snatch away the pen without the latter 's content.
" The first of the statements is certainly not the law.
It is settled law that where a bona fide claim of right exists, it can be a good defence to a prosecution for theft.
An act does not amount to theft, unless there be not only no legal right but no appearance or colour of a legal right.
in 2 East .
659, the law was stated a long time ago thus: "If there be in the prisoner any fair pretence of property of right, or if it be brought into doubt at all, the court will direct an acquittal." 14 And according to I Hale P.C. 509, the best evidence is that the goods were taken quite openly.
The law thus stated by East and Hale has not been altered in modern times.
There are numerous cases in which Courts in India have recognised a bone fide claim of right as a defence to the charge of theft.
See Ratanlal law of Crimes 19th Ed.
p. 933.
We are not concerned in this case with the declaration under the Press and Registration of Books Act.
A declared keeper of the Press is not necessarily the owner thereof so as to be able to confer title to the Press upon another.
The ownership of the Press is a matter of the general law and must follow that law.
Whether Pappala Chinna Ramadasu was not only the declared keeper of the Press but also its owner can only be effectively decided by the Civil Court.
For purposes of Criminal law, the evidence prima facie pointed to a transfer of the Press by Pappala Chinna Ramadasu and Govindachari to Kuna Appala Naidu.
The evidence prima facie also established that the appellants had taken possession of the Press under a bona fide claim of right, and that, in our opinion.
was sufficient to dispose of the present case.
The Additional District and Sessions Judge, Srikakulam, had rightly held that the matter was for the decision of the Civil Court, and that this was not a case of theft under the Indian Penal Code, and had rightly directed the acquittal of the appellants.
The learned Judge of the High Court considered the declaration by Pappala Chinna Ramadasu, which continued Unchanged, as sufficient to prove an offence of theft.
In our opinion, in tho circumstances and in the light of the finding given by the District and Sessions Judge with regard to exhibit D 2, it was necessary to go further to see what right Pappala Chinna Ramadasu had to the Press at all.
If this had been considered, the learned Judge would have seen that there was some doubt the right of Pappala Chinna Ramadasu 15 to transfer the Press in 1955 to Boddepalli Lakshminarayana, and further that the defence that the appellants took possession of the Press under a bona.
fide claim of right was a good defence entitling them to an acquittal.
In the result, this appeal must succeed.
The convictions of the appellants and the sentences passed on them are set aside, they are acquitted and their bail bonds shall stand discharged.
The fines, if realised, are ordered to be remitted.
Appeal allowed.
[/INST]Under the powers conferred by section 8(1) of the Foreign Exchange Regulation Act, 1947, the Central Government issued a notification on August 25, 1948, placing a ban on the importation of gold except with the permission of the Reserve Bank.
Section 23A of the Act, which was introduced by an amendment in 1952, provided that". the restrictions imposed by section 8(1). shall be deemed to have been imposed under section 19 of the , and all the provisions of the Act shall have effect accordingly. " Section 19 of the , enabled the Central Government, by notification, to prohibit or restrict the bringing goods of any specified description into 787 India and, by reason of other :provisions of that Act, goods imported in contravention of the notification issued under section 19 were liable to confiscation.
In 1955, the , was amended by the introduction of section 178A in that Act, which provided, inter alia that "where goods were seized, under that Act in the reasonable belief that they were smuggled goods, the burden of proving that they were not smuggled goods shall be on the person from whose possession the goods were seized.
" On June 26, 1956, N, an employee of the respondent, on alighting at the Central Station in Madras From Bombay was intercepted by a Police Head Constable and, on a search of his clothing, four blocks of gold weighing about a thousand tolas were found in his possession.
The officers of the customs department interrogated him and, finding that lie was unable to produce any record for the purchase of the gold, seized from him the blocks of gold.
N admitted that he brought the gold for the respondent and enquiries were made to verify the story narrated by him as to the source from which he obtained the gold.
Thereafter the Collector of Customs being prima facie of the view that the gold seized had been smuggled, issued notice to the respondent to show cause why the said gold should not be confiscated.
The respondent offered his explanation bat the Collector held that the respondent bad not discharged the onus of proving that the gold was not smuggled, an onus which had been cast on him by section 178A of the , and directed the confiscation of the gold under section 167(8) of that Act.
The respondent challenged the legality of the action taken by the Collector of Customs on the grounds, inter alia, (1) that section 178A of the Sea Customs Act, 1873, was consti tutionally invalid as it was an unreasonable restraint on the citizen 's rights to hold property or to do business guaranteed by article 19(1)(f) and (g) of the Constitution of India and was not saved by cls.
(5) and (6) respectively of article 19; (2) that section 178A of the Sea Customs Act which was enacted in 1955 could not be invoked in adjudicating a contravention of a notification under the Foreign Exchange Regulation Act inasmuch as section 23A of the latter Act when enacted in 1952 in effect incorporated into that Act all the relevant provisions of the Sea Customs Act as they stood in ' 1952 with the result that any subsequent amendments to the Sea Customs Act could not affect section 23A; and (3) that the rule as to the burden of proof under section 178A was not attracted to the present case because the Customs Officer who effected the seizure did not, at the moment of seizure, entertain a reasonable belief that the goods seized were smuggled.
The Collector of Customs besides maintaining the legality of the order of confiscation, contended that the question raised in the case as to the constitutional 788 validity of section 178A of the Sea Customs Act was concluded by the decision in Babulal Amthalal Mehta vs The Collector of Customs, Calcutta Held: (1) that Babulal Amthalal Mehta vs The Collector of Customs, Calcutta, [1957] section C. R. II 10, was a decision as to the validity of section 178A of the Customs Act, 1878, with reference to article 14 of the Constitution of India only and that the question whether the said section was obnoxious to the rights guaranteed by article 19(1)(f) and (g) was not considered by that judgment.
(2) that the object of section 178A was the prevention and eradication of smuggling, inter alia of gold which was widely prevalent, and in view of the fact that without a Law in that form and with that amplitude smuggling might not be possible of being effectively checked, the restrictions imposed by that section being in the interests of the general public could not be held to be violative of the rights guaranteed by article 19 (1) (f) and (g), though it might operate somewhat harshly on a small section of the public.
Accordingly, section 178A does not contravene article 19(1)(f) and (g).
State of Madras vs V. G. Row, ; , Manohar Lal vs State of Punjab, ; and Ram Dhan Dass vs State of Punjab; , , relied on.
Pukhraj Champalal Jain vs D. R. Kohli, (1959) 61 Bom.
T. R. 1230, approved.
M.G. Abrol vs Amichand, (1 960) , disapproved.
Nathella Sampathu Chetty vs Collector of Customs, Madras, A. 1.
R. , reversed.
(3) that a seizure to which section 178A was applicable was merely a preliminary to the proceedings before a quasi judicial authority under section 182 and that it was only when the latter authority was, satisfied that the seizure was made "in the reasonable belief that the goods seized were goods that had been smuggled" that the rule of evidence laid down by section 178A came into operation.
(4) that the wording of section 23A of the Foreign Exchange Regulation Act, 1947, showed that the reference in it to section 19 of the , was merely for rendering notifications under the named provisions of the Foreign Exchange Regulation Act to operate as notifications under the and that it could not have the effect of incorporating the relevant provisions of the latter Act in the Act of 1947, and that, consequently, when a notification issued under section 8(1) of the Foreign Exchange Regulation Act was deemed for ail purposes to be a notification issued under section 19 of the 789 , the contravention of the notification attracted to it each and every provision of the which was in force at the date of the notification.
The, Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd., (1931) L. R,.
A. 259, held inapplicable.
(5) that, in the instant case, the circumstances present at the moment when the gold was taken by the Customs Officer at the Central Station did tend to raise a reasonable suspicion that the gold seized had been obtained illicitly and that this was sufficient to constitute in the words of the statute "a reasonable belief that the goods (gold) were smuggled."
</s>
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<s>[INST] Summarize the judgementCivil Appeals Nos.
308 313 Of 1977 Appeals by Special leave from the Judgment and Order dated the 8th September, 1975 of the Patna High Court in C.W.J.C. Nos.
1419/73, 467/74 and 522 of 1974.
L.N. Sinha, R.P. Singh, R.K. Jain, Suman Kapur, for the Appellant in CA.No. 308 of 1977.
R.K. Garg.
R.P. Singh, R.K. Jain & Suman Kapur, for the Appellant in CA.
309 of 1977.
600 R.K.Jain for the Appellant in CA.
310/77.
L.N. Singh and D.Gourdhan for the Appellant in CAs.
311 13 L.N. Sinha, D. Goburdhan for Respondents 3 7 in CA.
308/77 and for Respondents Nos. 2 6 in CA.
309/77 & for Respondents 2 to 4 in CA No. 310/77.
M.K. Ramamurthi D.P. Mukherjee for Respondents 12 13 in CA.
No. 308/77 & RR 9 10 in CA.
310/77.
U.S. Prasad for Respondent No. 4 in CA.
309/77.
G.L. Sanghi, Radha Mohan & M.L. Verma for RR.
1, 2 & 16 in CA.
309/77 & for R 11 in CA.
310 of 1977.
Jaynarain, R.P. Singh, R.K.Jain & Suman Kapoor for Respondents in CA.
311 313 of 1977.
A.K. Sen, Radha Mohan Prasad & M.L. Verma for RR.
1 & 2 in CA.
313 of 1977.
The Judgment of the Court was delivered by MISRA, J.
This bunch of appeals is directed against a common judgment and order of the Patna High Court dated 8th September, 1975 allowing three petitions under article 226 of the Constitution in part.
The material facts to bring out the points for consideration in these appeals lie in a narrow compass.
The Public Works Department in Bihar had a very small mechanical organisation.
In 1962, however, it undertook the execution of a World Bank project.
In that connection a number of mechanical overseers were needed.
As the project had to be executed on an emergency basis within a short time and 601 `there being dearth of qualified overseers, persons who were working only as sub overseers or persons who had appeared at the diploma examination in engineering, but had not passed the same, were appointed against the sanctioned posts on a provisional basis.
There were some others who were also appointed as mechanical overseers on temporary basis in the World Bank project, a wing of the Public Works Department, after appearing before a selection committee duly constituted according to r.1, Appendix II of the Bihar Public Works Department Code, Ist Edn., 1958, Vol.
This rule reads: "All permanent appointments to the Bihar Subordinate Engineering Service either by absorption of temporary or work charged Overseers and Estimators, or by direct recruitment, will be made by the Chief Engineer, provided that in the case of direct recruitment (permanent or temporary) appointment will be made on the advice of the committee of senior officers constituted for the purpose.
The committee will constituted for the purpose.
The committee will consist of three members including the Chief Engineer, who will be the Chair man of the committee.
The other two members will be nominated by him with the approval of the Government in the Public Works Department from time to time".
The Chief Engineer by orders dated 18th August and 26th September, 1964 appointed among others the following persons, already working as sub overseers in the department as temporary overseers against the sanctioned posts on their passing the diploma examination from the date of publication of their results of the diploma in mechanical/electrical engineering examination: 1.
Ramendra Singh 2.
Keshav Singh 3.
Bhola Nath Chaudhary 4.
Awadesh Kumar Singh 5.
Rajeshwar Sinha 6.
Ram Chandra Prasad 7.
Udai Narain Singh 8.
Sunil Kumar 9.
Rajnandan Pd.
Singh 10.
Gopal Ram 11.
Sidh Nath Singh 602 12.
Prem Chand Prasad, and many others who are not parties here.
It appears that a provisional gradation list of overseers was prepared.
Certain overseers who felt aggrieved by the provisional list made various representations and eventually a revised gradation list dated 17th November, 1973 was prepared, Some of the aforesaid twelve persons were promoted as Mechanical Sub Divisional officers by an order dated 13th March, 1974.
The revised gradation list dated 17th November, 1973 and the two orders dated 18th August and 26th September, 1964 appointing the aforesaid twelve persons as temporary overseers with retrospective effect and the order dated 13th March, 1974 promoting some of them as Mechanical Sub Divisional Offers were challenged by three separate writ petitions: (1) writ No. 1419 of 1973 filed by Shyam Dayal Pandey, (2) writ No. 467 of 1974 filed by Ful Chand, and (3) writ No. 522 of 1974 filed by Jagdish Prasad and Mohammad Shamsuddin.
The respondents in the three petitions including the aforesaid twelve persons were common, though differently numbered.
It would be convenient to identify the parties with reference to the writ petitions.
The writ petitioners therein will be referred to herein after as the petitioners and the above mentioned twelve persons, whose retrospective appointment has been challenged, as the contesting respondents.
The case of the petitioners in the three petitions has been that they were appointed as mechanical overseers on temporary basis in the World Bank project, a unit of the Public Works Department after appearing before a selection committee duly constituted according to r. 1 referred to above.
The appointment of the contesting respondents by orders dated 18th August and 26th September, 1964 with retrospective effect has been challenged on the ground that they were temporary mechanical sub overseers and had not got the requisite qualification for being appointed as overseers nor did they appear before committee as required by r. 1 of the PWD Code and in any case they could not be appointed with retrospective effect.
It was further pleaded that the contesting respondents were junior to the petitioners but in 603 the revised gradation list the contesting respondents were shown above the petitioners on the basis of the aforesaid two orders dated 18th August and 26th September, 1964.
The promotion of some of the contesting respondents as mechanical sub divisional officers was also bad on that account.
The contesting respondents as well as the State of Bihar filed a return justifying the appointment of the contesting respondents as well as the promotion given to some of the contesting respondents as mechanical sub divisional officer.
On the contentions of the parties, the High Court formulated the following points for consideration: 1.
Whether the impugned gradation list had been prepared in accordance with law? 2.
Whether the promotion of various respondents on the basis of the said gradation list is justified? 3.
Whether the appointment of the respondents was bad as they had not appeared before the selection committee? 4.
Whether the orders dated 18th August and 26th September, 1964 appointing the respondents and some of the petitioners as temporary overseers from the date of publication of their result of diploma in mechanical/electrical Engineering examination, are justified and in accordance with law and whether the same could have been made the basis for preparing the gradation list? While supporting the appointment of contesting respondents on merits two preliminary objections were raised on behalf of the contesting respondents about the maintainability of the writ petitions: 1.
None of the requisites of r. 1 of the PWD Code was complied with while constituting the selection committee and this being the position the petitioners themselves were not selected by 604 a duly constituted committee, and, therefore, they had no right to assail the gradation list and to challenge the appointment of the contesting respondents under article 226 of the Constitution.
The petitioners could not challenge the gradation list without assailing the orders dated 18th August and 26th September, 1964 on which the gradation list was based, and the petitioners could not be allowed to assail those orders after a lapse of about 10 years and if they were allowed to challenge the gradation list that would virtually amount to permitting the petitioners to challenge those orders.
The High Court overruled both the preliminary objections.
The first preliminary objection was overruled on the ground that the requirements of r. I of the PWD Code are not mandatory, they are merely departmental instructions which had not acquired the statutory force and the petitioners could not be non suited merely because there was no compliance of r. 1 of the Code.
The second preliminary objection was also overruled on the grounds: (a) that the petitioners had not prayed for the quashing of the entire orders but they were aggrieved only with that portion of the orders by which the contesting respondents were appointed retrospectively from the date of the publication of the results of diploma in mechanical/electrical engineering examination, which affected the seniority of the petitioners in the revised gradation list:(b) that the petitioners came to know of the two orders after the preparation of the revised gradation list on 17th November, 1973 wherein the contesting respondents were placed above the petitioners; (c) that the Court was mainly concerned with the revised gradation list, but with a view to find out the basis for preparation of the revised gradation list, the Court had to examine as to whether the retrospective appointment of the contesting respondents by the aforesaid two orders in the circumstances was valid.
If the Court holds that they could not have been appointed retrospectively that would simply change their position in the revised gradation list and that would not affect the appointment of the contesting respondents; and (d) that ignoring the claim of the petitioners on the ground of laches or delay is not a rule of law but a rule of practice.
Coming to the merits, the appointment of the contesting respon 605 dents was challenged by the petitioners on the ground that they had not appeared before the selection committee as required by r. 1 and therefore their appointment was illegal and at any rate they could not have been placed higher than the Petitioners in the revised gradation list.
The High Court negatived the contention on the self same ground on which the preliminary objection No. 1 was overruled.
Rule I of the PWD Code was merely a departmental instruction and it had not acquired.
the statutory force therefore, the appointment of the contesting respondents could not be held to be invalid merely because they had not appeared before the selection committee.
Besides, there was no such stipulation in their initial order of appointment nor were they called for appearing before the selection committee.
Keshav Singh and Sunil Kumar, two of the contesting respondents and one Shyam Dayal Pandey, one of the petitioners in one of the writ petitions, who were placed in similar situation as the contesting respondents who were placed in similar situation as the contesting respondents appeared before the selection committee but it was due to some misunderstanding on the part of the Executive Engineer (Workshop Division) under whom they happened to be posted although their original letter of appointment contained no such stipulation that they would have to appear before the selection committee.
On the crucial point Whether the two orders dated 18th August and 26th September 1964 making retrospective appointments were the various authorities cited before it.
The Court further held that the petitioners were initially appointed provisionally but after they appeared before the selection committee they were appointed temporally and, therefore, the services of the petitioners from the date of their appointment could be counted while fixing their seniority, whereas those of the contesting respondents, who were provisionally appointed could not have been counted for fixing their seniority.
It also held that the revised gradation list showing the contesting respondents above the petitioners on the basis of the two orders dated 18th August and 26th September 1964 was bad in law.
Consequently, the High Court quashed only that part ofeth 606 two orders which had fixed the date of publication of the result of diploma in mechanical/electrical engineering examination as the date of commencement of length of services of temporary overseers.
The seniority list prepared in pursuance of the order dated 17th November 1973, insofar as it relates to the contesting respondents vis a vis the petitioners in the three petitions was also quashed.
The order of promotion of some of the contesting respondents, namely, Ramendra Singh, Bhola Nath Choudhary, Rajeshwar Sinha, Ramchandra Prasad and Udai Narain Singh was also quashed.
The contesting respondents have now come to challenge the order of the High Court by special leave under article 136 of the Constitution.
The State of Bihar has also filed three separate appeals against the same order and for the same relief.
The crucial question for consideration in this case is whether the appointment of the contesting respondents, arrayed as appellants in the first batch of three appeals, by the two orders dated 18th August and 26th September, 1964, with retrospective effect is bad in law.
Shri A.K. Sen along with Shri G.L. Sanghi appearing for the petitioners, now arrayed as respondents in these appeals supported the judgment of the High Court.
Their main contention was that the contesting respondents had not acquired the requisite qualification on the date of their appointment and, therefore, their appointment by orders dated 16th August and 26th September, 1964, with retrospective effect was in the teeth of r. 1 of the PWD Code, and in any case there can be no retrospective appointment of the contesting respondents from the date of passing their diploma examination inasmuch as it affected the seniority of the petitioners in the revised gradation list.
Shri Lal Narain Sinha assisted by She R.K. Garg appearing for the (petitioners) contesting respondent appellants, raised the following three contentions: 1.
The impugned orders are about ten years old and the petitioners could not be permitted to challenge those orders after the lapse of such a long time.
607 2.
The High Court itself had made a discrimination inasmuch as the writ petitions against Keshav Singh and Awadesh Kumar Singh have already been dismissed.
In the absence of any statutory rule or rules framed under article 309 of the Constitution, it was open to the Government to make appointments to suit the exigencies of the situation.
The High Court has given detailed reasons for not accepting the contention of undue deal in filing the writ petitions.
It is not necessary to repeat those grounds over again.
We fully agree with the view taken by the High Court that the writ petitions filed by the petitioners could not be dismissed on the ground of laches.
As regards the second contention of Shri Lal Narain Singh, we are of the view that the mere fact that the writ petitions have been dismissed against Keshav Singh and Awadesh Kumar Singh, will not be a ground for setting aside the impugned order of the High Court.
The contesting respondents have to show that the two orders dated 18th August and 26th September, 1964 making retrospective appointments were valid one.
As regards the third contention, Shri Lal Narain Sinha submits that the executive power of the State is co extensive with its legislative power and therefore if the State can pass an enactment so also it can pass orders in exercise of its executive power, as contemplated by article 162 of the Constitution to suit the exigencies of a particular situation.
In the instant case, as stated earlier, the World Bank project was undertaken by the PWD in 1962.
A large number of mechanical overseers were needed as the project had to be executed on emergency basis within a short time and there being dearth of qualified hands persons who were working only as sub overseers or who had appeared at the diploma examination but had not passed were appointed against sanctioned posts and were permitted to draw the pay scale of overseers from the date of the passing of the diploma examination.
There is no denying the fact that the executive power of the 608 State is in no way narrower than the legislative power.
But the question is whether in exercise of that power the State in violation of article 16 of the Constitution could make retrospective appointment of the contesting respondents in the instant case so as to affect seniority of the petitioners.
For the respondents reliance was placed on State of Punjab vs Kishan Dass.
In that case pursuant to certain charges against a police constable his entire service with permanent effect was forfeited, which meant reducing his salary to the starting point in the time scale for constables.
The constable challenged the order by filing a regular suit.
The two courts below decreed the suit holding that there was flagrant violation of article 311 (2) of the Constitution as the impugned order amounted to reduction in rank.
This Court interpreted the expression 'reduction in rank ' and held: "The expression 'reduction in rank ' in the article, therefore means reduction from a higher to a lower rank or post when imposed as a penalty.
Therefore, an order forfeiting the past service which has earned a government servant increments in the post or rank he holds, however adverse it is to him, affecting his seniority within the rank to which he belongs, or his future chances of promotion does not attract the article.
His remedy, therefore, is confined to the rules of service governing his post.
" The impugned orders in the instant case may not have resulted in reduction of rank but all the same they affected the seniority of the petitioners which eventually might result in reducing their chances for promotion.
Reliance was next placed on B.N. Nagarajan & Ors.
vs State of Mysore & Ors.
One of the arguments advanced in that case was that till the rules are made in that behalf no recruitment could be made to any service.
This argument was, however, repelled by this Court, firstly because, it was not obligatory under proviso to article 309 to make rules of recruitment, etc.
before a service could be constituted or a 609 post created or filled; secondly the State Government had executive power in relation to all matters with respect to which the legislature of the State has power to make rules; and it follows from this that the State Government will have executive power in respect of List II, Entry 41, State public Services.
Relying on Ram Jawaya Kapoor vs State of Punjab.
Ram was held that it was not necessary that there should be a law already in existence before the executive is enabled to function and that the powers of the executive were limited merely to the carrying out of these laws.
There was nothing in the terms of article 309 of the Constitution which abridges the power of the executive to act under article 162 of the Constitution without a law.
The Court, however, put a word of caution in mentioning that if there is statuary rule or an Act on the matter, the Executive must abide by that Act or rule and it could not in exercise of executive power under article 162 of the Constitution ignore or act contrary to that rule or Act.
The second contention in the above case was that the Executive could not frame rules retrospectively unless the Act specifically empowers it to do so.
This Court, however, refrained from deciding this point because in their opinion the appeal could be disposed of on another ground.
This Court observed that assuming for the sake of argument that the Mysore State Government could not make rules retrospectively and that the rules were thus void so far as they operated retrospectively, proceeded to ignore those rules and to examine whether the appointments made on October 31, 1961 could be upheld.
The Court came to the conclusion that those appointments could be considered to have been validly made in exercise of the executive power of the State under article 162 of the Constitution.
For the appellants strong reliance was also placed upon Rajendra Narain Singh & Ors.
vs State of Bihar & Ors.
It was laid down in that case that in the absence of any legislation on the subject or a rule framed under the proviso to article 309 of the Constitution, the State Government could regulate its public services in the exercise of its executive power.
In the above case there was no statute or any rule framed under the provision to article 309 to determine the seniority as between the direct recruits and the promotees.
The determination of the seniority on the 610 basis of continuous officiation was held to be valid on the basis of the decision in S.B. Patwardhan 's case.
There is no gainsaying the fact that the executive power of the State is co extensive with the legislative power, but whether the exercise of the power can be in such a way as to offend article 16 of the Constitution.
The retrospective appointment of the respondents in the aforesaid writ petitions affected the seniority of the respondents.
This question, however, need not detain us as the point in question is covered by R.N. Nanjundappa vs T. Thimmiah & Anr.
In that case the respondent Thimmiah was appointed through the Public Service Commission as an Assistant Geologist in the Department of Geology in the Mysore Government in 1951 in the grade of Rs. 125 10 175.
When the Kolar Gold Fields School of Mines was set up in July 1957 the respondent was sent on deputation for two years as Vice principal of the School of Mines.
When the then Principal of the School of Mines, who was employed on a part time basis on an allowance of Rs. 200/ left on 22nd July 1958, the respondent who was Vice Principal and was also doing the duties of Principal since 15th February 1958, was appointed as officiating Principal with effect from 22nd July, 1958 in the grade of Rs. 500 30 800 by an order dated 25th September, 1958.
On 3rd April, 1959 the State Government in modification of the notification dated 25th September, 1958 appointed the respondent as temporary officiating Principal with effect from 15th February, 1958.
The Mysore Education Department Service Rules 1967 regularised the appointment of the respondent.
The relevant portion of the Rules reads: "Notwithstanding any rule made under the proviso to article 309 of the Constitution of India, or any other rules or Order in force at any time, Dr. T. Thimmiah, B.Sc. (Hons.) Ph.D. (Lond.) F.G.S. shall be deemed to have been regularly appointed as Principal, School of Mines, Oragaum, Kolar Gold Fields, with effect from 15 2 1958.
" This rule was challenged by the appellants on various grounds: 611 (a) That the respondent was governed by the Mysore Service Regulations, 1943, the Mysore State Civil Services General Recruitment) Rules, 1957 as well as the Mysore Education Department Services (Technical Education Department) (Recruitment) Rules, 1964.
(b) That the respondent was in Class III service and his appointment by the impugned regulation amounted to his promotion from Class III service to Class I.
If so, it is hedged by two limitations as contemplated by sub clauses (a) and (b) of rule 4 (3) of the Mysore State Civil Services Rules, 1957, i.e. (1) it has to be on the basis of merit and suitability with due regard to seniority from among persons eligible for promotion, and (2) it has to be on the basis of seniority cum merit from among persons eligible for promotion.
The stand of the respondent, however, was that (1) he was a local candidate in service and, therefore, the aforesaid rules did not apply to him and the regularisation of his appointment was valid; (2) under article 162 of the Constitution regularisation would in itself be a mode of exercise of power of appointment of the Executive Government.
Such an appointment even if made in the shape of rules under article 309 could not be attacked on the ground of being made for one person just as a piece of legislation could not be attacked on the ground of being made for a particular person or entity.
The High Court came to the conclusion that the appointment of the respondent could be regularised with effect from any date as he was a local candidate within the meaning of the Mysore Government Seniority Rules, 1957.
This Court in appeal, however, reversed the judgment of the High Court and observed: "No one can deny the power of the Government to appoint.
If it were a case of direct appointment or if it were a case of appointment of a candidate by competitive examination or if it were a case of appointment by selection recourse to rule under Article 309 for regularisation would not be necessary.
Assume that rules under Article 309 could be made in respect of appointment of one man but there are two limitations.
Article 309 speaks of 612 rules for appointment and general conditions of service.
Regularisation of appointment by stating that notwithstanding any rules the appointment is regularised strikes at the root of the rules and if the effect of the regularisation is to nullify the operation and effectiveness of the rules, the rule itself is open to criticism on the ground that it is in violation of current rules.
Therefore the relevant rules at the material time as to promotion and appointment are infringed and the impeached rule cannot be permitted to stand to operate as a regularisation of appointment of one person in utter defiance of rules requiring consideration of seniority and merit in the case of promotion and consideration of appointment by selection or by competitive examination".
The Court gave further reasons for holding the regularisation to be bad in law.
It observed: "This regularisation is bad for the following reasons, First, regularisation is not itself a mode of appointment.
Secondly, the modes of appointment are direct recruitment or selection or promotion or appointing for reasons to be recorded in writing an officer holding a post of an equivalent grade, by transfer, from any other service of the State.
The Government did not contend it to be a case of promotion.
If it were a case of promotion it would not be valid because it would be a promotion not on the basis of seniority cum merit but a promotion of some one who was in Class III to Class I. Even with regard to appointment under rule 16 by transfer of a person holding an equivalent grade the appointment would be offending the rules because it would not be transfer from an equivalent grade.
Again, merit and seniority could not be disregarded because the respondent was not in the same class as the Principal of the School of Mines.
The pay of the Principal was Rs. 500 800 where as the respondent was getting a salary of Rs. 165 in the grade of Rs. 125 165 plus an allowance of Rs. 75".
The Court also brought out the distinction between the scope of article 309 and article 162 of the Constitution.
It observed: 613 "There were 1957 rules which spoke of appointment by competitive examination or by selection or by promotion.
Even if specific rules of recruitment for such services were not made the rule as to appointment by competitive examination or Selection or by promotion was there.
Article 162 does not confer power of regularisation.
Article 162 does not confer ' power on the Government to make rules for the recruitment or conditions of service.
Rules are not for the purpose of validating an illegal appointment or for making appointments or promotions or transfer.
Rules under Article 309 are for the purpose of laying down the conditions of service and recruitment.
Therefore, regularisation by the way of rules under Article 309 in the present case by stating that notwithstanding anything in the rules the appointment of the respondent was being regularised was in itself violation of the rules as to appointment and as to cadre and also as to the proper selection".
In view of this clear authority, it cannot be argued for the appellants that they could be appointed with retrospective effect so as to affect the seniority of the respondents.
The orders dated 18th August and 26th September, 1964 which purported to appoint the sub overseers named therein as temporary overseers from the date of Publication of their result of diploma examination are clearly violative of articles 14 and 16 of the Constitution inasmuch as the petitioners had already been appointed as overseers by selection committee constituted under the rules contained in P.W.D. Code.
The order of temporary appointment by the impugned orders dated 18th August and 26th September, 1964 conferred national seniority on the contesting respondents for the period while they were actually working as sub overseers in the lower scale outside the cadre of overseers.
The High Court in our opinion was fully justified in allowing the writ petitions in part.
For the reasons given above the appeals must fail.
They are accordingly dismissed.
In the circumstances of the case, however, we allow the parties to bear their own costs.
P.B.R. Appeals dismissed.
[/INST]In connection with the execution of a World Bank Project on an emergency basis, which was required to be completed within a short time, the Public Works Department of the State needed a number of mechanical overseers.
Since at that time there was acute shortage of qualified overseers the Department had appointed, as overseers on provisional basis against the sanctioned posts, certain persons who were working in the department as sub overseers even though they had only appeared in the diploma examination in engineering but had not yet passed it.
In the meantime, the respondents (petitioners before the High Court) were selected by a Selection Committee constituted in accordance with he procedure laid down in Bihar Public Works Department Code.
After they passed the diploma examination the Chief Engineer had in 1964 appointed the appellants (contesting respondents before the High Court) as temporary overseers against the sanctioned posts from the date of publication of results of the diploma examination.
In 1973, a gradation list was prepared and some of the appellants were subsequently promoted to higher posts.
The respondents in a writ petition filed in the High Court had impugned the order of the Chief Engineer appointing the appellants reproductively as overseers on the ground that while they were appointed after following the procedure prescribed under the rules, the appellants at the time of their appointment as overseers were neither qualified to be appointed as overseers nor were they selected by a Selection Committee constituted under the rules and that in any event the appellants could not be appointed with retrospective effect.
Secondly, though the appellants shown as seniors to the respondents by the Chief Engineer 's orders of 1964, the appellants were in fact junior to them and that their later promotion was improper.
The High Court held that the Public Works Department Code in accordances with which the respondents were recruited directly contained merely departmental instructions and had not acquitted statutory force and that, therefore, the appointment of the appellants could not be held to be invalid on the ground that the department had no power to make retrospective appointments.
It however held that the revised gradation list, showing the appellants above the respondents, on the basis of the 1964 orders was bad in law.
Consequently, the High Court quashed that part of the two orders which had fixed the date of publication of the result of diploma examination as the commencement of length of service of temporary overseers.
599 In appeal to this Court is was contended on behalf of the appellants that since the executive power of the State is co extensive with its legislative power, in the absence of a statutory rule framed under Article 309 of the Constitution, it was open to the executive, in exercise of its executive power under article 162 of the Constitution, to make appointment to meet the exigencies of a situation.
Dismissing the appeal, ^ HELD: The impugned order of 1964 which purported to appoint the sub overseers as temporary overseers from the date of publication of their result of diploma examination are clearly violative of Articles 14 and 16 of the Constitution inasmuch as the respondents had already been appointed as overhears by a Selection Committee constituted under the rules contained in the public Works Department Code.
The 1964 order making the temporary appointments conferred national seniority on the appellants for the period they are actually working as sub overseers in the lower scales outside the cadre of overseers.
The impugned orders may not have resulted in reduction of rank but yet they did affect the seniority of the respondents which eventually might result in reducing their chances for promotion.
[613 D F] There is no gain saying the fact that the executive power of the State is co extensive with the legislative power and that it is not necessary that there should be a law in existence before the executive is enabled to function and the power of the executive is limited merely to the carrying out of the laws.
There is nothing in terms of Article 309 which abridges the powers of the executive to act under Article 162 of the Constitution without a law but yet if there is a statutory rule or an Act on a matter the exercise of its executive power under article 162, ignore or act contrary to that Rule or Act. [609 B C] B.N. Nagarajan & Ors.
vs State of Mysore & Ors.
; Ram Jawaya Kapur vs State of Punjab ; Rajendra Narain Singh & Ors.
vs State of Bihar & Ors.
; ; S.B. Patwardhan 's case ; and R.N. Nanjundappa vs T. Thimmiah & Anr.[1972] 2 SCR 799, referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 812 of 1980 Appeal by special leave from the judgment and order dated the 23rd November, 1979 of the Allahabad High Court in Civil Misc.
Writ No 479 of 1978.
R.K. Garg, V.J. Francis and S.K. Jain for the Appellant.
Shanti Bhushan, R.K Jain, P.R. Jain and Pankaj Kalra for Respondent No. 1.
116 The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against a judgment dated November 23, 1979 of the Allahabad High Court allowing a writ petition quashing the order of the Rent Control and Eviction officer and remanding the case to him for considering the question afresh in accordance with law and in the light of the observations made by the High Court.
The appeal involves a short and simple point but the case appears to have had rather a long and chequered career.
Put briefly, the facts of the case fall within a narrow compass so far as the points for decision are concerned.
The first respondent, Smt.
Rajkumari Jain, inducted Shri Thapalayal as a tenant in the premises in dispute which are situated in the town of Bijnor.
The tenant intimated his intention to the Rent Control and Eviction officer to vacate the premises on 25.6.1974 on receipt of the aforesaid application of the tenant a Rent Control Inspector was directed to visit the spot and after visiting the same he reported that the premises in question were likely to fall vacant on 9.6.74.
The prescribed authority by its order dated 1.6.74 allotted the premises to the appellant.
In fact, the appellant had applied to the authority on 20.5.74 for allotment of the accommodation to him.
It appears that these proceedings were taken behind the back of the respondent landlady who was not taken into confidence either by the appellant or by the Rent Control authorities.
It was only after the prescribed authority had allotted the premises to the appellant and the respondent landlady came to know of this fact that she moved the prescribed authority for cancellation of the allotment but her prayer was rejected.
Thereafter, the landlady filed an appeal before the Additional District Judge, Bijnor which was allowed and the allotment in favour of the appellant was cancelled on the ground that the provisions of section 17(2) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the 'Act ') were not complied with.
Before narrating further sequence of facts, it may be necessary to examine the relevant provisions of the Act.
Section 17(2) of the Act may be extracted thus: "Where a part of a building is in the occupation of the landlord for residential purposes or is released in his favour 117 under clause (b) of sub section (1) of Section to for residential purposes, the allotment of the remaining part thereof under clause (a) of the said sub section (1) shall be made in favour of a person nominated by the landlord " A perusal of this statutory provision would clearly disclose that the object of the Act was that where a tenant inducted by the landlord voluntarily vacates the premises, which are a part of the building occupied by the landlord, an allotment in the vacancy should be made only to a person nominated by the landlord.
The dominant purpose to be subserved by the Act is manifestly the question of removing any inconvenience to the landlord by imposing or thrusting on the premises an unpleasant neighbour or a tenant who invades the right of privacy of the landlord.
It is obvious that if the tenant has vacated the premises by himself and not at the instance of the landlord, there is no question of the Landlord occupying the said premises because he has got a separate remedy for evicting the tenant on the ground of personal necessity.
The statute, however, while empowering the prescribed authority to allot the accommodation, safeguards at least the right of the landlord to have a tenant of his choice.
In the instant case, the admitted position seems to be that when the prescribed authority allotted the premises to the appellant, the landlady was not taken into confidence nor was she asked to induct either the appellant or somebody else as the tenant of the premises which were likely to fall vacant or which may have fallen vacant.
This was undoubtedly an essential requirement of the provisions of section 17(2) of the Act as extracted above.
In these circumstances, there could be no doubt that the order of the prescribed authority allotting the premises to the appellant was completely without jurisdiction and against the plain terms of section 17(2) of the Act.
It was in view of this serious legal infirmity that the District Judge allowed the appeal filed by the landlady on 27.1.1976 and cancelled the allotment of the accommodation to the appellant.
On 2.2.76 the landlady herself filed an application before the District Magistrate, Bijnor for delivery of possession of the said premises to her but the District Magistrate rejected the application by his order dated 8.3.76 on the ground that as the landlady had not applied for release of the accommodation, she could not be allotted the premises straightaway.
On 5.4.76 the District Supply officer, Bijnor directed the counsel for the landlady to nominate a person 118 for allotment of the premises.
As against this, the landlady applied for release of the accommodation to her in terms of the provisions of section 16(1) (b) of the Act which runs thus: "16.
Allotment and release of vacant building.
(1) Subject to the provisions of this Act, the District Magistrate may by order: (a) xx xx (b) release the whole or any part of such building, or any land appurtenant thereto, in favour of the landlord (to be called a release order).
" The prayer of the landlady under section 16(1) (b) also appears to have been ignored by the Rent Control authorities and by an order dated 15.4.76, the District Supply officer re allotted the accommodation to the appellant.
This led the landlady to file another appeal before the Additional District Judge, Bijnor who by his Order dated 21.9.77 rejected the plea of the landlady, dismissed the appeal and confirmed the order of allotment.
The respondent landlady there upon filed a writ petition in the High Court challenged the orders of the District Supply officer as also of the District Judge who had affirmed that order and confirmed the order of allotment in favour of the appellant.
The High Court by the impugned order allowed the writ petition and sent the matter back to the Rent Control and Eviction officer to consider the question of allotment afresh in view of the observations Made by the High Court.
The appellant then obtained special leave of this Court against the order of the High Court and hence this appeal before us.
In support of the appeal, Mr. Shanti Bhushan, learned counsel for the appellant submitted that the High Court had no jurisdiction to interfere with the concurrent finding of fact given by the District Supply officer and the District Judge confirming the allotment in favour of the appellant and that too in a writ jurisdiction.
He also submitted that the landlady was not at all in actual physical possession of the premises and had been living outside Bijnor and, there fore, neither the provisions of section 16(1) (b) nor those of section 17(2) of the Act would apply to the facts of the present case.
On the other 119 hand, the counsel for the respondent submitted that initially the only question before the Rent Control Authority was whether the allotment should be made to the appellant even though he was not nominated by the landlady under section 17(2) of the Act.
It is common ground that the appellant was not a nominee of the landlady and, as discussed above, the District Judge in his first order had quashed the allotment on the ground that the provisions of section 17(2) had not been complied with.
It was also argued on behalf of the respondent landlady that the circumstances having changed, she now wanted to stay in Bijnor permanently and as she wanted additional accommodation she had applied to the District Magistrate under section 16(1) (b) for releasing the building in her favour.
This application was not at all considered on merits by the District Magistrate or by any court for that matter.
If the respondent could succeed in convincing the District Magistrate that a case for release of the entire building was made out, then the question of allotting the premises to the appellant would not have arisen at all.
We have gone through the judgment of the High Court in the light of the arguments of the parties and we are inclined to agree with the view taken by the High Court that the mere fact that the lady did not actually reside in the premises which were locked and contained her household effects, it cannot be said that she was not in possession of the premises so as to make section 17(2) inapplicable.
Possession by a landlord of his property may assume various forms.
A landlord may be serving outside while retaining his possession over a property or a part of the property by either leaving it incharge of a servant or by putting his household effects or things locked up in the premises.
Such an occupation also would be full and complete possession in the eye of law.
It was further argued by Mr. Shanti Bhushan that the landlady had absolutely no reason to stay in Bijnor because she was staying with her son in some other town.
That by itself is hardly a good ground for the landlady who was a widow to sever her connections with her own property.
Moreover, we do not want to make any observations on the merits of this matter as the High Court has rightly remanded the case for a fresh decision on all the points involved.
So far as the second point is concerned, Viz.
, the question of allotment of the premises to the appellant, the High Court was fully 120 justified in quashing the order of the District Supply officer as affirmed by the District Judge because despite several opportunities no attempt had been made to approach the landlady to nominate a tenant.
There is no evidence to show that either the prescribed authority or the Rent Control and Eviction officer ever approached the landlady for making a nomination in respect of the premises vacated by the original tenant and she refused to do so.
All that the landlady did was to ask for the release of the premises but even if this was refused it was incumbent on the Rent Control authorities to have fulfilled the essential conditions of section 17(2) of the Act before making any allotment in favour of the appellant or for that matter any other person.
It was suggested that as the landlady was not living 4 in the premises which were locked up, section 17(2) did not apply.
We have already rejected this argument because even occupation of apart of a building by the owner which she may visit off and on is possession in the legal sense of the term and, therefore, it cannot be said that the provision of section 17(2) would not apply and that the Rent Control authorities could make an allotment in favour of any person without giving an opportunity to the landlady or the landlord to exercise her/his privilege of nominating a tenant.
We have already pointed out that the object of the Act seems to be to arm the owner with the power of nomination so as to protect him/her from unpleasant tenants or indecent neighbours who may make the life of the owner a hell.
Moreover, the conduct displayed by the appellant in this case clearly shows that if he was thrust on the respondent without her being allowed an opportunity to nominate a tenant, it will violate the very spirit and tenor of section 17(2) of the Act.
As we are of the opinion that the order of the High Court has to be upheld we refrain from making any further observations on the merits or any aspect of the matter which have to be gone into afresh as directed by the High Court.
We find no merit in this appeal which is dismissed with costs quantified at Rs. 1,000/ (Rupees one thousand only.).
P.B.R. Appeal dismissed.
[/INST]The Code of Criminal Procedure, 1973 by section 354(3) provides that when the conviction is for an offence punishable with death, the judgment shall in the case of sentence of death state 'special reasons ' for such sentence.
The appellant was charged under section 302 of the Penal Code for having committed the murder of his maternal uncle and his son.
The Sessions Judge convicted the appellant for murder and being of the opinion that it was "a terrific double murder" sentenced the appellant to death, The High Court condemned the murders as "cold blooded" and confirmed the conviction and sentence.
Allowing the appeal to this Court, limited to the question of sentence.
^ HELD: 1.
The sentence of death imposed on the appellant is set aside and he is sentenced to imprisonment for life.
[275 F] 2.
The reasons given by the Sessions Judge for imposing the death sentence are not 'special reasons ' within the meaning of section 354(3) of the Criminal Procedure Code.
It is not certain if he were cognizant of his high responsibility under that provision, that he would have imposed the death sentence.
[275 E] 3.
It is not understood what is meant by "a terrific murder" as suggested by the Sessions Judge.
All murders are terrific and if the fact of the murder being 271 terrific is an adequate reason for imposing the death sentence then every murder shall have to be visited with that sentence.
Death sentence will then become the rule, not an exception and section 354(3) would become a dead letter.
[272 F G] 4(i).
On the question of sentence it is not merely the accused but the whole society which has a stake.
[273 B] (ii) After the conviction is recorded, the occasion to apply the provisions of section 235(2) of the Criminal Procedure Code arises.
The obligation under this section to hear the accused on the question of sentence is not discharged by putting a formal question to the accused as to what he has to say on the question of sentence.
The Judge must make a genuine effort to elicit from the accused all information which will eventually bear on the question of sentence.
All admissible evidence is before the Judge but that evidence itself often furnishes a clue to the genesis of the crime and the motivation of the criminal.
It is the bounden duty of the Judge to cast aside the formalities of the Court scene and approach the question of sentence from a broad sociological point of view.
Questions which the Judge can put to the accused under section 235(2) and the answers which the accused makes are beyond the narrow constraints of the Evidence Act.
The Court, while on the question of sentence, is in an altogether different domain in which facts and factors of an entirely different order operate.
[273 B; 272 H 273 A; 273 C] In the instant case, the Sessions Judge complied with the form and letter of the obligation which section 235(2) imposes, forgetting the spirit and substance of that obligation.
[273 D] 5.
It is not possible to appreciate how, after being shot in the chest and receiving the injuries described in the post mortem report, the deceased could have survived for a couple of hours thereafter.
There is also no explanation as to why the F.I.R. was not recorded at the Police Station when P.W. 1 went there.
It is therefore unsafe to confirm the sentence of death imposed upon the appellant.
[273 H. E] 6.
It is not the normal function of the High Court to pass judgment on the conduct of lawyers who appear before the lower courts.
[275 C] 7.
The High Court should have given an opportunity to the two police officers to explain their conduct before making criticism on it.
[274 G]
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<s>[INST] Summarize the judgementtion No. 5723 of 1982 & 219 of 1986.
(Under Article 32 of the Constitution of India).
Mrs Pinky Anand and D.N. Goburdhan for the Petitioners.
B.B. Singh, Pramod Swarup, J.P. Verghese, LJ.
Vadakare and Ms. Kamini Jaiswal (N.P.) for the Respondents.
The following Order of the Court was delivered These two petitions under article 32 of the Constitution challenge the provisions of the Chhota Nagpur Tenancy Act which confines succession to property to the male line by contending that the provision is discriminatory against women and, therefore, ultra vires the equality clause in the Constitution.
Petitioner No. 1 in the first writ petition is the editor of a magazine while petitioners nos.
2 and 3 are two ladies of the 'Ho ' tribe, admittedly one of the sched uled tribes residing in Singhbhum district of Bihar.
The petitioners in the other writ petition belong to the 'Oraon ' tribe of the Chhota Nagpur area.
Challenge is essentially to sections 7 and 8 of the Chhota Nagpur Tenancy Act of 1908.
Sec tions 7 and 8 of the Act provide: "7.(1) Meaning of 'raiyat having khunt khatti rights '.
"Raiyat having khunt katti rights" means a raiyat in occupation of, or having any subsisting title to, land reclaimed from jungle by the original founders of the village or their descendants in the male line, when such raiyat is a member of the family which rounded the village or a descendant in the male line of any member of such family: Provided that no raiyat shall be deemed to have khunt katti 479 rights in any land unless he and all his predecessors in title have held such land or obtained a title thereto by virtue of inheri tance from the original founders of the vil lage.
(2) Nothing in this Act shall prejudicially affect the rights of any person who has law fully acquired a title to a khunt kattidari tenancy before the commencement of this Act.
Meaning of Mundan Khunt khattidar.
"Mundari khuntkattidar" means a Mundari who has acquired a right to hold jungle land for the purpose of bringing suitable portions thereof under cultivation by himself or by male members of his family, and includes (a) the heirs male in the line of any such Mundari, when they are in possession of such land or have any subsisting title thereto; and (b) as regards any portions of such land which have remained continuously in the possession of any such Mundari and his descendants in the male line, such descendants.
" Reliance has been placed on a Division Bench decision of the Patna High court in the case of Jitmohan singh Munda vs Ramaratan Singh & Anr., in support of the proposition that the Patna High Court had more than 30 years back taken the view that the provision was not operative and a widow was also entitled to inherit.
When analysed the judgment of the Patna High Court does not seem to provide prop for the argument raised in the writ petitions.
In paragraph 4 of the judgment the High Court indicated: "The contention based on section 8 also terminologically cannot be accepted in the first place, in defining khunt kattidari interest.
As quoted above, the word used is "includes" whereafter occur clauses (a) and (b) containing reference to the male in the male line of a Mundari.
The word "includes" cannot be taken to be exhaustive.
It only states that the heirs in the male line alone are in the category of a Mundari khunt kattidari in their possession, but in implication it may well be that the heirs of the deceased Mundari who are females will not be entitled to succeed to it.
That does not mean that the section is so definite as to exclude the inclusion of the widow of the deceased Mundari as a person who can hold the land during 480 her life time.
Moreover, clause (a) refers to the heirs male in the male fine.
The word "line" is also significant be cause it evidently refers to a person who has descended from the deceased Mundari whose interest may be in question.
Even, therefore, if these words "the heirs male in the male line" were to be given exclusive meaning, then also it would mean only the persons who are descended from him or repre sent another male line altogether.
There is no reference whatsoever to the exclusion of the widow of the particular Mundari.
In my opinion, the position in respect of the interest of the widow of the deceased Mundari is the same in respect of this property as it would be her position in regard to the other properties of her late husband.
Since the court below has accepted that the family has followed the Hindu rites and Hindu religion, the widow of Kartik Singh would be entitled to be in possession.
Section 8, as I have discussed, is not inconsistent with this position of the widow and, as such, the court below took the correct view in holding that the plaintiff could not recover posses sion of the property during the life time of defendant No. 1, but he is entitled to a declaration that he will succeed after the death of the widow.
" The interpretation given of section 8 in the Division Bench decision, therefore, does not provide full support to the point raised before us by the writ petitioners in the two cases.
It was a case confined to its own facts and the Court proceeded to dispose of the case with reference to the widow by bringing in the concept of Hindu law on the finding that the family had adopted Hindu law and was not bound by its own caste custom.
At an earlier stage while one of these writ petitions was heard we had given time to the State of Bihar to consid er the feasibility of carrying out an amendment in the offending sections and to clearly provide that succession was not confined to the male in the male line.
A committee appears to have been set up by the State of Bihar to examine this question and it has come to the conclusion that by custom prevalent among the scheduled tribes a female heir is excluded from succession and in case the law was otherwise interpreted or changed and property was allowed to go into the hands of female heirs, there would be great agitation and unrest in the area among the scheduled tribe people who have custom based living.
Scheduled tribe people are as much citizens as others and they are entitled to the benefit of guarantees of the Constitution.
It may be that the 481 law can provide reasonable regulation in the matter of succession to property with a view to maintaining cohesive ness in regard to Scheduled Tribes and their properties.
But exclusion from inheritance would not be appropriate.
Since this aspect of the matter has not been examined by the State of Bihar and the feasibility of permitting inheritance and simultaneously regulating such inheritance for the purpose of ensuring that the property does not go out of the family by way of transfer or otherwise we arc of the view that in the peculiar facts of the case the State of Bihar should re examine the matter.
In these circumstances, instead of disposing of the two writ petitions by a final order we adjourn the hearing thereof for three months and direct the State of Bihar to immediately take into consideration our order and undertake the exercise indicated and report to the Court by way of an affidavit and along with that a copy of the report may be furnished by the Committee to be set up by the State of Bihar.
This matter shall not be considered as part heard and shall be next listed before a Bench where Justice Kuldip Singh is one of the members.
R.P. Petitions adjourned.
[/INST]Chhota Nagpur Tenancy Act, 1908 confined succession to property to descendants in the male line of Scheduled Tribes covered by the Act.
The petitioners who were the ladies belonging to the 'Ho ' and 'Oraon ' Tribes of the Chhota Nagpur area contended that the provisions of Sections 7 & 8 of the Act were dis criminatory against women and, therefore, ultra vires the equality clause in the Constitution.
The Court at an earlier stage while hearing one of the writ petitions, gave time to the respondent State of Bihar to consider the feasibility of carrying out an amendment in the offending sections so as to clearly provide that succes sion was not confined in the male line.
In pursuance there of, a Committee was set up by the State which came to the conclusion that a custom prevailed among the Scheduled Tribes that a female heir be excluded from succession, and that if there was any change, and the property be allowed to go into the hands of female heirs there would be agitation and unrest.
Adjourning the hearing of the petitions, this Court, HELD: Scheduled Tribe people are as much citizens as others and they are entitled to the benefit of guarantees of the Constitution.
It may be that the law can provide reasonable regulation in the matter of succession to proper ty with a view to maintaining cohesiveness in regard to Scheduled Tribes and their properties.
But exclusion from inheritance would not be appropriate.
Since this aspect of the matter was not examined by the State, it should re examine the feasibility of permitting inheritance and simul taneously regulating such inheritance for the purpose of ensuring 478 that the property does not go out of the family by way of transfer or otherwise.
[480 H; 481 AB] Jitmohan Singh Munda vs Ramratan Singh & Anr., , referred to.
In the circumstances, hearing of the matter be adjourned for three months and the State of Bihar would immediately take into consideration the order and undertake the exercise indicated and report to the Court by way of an affidavit, and along with that a copy of the report may be furnished by the Committee to be set up by the State of Bihar.
[481 B C]
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<s>[INST] Summarize the judgementON: Criminal Appeal No. 205 of 1956.
Appeal by special leave from the judgment and order dated the 30th November, 1955, of the Punjab High Court in Crimi nal Appeal No. 282 of 1955, arising out of the judgment and order dated the 15th February, 1955, of the Court of the Additional Sessions Judge at Amritsar in Sessions Case No. 64 of Trial No. 6 of 1955.
R. L. Anand, and section N. Anand, for the appellant.
Kartar Singh Chawla, Assistant Advocate General, for the State of Punjab and T. M. Sen, for the respondent.
September 17.
The following Judgment of the Court was delivered by KAPUR J. This is an appeal against the judgment and order of the Punjab High Court reversing an order of acquittal by the Additional Sessions Judge, Amritsar.
The appellant Bakshish Singh and his brother Gurbakshi Singh were tried for an offence under sections 302/34 of the Indian Penal Code but were acquitted.
Against this judgment the State took an appeal to the High Court.
As Gurbaksh Singh was said to be ab sconding the appeal against the appellant alone was heard and decided by the High Court.
On August 1, 1954, sometime between 7 and 8 p.m Bachhinder Singh son of Bhagwan Singh of village Kairon was shot in the lane in front of their house and as a result of bullet injuries be died the next day in the hospital at Amritsar.
He was at the time of shooting accompanied by his younger brother Narvel Singh, a boy of 13, and after getting injured Bachhinder Singh and his brother returned to the house.
Bhagwan Singh states that he was informed of the identity of the assailants by Bachhinder Singh who was, at his own request, carried from the house to the hospital at Kairon but as the injuries were serious 411 the doctor at Kairon rendered " first aid " and advised the father to take his son to V. J. Hospital at Amritsar.
Bhagwan Singh then took Bachhinder Singh to the Railway Station but before the arrival of the train he went to the Police Post at Kairon which is at a distance of about 100 yds.
from the Railway Station in order to make a report.
As the Assistant Sub Inspector was away at Sarhali, he returned to the Railway Station and took his son to the Amritsar hospital by the train leaving Kairon at 9 47 p.m. Bhagwan Singh was accompanied at that time by his younger son, Narvel Singh, P.W. 12, and by Shamir Singh, Inder Singh and Narinjan Singh.
Soon after their arrival at the Amritsar hospital Bachhinder Singh was examined by Dr. Kanwal Ki shore, P.W. 2, at 11 45 p.m. and finding the injury to be of a serious nature the doctor sent information to the Police as a result of which Head Constable Maya Ram Sharma, P.W. 4, arrived at the hospital sometime after midnight and, in the presence of Dr. Mahavir Sud, P.W. 17, recorded the dying declaration of Bachhinder Singh, Exhibit P H, after getting a certificate from the doctor that the injured person was in a fit state to make a statement.
This statement is the basis of the First Information Report, Exhibit P H. 1, which is a copy of Exhibit P H.
This report was recorded on August 2, 1954, at 7 50 a.m. at Police Station Sarhali which, we were told, is about 20 miles or so away from Amritsar.
In the early hours of the morning Dr. K. C. Saronwala P.W. I performed an operation on Bachhinder Singh and extracted a bullet from the left abdominal wall which was handed over to the Police.
But Bachhinder Singh died at 1 35 p.m. on August 2, 1954.
An inquest report Exhibit P K was prepared at 2 30 p.m. by Head Constable Maya Ram, P.W. 4.
The case for the prosecution rests on the dying declaration of Bachhinder Singh, exhibit P H, and on the statement of Narvel Singh, P.W. 12, who was an eye witness to the occur rence and on the statement made by the deceased to his father as to his assailant as soon as he (Bachhinder Singh) was brought to the house after receiving the injuries.
The prosecution 53 412 also relied on an extra judicial confession made to Teja Singh, P.W. 13, but both the courts below have rejected this piece of evidence and it is unnecessary to consider it any further.
The learned Additional Sessions Judge rejected the dying declaration made by Bachhinder Singh on two grounds; that at the time of recording the dying declaration not only Bhagwan Singh, the father, and Narvel Singh, the brother of Bachhin der Singh, were " present but the police officer had actually made enquiries from them about the occurrence before he proceeded to record the dying declaration of Bachhinder Singh de ceased.
Head Constable Maya Ram, P.W. 4, has admitted in cross examination that Bachhinder Singh gave his statement in Punjabi but the form and the detailed account given in the statement, Exhibit P H, would show that it was not the product of Bachhinder Singh 's creation alone but it was a touched up ' declaration of the deceased.
It is laid down in 1954 Lahore 805 that a dying declaration which records the very words of the dying man unassisted by interested persons is most valuable evidence but the value of a dying declara tion altogether disappears when parts of it had obviously been supplied to the dead man by other persons whether interested or Police Officer.
As the dying declaration, Exhibit P H, in this case cannot be regarded as the creation of Bachhinder Singh deceased, no reliance whatsoever can be placed on it and it could not form the basis for the convic tion of any of the accused.
" The learned Judges of the High Court did not agree with this criticism.
Birhan Narain J., who delivered the main judg ment, said: " This criticism appears to me to be without any substance.
The statement was recorded by Head Constable Maya Ram who was posted in Amritsar and was not posted in village Kairon and therefore had no knowledge of the parties nor had any interest in them Thus there was no reason why he should record the statement falsely or irregularly.
Throughout the time that the statement was recorded Dr. Mahavir Sud of the Amritsar hospital was present.
He has appeared 413 as P.W. 17 in the present case.
He is a respectable and disinterested person and he 'is positive in his testimony before the court that the statement was made by the deceased voluntarily and that there was nobody present to prompt him.
He has further stated that he did not allow any person to be present at that time.
There is absolutely no reason for doubting the correctness of this statement. . . . . . . . . . . . .
Coming to the other objection of the Additional Sessions Judge, it is difficult to understand the significance at tached by him to the fact that the deceased spoke in Punjabi while the statement was recorded by Maya Ram in Urdu.
The court language is Urdu and the Police generally records statements in Urdu even if they are made in the Punjabi language.
I have no doubt in my mind that the dying decla ration recorded in the present case is a voluntary one and was made without any prompting from anybody.
The High Court in our opinion correctly appreciated the evidence and was right in accepting the authenticity of the dying declaration.
The statement of Maya Ram, P. W. 4, does not support the criticism of the learned trial judge.
And he had read more in the statement of Narvel Singh, P. W. 12, made before the Committing Magistrate, than it really con tains.
It is unfortunate that the criticism has proceeded on the English record of the Magistrate 's Court which does not appear to have been correctly recorded as the Urdu record is in many parts materially different.
The fact that the statement contained in Exhibit P H was made without any prompting is also supported by the testimony of a wholly disinterested witness, Dr. Mahavir Sud, whose statement made before the Committing Magistrate was transferred at the trial stage under section 33 of the Evidence Act.
He stated: " The statement of Bachhinder Singh was voluntary and there was none to prompt it.
I did not allow any attendant on Bachhinder Singh then.
" In cross examination he made it clearer that there was no relation or friend of the deceased person when 414 the statement was recorded.
Some criticism was levelled against the dying declaration based on a sentence in the statement of Dr. Mahavir Sud P. W. 17 that the Head Consta ble put certain questions to clarify the ambiguities and these questions and answers do not find place in Exhibit P H, the record of the dying declaration.
No such question was put to the Head Constable who recorded the statement.
The Head Constable stated that the dying declaration was written at the declarant 's own dictation without any addi tion or omission.
In/ cross examination nothing was asked as to any questions having been put to the deceased by this witness.
Therein the witness also stated : " It is not correct that I first made the inquiry from the father of the deceased and other persons before I proceeded to record his statement ".
He also made it clear that before he allowed the statement to be made he satisfied himself that Bachhinder Singh was in a fit state to make the statement.
We are of the opinion that the High Court rightly held the dying declaration to be a statement made by the deceased unaided by any outside agency and without prompting by anybody.
The declarant was free from any outside influence in making his statement.
Another reason given by the Additional Sessions Judge for rejecting the dying declaration was that the deceased gave the narrative of events in Punjabi and the statement was taken down in urdu.
In the Punjab that is how the dying declarations are taken down and that has been so ever since the courts were established and judicial authority has never held that to be an infirmity in dying declarations making them inefficacious.
As a matter of fact in the Punjab the language used in the subordinate courts and that employed by the Police for recording of statements has always been Urdu and the recording of the dying declaration in Urdu cannot be a ground for saying that the statement does not correctly reproduce what was stated by the declarant.
This, in our opinion, was a wholly in.
adequate reason for rejecting the dying declaration.
415 Exhibit P H, the dying declaration, is a long document and is a narrative of a large number of incidents which happened before the actual assault.
Such long statements which are more in the nature of First Information Reports than recital of the cause of death or circumstances resulting in it are likely to give the impression of their being not genuine or not having been made unaided and without prompting.
The dying declaration is the statement 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 and such details which fall outside the ambit of this are not strictly within the permissible limits laid down by section 32 (1) of the Evi dence Act and unless absolutely necessary to make a state ment coherent or complete should not be included in the statement.
We are informed that, in the Punjab, no rules have been made in regard to the recording of dying declara tions which, we are told, has been done in several other States.
We think it would be desirable if some such rules were framed and included in the Rules and Orders made by the High Court for the guidance of persons recording dying declarations.
Of course the authenticity of the dying declaration has to be judged in accordance with the circum stances of each case depending upon many factors which would vary with each case but those recording such statements would be well advised to keep in view the fact that the object of a dying declaration is to get from the person making the statement the cause of death or the circumstances of the transaction which resulted in death.
The admissibility of the statement of Dr. Mahavir Sud was assailed by counsel for the appellant on the ground that the conditions laid down for the admissibility of statements under section 33 had not been complied with and several decided cases were relied upon.
This question does not seem to have been raised at any previous stage of the proceedings, nei ther before the Additional Sessions Judge nor before the High Court, and this criticism seems to be without much substance.
At the trial the prosecution produced Foot Constable Kartar Singh, P. W. 14, who deposed that he took the 416 summons for this witness to the hospital where he was previ ously employed and the Superintendent of the hospital made a report that he was no longer in service and it was not known where he was.
This witness also stated that " from the inquiries made by me, I learnt that his whereabouts are not known.
" In cross examination he again stated that he made inquiries but he could not discover the whereabouts of this witness.
After the statement of Kartar Singh, P. W. 14, the Public Prosecutor made a statement that Dr. Mahavir Sud 's whereabouts were not known ' and prayed that his statement be transferred under section 33 of the Evidence Act on the ground that there was no likelihood of the witness being available without unreasonable delay and expense and no objection is shown to have been taken by the defence at that stage.
Thereupon the learned trial judge ordered the statement to be transferred under section 33 of the Evidence Act.
He might have been well advised to give fuller reasons for making the order transferring the statement.
It appears to us that the learned judge transferred it on the ground of unreasonable delay and expense and we do not find any infirmity in this order of transfer.
Counsel then contended that for the efficacy of the dying declaration, corroboration was essential.
In the present case there is the statement of Narvel Singh, P. W. 12, who is an eye witness to the occurrence which is relied upon by the prosecution as corroboration of the dying declaration.
The learned Additional Sessions Judge rejected the testimony of this witness on the ground that there were discrepancies between his statement made in the commitment proceedings and at the trial.
We have already pointed out that the cross examination of this witness was based on somewhat inaccurate English record of his statement in the Committing Court, the statement in Urdu record puts a different complexion on it.
But even if this were not so the High Court, in our opinion, has taken a correct view of the testimony of this witness and has accepted it for cogent reasons.
Besides Narvel Singh there is the statement of Bhagwan Singh, the father, who stated that as soon as Bachhinder Singh 417 came into the house he mentioned the names of his assailants to him.
The incident took place just outside the house of Bhagwan Singh and it was never disputed that he was present in the house when the incident took place.
It is only natural that as soon as the injured son came into the house he would be asked as to who had injured him or would himself state who had caused him the injury.
He was in his senses at that time and no reason has been suggested why the son would not disclose to his father the names of his assail ants.
There is no adequate reason for rejecting this por tion of the testimony of Bhagwan Singh and merely because the dying declaration does not mention it, is hardly a reason for not accepting it.
The non production of Sucha Singh who is stated in the dying declaration and in the statement of Narvel Singh, P.W. 12, to have witnessed the occurrence was commented upon by counsel as a very serious omission.
The Public Prosecutor stated at the trial that he was giving up Sucha Singh as he had been won over.
Therefore, if produced, Sucha Singh would have been no better than a suborned.
witnesss.
He was not a witness "essential to the unfolding of the narrative on which the prosecution was based" and if examined the result would have been confusion, because the prosecution would have automatically proceeded to discredit him by cross examination.
No oblique reason for his non production was alleged, least of all proved.
There was, therefore, no obligation on the part of the prosecution to examine this witness: See Abdul Moham.
mad vs Attorney General of Pales tine (1) ; Stephen Servaratne vs The King (1); Habeeb Moham mad vs The State, of Hyderabad (3).
In the circumstances the court would not interfere with the discretion of the prosecutor as to what witnesses should be called for the prosecution and no adverse inference under section 114 of the Evidence Act can be drawn against the State.
The High Court, in our opinion, have kept in view correct principles governing appeals against acquittals and have rightly applied them to the circumstances (i) A.I.R. 1945 P.C. 42 (2) A.I.R. 1936 P.C. 289.
(3) ; 418 of this case.
The erroneous view that the learned Sessions Judge took of the dying declaration and of the oral evidence were compelling enough reasons for the reversal of that judgment.
We therefore dismiss this appeal.
Appeal dismissed.
[/INST]There are two classes of officials amongst those who are holding the posts of Sub Inspectors, Inspectors and Deputy Superintendents of Police in the Central Bureau of Investi gation namely (i) who are directly recruited and (ii) those who have been drawn from various State cadres on deputation basis.
The deputationists are paid Deputation Allowance as compensation for the temporary displacement from their parent cadres occasioned by their deputation to the Central Bureau of Investigation.
Pursuant to the recommendation of the Third Pay Commission as accepted by the Central Govern ment both the Direct recruits and "deputationists" in the rank of Sub Inspectors and Inspectors were paid equal rate of Special Pay from 1.7.73, while the Dy.
Superintendents were not paid anything.
Both the direct recruits and the deputationists posted in one of the Central Units were granted Special Pay considering the special nature of duties of investigating officers, by its letter No. 203/13/76 AUD II dated 21.6.1976.
But the Special Pay granted to the deputationists were more in all the three categories.
Having failed to get the disparity in the pay ment of Special Pay set aright at the departmental level, the aggrieved direct recruits (non deputationists) have approached the Supreme Court for justice through their petitions under Article 32 of the Constitution.
Allowing the petitions, the Court, HELD: It is well settled by several decisions of the Supreme Court that in order to pass the test of permissible classification of persons belonging to the same class into groups for purposes of differential treatment two conditions must be fulfilled, namely, that the classification must be founded on an intelligible differentia which distinguishes 1015 persons who are grouped together from others left out of the group and that differentia must have a rational relation to the object sought to be achieved by the law which brings about discrimination between the two groups.
[1017G H; 1018A] The Special Pay that was being paid to all the officers in the cadre of Sub Inspectors.
Inspectors and Deputy Super intendents of Police in the Central Investigating Units of the Central Bureau of Investigation has nothing to do with any compensation for which the deputationists may be enti tled either on the ground of their richer experience or on the ground of their displacement from their parent depart ments in the various States, but it relates only to the arduous nature of the duties that is being performed by all of them irrespective of the fact whether they belong to the category of the 'deputationists ' or to the category of 'non deputationists '.
That being the position, the classifi cation of the officers working in the said cadres into two groups, namely, deputationists and non deputationists for paying different rates of Special Pay does not pass the test of classification permissible under Articles 14 and 16 of the Constitution of India since it does not bear any ration al relation to the object of classification.
[1022D F] The Court directed the Central Government to pay the nondeputationists who have been working in the cadres of Sub Inspectors, Inspectors and Deputy Superintendents of Police in the Central Investigating Units of the Central Bureau of Investigation Special Pay at the same rates at which the deputationists are being paid with effect from the date from which the decision contained in the letter of the Government of India, Cabinet Secretariat beaming No. 203/13/76 AVD.II dated 21.6.1976 came into force upto date and to pay hereafter Special Pay to all the officers (depu tationists and non deputationists) in the said cadres at the same rates.) [1022G H; 1023A B]
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<s>[INST] Summarize the judgementAppeal No. 587 of 1962.
Appeal by special leave from the judgment and order dated April 12, 1961, of the Bombay High Court in Civil Revision Application No. 441 of 1961.
232 S.V. Gupte, Additional Solicitor General of India and R.H. Dhebar, for the appellant.
S.G. Patwardhan and A.G. Ratnaparkhi, for respondent No. 1.
The Judgment of the Court was delivered by RAGHUBAR DAYAL J.
This appeal, by special leave, raises the question whether the amount of interest decreed for the period subsequent to the institution of a suit comes within the expression 'amount or value of the subject matter in dispute ' in article 1 of Schedule 1 of the Bombay Court fees Act, 1959, hereinafter called the Act, for purposes of court fee payable on the memorandum of appeal.
The plaintiff respondent No. 1 instituted Special Suit No. 5 of 1957 in the Court of the Civil Judge (Senior Division) at Ahmedabad to recover Rs.13,205 on account of the principal lent to defendant No. 7 and interest up to the date of the suit at the rate of 9 % per annum.
On July 18, 1960, his claim was decreed in a sum of Rs. 13,033 6 6 with future interest from the date of suit till realization at 40% per annum on a sum of Rs. 10, 120.
Defendant No. 7 appealed to the High Court against the decree.
In the memorandum of appeal, defendant No. 7 valued the claim for purposes of jurisdiction and court fee at Rs. 13,033 6 6 and his grounds Nos. 1 and 48 of appeal were as follows: 1.
That the lower Court erred in decreeing the plaintiff 's suit.
That the decree is otherwise erroneous, unjust and illegal and therefore deserves to be set aside.
" The remaining 46 grounds related to the merits of the plaintiff 's claim and did not deal with the correctness of the trial Court awarding future pendente site interest on the rate at which it was to be calculated.
The Taxing Officer was of opinion that the appeal was against the whole decree and that the amount of value of the subject matter in dispute for purposes 233 of court fee was Rs. 14,036.
80nP. as the amount of interest from the date of the suit till the date of the decree on Rs. 10,120 came to Rs. 1,033.40 nP. and it bad been conceded by the counsel for the defendant appellant that the subject matter of the appeal was the decree passed by the trial Court.
He therefore directed the defendant appellant to pay the deficit court fee of Rs. 70 on the memorandum of appeal and to amend the claim accordingly.
The defendant appellant then filed a revision to the High Court under section 5(2) of the Act.
His objection was upheld by the learned Judge who expressed the view: "The subject matter in appeal is the real matter in dispute between the parties and not something which must stand or fall with the decision oil it.
In other words, it must mean the right which is in dispute between the parties.
" He accordingly set aside the order of the Taxing Officer and held that the amount of court fee paid on the memorandum of appeal was the proper court fee.
The State of Maharashtra has filed this appeal by special leave against this order.
Mr. Gupta, for the appellant State, contends that the view expressed by the learned Judge is not correct and mainly relies on the construction put by Courts on the expression ' value or subject matter in dispute ' in the relevant provisions relating to the High Court 's giving leave to appeal to the Privy Council.
In Gooroo persad Khoond vs Juggutchunder (1) the Judicial Committee said, in connection with the requirements of the directions in the Order in Council of April 10, 1938, with respect to the conditions for granting leave to appeal to the Privy Council, that leave to appeal was to be given in cases where the value of the matter in dispute in the appeal amounted to the specified sum of Rs. 10,000 and that in (1) 8 M.I.A. 166. 234 determining such value, the amount of interest decreed up to the date of the decree be included to the amount of the principal.
Doorga Doss Chowdry vs Ramanauth Chowdry (1) is an authority for the proposition that the costs of a suit are no part of the subject matter in dispute.
Their Lordships of the Privy Council said: sum claimed, it would be in the power of every litigant, by swelling the costs, to bring any suit up to the appealable value.
" It may also be said that a litigant 's conduct may lead to a protracted trial and consequently to the increase in the amount of pendente lite interest which may raise the value of the subject matter in dispute in appeal to the appealable value.
We do not consider it correct that the expression in the Act be construed in the light of the construction placed on a similar expression for the purposes of considering whether the case had come within the rule allowing the High Courts to give leave for appeal to the Privy Council.
The Act is a taxing statute and its provisions therefore have to be construed strictly, in favour of the subject litigant.
The other provisions are for the purpose of allowing the party feeling aggrieved against the decision of the High Court to take up his case to the next higher Court.
the Privy Council and therefore the relevant provisions in that regard had to be given a liberal construction.
In the present case we have to construe the expression 'value of the subject matter in dispute in appeal ' for the purposes of determining the amount of Court fee due on a memorandum of appeal and not for determining such valuation for preferring an appeal to this Court.
The relevant provision governing the question of court fee to be paid on the memorandum of appeal filed in a Civil Court is contained in article 1 of Sche (1)8 M.I.A. 262.
235 dule 1 of the Act.
it is to be paid ad valorem according to the amount or value of the subject matter in dispute.
The rates applicable with respect to the various amounts are mentioned in the article.
The maximum amount of court fee, however, is Rs. 15,000.
The amount of court fee payable, therefore, depends on the amount or value of the subject matter in dispute in appeal.
The defendant appellant valued his claim at Rs. 13,033 6 6 and paid the requisite court fee on that amount.
It is obvious therefore that he disputes in appeal that part of the decree which awarded Rs. 13,033 6 6 against him on account of principal and interest due up to the date of the institution of the suit.
He did not dispute, according to the value of his claim, the amount of interest which could be found on calculation for the period between the date of the suit and the date of the decree at 4% per annum on a sum of Rs. 10,120 as had been awarded under the decree.
Whether his appeal is competent or not without his including this amount in his claim in appeal, is a question different from that relating to the value of the subject matter in dispute in appeal.
He does not dispute the decree for that amount and therefore the Court has not to decide about it and so this amount cannot be included in the amount of the subject matter in dispute in appeal covered by the relevant expression.
None of his grounds of appeal refers specifically to this amount of interest between the date of the suit and the date of the decree.
This makes it further plain that he does not question the propriety of awarding of future interest or the rate at which it was awarded or even the amount on which it could be awarded.
It is not possible to say, in these circumstances, that the value of the subject matter in dispute in the appeal must include this amount of interest between the date of the suit and the date of the decree.
Mr. Gupta has rightly conceded that it is well settled that the plaintiff has to value his appeal against the dismissal of his suit on the amount of the claim he had made in the plaint and has not to include 236 the interest due on the amount claimed up to the date of instituting the appeal, that the defendant has not to include that amount of future interest subsequent to the date of the decree till the institution of the appeal in the valuation of the appeal for the purposes of court fee and that no court fee is to be paid on the amount of costs decreed in the suit when the party aggrieved appeals against the decree.
On what principle are these amounts not treated as forming part of the value of the subject matter in dispute in appeal? Such value is to be determined on the substantial allegation in the plaint or from the pleas in the memorandum of appeal with respect to the points in dispute between the parties and sought to be determined by the Court.
Such are necessarily the points affecting the rights of the parties sought to be adjudicated by the Court.
Claims not based on any asserted right but dependent on the decision of the disputed right and reliefs in regard to which are in the discretion of the Court do not come within the purview of the expression 'subject matter in dispute in plaint or memo of appeal '.
There appears no good reason to make a distinction between the decreed amount of costs and that of pendente lite interest for the purpose of determining the amount of the subject matter in dispute in appeal.
It is true that costs of suit arise independently of the claim and are really those which are incurred by the plaintiff while the decree for the amount of pendente lite interest is directly related to the plaintiff 's claim though its award is within the discretion of the Court, but this will not justify the distinction.
The costs too, and particularly the costs on account of court fee and counsel 's fee, arise directly on account of the claim put forward in Court.
The reason really is that it is the value of the right claimed in the suit or appeal which is covered by the expression 'amount or value of subject matter in dispute in article 1, Schedule 1, of the Act and that the plaintiff ' has no right to get any of these amounts from the defendant though the Court may, in its discretion, allow future interest 237 and costs according to the circumstances of the suit in view of sections 34 and 35 C.P.C.
This principle equally applies to the non inclusion of the decreed amount ' of pendente lite interest in evaluating the subjectmatter in dispute in appeal as that too is awarded in the exercise of its discretion by the Court an the plaintiff has no right or claim for that amount against ' the defendant.
It is obvious that if the defendant appellant succeeds in establishing to the satisfaction of the appellate Court that the decree for the principal and interest up to the date of the suit is bad in whole or in part, that will itself lead the appellate Court to exercise its discretion with respect to the amount of costs and future interest in such a way that if the plaintiff 's claim is dismissed in too, he will not be awarded any future interest or any costs of the suit or appeal and that in case his claim succeeds in part, the amount of future interest and costs decreed in his favour would be appropriately modified by the appellate Court.
The defendant appellant has therefore no reason to appeal against the decree for costs or the decree for future interest unless he disputes those amounts wholly or partially for certain reasons.
If he disputes expressly the propriety or correctness of the decree with respect to the costs or pendente lite interest independently of the claim to the subject matter in the Trial Court he will have to pay court fee on the amounts challenged as in that case he does dispute those amounts in appeal and therefore those amounts do come within the expression 'value of the subjectmatter in dispute in appeal '.
This has been the basis of the various decisions of the Courts in which court fee has been demanded on the amount of costs or future interest.
In Mitthu Lal vs Chameli (1) it was held that no courtfee was to be paid on interest pendente lite granted by the lower Court unless the awarding of it was specifically challenged in appeal.
It was said at p. 76: 57 All.
238 "Interest pendente lite is awarded under section 34 of the Civil Procedure Code.
The Court may award it whether the plaintiff claims it or not.
In this respect the court 's power stands on the same footing as its power to award costs to a successful party.
It is well settled rule that no court fee is payable on the amount of costs awarded by a decree appealed from, if no ground is specifically directed against the award of costs. . . . .
The same principle is applicable to interest pendente lite which the Court may award in the exercise of its power under section 34.
On a proper reading of the appellant 's grounds of appeal in the lower appellate court we are satisfied that the subjectmatter of his appeal to that court was the principal amount and interest up to the date of the suit." In Keolapati, Mst. vs B.N. Varma "I it was held that unless the appellant expressly challenges the award of future interest, no court fee is to be paid on the amount of interest accruing from the date of the suit till the date of the filing of the appeal.
In Ashutosh vs Satindra Kumar (2) it was said at at p. 382: "Costs are not regarded as being any part of a subject matter in dispute either in the suit or in the appeal.
In the appeal, the appellant does not in such an event really dispute the order as to costs for it is the natural order that is ordinarily made following the decision as to the main subject matter in dispute and if he himself succeeds in the appeal in regard to the main subject matter, automatically he will expect to succeed with regard to the costs.
" We therefore hold that the amount of pendente lite interest decreed is not to be included in the 'amount or value of the subject matter in dispute in appeal ' for the purposes of article 1 of Schedule 1 of the Act unless the appellant specifically challenges the cor (1) I.L.R. 12 Luck.
(2) 239 rectness of the decree for the amount of interest pendente lite independently of the claim to set aside that decree.
The appellant here has not specifically challenged the decree in that respect and therefore the High Court is right in holding the memorandum of appeal to be, sufficiently stamped.
The appeal T. is therefore dismissed with costs.
Appeal dismissed.
[/INST]The plaintiff respondent No. 1 instituted a suit for recovery of the amount lent to the defendant with interest upto the date of the suit.
His claim was decreed in a sum of Rs. 13,033 6 6 with future interest from the date of suit till realisation at 4 % per annum on a sum of Rs.10,120.
Against this decree the defendant appealed to the High Court and valued the appeal at Rs. 13,033 6 6 and paid the requisite court fee on that amount.
All his grounds of appeal related to the merits of the plaintiff 's claims and did not deal with the correctness of the trial court awarding future pendente lite interest on the rate at which it was to be calculated.
The Taxing Officer directed the defendant to pay the deficit court fee of Rs. 70 on the memorandum of appeal as he was of the opinion that the appeal was against the whole decree and that the amount of value of the subject matter in dispute for purpose of court fee was Rs. 14,036.80nP. as the amount of interest from the date of the suit till the date of the decree on Rs. 10,120 came to Rs. 1,033.40nP. 231 The defendant challenged this order in revision before the High Court under section 5(2) of the Bombay Court fees Act, 1959.
The High Court set aside the order of the Taxing Officer and the learned Judge expressed the view: "The subjectmatter in appeal is the real matter in dispute between the parties and not something which must stand or fall with the decision on it.
In other words, it must mean the right which is in dispute between the parties".
In this Court the appellant State challenged the correctness of the said view of the High Court and relied mainly on the construction put by courts on expression " value or subject matter in dispute," in the relevant provisions relating to the High Court 's giving leave to appeal to the Privy Council.
Held:(i) That the expression 'amount or value of the subjectmatter in dispute ' in article 1 of Schedule 1 of the Bombay Court fees Act, cannot be construed in the light of the construction placed on a similar expression for the purposes of considering whether the case had come within the rule allowing the High Courts to give leave for appeal to the Privy Council.
The Act is a taxing statute and its provisions have to be construed strictly, in favour of the subject litigant.
Gooroopersad Khoond vs Juggutchunder, 8 M.I.A. 166 and Doorga Doss Chowdry vs Ramanauth Chowdry, 8 M.I.A. 262, held in applicable.
(ii)Claims not based on any asserted right but dependent on the decision of the disputed right and reliefs in regard to which are in the discretion of the court do not come within the purview of the expression 'subject matter in dispute in plaint or memo of appeal '.
(iii)The amount of pendente lite interest decreed is not to be included in the 'amount or value of the subject matter in dispute in appeal ' for the purposes of article 1 of Sch. 1 of the Act unless the appellant specifically challenges the correctness of the decree for the amount of interest pendente lite independently of the claim to set aside that decree.
In the present case, the decree in that respect was not specifically challenged and therefore the view of the High Court must be held to be correct.
Mitthu Lal vs Chameli, 57 All.
7 1, Keolapati Mst.
vs B.N. Varma, I.L.R. 12 Luck.
466 and Ashutosh vs Satindra Kumar, 54 C.W.N.380, referred to.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 379 of 1986.
From the Judgment and Order dated 13.7.1984 of the Punjab and Haryana High Court in Crl.
Appeal No. 82 D.B. of 1984.
R.L. Kohli and R.C. Kohli for the Appellant.
412 R.S. Suri for the Respondent.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
One may ask the question whether murder by poisoning is not run like any other murder? The learned counsel for the appellant purports to state that it is not.
He relies upon the judicial prescriptions as to the burden of proof in "poison murder" cases.
He contends that the prosecution must prove "that the accused had the poison in his possession".
He asserts that failure to establish that factor should entail the acquittal of the accused.
This is a vital question which goes far beyond the case and it, therefore, requires careful consideration.
Bhupinder Singh Appellant was prosecuted for the murder of his wife by poisoning.
He was sentenced for life imprisonment by the Additional Sessions Judge, Faridkot in Session Case No. 86 of 1983.
His conviction and sentence have been affirmed by the Punjab and Haryana High Court in criminal appeal No. 82 DB of 1984.
He has preferred this appeal by special leave challenging the conviction and sentence.
We may first advert to the prosecution case.
It reveals a sad story.
It runs like this: Gian Kaur, the victim in this case is the only daughter of Baltej Singh.
Baltej Singh like many other parents thought that his problems would be solved by the marriage of his daughter.
He got her married to Bhupinder Singh by spending all his savings.
His relatives also contributed for the marriage.
But ill luck would have it, his problems started immediately after the marriage.
Bhupinder Singh and his parents wanted Gian Kaur to bring Rs. 10,000 from her father.
It was nothing but a demand for dowry.
They stopped up their demand with harassment to Gian Kaur.
Gian Kaur informed her father.
The father could not arrange that much of amount.
He had already spent all that he had in connection with her marriage.
He had also then given presents in cash and kind to Bhupinder Singh.
So he felt helpless.
Unmerciful, Bhupinder Singh asked his wife to go back to her parents ' house.
So she left to seek shelter with her parents.
She remained with them for about eight months.
But how long the father could keep his married daughter away from her husband.
Some parents think that it is a reflection upon them.
Baltej Singh also must have thought like that.
He somehow arranged Rs.6,000 and sent Gian Kaur to her husband 's house.
Gian Kaur rejoined her husband upon making the payment of Rs.6,000.
That appears to have satisfied Bhupinder Singh for about 413 one year.
In the meantime, Gian Kaur had a male child.
Naturally there was jubilation for Baltej Singh.
He performed the customary Chuchhak ceremony and again gave Rs.4,000 and a buffalo as presents to Bhupinder Singh.
Bhupinder Singh ought to have been happy and satisfied.
But he was not.
It was alleged by the prosecution that this time he demanded a motorcycle.
Baltej Singh could not give it.
Gian Kaur, as usual, was again the target.
It was further alleged by the prosecution that Bhupinder Singh threatened to kill his wife if motorcycle was not given to him.
Gian Kaur had kept her father informed about the said demand and the threat.
On July 13, 1983, Gian Kaur died under mysterious circumstances.
Upon receiving that information, Baltej Singh with his brother Baldev Singh reached the place in the evening of that day.
They saw Gian Kaur, lying dead on a charpai.
They suspected foul play.
Baltej Singh gave the information to the police narrating all the above events.
He informed the police that his daughter was killed by Bhupinder Singh and his parents by administering something to her.
On the basis of that information, the F.I.R. was issued.
The investigation of the case was taken by A.S.I. (PW 4).
The body of Gian Kaur was sent to Dr. Sant Prakash Singh (PW 6) for post mortem.
The Doctor Prakash Singh noticed five minor injuries on the body of the deceased.
The brain and other vital organs were also found to be congested.
The Doctor sent stomach contents, portions of small intestine, liver, spleen and kidney to the chemical examiner for the purpose of analysis.
The chemical examiner in his report dated September 14, 1983 has stated that an Organo phosphorus compound was found in the substance sent to him for analysis.
The investigating officer sent that report for opinion of the Doctor Prakash Singh as to the cause of death of Gian Kaur.
The Doctor gave his opinion that the death of Gian Kaur was due to organo phosphorus compound poisoning.
Bhupinder Singh, his father Sher Singh and his mother Mukhtiar Kaur were tried for committing the murder of Gian kaur by administering poison.
The prosecution examined six witnesses and the accused in turn examined one.
The trial court after considering the evidence and other material on record held as follows: The accused had strong motive to get rid of Gian Kaur.
Apparently motive for the murder was the inability of Gian Kaur 414 to satisfy the demand for dowry.
The death of Gian Kaur was not accidental or suicidal.
There was no reason for her to commit suicide.
It was also not a death by food poisoning since the accused and deceased shared common food on the fateful night.
There was none else in the house on that night except Gian Kaur and the accused.
The accused had an opportunity to accomplish their design.
The accused must have administered the poison to the victim.
The injuries found on the body of the deceased indicated the resistence she must have offered when the poison was administered to her.
With these and other conclusions, the trial court finally said: "In the background of the circumstances and evidence discussed above, the only conclusion possible is that Bhupinder Singh and Mukhtiar Kaur did administer poison organo phosphorus compound to Gian Kaur and did cause her death with common intention, which was to get rid of her as she had not been able to persuade his father to meet their demand for motorcycle so as to clear way for another marriage of Bhupinder Singh in his youthful years in order to get more and more of dowry." Accordingly, the trial court found all the three accused guilty of the offence under Section 302 read with Section 34 I.P.C. They were sentenced to imprisonment for life.
Challenging the legality of the conviction and sentence the accused appealed to the High Court.
It was urged before the High Court that the death of Gian Kaur was not homicidal.
She must have in all probability committed suicide since she was suffering from tuberculosis.
It was also urged that the prosecution has failed to establish by evidence the necessary conditions for the proof of murder by poisoning.
The High Court did not agree with those contentions.
The High Court ruled out the theory of suicide.
It was observed that there was no evidence to show that Gian Kaur was suffering from tuberculosis or ever treated for that disease.
The High Court observed: "Case of murder by poisoning is always one of secrecy.
Almost in every such case one has to depend on circumstances.
Doubtless, before a person can be convicted on the strength of circumstantial evidence, the circumstances in question must be satisfactorily established 415 and the proved circumstances must bring home the offence to the accused beyond reasonable doubt.
If those circumstances or some of them can be explained by any reasonable hypothesis then the accused must have the benefit of that hypothesis.
But in assessing the evidence imaginary possibility has no place.
What has to be considered are ordinary human probabilities.
We have already referred to some important circumstances which in our opinion point out to the guilt of Bhupinder Singh and Sher Singh appellants.
In the well known case of Anant Chantman Lagu vs The State of Bombay, ; their Lordships held that in a cause of poisoning, the prosecution must establish: (a) that the death took place by poisoning; (b) that the accused had the poison in his possession; and (c) that the accused had an opportunity to administer the poison to the deceased.
All the three requirements are satisfied in this case.
There is no dispute that the death of the deceased was caused by poisoning.
It has been established by the chemical examiner 's report, that the viscera contained organo phosphorus compound poison.
The evidence of the prosecution witnesses has established that the aforesaid two appellants had the opportunity to administer poison to the deceased and that they had the motive to commit the crime.
Their running away from the house at the time when the Investigating Officer visited their house is also consistent with their guilt and not with their innocence.
" With these observations, the High Court confirmed the conviction and sentence on Sher Singh and Bhupinder Singh while acquitting Mukhtiar Kaur.
The present appeal is only by Bhupinder Singh.
Before embarking on the validity of the main submission made in this appeal, we may first dispose of one other contention urged for the appellant.
Mr. R.N. Kohli, learned counsel for the appellant submitted that it is not enough for the chemical examiner merely to state in his report that the organo phosphorus compound was present in the substance sent to him for examination.
He should have also stated that a lethal dose of the organo phosphorus compound was detected in the substance sent to him.
His report should be full and complete to take the place of evidence which he would have given if he were called to Court as witness.
In the absence of such particulars, the death by 416 poisoning cannot be inferred.
In support of this contention, learned counsel relied upon two decisions of the Allahabad High Court viz. (i) Mt. Gajrani and Anr.
vs Emperor, [A.I.R. 1933 Allahabad 394] and (ii) State vs Fateh Bahadur & Ors., [A.I.R. 1958, Allahabad 1].
In the first case, it was observed that it was not enough for the chemical examiner merely to state his opinion.
He must also state the grounds which formed the basis of his opinion.
The second case was a case of death by arsenic poisoning.
The chemical examiner did not state the quantity of arsenic poison found in the viscera of the deceased.
He did not state whether it was a fatal dose or not.
The High Court pointed out that it would be of the utmost importance before a Court could find any individual guilty of murder by arsenic poison that its complete analysis should be made.
It is not enough to state that arsenic was detected in the body of the deceased.
In our opinion, these observations cannot be taken as a rigid statement of law.
(No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
Section 293 of the Code of Criminal Procedure provides that the report ofscientific experts may be used as evidence in any inquiry, trial or other proceedings of the court.
The chemical examiner does not, as a rule, give an opinion as to the cause of death but merely gives report of the chemical examination of the substance sent to him.
The report by itself is not crucial.
It is a piece of evidence.
The only protection to it is that it does not require any formal proof.
It is, however, open to the Court if it thinks fit to call the chemical examiner and examine him as to the subject matter of the report.
The report should normally be forwarded to the Doctor who conducted the autopsy.
In the instant case, that was done.
The Doctor who conducted the autopsy was given a copy of the report of the chemical examiner.
The Doctor in the light of the report gave his opinion that the death of Gian Kaur was by poisoning i.e. organo phosphorus compound.
The report of the chemical examiner coupled with the opinion of the Doctor is, therefore, sufficient to hold that it was a death by poisoning.
This takes us to the main contention urged for the appellant.
It was urged that in a case of murder by poison there are three main points to be proved, firstly did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
It was also urged that if the prosecution fails to prove these factors, then the accused cannot be convicted.
The evidence in the case, according to learned counsel falls 417 short of these requirements and, in particular, as to the question of proof of possession of the poison with the accused and therefore the accused is entitled to acquittal.
We have been referred to some decisions of this Court in support of the contention urged.
We have also examined some other cases bearing on the question raised.
A brief survey of these cases would be useful to appreciate the contention urged for the appellant.
There are two unreported decisions of this Court of the year 1958.
The first one is in Chandra Kant Myalchand Seth 's case [Criminal Appeal No. 120 of 1957 decided on 19.2.1958].
There a woman died of alkali cyanide.
The husband of the deceased was tried and convicted by the trial court for the offence of murder.
The conviction was set aside by this Court.
In the course of the judgment, it was observed: "Before a person can be convicted of murder by poisoning, it is necessary to prove that the death of the deceased was caused by poison, that the poison in question was in possession of the accused and that poison was administered by the accused to the deceased." The acquittal, however, was based on the consideration of the entire facts and circumstances of the case.
It was found that there was a greater motive to the deceased to commit suicide than to the accused to commit murder.
This Court also took note of the concern and conduct of the accused when he found his wife lying unconscious.
The accused ran to the house of his friend and returned with a Doctor to render assistance to the victim.
The accused called another Doctor for the same purpose.
He was also found weeping all the while.
Taking into consideration of all these factors, this Court found no justification to sustain the conviction of the accused.
Dharambir Singh vs State of Punjab, (Criminal Appeal No. 98 of 1958 decided on 4.11.1958) is another case of homicidal action by cyanide poisoning.
It was perhaps in this case, the guidelines as to the proof of certain facts in "poison murder cases" were laid down by this Court.
It was observed: "Where the evidence is circumstantial the fact that the accused had motive to cause death of the deceased, though relevant, is not enough to dispense with the proof of certain facts which are essential to be proved in such cases, namely (firstly) did the deceased die of poison in 418 question? (secondly) had the accused the poison in his possession? and (thirdly) had the accused an opportunity to administer the poison in question to the deceased? It is only when the motive is there and these facts are all proved that the court may be able to draw the inference, that the poison was administered by the accused to the deceased resulting in his death.
" After laying down these principles, the court considered the entire evidence on record which indicated the likelihood of the deceased committing suicide or another person to have administered the poison to the deceased.
This Court accordingly acquitted the accused by extending the benefit of doubt.
If one prefers to go yet further back we find a decision of the Allahabad High Court which is exactly on the principles laid down in Dharambir Singh case.
In Mt. Gajrani vs Emperor, A.I.R. 1933 All.
394 Benett, J. speaking for the Court observed (at p. 394): "In a case of murder by poison there are three main points to be proved: firstly, did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
If these three points are proved, a presumption may under certain circumstances be drawn by the Court that the accused did administer poison to the deceased and did cause the death of the deceased.
It is not usual that reliable direct evidence is available to prove that the accused did actually administer poison to the deceased.
The evidence of motive which is frequently given in these cases is of subsidiary importance, and the mere fact that the accused had a motive to cause the death of the deceased is not a fact which will dispense with the proof of the second and third points that the accused had the poison in his or her possession, and that the accused had an opportunity to administer the poison.
" The above proposition found its way into Mohan vs State of Uttar Pradesh, ; and Ram Gopal vs State of Maharashtra, A.I.R. 1972 S.C. 656.
In Mohan 's case, the death in question was by arsenic poisoning.
In that case, the prosecution was able to prove that the accused gave 'peras ' to the victim as 'pershad ' and the victim 419 died after eating the 'pershad '. 'Pershad ' contained arsenic.
There was thus direct evidence as to the possession of the poison with the accused.
This Court, therefore, had no difficulty to sustain the conviction and sentence awarded to the accused.
Ram Gopal 's case was concerned with homicidal action by administering a compound called "kerosene and orango choloro compound".
The High Court, relying upon the motive and other circumstantial evidence convicted the accused for the offence of murder although there was no evidence that the accused was in possession of poison.
This Court could not agree with the view taken by the High Court.
The analysis of the evidence produced by the prosecution revealed that the motive alleged against the accused was not fully established.
The incriminating circumstantial evidence against the accused was also found to be insufficient.
So the conviction of the accused was set aside and the acquittal was recorded.
Sharda E. Chand Sarda vs State of Maharashtra, ; is yet another case of death by cyanide poisoning for which the husband of the deceased was tried for murder.
There was no direct evidence to establish that the accused was in possession of that poison.
The High Court, however, relied upon the circumstantial evidence and convicted the accused.
In the appeal preferred by the accused, this Court did not agree with the reasoning of the High Court.
After referring to Ram Gopal 's case.
Fazal Ali, J., focussed the attention on the following four factors: The learned Judge observed (at p.167): "So far as this matter is concerned, in such cases the court must carefully scan the evidence and determine the four important circumstances which alone can justify a conviction: (1) there is a clear motive for an accused to administer poison to the deceased, (2) that the deceased died of poison said to have been administered, (3) that the accused had the poison in his possession, (4) that he had an opportunity to administer the poison to the deceased.
" 420 The learned Judge went on to state: "In the instant case, while two ingredients have been proved but two have not.
In the first place, it has no doubt been proved that Manju died of potassium cyanide and secondly, it has also been proved that there was an opportunity to administer the poison.
It has, however, not been proved by any evidence that the appellant had the poison in his possession.
On the other hand, as indicated above, there is clear evidence of PW 2 that potassium cyanide could have been available to Manju from the plastic factory of her mother, but there is no evidence to show that the accused could have procured potassium cyanide from any available source.
We might here extract a most unintelligible and extra ordinary finding of the High Court: "It is true that there is no direct evidence on these two points, because the prosecution is not able to lead evidence that the accused had secured potassium cyanide poison from a particular source.
Similarly there is no direct evidence to prove that he had administered poison to Manju.
However, it is not necessary to prove each and every fact by a direct evidence.
Circumstantial evidence can be a basis for proving this fact.
" The comment by the high Court appears to be frightfully vague and absolutely unintelligible.
While holding in the clearest possible terms that there is no evidence in this case to show that the appellant was in possession of poison, the High Court observes that this fact may prove either by direct or indirect (circumstantial) evidence.
But it fails to indicate the nature of the circumstantial or indirect evidence to show that the appellant was in possession of poison.
If the Court seems to suggest that merely because the appellant had the opportunity to administer poison had the same was found in the body of the deceased, it should be presumed that the appellant was in possession of poison, then it has committed a serious and gross error of law and has blatantly violated the principles laid down by this Court.
The High Court has not indicated as to what was the basis for coming to a finding that the accused could have procured the cyanide.
On the other hand, in view of the 421 decision in Ram Gopal 's case failure to prove possession of the cyanide poison with the accused by itself would result in failure of the prosecution to prove its case." This Court then went into the merits of the prosecution case.
It was observed that the deceased was of sensitive mind.
She had occasionally suffered mental depression due to her inability to adjust herself to her husband 's family.
It was also observed that the deceased had access to the poison in question.
She could have secured the poison from the factory of her mother.
Considering these and other circumstances, it was held "that it might be a case of suicide or murder and both were equally probable".
So the accused was given the benefit of doubt and he was acquitted.
From the foregoing cases, it will be seen that in poison murder cases, the accused was not acquitted solely on the failure of the prosecution to establish one or the other requirement which this Court has laid down in Dharambir Singh case.
We do not also find any case where the accused was acquitted solely on the ground that the prosecution has failed to prove that the accused had the poison in his possession.
The accused in all the said cases came to be acquitted by taking into consideration the totality of the circumstances including insufficient motive, weakness in the chain of circumstantial evidence and likelihood of the deceased committing suicide.
We do not consider that there should be acquittal on the failure of the prosecution to prove the possession of poison with the accused.
Murder by poison is invariably committed under the cover and cloak of secrecy.
Nobody will administer poison to another in the presence of others.
The person who administers poison to another in secrecy will not keep a portion of it for the investigating officer to come and collect it.
The person who commits such murder would naturally take care to eliminate and destroy the evidence against him.
In such cases, it would be impossible for the prosecution to prove possession of poison with the accused.
The prosecution may, however, establish other circumstances consistent only with the hypothesis of the guilt of the accused.
The court then would not be justified in acquitting the accused on the ground that the prosecution has failed to prove possession of the poison with the accused.
The poison murder cases are not to be put outside the rule of circumstantial evidence.
There may be obvious very many facts and circumstances out of which the Court may be justified in drawing 422 permissible inference that the accused was in possession of the poison in question.
There may be very many facts and circumstances proved against the accused which may call for tacit assumption of the factum of possession of poison with the accused.
The insistence on proof of possession of poison with the accused invariably in every case is neither desirable nor practicable.
It would mean to introduce an extraneous ingredient to the offence of murder by poisoning.
We cannot, therefore, accept the contention urged by the learned counsel for the appellant.
The accused in a case of murder by poisoning cannot have a better chance of being exempted from sanctions than in other kinds of murders.
Murder by poisoning is run like any other murder.
In cases where dependence is wholly on circumstantial evidence, and direct evidence not being available, the Court can legitimately draw from the circumstances an inference on any matter one way or the other.
The view that we have taken gets support from the decision of this Court in Ananth Chintaman Laguy vs The State of Bombay, ; where Hidayatullah, J., has given an anxious consideration to the three propositions laid down in Dharambir Singh case.
The learned Judge did not consider them as invariable criteria of proof to be established by the prosecution in every case of murder by poisoning.
The learned Judge said (at p. 519 520): "It is now necessary to consider the arguments which have been advanced on behalf of the appellant.
The first contention is that the essential ingredients required to be proved in all cases of murder by poisoning were not proved by the prosecution in this case.
Reference in this connection is made to a decision of the Allahabad High Court in Mt. Gajrani vs Emperor.
AIR 1933 All 394 and to two unreported decisions of this Court in Chandrakant N Nyalchand Seth vs The State of Bombay, Criminal Appeal No. 120 of 1957 decided on February 19, 1958 and Dharambir Singh vs The State of Punjab, Criminal Appeal No. 98 of 1958, decided on 4.11.1958.
In these cases, the Court referred to three propositions which the prosecution must establish in a case of poisoning; (a) that death took place by poisoning; (b) that the accused had the poison in his possession, and (c) that the accused had an opportunity to administer the poison to the deceased.
The case in Cr. A. No. 98 of 1958 D/ 4.11.1958 (SC) turned upon these three propositions.
There, the deceased had died as a result of poisoning by potassium cyanide, which poison was also found in the 423 autopsy.
The High Court had disbelieved the evidence which sought to establish that the accused had obtained potassium cyanide, but held, nevertheless that the circumstantial evidence was sufficient to convict the accused in that case.
This Court, did not, however, accept the circumstantial evidence as complete.
It is to be observed that the three propositions were laid down not as the invariable criteria of proof by direct evidence in a case of murder by poisoning, because evidently if after poisoning the victim.
the accused destroyed all traces of the body, the first proposition would be incapable of being proved except by circumstantial evidence.
Similarly, if the accused gave a victim something to eat and the victim died immediately on the ingestion of that food with symptoms of poisoning and poison, in fact, was found in the viscera, the requirement of proving that the accused was possessed of the poison would follow from the circumstances that the accused gave the victim something to eat and need not be separately proved.
" The learned Judge continued: "The cases of this Court which were decided proceeded upon their own facts, and though the three propositions must be kept in mind always, the sufficiency of the evidence, direct or circumstantial? to establish murder by poisoning will depend on the facts of each case.
If the evidence in a particular case does not justify the inference that death is the result of poisoning because of the failure of the prosecution to prove the fact satisfactorily, either directly or by circumstantial evidence, then the benefit of the doubt will have to be given to the accused person.
But if circumstantial evidence, in the absence of direct proof of the three elements, is so decisive that the Court can unhesitatingly hold that the death was a result of administration of poison (though not detected) and that the poison must have been administered by the accused person, then the conviction can be rested on it." So much for the principles for which the learned counsel for the appellant fought for.
On the facts there is concurrence of opinion between the two courts below.
This Court seldom re examines the findings of fact reached by the High Court.
We may, however, out of 424 deference to the counsel briefly refer to the evidence.
The prosecution has established the motive for the murder.
The proof of motive goes a long way to tilt the scale against the accused which provides a foundational material to connect the chain of circumstances.
The facts which hear on motive are distressing.
After the marriage, Gian Kaur was subjected to repeated harassment for not satisfying the demand for dowry made by Bhupinder Singh.
Baltej Singh (PW2) has stated that Bhupinder Singh asked Gian Kaur to bring Rs. 10,000.
The parents of Bhupinder Singh were also parties to that demand.
Baltej Singh with all difficulties satisfied that demand in part by payment of Rs.6,000.
Bhupinder Singh thereafter demanded a motorcycle.
When that was not immediately given Bhupinder Singh held out a threat to his wife that she would be killed.
This was conveyed to Baltej Singh.
Before he could take a decision in this regard he was shocked to receive the news of death of Gian Kaur.
This has been proved by the testimony of Baltej Singh (PW 2) and Nazir Singh (PW 3).
The demand for dowry followed by harassment to the deceased has been thus satisfactorily proved.
The evidence of the Doctor and the report of the chemical examiner has established beyond doubt that Gian Kaur died of organo phosphorus compound poisoning.
Bhupinder Singh had an opportunity to administer that poison.
There was nobody else in the house.
All the inmates had their common food in the night.
All of them slept in the same place.
Both the Courts have ruled out the theory of suicide by Gian Kaur.
We entirely agree with that finding.
She could not have thrown her child to the mercy of others by committing suicide and indeed no mother would venture to do that.
The postmortem report giving the description of injuries found on the body of the deceased would also defy all doubts about the theory of suicide.
She had contusion on the front of right leg.
Abrasion on the front of the left leg just below the knee joint.
Linear abrasion on the back of the right hand.
Linear abrasion on the antro lateral aspect of left fore arm in its middle.
And contusion on the back of right elbow joint.
These injuries, as the Courts below have observed could have been caused while Gian Kaur resisted the poison being administered to her.
The behaviour of Bhupinder Singh in the early hours of that fateful day by going to his field as if nothing had happened to his wife is apparently inconsistent with the normal human behaviour.
There was no attempt made by him or other inmates of the house to look out for any Doctor to give medical attention to the victim.
The movement and disposition of Bhupinder Singh towards the victim and situations 425 are incompatible with his innocence.
On the contrary, it gives sustenance to his guilt.
The Courts below having considered all these facts and circumstances had no difficulty to convict the accused for murder and we see no good reason to interfere with that conclusion.
In the result, the appeal fails and is dismissed.
R.S.S. Appeal dismissed.
[/INST]An agreement for distribution of the film "Savere Wali Gadi" was entered into on 19th March, 1983 between the petitioner as the distributor and the respondent as the producer.
The agreement contained an arbitration clause.
A sum of Rs.3.40 lakhs paid to the respondent and acknowledged by him earlier to the agreement was deemed to have been adjusted against the first instalment.
In or about 1984 about Rs. 3 lakhs were further advanced to the respondent.
As per the agreement the respondent was to hand over the prints of the film by 10th August, 1983, but it was not done.
On 11th March, 1985 a further agreement was entered into between the parties whereby the respondent agreed to pay a total sum of Rs.6.50 lakhs to the petitioner for giving up his distribution rights in the first agreement.
The first agreement was accordingly irrevocably cancelled and superseded by the subsequent agreement.
The respondent took up the matter with Motion Pictures Association to de register the film in the name of the petitioner.
The Motion Picture Association stated that de registration would be allowed only when the respondent pays Rs.6.50 lakhs to the petitioner or deposits the amount with the Association.
The petitioner 's claim before the Association was that the respondent committed breach of the subsequent agreement.
A civil suit was filed in the High Court for recovery of Rs.6.50 lakhs with interest, by the petitioner against the respondent.
Later, an application under section 20 of the was made.
The Single Judge held that the first agreement had revived and directed the 528 filing of the agreement.
On appeal, the Division Bench confirmed the order.
This special leave petition is against the order of the Division Bench of the High Court.
Dismissing the special leave petition, this Court, ^ HELD: 1.1 Whether in any particular case there was a complete novation of a contract in the sense that the new contract replaced or substituted the old contract, could depend upon the facts and circumstances of the case.
[531B C] 1.2 When the agreement of 1985 was entered into, it was the intention of the parties that the earlier agreement would be superseded and a new arrangement was sought to be brought about whereby the rights of the petitioner under the earlier agreement were to be yielded for a sum of Rs.6.50 lakhs.
This amount of Rs.6.50 lakhs was never paid by the respondent, and it was the case of the petitioner that the earlier agreement stood cancelled.
The petitioner who claimed rights under the earlier agreement, sought the continuation of his registration of distributorship.
This registration could continue only by virtue of the earlier agreement which had revived.
[530G HG; 531B] Babulal Marwari and others vs Tulsi Singh and others, A.I.R. 1940 Patna 121, refered to.
2.1 Sub section (1) of Section 20 of the gives an option to the parties by the use of the expression 'may ', but the other sub sections, if the conditions are fulfilled, make it obligatory for the Court to direct filing of an arbitration agreement.
[532G] 2.2 Indubitably, there was an arbitration clause in the agreement.
The parties have applied for reference.
The Division Bench has reiterated that the original agreement dated 19th March, 1983 which ceased to have effect and came to an end by the agreement dated 11th March, 1985 stood revived by virtue of the two letters dated 15th July, 1985 and 11th September, 1985 by the appellant.
It is clear that the petitioner in the above letters fell back on the original contract of 19th March, 1983.
This was accepted by the respondent.
Hence there was at all relevant times a valid and binding contract between the parties.
That contract contained an arbitration clause.
There was nothing to disentitle the parties to have their rights adjudicated in terms of an arbitration clause.
The civil suit filed does not by itself preclude filing of proper arbitration agreement between the parties.
There being no impediment 529 in filing the arbitration agreement which was subsisting at the relevant time when the High Court directed that the arbitration agreement be filed, that discretion should not be interfered with.
[532G H; 531F G]
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<s>[INST] Summarize the judgementCivil Appeal No. 755 of 1971 From the Judgment and Order dated 21.12.1970 of the Allahabad High Court in Second Appeal No. 2757 of 1963.
D.P. Singh, R.P. Singh and D.S. Mehra for the Appellant.
L.P. Vats and S.P. Panday for the Respondent.
The Judgment of the Court was delivered by B.C. Ray, J.
This appeal by special leave is against the judgment and decree dated 21st December, 1970 of the Allahabad High Court in Second Appeal No. 2757 of 1963 allowing the appeal on setting aside the judgment and decree of the court of appeal below and dismissing the plaintiff 's suit.
The plaintiff Hari Chand @ Harish Chandra instituted suit No.610 of 1961 in Court of the Munsif, Agra for recovery of possession of the disputed land shown in red colour attached to the plan marked with letters GCDH on demolition of the unauthorised constructions made thereon by the defendant alleging inter alia that the plaintiff became owner in possession of a piece of land measuring 1580 Sq.
situated at Sultanpura, Agra Cantt.
designated as No. 164A, and 1032 shown in the plan attached thereto with letters A, B, C, D, E, F on the basis of a registered sale deed dated 9th May, 1961, from Ramji Lal owner of the said property.
It has been further alleged that the plaintiff started to build a compound wall over and around his land after his purchase.
The defendant taking undue advantage of the plaintiff 's temporary absence from Agra, wrongfully encroached and trespassed along the whole Northern length of the plaintiff 's land measuring North to South about 4 ft. and East to West about 62 1/2 ft.
by hurriedly raising a low mud wall and extending his khaprail thatch over it.
It has been shown in the attached plain in red colour with letters G, C, D & H.
It has been further alleged that inspite of plaintiff 's objection against the said wrongful encroachment and trespass the defendant did not pay any heed to it.
It has also been pleaded that the cause of action of the suit primarily arose on or about 22nd May, 1961 when the defendant made the encroachment and wrongful constructions over the plaintiff 's land as well as it arose on 4.6.1961 when the defendant failed to remove the encroachment inspite of the plaintiff 's notice.
Hence this suit has been instituted.
The defendant filed a written statement denying that the plaintiff was owner of the land shown by GCDH in the plan attached to the plaint.
The defendant also denied the correctness of the sale deed dated 9.5.1961.
It has been stated that the land marked GCDH as shown in red colour in the plan attached to the plaint never belonged to the plaintiff.
The wall and khaprail belonging to the contesting defendant have been existing at their present site since time immemorial.
The plaintiff 's allegation that the contesting defendant has constructed the wall and extended the khaprail (tiled roof) in May 1961 is totally wrong and baseless.
It has been further stated that he did not make any new construction.
The defendant also stated that the plaintiff illegally tried to remove his kutcha wall and the tiled roof situate at the place marked G, C, D & H. Accordingly, on 25.5.1961 the contesting defendant gave a notice to the plaintiff mentioning the actual facts to which he gave a wrong reply.
The plaintiff 's allegation that the wall and tiled roof of the defendant encroach upon the plaintiff 's land is totally wrong, false and baseless.
It has been stated that the wall and tiled roof belongs to the contesting defendant and the eaves of tiled roof have been at the same place since time immemoral where they are at present.
He has been regularly and openly enjoying all the proprietary rights and rights of adverse possession in respect of the land aforesaid.
Under Sec.
142 of the Limitation Act, the contesting defendant became the absolute owner of the land in dispute on the 1033 basis of the adverse possession as well and he has a right of easement in the form of flowing of water from the tiled roof.
The kuchha house No.164 belonging to the contesting defendant has been existing at its site exactly in the same condition in which it was built by the defendant 's grandfather.
The eaves have been dropped at that very place and the khaprail has also been existing at that very place.
The contesting defendant did not make any new construction as alleged by plaintiff in the plaint.
Property Nos. 163 and 164 consisted of kuchha houses.
The contesting defendant demolished the Property No. 163 which had come to his share and got in pucca built.
Property No. 164 is a khaprail in which the contesting defendant is living and was living at the time of partition.
The defendant therefore, states that the suit is liable to be dismissed.
Third Additional Munsif, Agra after hearing the parties and also on a consideration and appraisement of the evidence on record held that the plaintiff was the owner of the property described in the plaint by the boundaries but the defendant has not trespassed over his land and has not constructed a new wall or khaprail.
It has been further held that the plaintiff failed to prove the case of trespass and encroachment.
The suit was accordingly dismissed with costs.
Against this judgment and decree the plaintiff preferred an appeal being numbered as Civil Appeal 220 of 1963 in the court of District Judge, Agra.
This appeal was allowed by the IInd Addl.
Civil Judge, Agra holding that the defendant failed to prove that the wall in dispute and the khaprail existed for the last more than 12 years before the suit, even though it was not proved that the khaprail had been raised in May 1961 as was the case of the plaintiff, but they are recent construction.
It was further held that even if the defendant 's wall and khaprail are old ones he is not entitled to maintain them after the same was allotted to Ramji Lal in the deed of partition dated 3.3.1958.
It has been further held that the plaintiff is entitled to possession after demolition of the construction on the portion found encroached by defendant.
The judgment and degree of the court below was set aside.
Against this judgment and decree Second Appeal No. 2757 of 1963 was filed before the High Court at Allahabad.
This appeal was dismissed by judgment and order dated 8.9.1963 and the judgment and decree of the lower appellate court was affirmed.
A review application No. 269 of 1969 for the review of the said 1034 judgment was filed before the High Court on the ground that the alleged partition deed dated 17th March, 1963 was not in fact a deed of partition but merely an agreement between the parties to partition the property and there was no actual partition by metes and bounds.
The defendent continued to remain co owner and co sharer of the property in suit.
The decree passed in the said suit is neither possible nor permissible under the law.
This review application was allowed by judgment and order dated December 9, 1970 setting aside the judgment dated 8th September, 1969 and directing the appeal to be listed for further hearing.
Accordingly on 21.12.1970 the appeal was heard by the learned judge who held that the mere allotment of shares by the said deed of partition did not amount to partition by metes and bounds.
The appeal of the defendant was allowed and the judgment and decree of the lower appellate court were set aside and the suit was dismissed.
Against this judgment and decree the instant appeal on special leave was filed by the plaintiff.
The learned counsel for the plaintiff tried to urge before us that the land in dispute marked as GCDH in the plan was allotted to the share of the plaintiff 's vendor Ramji Lal in accordance with the deed of partition (Ext.
3/1) and shown in map (Ext. 3/2) effected between the parties on 17.3.1958 and this has been mentioned in the sale deed (Ext. 1) executed by Ramji Lal, one of the co sharers of the property.
It has, therefore, been submitted that the judgment and decree of the High Court is not in accordance with law and it should be set aside.
This contention advanced on behalf of the plaintiff cannot be sustained in as much as there is no pleading in the plaint that the disputed property shown in red colour and marked as GCDH fell within the allotment of the plaintiff on the basis of the deed of partition executed in 1958 between the plaintiff 's vendor Ramji Lal and his two other brothers Daulat Ram and Bishambhar Nath.
It was also been not pleaded that the disputed mud wall and the Khaprail over it were all along in possession of his vendor before the sale of the said land measuring 1580 Sq.
ft appertaining to Property No. 164A.
The plaintiff 's case is that he got possession of the land he purchased including the suit land on May 9, 1961 and the defendant illegally trespassed on the said portion of land marked in red colour in the plan attached to the plaint and hurriedly constructed a low mud wall and extended his khaprail thatch over it on May 22, 1961 and so the suit for recovery of possession of this land on demolition of the unauthorised construction put up by the defendant was brought.
There is no pleading regarding the partition of the Property No. 164 between 1035 Ramji Lal and his two brothers nor there is any pleading to the effect that the disputed mud wall with the khaprail on it was ever in possession of his vendor Ramji Lal before the sale of the land in question in favour of the plaintiff.
On the other hand, the defendant strongly and categorically stated in his written statement that the mud wall along with khaprail were in existence there for a long time and he was living in the said khaprail to the knowledge of the plaintiff 's vendor.
He also denied that he made any new construction of the wall on 22nd May, 1961 as alleged by the plaintiff.
He also stated that the wall and the tiled roof belonged to the defendant and the existence of the tiled roof had been at the same place in the same condition for a long time long before.
the partition deed made in 1958.
The defendant also stated in his written statement that more than twenty years before private parition took place amongst the defendant and his brothers Bish ambar Lal and Ramji Lal.
Property No. 163 and 164 had come to his share.
He demolished the Property No. 163, and he made pucca construction therein.
Property No. 164 is khaprail wherein the contesting defendant is living and was also living at the time of partition.
The plaintiff has examined three witnesses including himself and his vendor Ramji Lal.
P.W. 1 Ramji Lal stated in his deposition that the portion shown in red in plan No. 36/4 Ka came to his share and defendant Daulat Ram was never in possession of this red portion after partition.
It was also his evidence that at the time of sale, wall belonging to Daulat Ram did not exist over the portion showed in red colour.
In cross examination he said that there was a tiled shed towards the north of the land in dispute.
Daulat Ram used to live therein.
All these three portions had old tiles.
There was a chhappar over the portion shown in red.
Tiled roof was made after the fire accident.
It happened about 28 years back.
The land in dispute has been affected by salt and the adjoining kuchha walls have also been affected by salt.
P.W. 2 Harish Chandra, the plaintiff, stated in his evidence that he was not present at the time encroachment was made by constructing a wall.
Some persons told him about the extension of the wall.
On crossexamination he stated that pucca rooms belonging to Daulat Ram stand at No. 163.
He cannot say if they have been in existence 15 20 years.
It is the evidence of defendant Daulat Ram, D.W. 1, that the wall in dispute has been in its place since the time he attained the age of discretion.
There has been tiled roof for the last about 28 years back.
Before that there was a thatched shed.
It is also his evidence that his mother effected partition about 28 years.
The wall in dispute was in existence when this partition was effected.
It has been existing 1036 in the same condition since then.
It is also his evidence that his mother got the partition effected 28 years back.
He also stated in crossexamination that he did not affix his thumb impression on the plan prepared at the time the partition deed was executed.
No measurements were done at the time the plan was prepared.
D.W. 2 Khunni Lal a retired overseer stated in cross examination that he had given his opinion that the wall in dispute belonged to Daulat Ram and that the flow of its water on the southern side was reasonable.
On a consideration of these evidences it is quite clear that the disputed kachha wall and the khaprail over it is not a new construction, but existed for over 28 years and the defendant has been living therein as has been deposed to by Ramji Lal vendor of the plaintiff who admitted in his evidence that the land in dispute and the adjoining kachha walls had been affected by salt and the chhappar over the portion shown in red was tiled roof constructed about 28 years back.
This is also supported by the evidence of the defendant, D.W. 1, that the wall in dispute was in existence when the partition was effected i.e., 28 years before.
On a consideration of these evidences the Trial Court rightly held that the defendant had not trespassed over the land in question nor he had constructed a new wall or khaprail.
The trial court also considered the report 57C by the court Amin and held that the wall in question was not a recent construction but it appeared 25 30 years old in its present condition as evident from the said report.
The suit was therefore dismissed.
The lower appellate court merely considered the partition deed and map Exts.
3/1 and 3/2 respectively and held that the disputed property fell to the share of the plaintiff 's vendor and the correctness of the partition map was not challenged in the written statement.
The court of appeal below also referred to Amin 's map 47 A which showed the encroached portion in red colour as falling within the share of plaintiff 's vendor, and held that the defendant encroached on this portion of land marked in red colour, without at all considering the clear evidence of the defendant himself that the wall and the khaprail in question existed for the last 28 years and the defendant has been living there all along.
P.W. 1 Ramji Lal himself also admitted that the wall existed for about 28 years as stated by the defendant and the kachha walls and the khaprail has been effected by salt.
The lower appellate court though held that P.W. 1 Ramji Lal admitted in cross examination that towards the north of the land in dispute was the khaprail covered room of Daulat Ram in which Daulat Ram lived, but this does not mean that the wall in dispute exists for the last any certain number of years, although it can be said that it is not a 1037 recent construction.
Without considering the deposition of defendant No. 1 as well as the report of the Amin 57 C the IInd Addl.
Civil Judge, Agra wrongly held that the defendant failed to prove that the wall in dispute and the khaprail existed for the last more than 12 years before the suit.
The Civil Judge further held on surmises as "may be that the wall and khaprail have not been raised in May, 1961 as is the plaintiff 's case, but they are recent constructions.
" This decision of the court of appeal below is wholly incorrect being contrary to the evidences on record.
On a consideration of all the evidences on record it is clearly established that the alleged encroachment by construction of kuchha wall and khaprail over it is not a recent construction as alleged to have been made in May 1961.
On the other hand, it is crystal clear from the evidences of Ramji Lal P.W. 1 and Daulat Ram D.W. 1 that the disputed wall with khaprail existed there in the disputed site for a long time, that is 28 years before and the wall and the khaprail have been affected by salt as deposed to by these two witnesses.
Moreover the court Amin 's report 57 C also shows the said walls and khaprail to be 25 30 years old in its present condition.
The High Court has clearly came to the finding that though the partition deed was executed by the parties yet there was no partition by metes and bounds.
Moreover there is no whisper in the plaint about the partition of the property in question between the co sharers by metes and bounds nor there is any averment that the suit property fell to the share of plaintiff 's vendor Ramji Lal and Ramji Lal was ever in possession of the disputed property since the date of partition till the date of sale to the plaintiff.
The plaintiff has singularly failed to prove his case as pleaded in the plaint.
In the premises aforesaid the appeal fails and it is dismissed.
There will however be no order as to costs.
A.P.J. Appeal dismissed.
[/INST]The appellant instituted a suit for recovery of possession of the disputed land after demolition of the unauthorised constructions made thereon by the respondent alleging that he became owner of the land on the basis of a registered sale deed, that he started to build a compound wall over and around his land after his purchase, that taking undue advantage of his temporary absence the respondent wrongfully encroached and trespassed along the whole northern length of the land and hurriedly raised a low mud wall and extended his khaprail thatch over it.
In his written statement the respondent denied that the appellant was owner of the land and claimed that the wall and khaprail belonged to him as they have been existing at their present site since time immemorial, that he had been regularly and openly enjoying the land and that under section 142 of the Limitation Act he became the absolute owner of the land in question on the basis of adverse possession and he has a right of easement in the form of flowing of water from the tiled roof.
The Additional Munsif dismissed the suit holding that the appellant was the owner of the property and that he had failed to prove the case of trespass and encroachment.
The appeal filed by the appellant was allowed by the Additional Civil Judge holding that the respondent has failed to prove that the wall in dispute and the khaprail existed for the last more than 12 years before the suit, that even if respondent 's wall and khaprail are old ones he is not entitled to maintain them after the same was allotted in the deed of partition dt. 3.3.58, and that the appellant is entitled to posses 1030 sion after demolition of the construction of the portion found encroached by respondent.
The second appeal filed by the respondent was dismissed by the High Court and the judgment and decree of the lower Appellate Court were affirmed.
The respondent filed a review application alleging that the partition deed dt.
17th March, 1963 was not in fact a deed of partition but merely an agreement between the parties to partition the property and there was no actual partition by metes and bounds and that the respondent continued to remain co owner and co sharer of the property in suit.
The High Court allowed the review application and held that the mere allotment of shares by the said deed of partition did not amount to partition by metes and bounds, set aside the judgment and decree of the lower Appellate Court and dismissed the suit.
In the appeal to this Court on behalf of the appellant it was contended that the land in dispute was allotted to the vendor in accordance with the deed of partition (Ext. 3/1) and shown in map (Ext. 3/2) effected between the parties on 17.3.58 and this has been mentioned in the sale:deed (Ext. 1) and, therefore, the judgment and decree of the High Court is not in accordance with law and should be set aside.
Dismissing the appeal, ^ HELD: 1.
There is no pleading regarding the partition of the property No. 164 nor there is any pleading to the effect that the disputed mud wall with the khaprail on it was ever in possession of appellant 's vendor before the sale of the land in question in favour of the appellant.
[1034H; 1035A B] 2.
On a consideration of the evidence on record it is established that the alleged encroachment by construction of kuchha wall and khaprail over it is not a recent construction as alleged to have been made in May 1961.
On the other hand it is crystal clear from the evidence of PW 1 and DW 1 that the disputed wall with khaprail existed there on the disputed site for a long time i.e., 28 years before and the wall and the khaprail have been affected by salt, as deposed by these two witnesses.
The Court Amin 's report 57C also shows the said walls and khaprail to be 25 30 years old in its present condition.
The High Court rightly came to the finding that though the partition deed was 1031 executed by the parties yet there was no partition by metes and bounds.
Moreover, there is no whisper in the plaint about the partition of the property in question between the co sharers by metes and bounds nor there is any averment that the suit property fell to share of appellant 's vendor and he was ever in possession of the disputed property since the date of partition till the date of sale to the appellant.
The appellant has singularly faild to prove the case as pleaded in the plaint.
[1037C E] 3.
Without considering the deposition of Respondent No. 1 as well as the report of the Amin 57C the Additional Civil Judge wrongly held that the respondent failed to prove that the wall in dispute and the khaprail existed for the last more than 12 years before the suit.
The Civil Judge further held on surmises as "may be that the wall and khaprail have not been raised on May 1961 as is the plaintiff 's case, but they are recent constructions.
" This decision of the lower Appellate Court is wholly incorrect being contrary to the evidence on record.
[1037A B]
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<s>[INST] Summarize the judgementAppeal No. 582 of 1965.
Appeal by special leave from the judgment ' and order dated August 23, 1961 of the Madras High Court in Appeal No. 157 of1957.
C.R. Pattabhiraman and R. Thiagarajana, for the appellants.
Vedantachari, G. Kausalya and section Balakrishnan, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
This is an appeal by special leave.
It is directed against the decision of the High Court of Madras in A.S. No. 157 1957.
This case has a fairly long history but we shall set out in this Judgment only such facts as are necessary for the decision of the issues debated before us.
In the course of his arguments Mr. C.R. pattabhiraman, learned Counsel for the appellant, urged two grounds in support of this appeal.
They are: (1 ) the appellant being an 'occupancy tenant ' of the suit properties he cannot be evicted from the land 510 in view of the provisions of the Madras Estates Land Act (Madras Act I of 1908) as amended by the Madras Estates Land Third Amendment Act (Madras Act XVIII of 1936) and (2) that under any circumstance the appellant should be held as enjoying the lands in question by personal cultivation and there fore he cannot be evicted in view of the provisions of the Madras Cultivating Tenants Protection Act (Madras Act XXV of 1953).
The respondent is the owner of the suit properties.
It leased out two different portions of those properties to the appellant under two lease deeds dated 11 9 1945 and 27 7 1946 (Exhs.
A 7 & A 8) respectively for a period of three years.
Even before the lease period came to an end the respondent sued the appellant for the possession of the suit properties on various grounds.
The appellant pleaded that the cannot be evicted from the suit properties in view of the protection afforded to him by section 6 of the Madras Estates Land Act.
He claimed 'occupancy right ' in the suit properties on the basis of the provisions of that Act.
The trial court upheld his contention and dismissed the suit.
But in appeal the High Court held that as the case fell within the scope of section 8(5) of the Madras Estates Land Act, the appellant was not entitled to the benefit of section 6 of that Act.
It accordingly allowed the appeal and remanded the case to the trial court for the trial of the other issues.
During the pendency of the appeal in the High Court the Madras Cultivating Tenants Protection Act came into force.
On the basis of the provisions of that Act, the appellant claimed before the trial court after remand that he should be considered as a cultivating tenant under that Act and if so held, he cannot be evicted from the suit properties.
Both the trial court as well as the High Court rejected both the aforementioned contentions of the appellant.
As regards the occupancy right pleaded, they held that the matter is concluded by the earlier decision of the High Court.
The trial court held that the appellant cannot be considered as a cultivating tenant under the Madras Cultivating Tenants Protection Act as he is not proved to have cultivated the properties by his own physical labour as claimed by him.
That Court opined that mere supervision of the work of the hired labour cannot be considered as "Physical labour" of the appellant.
The High Court affirmed this conclusion observing: "But the evidence disclosed that the cultivation of the suit lands was carried on by the appellant solely with the aid of hired labour.
Neither the appellant nor any member of his family took part in the cultivation operations in respect of the suit lands.
We therefore agree with the learned District Judge in his view that the appellant does not satisfy the test of carrying on personal cultivation to qualify for becoming a cultivating tenant.
He could not therefore claim the benefits conferred by the various protection Acts in force.
" 511 We have to first decide whether the appellant can be permitted to raise the contention that he has 'occupancy right in the suit properties in view of the decision of the High court of Madras in A.S. No. 241 of 1949.
In other words whether that decision operates as res judicata as regards his claim to the occupancy fight.
We are unable to agree with Mr. Pattabhiraman that the High Court did not finally decide the appellant 's claim to occupancy right in the suit properties in A.S. No. 241 of 1949 and that it merely made some tentative observations in respect of the same leaving the matter for a fresh decision by the trial court.
The High Court has specifically gone into the appellant 's claim to occupancy right, examined the relevant provisions of the Madras Estates Land Act, took into consideration the decisions bearing on the point and thereafter came to a firm conclusion that the appellant 's claim is unsustainable.
The case was remanded to the trial court for the trial of the issues that have not been decided earlier.
Therefore we have now to see whether the plea of occupancy right can be gone into afresh.
There is hardly any doubt that the trial court could not have gone into that issue again.
It was bound by the Judgment of the High Court.
It is also clear that that decision was binding on the Bench which heard the appeal.
On this question judicial opinion 'appears to be unanimous and it is a reasonable view to take.
We are unable to agree with the contention of the respondent that the decision of the High Court of Madras in A.S. No. 241 of 1949 on its file precludes the appellant from reagitating in this Court the plea that he has occupancy right in the suit properties.
An identical question came up for decision in this Court in Satyadhyan Ghosal and Ors.
vs Sm.
Doorajin Debi and Ant.(1) wherein this Court ruled that such a decision can be challenged in an appeal to this Court against the final Judgment.
As it is open to the appellant to recanvass the correctness of the decision of the High Court regarding his claim for occupancy right, we shall now go into the merits of that claim.
The suit land was in an Inam village but it was not an 'estate ' within the meaning of the Madras Estate Land Act as it originally stood; but it became an 'estate ' by virtue of the amending Act XVIII of 1936.
The lands in dispute are not admittedly 'private lands '.
Prior to the amending Act came into force, the respondent had obtained a decree for possession against the tenants who were then in the suit lands.
It is also not in dispute that no tenant had obtained any occupancy fight in those lands prior to 1936.
Therefore all (1) ; 512 that we have to see is whether the appellant can 'be said to have acquired occupancy right in those lands in view of the leases in his favour.
For deciding this question we have to examine the scope of section 6(1) and section 8(5) of the Act as they now stand.
Section 6(1) reads thus: "Section 6(1) : Subject to the provisions of this Act every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such land holder shall have a permanent right of occupancy in his holding.
Explanation (1 ).
For the purposes of this Sub section, the, expression 'every ryot in possession ' shall include every person who, having held land as a ryot, continues in possession of such land at the commencement of this Act.
Explanation (2).
In relation to any inam village which was not an estate before the commencement of the Madras Estate Land (Third Amendment) Act, 1936 but became an estate by virtue of that Act, or in relation to any land in an inam village which ceased to be part of an estate before the commencement of that Act, the expression 'now ' and 'commencement of that Act ' in this sub section and Explanation (1) shall be construed as meaning and thirtieth day of June 1934, and the expression 'hereafter ' in the sub section shall be construed as meaning the period after the thirtieth day of June,1934.
" Section 8 ( 5 ) reads as follows: "If before the first day of November 1933 the landholder has obtained in 'respect of any land in an estate within the meaning of Sub clause (d) of Clause (2) of Section 3 a final decree or order of a competent Civil Court establishing that the tenant has no occupancy right in such land, and no tenant has acquired any occupancy right in such land before the commencement of the Madras Estates Land (Third Amendment)Act, 1936, the .land holder shall, if.the land is not private land within the meaning of this Act, have the right, notwithstanding anything contained in this Act, for a period of twelve years from the commencement of the Madras.
Estates Land (Third Amendment) Act, 1936, of admitting any person to the possession of such land on such terms as, may be agreed upon between them: Provided that ' nothing contained ' in "this sub section shall be deemed during the said period of twelve years 513 or any part thereof to affect the validity of any agreement between the land holder and the tenant subsisting at the commencement of the Madras Estates Land (Third Amendment) Act, 1936.
" The parties are agreed that the facts of this case satisfy the requirements of section 8(5) of the Act.
That being so the respondent was entitled for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 to admit any person to the possession of the suit lands on such terms as may be agreed upon between him and his lessee notwithstanding anything contained in the Act.
While section 6(1) is subject to the provisions of the Act, section 8(5) is not controlled by any other provision of the Act.
Therefore if the case falls both within section 6( 1 ) as well as section 8( 5 ) then the governing provision will be section 8 ( 5 ) and not section 6 ( 1 ).
Once it is held ' that the present case falls within section 8 (5 ) it necessary follows that it is taken out of the scope of section 6 (1 ), But what is argued on behalf of the appellant is that when section 8(5) says that the land holder shall"have . the right notwithstanding anything contained in the Act for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them" it merely means that for the said period of twelve years, the tenants on the land cannot claim the benefit of section 6( 1 ) of the Act but they get those rights immediately after the twelve years period is over.
It was urged on behalf of the appellant that the object of the Act is to confer occupancy right on the tenants in respect of all lands included the inam excepting the 'private lands ' of the inamdar; at the same time the legislature thought that in respect of lands coming within the scope of section 8 ( 5 ) a period of grace should be allowed to the inamdar so that he may adjust his affairs; once that period is over all lands other than 'private lands ' would be governed by the provisions of section 6(1).
Another facet of the same argument was that section 6(1) is the main provision; it has general application; that provision contains the policy and purpose of the law; section 8(5) is an exception; therefore section 6(1) should be construed liberally and section 8(5) should be strictly construed with a view to advance the purpose, of the law.
Further we were asked to take into aid the policy laid down, in the proviso to section 8(5) while ascertaining the legislative intention behind section 8(5).
This proviso applies to agreements entered into between landholders and their tenants prior to the 1936 amendment.
It 'was said that there was no, discernible reason for treating the agreements in force on October 31,, .1936 (the date of commencement of the amended Act).
differently from agreements entered into 'after that date and since the legislature has expressly stated that the former shall be in force only for a period of twelve years, it is not reasonable to hold that in the case Of leases subsequent to Oct. 514 31, 1936, it intended to lay down a different rule.
We do see some force in these contentions but in our opinion none of these considerations are sufficient to cut down the plain meaning of the words "that the landlord has a right of admitting any person to the possession of such land on such terms as may be agreed upon between them." "Such terms" must necessarily include the term relating to the period of the lease.
We have to gather the intention of the legislature from the language used in the statute.
The language of section 8(5) is plain and unambiguous.
Hence we cannot call into aid other rules of construction of statutes.
If it was the intention of the legislature that the terms of the agreements entered into between the land holders and their tenants during the period of the twelve years mentioned earlier should come to an end at the close of the period and thereafter the provisions of the Act other than those in section 8(5) should govern the relationship between them it should have said so.
From the language of section 8(5), it is not possible to hold that the contract itself is exhausted or stands superseded at the end of the twelve years period mentioned therein.
If the legislative intention is not effectuated by the language employed in section 8(5) then it is for the legislature to rectify its own mistake.
It must be remembered that this legislation is in operation only in some parts of the Madras State as it was prior to the formation of the Andhra State in 1954.
In other words it is a State legislation.
The Madras High Court has consistently taken the view right from 1955 that agreements entered into by virtue of section 8(5) under which tenants were admitted into possession of lands falling within the scope of that provision do not get exhausted or superseded merely by the expiry of twelve years period mentioned in that sub section.
On the other hand under section 8 ( 5 ) a land holder is given a right during the said period of twelve years to admit tenants to possession of such lands on such terms as may be agreed upon.
It was so held for the first time in this very case before it was remanded to the trial court for further trial.
That decision is reported in Navaneethaswaraswami.
Devasthanam, Sikki represented by its Executive Officer vs L.K. Ganapathi Thevar(1).
This view was affirmed by a Full Bench of that High Court in Sri Navaneethaswaraswami Devasthanam Sikki represented by its Executive Officer vs
P. Swaminatha Pillai(2).
The learned Counsel for the appellant invited our attention to three decisions of the Madras High Court and one of Andhra Pradesh High Court.
The first decision to which our attention was invited is Muminia Damudu and Ors.
vs Datla Papayyaraju Garu by Muktyar Putravu Ramalingaswami and Ors.(3).
That is a decision of Hotwill, J. sitting singly.
Therein it was head that when (1) (2) I.L.R. (3) A.I.R. (1944) Mad.
515 the legislature spoke in section 8(5) of the tenant acquiring occupancy right during the period between the passing of the final decree and the commencement of the Act, it was referring to acquisition of occupancy rights otherwise than under the Act; the legislature must have intended by section 8(5) to exempt from the general operation of section 6, all cases where the 1andholder had obtained a decree prior to 1st November, 1933, unless the tenant subsequent to the passing of the final decree had acquired occupancy right independently of the Act.
Consequently where the landlord obtained a final decree referred to in section 8(5) before 1st November, 1933, the tenant cannot be said to have acquired occupancy rights under section 6 merely because he was in 'possession on 30th June 1934 so as to render section 8(5) inapplicable.
We fail to see how this decision bears on the rule with which we are concerned in this appeal.
In Korda Atchanna vs Jayanti Seetharamaswami(1), Viswanatha Sastri, J. differed from the view taken by Hotwell,.
J. in the decision cited above.
This decision also does not bear on the question of law we are considering.
In Thota Seshayya and six ors.
vs Madabushi Vedanta Narasimhacharyulu(2), a Bench of the Madras High Court while considering the vires of section 8(5 ) observed: "We are satisfied that section 8(5) is giving some limited privileges for a limited period to the landholders who have obtained decrees before 1st November 1933, has acted on a classification based on some real and substantial distinction beating a reasonable and just relation to the object sought to be attained, and that the classification cannot be called arbitrary or without any substantial basis, and must be upheld as perfectly valid and not impugning in the least on article 14 or 15 of the Constitution of India.
We may add that tenants who have been given now occupancy rights under the third amendment where they had none before, cannot reasonably complain of the restrictions put on the acquisition of such new occupancy rights in a few cases where justice requires such restrictions as in section 8(5).
The tenants acquired the right only under those conditions and cannot very well complain about them.
" From these observations we are asked to spell out that the learned Judges had come to the conclusion that all contracts entered into between the landholders and their tenants during the twelve years ' period mentioned in section 8(5) came to an end at the end of that period.
In the first place this conclusion does not necessarily flow from the observations quoted above.
Even if such a conclusion, can be spelled out, the observations in question are mere obiter on the question for decision before us.
That was also the view taken by the Division Bench of the Madras High Court in Nava (1).
AIR. 1950 Mad.
I.L.R. Ll3Sup.
CI/68 2 516 neetheeswaraswami Devasthanam Sikkil vs L. K. Ganapathi Thevar(1) .
In Vadranam Ramchandrayya and ant. vs Madabhushi Ranganavakamma(2), a Division Bench of the Andhra pradesh High Court followed the decision of the Madras High Court in Thota Seshayya and ors.
vs Madabushi Vendanta Narasimbhacharyulu(3).
Therein again the Court was not called upon to consider the scope of section 8(5).
For the reasons already mentioned we are unable.to hold that .the appellant had acquired occupancy right in the suit properties.
This takes us to the question whether the appellant can be considered as a 'cultivating tenant ' within the meaning of the Madras Cultivating Tenants Act 1955.
If he can be considered a cultivating tenant then he cannot be evicted from the suit properties except in accordance with the provisions of that Act.
In the Cultivating Tenants Act as it originally stood the definition .of a cultivating tenant was as follows : "Cultivating tenant in relation to an), land means a person who carries on personal cultivation on such land, under a tenancy agreement, express or implied, and includes (i) any such person who continue in possession of the land after the determination of tenancy agreement.
" If this definition had remained unaltered then on the basis of the findings of the trial court and the High Court the appellant could have been held as a cultivating tenant, as cultivation today is a .complex process involving both mental as well as physical activity.
But by the time this case came to be instituted the definition of "cultivating tenant ' was amended by additing an explanation to the original definition.
That explanation reads: "A person is said to carry on personal cultivation on a land when he contributes his Own physical labour or that of the members of his family in the cultivation of that land." The true effect of the amended definition came up for consideration before a Division Bench of the Madras High Court in Mohamed Abubucker Lebbai and anr.
vs The Zamindar of Ettayapuram Estate, Koilapatti(4).
' Therein it was held that in order to fall within the definition of 'cultivating tenant ', a person should carry on personal cultivation which again requires that he should contribute physical labour.
The use of physical labour includes physical strain, the use of muscles and sinews.
Mere supervision of work, or maintaining of accounts or distributing the wages will not be such contribution of physical labour as to attract the definition.
This view was upheld by this Court in section N. Sunda (1) (1955)2 M.L.J. 112.
(2) (1957) 2 Andhra Weekly Reports, p. 114.
(3) I.L.R. (4) (1961) 1 M.L.J.P. 256.
517 laimuthi Chettiar vs Palaniyandayan(1) to which one of us was a party.
In view of the said decision it follows that on the facts found in tiffs case, the appellant cannot be considered as a cultivating tenant.
In the result, this appeal fails and the same is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) [1966] I S.C.R. 450.
[/INST]4(2) of the Indian Independence (Legal Proceedings) Order, 1947, runs as under: " 4.
Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independence Act, 1947. . . (2)Any appeal or application for revision in respect of any proceedings so pending in any such Court shall lie in the Court which would have appellate, or as the case may be, revisional jurisdiction over.
that Court if the proceedings were instituted in that Court after the appointed day. . .
An application by the decree holder for re restoration of properties by reason of the default made by the judgment debtor after a new decree had been passed under section 36 of the Bengal Money Lenders Act, 1940, was pending in the Court of the Subordinate Judge, Alipore, on 15th August, 1947, when the bulk of the properties, which were the subject matter of the new decree, went to East Pakistan as being situated there.
The application was saved by the provisions of para.
4(1) which provided for the continuance in the same Court of these proceedings as if the said Act (Indian Independence Act) had not been passed.
It was con tended that the appeal to the High Court filed by the decreebolder was not saved by para.
4(2) as it was filed after 15th August, 1947, as the words "if the proceedings were instituted in this Court" in the said para.
should mean "if the proceedings could have been instituted in that Court.
" Held, that the appeal from the Court of the Subordinate Judge was competent to the Calcutta.
High Court because the only construction that could be put upon this provision was that the Court having appellate or revisional jurisdiction over that Court would 151 have such jurisdiction as if the proceedings had been instituted in that Court after the 15th August, 1947.
An application by the decree holder was in substance an application for the execution of the new decree which had been passed under section 36 of the Bengal Money Lenders Act, 1940.
Orders passed on such applications for execution would be clearly appealable.
The reasoning of the High Court that such an application was an application in the suit for a special remedy given under a special law and that the rules of Civil Procedure Code applied and an appeal lay against such orders because they were deerees within the definition of section 2(2) of the Civil Procedure Code was not sustainable and could not be accepted.
Tirlok Nath vs Moti Ram and Others (A.I.R. 1950 East Punjab 149) referred to.
</s>
|
<s>[INST] Summarize the judgementAppeal '.
No.75 of 1956.
Appeal by special leave from judgment and order dated March 17, 1955, of the Small Causes Court, Bombay, in Appeal No. 1 of 1955.
M.C. Setalvad, Attorney General for India, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellant.
K. B. Choudhuri, for the respondents.
702 1960.
January 12.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
When does an employer get a right to prefer an appeal against a direction made under sub section
(3) of section 15 of the (4 of 1936) (hereinafter called the Act)? That is the short question which arises for our decision in the present group of four appeals.
The decision of this question depends on the construction of section 17 (1)(a) of the Act.
In dealing with the question thus posed by the present group of appeals we will refer to the facts in Civil Appeal No. 75 of 1956, and our decision in it would govern the three remaining appeals.
Civil Appeal No.75 of 1956 which has been brought to this Court by special leave arises from a dispute between the General Manager of the Times of India Press.
, Bombay, owned by Benett Coleman & Co, Ltd., (hereinafter called the appellant) and some of the employees in his service (hereinafter called the respondents).
In November 1953, 1,066 applications were made by the Vice President of the Times of India Indian Employees Union on behalf of some of the respondents before Mr. C. P. Fernandes, the authority appointed under the Act in which a claim was made for arrears of increments alleged to have been withheld by the appellant from July 1, 1951, to September 30, 1953, as also for increased dearness allowance from January 1, 1953, to August 31, 1953.
The authority dealt with the whole group of the said applications as a single application under section 16(3) of the Act, and held that the claim made by the respondents for increased dearness allowance was not justified.
In regard to the claim of arrears of increments alleged to have been withheld the authority rejected the claim made by 761 employees and allowed the same in respect of 305 employees.
In the result the order passed by the authority on 31 12 1954 directed the appellant to deposit Rs. 22,698 for payment to the said 305 employees.
The direction thus issued by the authority gave rise to two appeals before the Small Causes Court at Bombay, which is the appellate authority appointed 703 under the Act.
Appeal No. 11 of 1955 was filed by the appellant while Appeal No. 187 of 1954 was filed by the respondents.
Meanwhile the question about the extent of the right conferred on the employer to prefer an appeal by section 17(1)(a) of the Act had been considered by the Bombay High Court in Laxman Pandu & Ors.
vs Chief Mechanical Engineer, Western Railway (B.B. & C.I. Railway), Lower Parel, Bombay (1); and it had been held that under the said section the employer gets a right of appeal only if the order of the authority under the Act awards payment of an amount of Rs. 300 or more in respect of a single individual worker; the right does not exist if the order awards a sum exceeding Rs. 300 collectively to an unpaid group of workers every one of whom gets an amount under Rs. 300.
Following this decision the appellate authority held that the appeal preferred by the appellant was incompetent and so dismissed it.
The appellant then applied for and obtained special leave from this Court to prefer an appeal against the said appellate decision; and so the main point raised by the appeal is about the construction of section 17(1)(a) of the Act.
The Act has been passed in 1936 with a view to regulate the payment of wages to certain classes of persons employed in industry.
Section 15(1) of the Act authorises the State Government by notification in the official Gazette to appoint any Commissioner for Workmen 's Compensation or other officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of wages of persons employed or paid in that area.
Section 7 has provided for deductions which may be made from wages.
Any deductions made not in accordance with the said section and contrary to the provisions of the Act as well as wages the payment of which has been delayed can be brought before the authority under sub s (2) of section 15.
Sub section (3) of section 15 empowers the authority to deal with the applications made under sub section
(2) and to direct a refund to (1) , 704 the employed person of the amount deducted or the payment of delayed wages together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding Rs. 10 in the latter.
Sub section (4) provides that in cases where the authority is satisfied that the application made by the employee was either malicious or vexatious it may direct that a penalty not exceeding Rs. 50 be paid to the employer or other persons responsible for the payment of wages by the applicant.
It would thus be seen that section 15 provides for the making of applications by the employees and for their decision in accordance with the provisions of the Act.
It is necessary to refer to section 16 as well before dealing with the question of the construction of section 17(1)(a).
Section 16 provides for the making of a single application in respect of claims from unpaid group.
Section 16(1) provides that employed persons are said to belong to the same unpaid group if they are borne on the same establishment and if their wages for the same period or periods have remained unpaid after the day fixed by section 5.
Sub section (2) provides for the making of a single application under section 15 on behalf of or in respect of any number of employed persons belonging to the same unpaid group, and prescribes that in such a case the maximum compensation that may be awarded under sub section
(3) of section 15 shall be Rs. 10 per head.
Subsection (3) then provides that the authority may deal with any number of separate pending applications presented under section 15 in respect of persons belonging to the same unpaid group as a single application presented under sub section
(2) of the said section, and the provisions of that sub section shall apply accordingly.
Thus the effect of section 16 is that a single application may be made on behalf of any number of employed persons belonging to the same unpaid group, or if separate applications are made by employed persons belonging to the same unpaid group they may be consolidated and tried as a single application.
Let us now read section 17 which provides for appeals.
Section 17(1) provides that an appeal against a 705 direction made under sub section
(3) or sub section
(4) of s 15 may be preferred within thirty days of the date on which the direction was made, in a Presidency town before the Court of Small Causes and elsewhere before the District Court (a) by the employer or other person responsible for the payment of wages under section 3, if the total sum directed to be paid by way of wages and compensation exceeds Rs. 300, or (b) by an employed person, if the total amount of wages claimed to have been withheld from him or from the unpaid group to which he belonged exceeds Rs. 50, or (c) by any person directed to pay a penalty under sub.s.
(4) of section 15.
Sub section (2) of section 17 makes the directions made under sub section
(3) and sub section
(4) of section 15 final save as provided in sub section (1).
On a plain reading of section 17(1)(a) it seems fairly clear that the only test which has to be satisfied by the appellant before preferring an appeal against a direction issued under section 15(3) is that the total sum directed to be paid by him should exceed Rs. 300.
Where a single application has been made on behalf of a number of employed persons belonging to the same unpaid group under section 16, sub section
(2), and a direction has been issued for the payment of the specified amount, it is the said specified amount that must be considered in deciding whether the test prescribed by section 17(1)(a) is satisfied or not.
The view taken by the Bombay High Court, however, is that section 17(1)(a) is applicable only where the amount directed to be paid to each single applicant exceeds Rs. 300.
In other words, on this view the expression " the total sum directed to be paid " used in section 17(1)(a) is construed to mean the total sum directed to be paid to each individual applicant, and that clearly involves the addition of certain words in the section.
If the application is made by a single employee an appeal can be preferred by the employer against the direction issued in such an application if the total sum directed to be paid to the applicant exceeds Rs. 300; but if a single application is made on behalf of several employees belonging to the same unpaid group the test to be applied is not whether a direction has been issued that the employer 99 706 should pay Rs. 300 or more to each one of the applicants; the test clearly is whether a direction has been issued on the said single application calling upon the employer to pay to the applicants Rs. 300 or more.
Reading section 17(1)(a) by itself we feel no difficulty in reaching this conclusion.
It is, however, urged that in construing section 17(1)(a) it would be relevant and material to compare and contrast its provisions with those of cl.
(b) of section 17, sub section
Providing for the right of an employee to make an appeal this clause requires that the total amount of wages claimed to have been withheld from him or from the unpaid group to which he belonged should exceed Rs. 50.
It is emphasised that this clause refers expressly to the case of an individual employee as well as the cases of employees belonging to an unpaid group; and the argument is that since cl.
(a) does not use the words " unpaid group " it indicates that the direction about the payment of the amount prescribed by the said clause has reference to each individual employee.
We are not impressed by this argument.
Since the Act has provided for the making of a single application on behalf of a number of employed persons belonging to the same unpaid group as well as separate applications made by individual workmen it was unnecessary to refer to the persons employed in the unpaid group while providing for appeals against directions made under section 15(3).
On the other hand, if the Legislature had intended that the right to prefer an appeal should accrue to the employer only if Rs. 300 or more are directed to be paid to each individual employee it would have used appropriate additional words in cl.
Therefore the argument based upon the use of the words " unpaid group " in cl.
(b) is not of any assistance in construing cl.
We are also inclined to think that it could not have been the intention of the Legislature to confer on the employer the right to prefer an appeal only if Rs. 300 or more are ordered to be paid to each one of the applicants.
It is true that the policy of the Act is to provide for speedy remedy to the employees in respect of unauthorised deductions made by the employer or 707 in respect of delayed wages; and with that object the Act provides for the appointment of the authority and prescribes the summary procedure for the decision of the claims;butitseemsveryunlikelythatwhereas an appeal by the employee has been permitted by cl.
(b) whenever the amount in dispute happens to be Rs. 50 or more in respect of an individual applicant or in respect of the unpaid group the Legislature could have intended that the employer should have no right of appeal against a direction made on a; single consolidated application, even though the total liability flowing from the said direction may exceed the specified amount of Rs. 300 by several thousands.
In the present case the amount directed to be paid is more than Rs. 22,000 but it has been held that since each one of the employees is not ordered to be paid Rs. 300 or more there is no right of appeal.
On general considerations, therefore, the conclusion which we have reached on a fair and reasonable construction of cl.
(a) appears to be well founded.
There is another point to which reference must be made.
Section 16(3) empowers the authority to consolidate several applications made by individual employees and bear them as a single application as though it was presented under section 16, sub section
(2); and it is urged that this procedural provision cannot and should not have a decisive effect on the employer 's right to prefer an appeal under section 17(1)(a).
If several applications made by individual employees are not consolidated and heard as a single application under section 16(3) and separate directions are issued, then the employer would have the right to prefer an appeal only where the total amount directed to be paid exceeds Rs. 300.
On the other hand, if the authority consolidates the said applications and makes a direction in respect of the total amount to be paid to the employees belonging to the unpaid group the employer may be entitled to make an appeal even though each one of the employees receives less than Rs. 300.
It would be anomalous, it is said, that the right to appeal should depend upon the exercise of discretion vested in the authority under section 16(3).
We are unable to see the force of this argument.
We apprehend that 708 ordinarily when several applications are made by the employees belonging to the same unpaid group the authority would prefer to treat the said applications as a single application under section 16(3); but apart from this practical aspect of the matter, if section 16(3) permits the consolidation of the several applications and in consequence of consolidation they are assimilated to the position of a single application contemplated by section 16(2), the only question which has to be considered in dealing with the competence of the appeal is to see whether the direction appealed against satisfies the test of section 17(1)(a), and on that point we feel no hesitation in holding that the test prescribed by section 17(1)(a) is that the direction should be for the payment of an amount exceeding Rs. 300.
Besides, we think it would not be right to assume that it is anomalous if different consequences follow from the adoption of different procedures in trying employees ' claims and an appeal does not lie where several applications are tried separately while it lies where similar applications are heard as a single application under section 16(3).
This difference is clearly intended by the Legislature.
A similar different consequence is prescribed in the matter of the award of compensation by section 15, sub section
(3) and section 16,sub section
(2) respectively.
Therefore, the argument based on the alleged anomaly cannot have any validity inconstruing section 17(1)(a).
Incidentally, if one or more employees in the same unpaid group are paid an amount exceeding Rs. 300 and the rest are paid less than Rs. 300, on the alternative construction, the employer would be entitled to make an appeal only in respect of a workman to whom more than Rs. 300 is ordered to be paid and not against the others though the total amount directed to be paid to them may exceed by far the amount of Rs. 300.
In such a case, if the appeal preferred by the employer in respect of the amount ordered to be paid to some of the workmen succeeds that would leave outstanding two conflicting decisions, with the result that a large number of employees in the same unpaid group may get the amount under the direction of the authority while those who were awarded more 709 than Rs. 300 by the authority would get a smaller amount under the decision of the appellate authority.
We are referring to this anomalous aspect of the matter only for the purpose of showing that where the words used in the relevant clause are clear and unambiguous considerations of a possible hypothetical anomaly cannot affect its plain meaning.
That is why we prefer to leave anomalies on both sides out of account and confine ourselves to the construction of the words used in section 17(1)(a).
If the said words had been reasonably capable of two constructions it would have been relevant to consider which of the two constructions would avoid any possible anomalies.
We would, therefore, hold that the appellate authority was in error in dismissing the appeal preferred before it by the appellant on the ground that it was incompetent under section 17(1)(a).
We would like to add that the question about the construction of section 17(1)(a) has been considered by the Madras High Court (Union of India, owning the South Indian Railway by the General Manager vs section P. Nataraja Sastrigal & Ors.
(1) and A. C. Arumugam & Ors.
vs Manager, Jawahar Mills Ltd., Salem Junction (2), the Calcutta High Court (Promod Ranjan Sarkar vs R.N. Munllick (3) and Assam High Court (Cachar Cha Sramik Union vs Manager, Martycherra Tea Estate & Anr.
(4) and they have all differed from the view taken by the Bombay High Court and have construed section 17(1)(a) in the same manner as we have done.
The result is the appeal is allowed, the order of dismissal passed by the appellate authority is set aside and the appeal sent back to it for disposal in accordance with law.
Since the hearing of the appeal has been thus delayed we would direct that the appellate authority should dispose of the appeal as expeditiously as possible.
Under the circumstances of this case we would direct that the parties should bear their own costs.
Appeal allowed.
(1) A.I.R. 1952 Mad. 808.
(3) A.I.R. 1959 Cal.
318 S.C.; (2) A.I.R. 1956 Mad. 79.
(4) A.I.R. 1959 Assam 13.
[/INST]In ascertaining the surplus available for the payment of bonus according to the Full Bench formula the Industrial Court allowed the statutory depreciation but did not give any credit for the rehabilitation amount claimed.
The Industrial Court estimated the amount required for rehabilitation at Rs. 60 lakhs; out of this amount it deducted Rs. 51 lakhs representing the reserves and the balance of Rs. 9 lakhs spread over a period Of 15 years gave the figure of Rs. 6o,000 as the amount that should be set apart for the year in question for rehabilitation.
This amount being less than the statutory depreciation the Industrial Court held that the appellant was not entitled to any deduction on account of rehabilitation as a prior charge.
The appellant contended that the balance sheet disclosed that the entire reserves had been used as working capital and consequently the said reserves should not be excluded from the amount claimed towards rehabilitation.
Held, that the appellant had failed to prove that the reserves had in fact been used as working capital and as such the amount was rightly deducted by the Industrial Court from the amount fixed for rehabilitation.
The Associated Cement Companies Ltd. vs Its Workmen. , referred to.
In view of the importance of the item of rehabilitation in the calculation of the available surplus it was necessary for tribunals to weigh with great care the evidence of both parties to ascertain every sub item that went into or was subtracted from the item of rehabilitation.
If parties agreed, agreed figures could be accepted.
If they agreed to a decision on affidavits, that course could be adopted.
But in the absence of agreement the procedure prescribed by 0.
XIX, Code of Civil Procedure had to be followed.
The accounts, the balance sheet and profit and loss accounts were prepared by the management and the labour had no hand in it.
When so much depended on this item it was necessary that the Industrial Court insisted upon a clear proof of the item of rehabilitation and also gave a real and adequate opportunity to labour to canvass the correctness of the particulars furnished by the employers.
Indian Hume Pipe Company, Ltd. vs Their Workmen.
[196o] 2 S.C.R. 32, Tata Oil Mills Company Ltd. vs Its Workmen ; and Anil Starch Products Ltd. vs Ahmedabad Chemical Workers ' Union.
C.A. No. 684 Of I957 (not reported), referred to, 842
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<s>[INST] Summarize the judgementN: Criminal Appeal Nos.
66 67 of 1980.
Appeals by Special Leave from the Judgment and order dated 30/8/1979 of the Delhi High Court in Criminal Revision Nos.
65 66 of 1979.
N. section Das Bahl for the Appellant.
M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The common appellant in both these appeals is a teen aged student turned criminal adventurer in the elitist area of car lifting and scooter poaching current in our fashionable cities, including Delhi.
While he was a college student and but 19 years old, the appellant tried his hand at stealing a scooter way back in 1971.
He was arrested but bailed out and while on bail was accused of committing a car theft.
Both these cases were tried and he was found guilty.
The 864 scooter offence resulted in a sentence of two years ' imprisonment and a fine of Rs. 2,000.
The car theft case got converted into an offence under Section 411 I.P.C. and, consequently, a reduced sentence of imprisonment for six months and a fine of Rs. 500.
The convictions being concurrent and no substantial infirmity being present, we have confined leave to appeal to the question of sentence only.
But sentencing the cutting edge of the judicial process is the crucial strategy of the criminal law in achieving social defence and delinquent rehabilitation.
So we have to consider the totality of factors bearing on the offence and the offender and fix a punishment which will promote effectively the punitive objective of the law deterrence and habilitation.
We do not deem it necessary to set out elaborately all the socio legal facts which have been discussed at the bar.
All that we need say is that the offence took place in 1971 and we are now in 1980.
A long protracted litigation is some deterrent for a young man in his twenties.
The accused was nineteen when the offences were committed and his youthful age is a factor which deserves consideration.
A long period of incarceration in the present condition of prisons may brutalise the boy and blunt his finer sensibilities so that the end product may perhaps be more criminal than the one at the point of entry.
Not that all prison terms are not deterrent but some cases prove to be counter productive especially when the delinquent is young.
It may be interesting to recall Lord Soper 's observations in the House of Lords in a debate on British Prisons, where he said: "Now as to reform.
I was a prison chaplain for 30 years.
I cannot remember a single man who was reformed by being in prison not one.
I can remember those who, serving very short sentences, were for a time, perhaps, brought to recognise something of the gravity of what they had been doing; but I am completely convinced that the longer a man stays in prison, the longer he stays in that kind of incarceration, the less is the prospect of reform and the more certain is the process of decay.
That is why I have consistently tried to say that any man who is imprisoned in one particular set of circumstances for more than five years is probably dead for life.
It is highly unlikely that those who have endured that kind of monotonous deadening will be able to recover in the real world what they have lost in the artificial element and environment of prison life.
There has been, I think, in my time, a considerable increase 865 in the amelioration of conditions in prison; but, to refer again for a moment to the artificiality of it, the longer a man stays in prison the less capable he will be of recovering his place and establishing his position back in the real world to which he is increasingly made alien by the very processes which he undergoes." Moreover, the appellant has already suffered nearly six months ' imprisonment and it is a well known fact for criminologists that the initial few months of jail life are the most painful and, therefore, the most deterrent.
In the present case the offender having served a term of nearly six months must well have realised that the game of crime does not pay.
The fines of Rs. 2,000 and Rs. 500 imposed on the appellant should remain without interference.
Payment of fine brings home the sense for responsibility in a surer fashion than even short terms of imprisonment in some cases.
We, therefore, decline to reduce the fine and reject counsel 's plea in this behalf.
More important than these circumstances is the social urgency of making this student offender a non offender.
There are two circumstances which weigh in our mind.
The young man has married and has three children.
This is a measure of assurance that he will not play recklessly with his freedom.
Family life is ordinarily an insurance against a career of crime.
We have also insisted on the uncle of the appellant undertaking to assure the good behaviour of the nephew who is the delinquent in question.
The uncle Shri Kohli has filed an affidavit dated 10 12 1979 in this Court making the necessary undertaking to guarantee the good behaviour of his nephew.
Thoughtless parents and guardians leaving a free hand for their wards account for flippant criminality of the type we come across in middle class society.
The undertaking given by the uncle has, therefore, considerable relevance.
We make a breach of the conditions in the affidavit actionable on the motion of the State.
It is a tragic reflection that affluent criminality should become so pervasive among the student community.
It is uncomplimentary to the character building component of the system of education in the prestigious institutions of our cities.
We hope the State will take better care to instil a sense of values in the college campuses than it does now.
We allow the appeals to the extent of reducing the sentence of the appellant to the period undergone, but maintain the sentences of fine and the alternative period of imprisonment in case of default.
P.B.R. Appeals allowed.
[/INST]The original owners of the land in dispute granted a permanent lease of the land to a company.
The lessee could use the land for any purpose and could also transfer the leasehold interest.
Though a permanent lease the lessor could forfeit the lease if the lessee failed to pay rent for three consecutive years.
The lessors interest changed hands twice and by virtue of a decree in a suit for pre emption filed by the respondents they became entitled to such interest.
In the meanwhile the company went into voluntary liquidation and the liquidator executed an agreement of sale of all its assets including the leasehold interest in favour of a Bank which was the biggest creditor of the Company.
Immediately thereafter the Bank itself went into liquidation.
Sometime later the official liquidator of the Bank found that no deed of transfer was executed by the voluntary liquidator in favour of the Bank, the erstwhile voluntary liquidator therefore executed a deed of sale in favour of the Bank.
Thereafter the official liquidator of the Bank transferred the lease hold interest in the land to the defendant appellant.
Before the company went into liquidation the first transferee of the land accepted rent from the voluntary liquidator.
After the transfer of the leasehold interest to the Bank the second transferee demanded from the official liquidator arrears of rent for four years and claimed that the lease was forfeited by reason of the Bank 's failure to pay rent for a continuous period of three years in terms of the lease.
The official liquidator denied the right to forfeit the lease.
He, however, paid rent which was accepted by the lessors.
Even subsequently rent was accepted by the lessors.
The respondent sued to recover possession of the suit land on the ground that the lease hold interest was not validly transferred by the voluntary liquidator and that therefore neither the Bank nor the defendant acquired any right in the land.
The defendants contended that the voluntary liquidator had the authority in law to execute the deed of sale and formally complete a transaction which had already taken place, that the predecessors in interest of the plaintiff having accepted rent from the official liquidator were estopped 822 from contending that the transfer in favour of the Bank was not valid and that the lease hold interest in the land had escheated to the Government on the dissolution of the company.
The suit was dismissed by the Trial Court and the Appellate Court.
On second appeal, the High Court decreed the suit holding that the voluntary liquidator had no authority to execute the deed of sale after the dissolution of the company and that there was neither estopped nor escheat.
Allowing the appeal, ^ HELD: 1.
The High Court was right in holding that the liquidator had no jurisdiction to execute the deed of sale after the company had been dissolved.
Once the company was dissolved in accordance with the procedure laid down in the Indian Companies Act, 1913 it ceased to exist and therefore the voluntary liquidator could not represent a non existent company.
If the liquidator was to discharge any duty or perform any function on behalf of the dissolved company he should have express statutory authority to do so, which he did not have under the Act.
[826 D, 825 G] 2.
If the company had a subsisting interest in the lease on the date of dissolution, such interest must necessarily vest in the Government by escheat or bona vacantia.
It is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved corporation passes to the Government by escheat or bona vacantia.
If the lease hold interest of company became vested in the Government on its dissolution, a suit at the instance of the plaintiffs was not maintainable.
[826 E, 827 G] 3.
The successors in interest of the original lessors accepted rent from the official liquidator indicating that they accepted the position that the Bank had succeeded to the rights of the company in the lease hold interest.
The official liquidator sold the land to the defendant with the permission of the Company Judge only when he failed to get the highest bid in public auction.
At no point of time did the predecessors in interest of the plaintiffs raise an objection to the sale of the lease hold interest.
When the defendant obtained permission of the Municipal Board and raised constructions on the land, the plaintiffs who resided near about the land did not raise any objection to the constructions.
In the circumstances the plaintiffs were estopped from contending that the defendant had no right in the land.
Their only right is to receive rent.
[827 F 828 B]
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<s>[INST] Summarize the judgementAppeal No. 1934 of 1978.
From the Judgment and Order dated 21.12.1977 of the Allaha bad 11 High Court in Civil Misc.
Writ Petition No. 227 of 1977.
Ms. Rachna Gupta for the Appellant.
S.C. Manchanda and K.P. Bhatnagar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The Income tax Act, 1961 replaced the Indian Income tax Act, 1922 w.e.f. 1.4.1962.
The repeal of the earlier Act necessitated the enactment of transitional provisions to facilitate the change over.
Perhaps the sim plest course would have been to provide that the new Act would apply to all proceedings for the assessment year 1962 63 and thereafter.
The legislature, however, evolved a more complicated procedure.
While section 297(1) of the new Act declared that the Indian Income tax Act, 1922 stood repealed by the new Act, sub section (2) of the above sec tion made detailed and meticulous provisions in clauses (a) to (m) as to whether the new Act or the old Act will govern in the various situations dealt with therein.
These provi sions have led to a lot of litigation and the controversy in this appeal also arises out of one such provision.
We are concerned here with the scope of proceedings for reassess ment in respect of assessment years prior to 1962 63 and the answer to the question before us turns on the provisions of the following two sections of the 1961 Act: Section 297 "297(1) xxx xxx xxx (2) Notwithstanding the repeal of the Indian Income tax Act, 1922 (11 of 1922) (hereinafter referred to as 'the repealed Act ') xxx xxx xxx xxx (d) where in respect of any assessment year after the year ending on the 31st day of March 1940 (i) a notice under section 34 of the re pealed Act had been issued before the com mencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed; 12 (ii) any income chargeable to tax had es caped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in re spect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150 be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly.
" Section 150 "150(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recom putation in consequence or, or to give effect to, any finding or direction contained in an order passed by any authority in any proceed ing under this Act by way of appeal, reference or revision." (underlining ours) We may proceed now to set out how the question arises in the present case: The appeal arises out of an order of the High Court in a writ petition filed by one Mahadeo Prasad Bais (since deceased, represented by his legal representa tives) challenging reassessment proceedings initiated against him for the assessment years 1953 54 to 1963 64.
The appeal is, however, restricted to the assessment years 1953 54 to 1961 62.
Upto assessment year 1948 49, the appel lant was being assessed as the Karta of a Hindu Undivided Family consisting of himself, his mother, his wife and three sons.
For the assessment year 1949 50 and subsequent years upto 1961 62 he had filed a return in his individual capaci ty on the footing that there had been a total partition of the family within the meaning of Section 25A of the Indian Income tax Act, 1922 and that he was assessable in respect of the income from the properties of the family allotted to him at the partition.
In the alternative, he claimed partial partition of some of the joint family properties.f Both these claims were initially negatived and the entire income was assessed in the hands of the Hindu Undivided Family.
The returns filed by the appellant in his individual capacity were finalised by holding that there was no income assessa ble in his individual capacity.
The Hindu Undivided Family went up in appeals and ultimately the Tribunal accepted the claim of partial partition in respect of some of the proper ties with effect from different dates.
This conclusion of the Tribunal was also affirmed by the High Court in the decision reported as Mahadeo Prasad Bais vs Income tax Officer, which related .
13 to the assessment years 1956 57 to 1958 59.
Consequent on these decisions of the Tribunal and the High Court, the income from some of the erstwhile family properties stood excluded from the assessment of the Hindu Undivided Family and became liable to be included in the hands of the present appellant.
The assessment for 1949 50 and subsequent years upto 1961 62 on the family had been completed and the ap peals and reference disposed of under the Indian Income tax Act, 1922.
The original assessments made on the appellant as an individual for the assessment years 1953 54 to 1961 62 had been completed under the Indian Income tax Act, 1922.
In these assessments no income from the erstwhile joint family properties had been included as the officer was of the view, as in 1949 50, that it was assessable in the hands of the family.
There were no proceedings initiated or pending under Section 34 of the 1922 Act in respect of these assessment years as on 1.4.1962.
Quite sometime after the High Court had decided the reference for 1949 50 in the case of the family, the Income tax Officer thought of steps to include the income assessable in the hands of the appellant conse quent on the decisions of the Tribunal and the High Court which he had failed 10 assess earlier.
He, therefore, served on the appellant on 19.3.1977 notices for reassessment, as required by section 297(2)(d)(ii), under section 148 of the 1961 Act.
The appellant resisted these proceedings, inter alia, on the ground that the notices were barred by limita tion.
The department, however, contended that, though nor mally reassessment proceedings had to be initiated within a period of four, eight or sixteen years as the case may be, under the then provisions of Section 149 of the 1961 Act, the reassessment proceedings in this case were saved by the provisions of Section 150(1) of the 1961 Act set out earli er.
This contention of the department has been accepted by the High Court in the decision under appeal before us which is reported in The issue involved in this appeal is basically a short one turning on the language of section 150(1).
Before con sidering the interpretation of this section, we may, howev er, point out that, on this question, there appears to be a conflict of judicial opinion between the several High Courts.
The Allahabad High Court, in the decision presently under appeal (1980)125 I.T.R. 49 and the Calcutta High Court in I.T.O. vs Eastern Coal Co. Ltd., have taken the view that a reassessment in such circumstances is saved by the provisions of Section 150(1) of the 1961 Act.
An earlier Allahabad decision in C.I.T. vs Kamalapat Moti lal, (1977)110 I.T.R. 769 and an earlier Bombay decision in Ambaji Traders vs 1.T.O., (1976)105 I.T.R. 273 took a simi lar view on the analogous provision contained in section 153(3) of the 1961 Act but a contrary view was taken by the latter 14 High Court in the latter case reported as CIT vs
T.P. Asrani, Both sets of decisions have placed reliance on certain observations of this Court in differing contexts.
But it will be best to have a look at the statuto ry provisions first, in the context of the facts of the present case.
To start with, there is no dispute that reassessment proceedings were rightly initiated under section 148 of the Act.
It is also common ground that on the language of sec tion 148, as it stood at the relevant time, no notice under section 148 could have been issued in March 1977 for the assessment years in question.
The Revenue can successfully support the validity of this notice only by reference to section 150 (1).
Two questions then arise: (i) Are the provisions of section 150 (1) attracted ? (ii) If yes, do they save the impugned proceedings ? The answer to the first question is furnished by section 297 (2) (d) (ii), the very clause which authorises the issue of the notice of reassess ment under section 148.
It permits the issue of the notice under section 148, "subject to the provisions contained in section 149 or section 150".
Though the words "subject to" may be appropriate in the context of section 149 and section 150 (2) (which place restrictions on the issue of the notice u/s 148), they are somewhat inappropriate a propos section 150 (1) which relaxes the conditions for issue.
But there is no doubt that the statute clearly intends that the benefit of enlargement of the time limited under section 149 should be available in respect of the notice issued under section 148 read with section 297 (2) (d) (ii).
The answer to the second question is furnished by section 150 (1).itself.
It removes the bar of time when the reassessment proceedings are initiated in consequence of or to give effect to a finding contained in an order passed by any authority in any proceeding by way of appeal, reference or revision.
There is no difficulty here for the orders of the Tribunal and the High Court for the several years between 1949 50 and 1961 62 were passed in proceedings by way of appeals and reference and there is no dispute that the reassessment proceedings have been initiat ed to give effect to findings in such orders.
There is, however, a catch in applying the terms of section 150(1) ' to this case.
There is no doubt that the whole idea of the sub section was to lift the embargo placed on initiation of reassessment proceedings and to remove the time limit where the notice of reassessment is issued with a view to give effect to a direction or finding contained in an appellate order or an order passed on revision or on reference.
Unfor tunately, however, in expressing its above intention, the legislature has worded the exemption from time limit so as to cover only cases where the finding or direction is con tained in an order passed by any such authority in any such proceeding "under this Act" i.e. the 1961 Act.
In the present case the assessments for 1949 50 and subsequent years in the case of the family were made under the old Act and were the subject matters of appeal to the 15 Appellate Assistant Commissioner and Tribunal and of refer ence to the High Court under the provisions of the 1922 Act.
In other words, the finding in consequence of which the assessments presently under consideration are being sought to be reopened is a finding contained in orders passed not 'under this Act ' but in orders passed under the 1922 Act.
Literally applied, therefore, the language of section 150 (1) does not help the department to overcome the bar of limitation otherwise imposed by Section 149.
Pressing for the literal construction of the sub sec tion, it is contended for the appellant that there are good reasons why this construction should be accepted: (1) To accept the contention of the depart ment would mean the virtual deletion of the words "under this Act" from section 150 (1); (2) It seems clear that the above words have not been inadvertantly used in the statute.
If one turns 10 s.153 (3), which is an extension of section 150 (1 ) removing the time ban for the completion of reassessments initiated for the same purpose, the legislature goes further than section 150 (1) and makes specific refer ence to particular provisions of the new Act; (3) The provisions of section 150 (1) will not become redundant if read in the manner con tended for by the assessee.
While no doubt the proceedings are initiated, in all cases cov ered by section 297 (2) (d) (ii), under the new Act, the orders, for giving effect to a finding or direction in which such proceedings are initiated, may belong to either category they may be orders passed under the old Act or they may be orders passed under the new Act.
The terms of section 150 (1) will be effective in the latter category of cases; and (4) The provisions contained in Ss. 150 (1) and 153 (3) are provisions exempting the applicability of a normal rule of limitation otherwise applicable to actions for reassess ment and such provisions should be construed strictly.
On the other hand, it is contended for the department that the object of the provision being very obvious, namely, that where reassessment proceedings are initiated to give effect to orders on appeal, reference or 16 revision, there should be no time limit tying down the hands of the Revenue as such orders are seldom likely to be passed within the limits of time mentioned in section 149, we should give effect to the clear intention of the legislature and should not frustrate its object.
It is, therefore, necessary to examine the provisions of section 297 (2) (d) (ii) and section 150 (1) a little more closely and examine which of the two interpretations is preferable.
Taking up the appellant 's interpretation first, it has no doubt the attractiveness of simplicity.
It is a strict and literal interpretation of section 150 (1).
This apart, learned counsel drew our attention to the fact that the decided cases have referred to certain decisions of this Court in this context.
We do not, however, think that the decisions of this Court in Jain vs Mahendra, and Govinddas vs I.T.O, (1976)103 ITR 123 cited by appellant 's counsel arc of any assistance to them.
In the former case, a notice u/s 34 had been issued before 1.4.1962 but it had been quashed as without jurisdiction as it was barred by time.
The question was whether the proceedings initiated by the notice can be said to have been pending as on 1.4.1962.
The Court answered the question in the affirma tive.
It held that, for purposes of section 297 (2) (d) (ii), all that had to be seen was whether proceedings under section 34 of the 1922 Act were factually pending on 1.4.1962.
That the notice issued before that date was barred by time and was held so later was immaterial.
The notice had in fact been quashed by the High Court in a writ only much later, on 6.3.1963, and so proceedings under section 34 were pending as on 1.4.1962.
We are unable to see how this decision is of any help here.
In the second case, the claim by the assessee, a Hindu undivided family, that there had been a partial parti tion on 15.11.1955 (as a result of which the share income from two firms had ceased to be the income of the family from that date) was accepted by the Income tax Officer.
Subsequently, the assessments of the two firms for the assessment years 1950 51 to 1956 57 had been reopened and reassessments were made on them enhancing their income.
Consequently action was also taken to reopen the assessments of the family (which, for the relevant previous years had a share in the firms ' income).
These assessments were initiat ed under the new Act in accordance with the provisions of section 297 (2) (d) (ii).
The assessee had no grievance thus far.
But, while completing the reassessment, the officer, in addition to reassessing the family, also took advantage of the provisions enacted in Ss. 171(6) and (7) of the 1961 Act which had no counter part in the 1922 Act and passed orders apportioning the tax assessed on the family amongst its members.
This was objected to by the assessee.
The department, referring to the language of section 297 (2) (d) (ii) "that all the provisions of this Act shall apply ac cordingly", contended that the I.T.O. could legitimately invoke the provisions of Ss. 171 (6) and (7) as well while 17 making the reassessments.
This contention was negatived.
The Court observed: "These words merely refer to the machinery provided in the new Act for the assessment of the escaped income.
They do not import any substantive provisions of the new Act which create rights or liabilities.
The word "ac cordingly" in the context means nothing more than "for the purpose of assessment" and it clearly suggests that the provisions of the new Act which are made applicable are those relating to the machinery of assessment.
" It will be at once clear that this line of approach can have no validity in the context of section 297 (2) (d) (ii).
Here there is no need to guess or speculate on which provi sions of the new Act are to apply.
The section itself, in so many words, provides that Ss. 148, 149 and 150 will apply to the initiation of a reassessment proceeding under section 297 (2) (d) (ii) and this cannot be negatived by the last few words of that clause.
On the contrary, as pointed out earlier, they place it beyond all doubt that the provisions of the 1961 Act have to be applied to the reassessment on the basis that Ss. 148 to 150 apply.
This case also does not, there fore, advance the case of the assessees.
It is next contended by the appellant 's counsel that the very issue before us had been considered in the decision of this Court in Seth Gujarmal Modi vs CIT, and this concludes the issue in his favour.
The second headnote at page 261 seems to bear out this contention.
It reads: " . .
Since the Appellate Assistant Com missioner 's order was not passed under the 1961 Act, the department could not take any support from section 150 (1) of the Act." A perusal of the decision shows, indeed, that this was the ground on which a separate contention urged on behalf of the department on the basis of section 150 (1) was repelled.
It is no doubt seen from the facts of the case that it was a case of reassessment under section 297 (2) (d) (i) of the Act and the Court specifically held that reassessment pro ceedings should have been initiated under section 34 of the 1922 Act and not under section 148 of the 1961 Act.
In view of this conclusion no question of drawing any support from section 150 (1) could at all arise.
Still an argument was addressed and was repelled on the basis of the words "under this 18 Act" used in section 150 (1) thus upholding the literal construction argument now addressed on behalf of the asses see.
We shall consider this decision later after considering the department 's contentions.
As against the above contentions, Sri Manchanda submits that the provisions of section 150 (1) should be applied not blindly but with necessary modifications to suit the situa tion.
In support of this plea, he relies strongly on the last few words of section 297 (2) (d) (ii).
It is urged that the expression :"all the provisions of this Act shall apply accordingly" should be so construed as to enable the Revenue to invoke reassessment proceedings on the footing that the orders on appeal or reference were ones passed "under this Act" within the meaning of section 150 (1).
Sri Manchanda cited two decisions in support of his contention.
In Third I.T.O. vs Damodar Bhat, the question was whether proceedings under section 226 (3) of the new Act would apply with respect to a tax liability incurred under the 1922 Act.
The answer to this question, in the affirmative, turned on the language of section 297 (2) (j).
which provided that any tax or other dues payable under the 1922 Act may, notwithstanding the repeal of the 1922 Act, be recovered under the Act.
The contrary interpretation accepted by the High Court in that case would have had the effect of nulli fying the provisions of section 297 (2)(j).
Again, in Jain Bros. v,.
Union of India; , , it was held that penalty could be imposed under section 271 (1) of the 1961 Act in respect of returns filed before 1.4.1962 and assessments completed after 1.4.1962 but under the 1922 Act.
This was because of section 297 (2) (g), the special transitory provision in this behalf, which provided that "any proceeding for the initiation of a penalty in respect of any assessment for the year ending on the 31st day of March 1962 or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act.
" Here again section 297 (2) (g) had been enacted to provide for the exact situation in question and to have held to the contrary would have rendered the provisions of section 297 (2) (g) meaningless and redundant.
The position is no doubt a little different here.
The provisions of section 150 (1) have been specially made applicable and operative in respect of the notice under section 148 issued in pursuance of section 297 (2) (d)(ii) and, as pointed out earlier, the application of the provisions of section 297 (2)(d)(ii) gives rise to two sets of situations to one of which the language of section 150(1) would squarely apply and so the interpretation sought for by the appellant does not render the words of section 150 (1) redundant.
Despite this point of difference in the two situations, we think that the principle of the above decisions that the mutatis mutandis rule should be invoked in interpreting 19 section 297 (2) has application here also.
Not to do so would no doubt not make section 150(1) redundant but it will bring about an unintended and inequitable situation.
It is clear that section 150 (1) will operate to lift the time bar in cases where the reassessment is initiated under section 148 to give effect to an order passed under the 1961 Act.
Equal ly, where assessments had been reopened under section 34 of the 1922 Act before 1.4.1962 to give effect to orders passed under the 1922 Act and are continued after that date by virtue of section 297 (2) (d) (i), the provisions of the second proviso to section 34 (3) of that Act would preclude the operation of the normal rule of limitation for reassess ments.
In this situation, it will be a great anomaly to reach the conclusion that the time limit will operate in cases where proceedings under section 148 are initiated to give effect to an order on appeal, revision and reference merely because such order is one passed under the 1922 Act.
Neither reason nor rhyme can explain how the statue could have intended such anomaly or why it should be so interpret ed as to result in a discriminatory treatment only to this class of cases.
An interpretation which will result in such anomaly or absurdity should be avoided.
It is also necessary to remember that section 297 (2) is a provision enacted with a view to provide for continuity of proceedings in the context of repeal of one Act by a fresh one broadly containing analogous provisions and the transitory provisions should, as far as possible, be construed so as to effect such conti nuity and not so as to create a lacuna.
For these reasons we think that it will be appropriate to so read the words of section 297 (2)(d)(ii) as to permit the applicability of section 150 (or section 153) with the necessary modifica tions.
To paraphrase, the last words of section 297(2)(d)(ii) should be read to mean that where the proceedings initiated under section 148, subject to the relaxations and limitation of Ss. 149 and 150, all the provisions of the Act shall apply accordingly: that is to say, in the same manner as they would apply in case of proceedings normally initiated under these provisions.
Since reassessment proceedings so initiat ed to give effect to orders on appeal, revision or reference will not be subject to a time limit, the proceedings like wise initiated under section 297(2)(d)(ii) read with section 148 will also not be subject to any limitations save to the extent mentioned in section 150(2).
We would like to add that, even if section 150(1) is to be read literally and considered as posing a hurdle as contended for by the appellant, we think this result can be overcome by a liberal interpretation of section 297(2)(k).
This clause reads: "any agreement entered into, appointment made, approval given, recognition granted, direc tion, instruction, notification, 20 order, or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly;" This is principally a provision intended to save admin istrative steps taken under the 1922 Act by deeming them to be steps taken under the 1961 Act.
Strictly construed, the words "order issued" also would seem, prima facie, to carry only a similar connotation.
But we see no objection, for our present purposes, in the way of our construing these words liberally and consequently deeming the orders passed and issued by the Tribunal and the High Court in this case for the assessment year 1949 50 and subsequent assessment years as orders passed or issued under the corresponding provi sions of the new Act.
Once this deeming is made, there is no difficulty in the way of accepting the Revenue 's contention.
We think that the circumstances justify a slight straining of the language of this clause and applying it so interpret ed to the problem before us so as to avoid a meaningless anomaly.
Thus construed, the statute can be said not to have misfired in its application to the situation in the present case.
We should, before we conclude, refer to the decision of this Court in the Gujar Mat Modi case.
As we have pointed out earlier, the principal conclusion reached in that case was that proceedings under section 148 could not have been initiated as the case fell under the provisions of section 297(2)(d)(i).
It was, therefore, unnecessary to deal with the contention based upon section 150.
Moreover, this part of the decision was only based on a prima facie reading of section 150(1) and contains no discussion of the various aspects that need consideration and have been touched upon above.
We do not, therefore, think that the above decision can be treated as conclusive on the issue before us which, for the reasons discussed above, we think, should be an swered differently.
We affirm the conclusion of the High Court and dismiss the appeal.
No costs.
Y.L. Appeal dismissed.
[/INST]On a complaint made by the Managing Committee of the 6th respondent Cooperative Housing Society, the third respond ent, Registrar, Cooperative Societies, referred the dispute relating to irregularities in the purchase of building material for construction of flats for members of society by the past Managing Committee, of which the appellant was the President at the relevant time, to arbitration.
The first respondent Arbitrator, gave his ex parte award, on the failure of the appellant and another person to file their reply to the claim of the claimant society, and directed the appellant and the other person to pay the society certain sum with interest thereon.
The appellant challenged the award before second re spondent, the Delhi Cooperative Tribunal, which dismissed the same holding that the Arbitrator 's act of proceeding ex parte was justified and that the appeal had no merit.
The appellant 's writ petition was also dismissed by the High Court.
In the appeal before this Court on behalf of the appel lant it was contended that it was Sec.
59 dealing with surchage which was applicable to the instant case and not Section 60, which pertained to settlement of disputes by arbitration since the dispute in question was one which could not be referred to arbitration in terms of Section 60 of the Act.
On behalf of the contesting respondents it was submitted that it was Section 60, which was applicable and not Section 59.
Dismissing the appeal, this Court, HELD: 1.1 Sub Section (1) of Section 60 of the Delhi Co operative 783 Societies Act, 1972 indicates the true scope of the Section 60, while sub section (2) is merely illustrative, and not exhaustive.
Clause (c) of sub section (1) expressly provides that if any dispute touching the constitution/management or the business of the cooperative society arises between the society or its committee and any past committee.
any offi cer, agent or employee or any past officer of the society, the dispute should be referred to the arbitration.
[787H, 788A B, D] 1.2 In the instant case, the dispute, viz. irregulari ties in the purchase of building material for construction of flats for the members of the Society by the previous Managing Committee, touches the management of the Society and fails within the ambit of Section 60 of the Act.
The third respondent, Registrar, Cooperative, Societies was, therefore, right in referring the dispute to arbitration.
[789D F] Pentakota Srirakulu vs The Cooperative Marketing Society Ltd. ; , followed.
Change Nagar Cooperative House Building Society Ltd. and Anr.
Ashok Ohri, AIR 1976 63 Delhi 239, disapproved.
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<s>[INST] Summarize the judgementax Reference Case No. 15 of 1975.
Tax Reference under Section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal Delhi Bench R.A. No. 508 of 1971 72 arising out of I.T.A. No. 3410 of 70 71 for assessment year 1964 65.
section L. Aneja and K. L. Taneja for the Appellant.
section C. Manchanda, G. A. Shah and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
Is an assessee, who has concealed the particulars of his income, liable to penalty under clause (iii) of sub section (1) of section 271 of the Income Tax Act, 1961 as it stood on the date of the concealment or as it stand during the assessment year relevant to the previous year in which the income was earned ? That is the question in this reference made by the Income Tax Appellate Tribunal under section 257 of the Income Tax Act.
The assessee is a partner in two firms, Messrs. Hindustan Pottery Agency and Messrs. New Crockery House.
He filed a return of his total income for the assessment year 1964 65 on April 201 24, 1968.
He disclosed an income of Rs. 460/ from his share in the profits of Messrs. Hindustan Pottery Agency.
He did not disclose the income from his share in Messrs. New Crockery House.
In the course of the assessment proceedings, the Income Tax officer found that the assessee had received income from Messrs. New Crockery House also.
Because of non compliance by the assessee with a notice issued under section 143 (2) of the Act, the Income Tax officer made a best judgment assessment under Section 144 of the Act on a total income of Rs. 12,118/ .
This included a share income of Rs. 1,462/ from Messrs. Hindustan Pottery Agency and a share income of Rs. 3,456/ from Messrs. New Crockery House.
Certain other items of income were also included.
On appeal by the assessee, the Appellate Assistant Commissioner reduced the income from Messrs. New Crockery House to Rs. 2,955/ and taking into account certain other items determined the figure of concealed income at Rs. 7,357.
The Income Tax officer instituted penalty proceedings, and applied clause (iii) of sub section (1) of section 271 of the Act, as it stand after amendment by the Finance Act, 1968.
Having regard to the minimum penalty which, in his opinion, was leviable, he referred the case to the Inspecting Assistant Commissioner.
The Inspecting Assistant Commissioner examined the matter, and on the basis that the concealed income was Rs. 7,357/ he imposed a 13 penalty in the like sum, in view of the amended clause (iii) of subsection (1) of section 271 of the Act.
The assessee appealed to the Income Tax Appellate Tribunal, and contended that the amended provision could not be invoked and what came into operation was the law as it stood in the assessment year 1964 65.
The Tribunal rejected the contention.
But it reduced the penalty to Rs. 2,955/ taking the view that the assessee was guilty of concealing the share income from Messrs. New Crockery House only.
The assessee then applied for a reference.
The Tribunal saw a conflict of opinion on the point raised by the assessee between the Kerala High Court in Hajee K. Asseinar vs Commissioner of Income Tax, Kerala and the Punjab and Haryana High Court in Income Tax Reference No. 45 of 1971 (decided on April, 26, 1972) which had followed Saeed Ahmed vs Inspecting Assistant Commissioner of Income tax, Range ll, Lucknow(2) decided by the Allahabad High Court .
In the circumstances, it made the present reference directly to this Court on the following question of law: 202 "Whether the Tribunal was, in law, right in sustaining the penalty of Rs. 2,955/ by applying the provisions of section 271(1)(c) (iii) of the Income Tax Act, 1961 as amended with effect from 1 4 1968 ?" Section 271 of the Income Tax Act provides for penalties in certain cases.
Clause (c) of sub section (1) of section 271 speaks of a case where the Income Tax officer is satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income.
The measure of the penalty is specified in clause (iii) of the sub section.
During the assessment year 1964 65, clause (iii) read "(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income." That clause was substituted with effect from April 1, 1968 by the Finance Act, 1968 by the following: "(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished. ' It is evident that the quantum of tax which is levied under the substituted clause (iii) can be greater than that imposable in terms of the original clause (iii).
The case of the assessee is that an assessment proceeding for the determination of the total income and the computation of the tax liability must ordinarily be made on the basis of the law prevailing during the assessment year, and inasmuch as concealment of income is concerned with the income relevant for assessment during the assessment year any penalty imposed in respect of concealment of such income must also be governed by the law pertaining to that assessment year.
We are unable to accept the contention.
In our opinion, the assessment of the total income and the computation of tax liability is a proceeding which for that purpose, is governed by entirely different considerations from a proceeding for penalty imposed for concealment of income And this is so notwithstanding that the income concealed is the income assessed to tax.
203 In the case of the assessment of income and the determination of the consequent tax liability, the relevant law is the law which rules during the assessment year in respect of which the total income is assessed and the tax liability determined.
The rate of tax is determined by the relevant Finance Act.
In the case of a penalty, however, we must remember that a penalty is imposed on account of the commission of a wrongful act, and plainly it is the law operating on the date on which the wrongful act is committed which determines the penalty.
Where penalty is imposed for concealment of particulars of income, it is the law ruling on the date when the act of concealment takes place which is relevant.
It is wholly immaterial that the income concealed was to be assessed in relation to an assessment year in the past.
We do not think that the cases to which the Tribunal has referred can be said to differ on this.
The concealment of the particulars of his income was effected by the assessee when he filed a return of total income on April 24, 196$,.
Accordingly, it is the substituted clause (iii), brought in by the Finance Act.
1968, which governs the case.
That clause came into effect from April 1, 1968.
Another contention raised by the assessee may be noticed.
It is urged that under section 139 of the Income Tax Act, as it stood during the assessment year 1964 65 the return of income should have been filed by the end of September, 1964 and inasmuch as the return, although filed as late as April 24, 1968, was accepted by the Income Tax officer it should be deemed that the return was treated as filed within time or, in other words, that the return had been filed by September 3(), 1964.
In that event, the submission continues, the concealment of the particulars of income must be deemed to have taken place when the original clause (iii) of section (1) of section 271 of the Act was in operation.
This contention is also without force.
Under section 139 of the Act, although the statute itself prescribes the date by which a return of income must be filed, power has been conferred on the Income Tax officer to extend the date of furnishing the return.
A return filed within the extended period is a good return in the sense that the Income Tax officer is bound to take it into consideration.
But nowhere does section 13 declare that where a return is filed within the extended period it will be deemed to have been filed within the period originally prescribed by the statute.
On the contrary, the section contains a provision for payment of interest where the return is filed beyond the 204 prescribed date even though within the extended period.
That is evidence of the fact that the return filed during the extended period is not regarded by the statute as filed within the time originally prescribed.
Accordingly, we are of opinion that clause (iii) substituted in sub section (1) of section 271 of the Income Tax Act, 1961 by the Finance Act, 1968, governs the case before us and, therefore, the penalty imposed on the assessee in the instant case is covered by that provision.
We answer the question in the affirmative, in favour of the Revenue and against the assessee.
The Revenue is entitled to its costs of this Reference.
[/INST]Section 271(1)(c)(iii) provided that where the Income Tax officer had reason to believe that the assessee had concealed particulars of his income or furnished inaccurate particulars of such income he may impose a penalty of a sum in addition to any tax payable by the assessee which shall not be less than twenty per cent but which shall not exceed one and a half times the amount of the tax.
The Finance Act 1968, which came into effect from April 1, 1968, enhanced the penalty to a sum which shall not be less than 7 but which shall not exceed twice.
the amount of income in respect of which the particulars have been concealed or inaccurate particulars have been furnished.
The assessee filed a return of his total income for the assessment year 1964 65 on 24th April, 1968.
In the course of assessment proceedings, the Income Tax officer found that the assessee had concealed the income earned from one of his two firms.
Having regard to the minimum penalty which he considered was leviable, he referred the case to the Inspecting Assistant Commissioner.
The Inspecting Assistant Commissioner imposed a penalty in respect of the concealed income in accordance with section 271 (1) (c) (iii) as amended by the Finance Act 1968.
It was argued on behalf of the assessee that (i) assessment proceeding for the determination of total income and computation of tax liability must ordinarily he made on the basis of the law prevailing during the assessment year, and inasmuch an concealment of income is concerned with the income relevant for assessment during the assessment year any penalty Imposed in respect of concealment of such income must also be governed by the law pertaining to that assessment year, (ii) under section 139 of the Act as it stood during the assessment year 1964 65, the return of income should have been filed by the end of September 1964 and as the return although filed on April 24, 1968 was accepted by the Income Tax officer and therefore should be deemed to have been filed within time i.e. by September 30, 1964 the penalty would be governed by the section as it originally stood then.
^ HELD: 1.
Clause (iii) substituted in sub section (1) of section 271 of the Income Tax Act, 1961 by the Finance Act, 1968, governs the case.
Therefore, the penalty imposed on the assessee in the instant case is covered by that provision [204B] 2.
The assessment of the total income and the computation of tax liability is a proceeding which for that purpose, is governed by entirely different considerations from a proceeding for penalty imposed for concealment of income.
And this is so notwithstanding that the income concealed is the income assessed 200 to tax.
In the case of the assessment of income and the determination of the consequent tax liability, the relevant law is the law which rules during the 1 assessment year in respect of which the total income is assessed and the tax liability determined.
The rate of tax is determined by the relevant Finance Act.
In the case of a penalty, however, it is imposed on account of the commission of a wrongful act.
It is the law operating on the date on which the wrongful act is committed which determines the penalty.
Where penalty is imposed for concealment of particulars of income, it is the law ruling on the date when the act of concealment takes place which is relevant.
It is wholly immaterial that the income concealed was to be assessed in relation to an assessment Year in the past.
[202G H, 203A C] 3.
Under section 139 of the Act, although the statute itself prescribes the date by which a return of income must be filed, power has been conferred on the Income Tax Officer to extend the date of furnishing the return.
A return filed within the extended period is a good return in the sense that the Income Tax officer is bound to take it into consideration.
But nowhere does section 139 declare that where a return is filed within the extended period it will be deemed to have been filed within the period originally prescribed by the statute.
On the contrary, the section contains a provision for payment of interest where the return filed beyond the prescribed date even though within the extended period.
That is evidence of the fact that the return filed during the extended period is not regarded by the statute as filed within the time originally prescribed.
[203 F H, 204A]
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<s>[INST] Summarize the judgementil Appeal No. 1655 of 1968.
Appeal by special leave from the judgment and order dated December 20, 1967 of the Mysore High Court in Regular Second Appeal No. 811 of 1965.
A. K. Sen, Shyamala Pappu and Vineet Kumar, for the appellant.
S.V. Gupte, Janendra Lal, B.R. Agarwala and Kumar M. Mehta, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Mysore High Court in which the question involved is whether an option given to a lessee to get the lease,, which is initially for a period of 10 years, renewed after every 10 years is hit by the rule of perpetuity and is void.
The respondent entered into a deed of lease on October 26, 1951 with the appellant in respect of premises Nos. 8 & 9, Mahatma Gandhi Road, (South Parade), Civil Station, Bangalore.
It was stipulated that the lease would be for a period of 10 years in the first instance with effect from November 1, 1961 "with ,an option to the lessee to renew the same as long as desired as provided".
Clauses 9 and 10 which are material may be reproduced: "9.
The lessee shall have the right to renew the lease of the scheduled premises at the end of the present period of ten years herein secured on the same rental of Rs. 450/ per month, for a similar period and for further similar periods thereafter on the same terms and conditions as are set forth herein; and the Lessee shall be permitted and shall have the right to remain in occupation of the premises on the same terms and conditions for any further periods of ten years as long as they desire to do so.
The Lessor shall not raise any objection whatsoever to the Lessee exercising his option to renew the lease for any further periods of ten years on the same terms and conditions as long as they desire to be in 142 occupation, provided that the Lessee shah not have the right to transfer the lease or alienate any right thereunder. ' ' It appears that before the expiry of the period of ten years from the date of the commencement of the lease the lessee wrote to the lessor informing him of the intention to exercise the option given to the lessee under the deed of lease to get the same renewed on the same terms and conditions as before for a period of ten years from November 1, 1961.
The lessor did not comply with the request.
After serving a notice the lessee filed a suit for specific performance of the covenant in the lease for renewal.
It was prayed that the lessor be directed to execute a registered deed to lease in favour of the lessee and if he failed to do so the court should execute a deed in his favour.
The lessor pleaded, inter alia, that the condition relating to renewal was hit the rule against perpetuity.
Certain other pleas were taken with which we are not concerned.
The trial court decreed the suit.
The first appellate court and the High Court affirmed the decree.
The rule against perpetuity is embodied in section 14 of the Transfer of Property Act, hereinafter called the Act.
According to it no transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer and the minority of some person who shall be in existence at the expiration of that period and to whom, if he attains full age, the interest created is to belong.
It is well known that the rule against perpetuity is rounded on the principle that the liberty of alienation "shall not be exercised to its own destruction and that all contrivances shall be void which tend to create a perpetuity or place property for ever out of the reach of the exercise of the power of alienation".
The words "transfer of property" have been defined by section 5 of the Act to mean an act by which a living person conveys property in present or in future to one or more other living persons etc.
The words "living persons" include a Company or association or body of individuals.
Section 105 of the Act defines "lease".
A lease of immovable property is a transfer of a right to enjoy such property made for a certain time express or implied or in perpetuity in consideration of a price paid or promised or of money, a share of crops, service or any other thing of value.
A lease is not a mere contract but it is a transfer of an interest in land and creates a right in rem.
Owing to the provisions of section 105 a lease in perpetuity can be created but even then an interest still remains in the lessor which is called a reversion.
It is not disputed on behalf of the appellant that a lease in perpetuity could have been created but the lease in the present case 143 was not of that kind and was for a period of ten years only in the first instance.
It is said that the mischief is created by the clauses relating to renewal which are covenants that run with the land.
It is pointed out that on a correct construction of the renewal clauses the rule of perpetuity contained in section 14 would be immediately attracted.
We are unable to agree.
Section 14 is applicable only where there is transfer of property.
Even if creation of a lease hold interest is a transfer of a right in property and would fall within the expression "transfer of property" the transfer was for a period of ten years only by means of the indenture Exh.
The stipulation relating to the renewal could not be regarded as transferring property or any rights therein.
In Ganesh Sonar vs Purnendu Narayan Singha & Ors.(1) in the case of lease of land an option had been given to the lessor determine the lease and take possession of the lease hold land under specified conditions.
The question was whether such a covenant would fall within the rule laid down in the English case Woodall vs Clifton(2) in which it was held that a proviso in a lease giving an option to the lessor to purchase the fee simple of the land at a certain rate was invalid as infringing the rule against perpetuity.
The Patna High Court distinguished the English decision quite rightly on the ground that after the counting into force of the Act a contract for the sale of immovable property did not itself create an interest in such property as was the case under the English law.
According to the Patna decision the option given by the lessee to the lessor to resume the lease hold land was merely a personal covenant and was not a covenant which created an interest in land and so.
the rule against perpetuity contained in section 14 of the Act was not applicable.
The same principle would govern the present case.
The clauses containing the option to get the lease renewed on the expiry of each term of ten years can by no means be regarded as creating an interest in property of the nature that would fall within the ambit of section 14.
Even under the English law the court would give effect to a covenant for perpetual renewal so long as the invention is clear and it will not be open to objection on the ground of perpetuity; see Halsbury 's Laws of England, 3rd Edn.
23, p 627.
In Muller vs Traf Jword(3) it was held that the covenant in a lease for renewal was not strictly a covenant for renewal.
But Farwell, J., proceeded to observe that a covenant to renew had been held for at.
least two centuries to be a covenant running with the land.
If so, then no question of perpetuity would arise.
It appears that in England whatever might have been the reason, the objection of perpetuity had never been taken to cases (1) (1962) Patna 201.
(2) (3)(1901) 1 Ch.
54. of covenants for renewal.
The following observations of Farwell, J., which were quoted with approval by Lord Evershed, M.R. in Weg Motors Ltd. vs Hales & Others(1) are note worthy: "But now I will assume that this is a covenant for renewal running with the land; it is then in my opinion free from any taint of perpetuity because it is annexed to the land.
See Rogers vs Hosegood, The equitable rule that the burden of a covenant runs with the land is to be found in section 40 of the Act.
This section reads: 40.
"Where for the more beneficial enjoyment of his own immoveable property, a third person, has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment in a particular manner of the latter property, or where a third person is entitled to the benefit of an obligation arising out of contract, and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation nor against such property in his hands." As pointed out in Mulla 's Transfer of Property Act, 5th Edn.
at page 194, section 40 expressly says that the right of the covenantee not an interest in the land bound by the covenant nor an easement.
It is not an interest because the Act does not recognise equitable estates and it cannot be said as Sir George Jessal said in London & South Western Rly.
vs Gomm(2) that if a covenant "binds the land it creates an equitable interest in the land.
" The expression "covenant runs with the land" has been taken from the English law of real property.
It is an exception to the general rule that all covenants are personal.
Even on the footing that the clauses relating to renewal in the lease, in the present case, contain covenants running with the land the rule against perpetuity contained in section 14 of the Act would not be applicable as no interest in property has been created of the nature contemplated by that provision.
For the above reasons the appeal fails and it is dismissed with costs.
G.C. Appeal dismissed.
(1) ,188.
(2) , 580.
[/INST]A large number of parts of machinery bearing railway marks, contained in bags of metal scrap booked for transport by lorry by the appellant, was seized by the Railway police and the appellant was charged with an offence under section 3 of the Railway Stores (Unlawful Possession) Act, 1955.
The expert on railway machinery parts certified that the goods were unactionable, suggesting that they could not have been auctioned and lawfully purchased by any third party, but in court, he gave evidence and made a categorical statement that he could not say if the articles were auctioned in the market or not.
The appellant was convicted and the conviction was confirmed by the High Court.
In appeal to this Court, HELD: Before anyone can be charged with the offence under section 3, the prosecution must show that the articles in his possession are 'railway stores ' as defined in section 2, that is: (i) that the articles are the property of a railway administration (though it is not necessary to prove that they belong to any particular railway administration); and (ii) that they are used or intended to be used in the construction, operation or maintenance of a railway.
The prosecution must also show that there was cause for reasonable suspicion of the stores having been stolen or unlawfully obtained.
Evidence that the goods conformed to the railway standards, or that they were new, fails short of the requisite proof, because, an article, though it is the property of a railway administration would not be "railway stores ' if the article has been discarded or rejected as useless.
Since the evidence in this case did not establish that the goods were used or intended to be used in the construction, operation or maintenance of a railway the charge must fail.
[188 D F, E H; 189 F H] Moyalal Rostagir vs State, , approved.
Observations contra in Udaya Dalai vs State, 30 Cuttack L.T. 275, disapproved.
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<s>[INST] Summarize the judgementCivil Appeals Nos. 299 and 120 to 124 of 1972.
From the Judgment and order dated the 25th March, 1970 of the Punjab & Haryana High Court in Civil Writ No. 325 of 1968, L.P.A. No. 177 of 1969, Civil Writ No. 1534, 1545, 1829 and 2201 of 1969 respectively.
G. L. Sanjay, section K. Mehta, R. L. Batta and M. Qumaruddin, for the appellants (in Civil Appeal No. 299/72).
2 V. C. Mahajan, section section Khanduja and R. L. Bata, for the appellants (In C.As.
120 124/72) D. Mukherjee, Hardev Singh, R. section Sodhi and G. C. Garg, for the respondents.
(In C.A. No. 299/72).
The Judgement of the Court was delivered by GOSWAMI, J.
In these appeals by certificate of the High Court of Punjab and Haryana validity of action taken by the Market Committee, Patiala, under the provisions of the Punjab Agricultural Produce Markets Act, 1961, is under challenge.
The appellants are shop keepers of Gur Mandi, Patiala, and are licensees under section 10 of the Punjab Agricultural Produce Markets Act, 1961 (briefly the Act) and are also pucca arhtiyas.
It is not in dispute that they sell gur and shakkar within the market area notified under the Act.
It is also admitted that they have licences under section 10 of the Act in Form 'B ' as kacha arhtiyas or commission agents.
Since they were found to be selling gur and shakkar in their own shops within the notified market area without submitting accounts and without payment of fees they were asked to show cause by the Market Committee why legal action should not be taken against them for violation of rules 29(3) and 31(1) of the Punjab Agricultural Produce Markets (General) Rules, 1962 (briefly the Rules) and for violation of condition No. 1 of the licence which is to the effect that the licensee shall comply with the provisions of the Act, Rules and Bye laws framed thereunder and instructions issued from time to time.
The appellants disclaimed liability to pay fee under the Act on various grounds.
The Administrator of the Market Committee after some correspondence levied on one of the appellants, M/s Prem Chand Ram Lal, appellants in Civil Appeal No. 120 of 1972, Rs. 5014/ as market fee on the basis of best judgment assessment and imposed equal amount of penalty and a demand notice was issued for payment.
M/s Prem Chand Ram Lal filed a writ application before the High Court for quashing the demand notice.
The High Court allowed the petition quashing the order of assessment as arbitrary and violative of the principles of natural justice.
The High Court, however rejected the other contentions of the said petitioner questioning the validity of the fee levied.
M/s Prem Chand Ram Lal filed a Letters Patent Appeal against the judgment of the learned single Judge rejecting their other substantial points.
The appellants in civil Appeal No. 299 of 1972 had also filed a writ application under articles 226 and 227 of the Constitution in the High Court questions the action taken against them as well as the levy under the Act.
By a common judgement of March 25, 1970 the Division Bench of the High Court dismissed the Letters Patent Appeal of M/s Prem Chand Ram Lal as also the writ application of the appellants and granted certificates to appeal to this Court.
The question is whether the appellants are liable to payment of fee under the Act.
3 Action in this case was taken for violation of rules 29(3) and 31(1) of the Rules.
We will read these rules : R.29(1). 'Under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time`. " (3) "The fees shall be paid to the Committee or a paid officer duly authorised to receive such payment on the day of the transaction or on the following day".
R.31(1).
"Every licensed dealer and every dealer exempted under rule 18 from obtaining a licence shall submit to the Committee a return in Form M showing his purchases and sale of each transaction of agricultural produce on each day, on the day on which the transaction takes place or on the following day . . " The fault of the appellants lies in that they have neither paid fees under rule 29(3) nor have they submitted returns in Form 'M '.
A perusal of the above two rules would show that the Committee is authorised to levy fees on agricultural produce brought or sold only by a licensee in the notified market area.
Similarly under rule 31 (1) only a licensed dealer is required to submit a return.
We have now to take note of the scheme disclosed in a few other relevant provisions which are material for our purpose.
Under section 10 of the Act "any person may apply to the authority specified in section 9 for a licence which may be granted for such period, in such form, on such conditions and on payment of such fees not exceeding one hundred rupees as may be prescribed".
There is a proviso to this sub section whereby "if any personal carrying on any business of the nature specified in sub section (3) of section 6 in a notified market area on the date of issue of notification under sub section (1) of that section fails to apply for licence on or before the date specified therein t`or obtaining licence, the prescribed authority may, before a licence is issued, impose on him such penalty not exceeding one hundred rupees as may be prescribed".
By section 5 of the Act the State Government by notification declares its intention of exercising control over the purchase, sale, storage and processing of specified agricultural produce in a specified area.
By section 6(1) the Government by notification notifies a market area for the purpose of the Act.
Section 6(3) may be quoted: 6(3). "After the date of issue of such notification or from such later date as may be specified therein, no person, unless exempted by rules made under this Act, shall, either for him I self or on behalf of another person, or of the State Government within the notified market area set up, establish or continue or allow to be continued any place for the purchase, sale, storage and processing of the agricultural produce except 4 under a licence granted in accordance with the provisions of the Act.
the rules and by laws made thereunder and the conditions specified in the licence. ." As we read the above sub section it is clear that no person shall, unless exempted by rules, inter alia, purchase, sell, store or process the specified agricultural produce except under a licence.
It is not the case of the appellants that they belong to the exempted class.
Rule 17(1) provides that "a person desirous of obtaining a licence under section 10 of the Act shall apply in Form A (to be submitted in duplicate) to the Chairman of the Board through the Committee of the area in which he wishes to carry on his business and shall also deposit with the committee the requisite licence fee".
Sub rule (3) provides that if any person on the specified date fails to apply for a licence, he is liable to penalty in accordance with a certain scale.
Under sub rule (7) "the Chairman may grant a licence to the applicant in Form B.
The licence shall be subject to the conditions mentioned therein".
When we look to Form 'A ' which is the form for application for a licence under section 10 we find that against entry 8, the applicant has to give the "particulars of the business for which the licence is required" under four heads: (1) Kacha Arhtiya (2) Commission Agent (3) Storage (4) Processing Similarly in Form 'B ' which is the form of the licence under section 10, against entry 5, the same particulars of the business as against entry in Form 'A ' appear.
As a matter of fact one of the licences of the appellants was shown to us and it was in accordance with Form 'B '.
It is, therefore, clear that no licence has been issued to the appellants for doing business of buying and selling agricultural produce.
It is the case of the appellants that they make direct purchases and this fact is not controverted.
Although, there are, the appellants are licensees as required for some of the businesses mentioned in Form 'B ', they have no licence for carrying on business of purchase and sale of agricultural produce within the notified market area.
Now under section 23 "a Committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not exceeding rupee one fifty paise for every one hundred rupees, provided. . " Section 43 provides for rule making power.
Rule 24 is referable to section 43(2)(v), but we are not concerned with this rule in this case.
Rule 29 provides that under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time.
Reading section 23 and rule 29 together it is not possible to escape from the conclusion that the Act 5 authorises levy of fee on agricultural produce bought or sold by licensees only.
The appellants have licence only in respect of the business of kacha arhtiya and commission agent.
While we express no opinion on the point whether the absence of reference to buying and selling of agricultural produce in Form 'A ' and Form 'B ' disables the Committee to issue licences for that purpose, we are of opinion that the present appeals can be disposed of all the sole ground that the appellants have not as a matter of fact been issued such licences and no fees can, therefore, be levied on them in respect of purchases and sales of agricultural produce by them.
The appellants are, therefore, not liable to payment of fee under the Act as demanded.
The appellants also contend that since gur and shakkar are manufactured products they cannot come under the definition of agricultural produce with the meaning of section 2(a) of the Act.
Section 2(a) defines agricultural produce to mean "all produce whether processed or not, of agriculture, horticulture, animal husbandry or forest as specified in the Schedule to this Act" which mentions 85 items of commodities.
These are statutorily agricultural produce under section 2(a).
It is not possible to entertain the argument that the Court will undertake a judicial scrutiny of these items in order to come to a conclusion whether these are agricultural produce or not.
In view of the definition in section 2(a) such an enquiry is out of place.
In this context we may note that under section 38 the State Government may be notification add to the schedule any other item of agricultural produce or amend or omit any such specified item It is because of this power to add to the schedule items of agricultural produce that the first part of the definition under section 2(a) gives guidance as to what agricultural produce means.
The submissions are.
therefore.
devoid of substance.
In the result the appeals are allowed.
The appellants are not liable for payment of fee with regard to their sales in the notified market area other than in the capacity as kacha arhtiyas or commission agents.
In the circumstances of the case there will be no order as to costs.
P.H.P. Appeals allowed.
[/INST]The respondents were tried for having committed offences under section 4(3), 20(3) and 22 of the Foreign Exchange Regulation Act, 1947 read with section 120 B of the Indian Penal Code and section 23 of ' the Act.
The Court discharged the respondents in view of the decision of the High Court of Calcutta in M/s Serajuiddin & Co. and Ors.
vs Union of India and Ors.
Civil Rules Nos.
2183 (W) of 1966 and cases Nos.
1998 and 1999 of 1963 decided on 16 9 1971, holding that section 23(AI) was violative of article 14 of the Constitution.
The appellant filed a revision petition against the order, before the High Court.
The High Court concurred with the decision of the trial Court and dismissed the revision.
This appeal, by special leave, is against that order dismissing the revision, It was contended for the respondents that section 23 provides for two different procedures for dealing with contravention of the provisions of the Act.
That is to say, persons who have contravened the provisions specified in section 23(1)(a) and are found guilty by the Director of Enforcement need not face prosecution in a criminal court if the Director is of opinion that the penalty he is empowered to impose would be adequate punishment, whereas, the persons alleged to contravene the other provisions of the Act have necessarily to face prosecution in criminal court without being given the benefit of an inquiry by the Director of Enforcement and the opportunity to the delinquents to convince him that imposition of penalty by him would be adequate punishment even if they are found guilty.
The classification made in section 23(1) is under inclusive and is, therefore, unreasonable.
Allowing the appeal, HELD : (i) When the purpose of a challenged classification is in doubt, the courts attribute to the classification the purpose thought to be most probable.
Instead of asking what purpose or purposes the statute and other materials reflect, the court may ask what constitutionally permissible objective this statute and other relevant materials could plausibly be construed to reflect.
The latter approach is the proper one in economic regulation cases.
The decisions dealing with economic regulation indicate that courts have used the concept of 'purpose ' and 'similar situations ' in a manner which give considerable leeway to the legislature.
This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit of doubt about its purpose.
[805H 806C] (ii) Often times the courts hold that tinder inclusion does not deny the equal protection of laws under Article 14.
In strict theory, this involves an 803 abandonment of the principle that classification must include all who are similarly situated with respect to the purpose.
This under inclusion is often explained by saying that the legislature, is free to remedy parts of a mischief or to recognize degrees of evil and strike at the harm where it thinks it most :acute.
There are two main considerations to justify an under inclusive classification.
First, administrative necessity.
Second, the legislature might not be fully convinced that the particular policy which it adopts will be fully successful or wise.
Thus to demand application of the policy to all whom it might logically encompass would restrict the opportunity of a state to make experiment.
These techniques would show that some sacrifice of absolute equality may be required in order that the legal system may preserve the flexibility to evolve new solutions to social and economic problems.
[806E; H.807B] Missouri &. and T. Rly.
vs May, ; at p. 269 and Gujarat vs Ambica, Mills ; referred to.
(iii) The experience of the Government was that persons contravening the provisions of the Act specified in section 23(1)(a) invariably escaped without punishment.
: firstly because, successful prosecution of these offences in many cases was not possible for want of legal evidence; secondly because, the criminal courts were not equipped with the training, expertize and experience necessary to deal with the intricate and ingenious methods adopted by the persons contravening them.
The Government, therefore, thought that imposition of penalty by departmental adjudication would prove a more effective means of ,checking these types of foreign exchange offences as against the previous system of ' prosecution of all offences on the basis of the strict standard of proof required for criminal prosecution which proof was, by and large, so much within the special knowledge of the offender and so much out of the reach .of the department.
[808D F] The basis of classification was that in cases where there was likelihood of getting sufficiently unimpeachable evidence as, for instance.
in cases involving contravention of sections 14, 13(2), 15, 18 etc., where the Reserve Bank of India as a specialized agency comes into the picture and be in possession of relevant materials, those cases were left to be dealt with under section 23(IA) by criminal courts.
The classification made in section 23(IA) is, therefore, not dis criminatory.
[808H; 809E]
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<s>[INST] Summarize the judgementminal Appeal No. 119 of 1961.
Appeal from the judgment and order dated December 21, 1961, of the Calcutta High Court in Cr. A. No. 423 of 1958.
P. K. Chakravarty, for the appellant.
section C. Mazumdar, for respondent No. 1.
D. N. Mukherjee, P. K. Mukherjee for P. K. Bose, for the respondent No. 2. 1962.
August 3.
The Judgment of the Court was delivered by SINHA, C.J.
This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c).
566 of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958.
We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later.
It appears that the appellant, who it; a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952.
The prosecution case was that the respondent had entrusted the.
sum of Rs. 5000/ to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders ' Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client.
The appellant was, therefore, charged under section 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/ , which had been entrusted to him as a lawyer on behalf of the respondent.
The appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated.
In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses.
He also adduced in evidence a certain document, marketed exhibit 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/ being a portion of the amount of Rs. 5000/ required for the deposit, had been asked for by the appellant.
It also con tained writings in the hand of the complainant &owing that there was correspondence in the matter 567 of the deposit.
That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant.
But the appellant challenged the document as a forgery in material parts, and cross examined the complainant who had produced the document.
In spite of the fact that the complainant was very pointedly cross examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined.
The trial Court, on an examination of the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him.
The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document.
Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document.
Otherwise it could have pronounced its judgment one way or the other, on the merits of the controversy, whether or not the prosecution had succeeded in bringing the charge home to the accused.
If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh 'opportunity to the complainant to have second round of litigation, to the great prejudice of the accused.
In this connection, the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case: 568 "Thus there can be no doubt that this was a document of considerable importance.
According to the prosecution it clearly showed the respondent 's connection with the sum of Rs. 4200/ which was a part of the sum of Rs. 5000/ , the subject matter of the charge.
According to the respondent, the figures 4200 and the Bengali word 'sankranta ' were for geries just as at the bottom of the document the word yes ' and the signature of the res pondent with date were also forgeries.
This case was clearly put by the respondent to Bimla, Krishna Ben and it was suggested to him that the impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent.
It must be said that inspite of this challenge, the appellant took no steps what.
ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document.
It is true that expert evidence cannot always be a final settler; still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent. .
Comment was also made by the Magistrate on the appellant 's failure to call expert evidence.
In one sense that comment was justified; but in a case of this kind between lawyer and client we think the matter cannot be left, where it is.
In view of the fiduciary relation.
ship between the parties it is as much necessary in the interest of, the prosecution as in.
the interest of the accused that the whole matter should be cleared ' up, and no steps 569 should be spared which might ensure complete justice between the parties.
If it were an ordinary case between one litigant and another, we might have hesitated at this dis tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case.
" In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances.
In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person.
It was not that he proved for the examination of an expert and that opportunity had been denied to him.
The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court.
That Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused.
The accused was thus acquitted.
On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court.
If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction.
But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance.
It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that 570 the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case.
It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce.
That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client.
Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him.
In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial.
The High Court was not sitting on a disciplinary proceeding for professional misconduct.
It had to apply the same rules of criminal jurisprudence as.
apply to all criminal trials, and, in our opinion, the only.
reason given by the High Court for ordering retrial is against all well established rules of criminal jurisprudence.
The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client.
There was no relationship of lawyer and client so far as the criminal case was concerned.
Hence, in our opinion, the order of retrial passed by the High Court is entirely erroneous and must be set aside.
Appeal allowed.
[/INST]The Bombay City Civil Court Act of 1948, an Act passed by the Provincial Legislature of Bombay, provided by section 3 that the Provincial Government may, by notification in the official Gazette, establish for the Greater Bombay a court to be called the Bombay City Civil Court, and that this court shall, notwithstanding anything contained in any law, have jurisdiction to receive, try ' and dispose of all suits and other proceedings of a civil nature nob exceeding Rs. 10,000 in value arising within Greater Bombay except certain kinds of suits which were specified in the section.
Section 4 of the Act provided that subject to the exceptions speci fied in 8. 3 the Provincial Government may, by notification in the official Gazette, invest the City Civil Court with jurisdiction to 52 receive, try and dispose of all suits and other proceedings of civil nature arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification.
Section 12 barred the jurisdiction of the Bombay High Court to try suits and proceedings cognizable by the City Civil Court.
In exercise of the powers conferred by section 4 the Provincial Government invested the City Civil Court with jurisdiction to receive, try and dispose of all suits and proceedings of a civil nature not exceeding Rs. 25,000 in value.
The first respondent instituted a suit in the High Court of Bombay for recovery of Rs. 11,704 on the basis of a promissory note, contending that the Provincial Legislature had no power to make laws with respect to juris diction of courts in regard to suits on promissory notes which was a matter covered by item 53 of List I, and the Bombay City Civil Court Act of 1948 was therefore ultra vires.
It was further contended on his behalf that in any event section 4 of the Act was invalid as it involved a delega tion of legislative powers to the Provincial Government and that the suit was therefore cognisable by the High Court.
Held by the Full Court. (i) that the impugned Act was a law with respect to a matter enumerated in List II and was not ultra vires; (ii)that, as the legislature had exercised its judgment and determined that the City Civil Court should be invested with pecuniary jurisdiction up to Rs. 9,5,000 and all that was left to the discretion of the Provincial Government was the determination of the conditions under which the court should be invested with the enhanced juris diction, section 4 did not involve any delegation of legislative powers but was only an instance of conditional legislation and was not ultra vires or invalid on this ground; (iii) inasmuch as the impugned Act was in pith and substance a law with respect to a matter covered by List II, the fact that it incidentally affected suits relating to promissory notes (a subject falling within items 28 and 53 of List I) would not affect its validity and the suit was accordingly not cognisable by the High.
Court.
Per FAZL ALI, MEHR CHAND MAHAJAN and MUKHERJEA JJ.
The power of the Provincial Legislature to make laws with re spect to "administration of justice" and "constitution and organisation of all courts" under item 1 of List II is wide enough to include the power to make laws with regard to the jurisdiction of courts established by the Provincial Legis lature; the object of item 53 of List I, item 9, of List II and item 15 of List III is to confer special powers on the Central and the Provincial Legislatures to make laws relat ing to the jurisdiction of courts with respect the particu lar matters that are referred to in Lists I and II respec tively and the Concurrent List, and these provisions do not in any way curtail the power of Provincial Legislature under Item I of List II to make laws with regard to juris diction of courts and to confer jurisdiction on courts established by it to try all causes of a civil nature sub ject to the power of the Central and 53 Provincial Legislatures to make special provisions relating to particular subjects referred to in the Lists.
Per PATANJALI SASTRI and DAS JJ.
The words" adminis tration of justice" and "constitution and organisation of all courts" in item 1 of List II must be understood in a restricted sense excluding from their scope "jurisdiction and powers of courts" as the latter subject is specifically dealt with in item 2 List II.
Item 1 of List II does not therefore by itself authorise legislation with respect to jurisdiction and powers of courts, and the legisltive power under item 9.
in regard to "jurisdiction 'and powers of courts ", which can legitimately be exercised with respect to any of the matters in List II, can be exercised with respect to administration of justice as this is one of the matters enumerated in that List, with the result that the subject of general jurisdiction of courts is brought within the authorised area of provincial legislation; and as the Provincial Legislature is thus competant to make a law with respect to the general jurisdiction of the court, the apparent conflict with the central legislative power under item 53 of List I can be resolved by invoking the doctrine of pith and substance and incidental encroachment.
[The legislative practice which prevailed in India before 1935 was relied on in this case in support of the view that the Provincial Legislatures had power under the constitution of 1935 to invest courts constituted by them with general pecuniary jurisdiction].
Quaere: Whether it was not open to the Legislatures of India under the Government of India Act of 1935 to delegate their legislative powers to other agencies.
Queen vs Burah (59.
A 178).applied.
Jatindra Nath Gupta vs Province of Bihar distinguished.
Mulchand Kundanmmal Jagtiani vs Raman (51 Born.
L.R. 86 :, United Provinces vs Atiqa Begum Prafulla Kumar Mukherjea and Others vs Bank of Commerce, Khulna referred
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<s>[INST] Summarize the judgementAppeals Nos. 776 and 777 of 1957.
Appeals by special leave from the judgment and order dated September 25, 1956, of the Bombay High Court in Income tax Application No. 48 of 1956; and from the judgment and order dated March 17,1954, of the Income tax Appellate Tribunal, Bombay, in E.P.T.A. Nos. 757, 903 and 944 of 1948 49, respectively.
A. V. Viswanatha Sastri and G. Gopalakrishnan, for the appellants.
A. N. Kripal and D. Gupta.
for the respondent.
November 30.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These are two appeals, with special leave, against an order of the High Court of Bombay rejecting a petition under section 66(2) of the Indian Income tax Act and the order of the Income tax Appellate Tribunal, Bombay, in respect of which the petition to the High Court was made.
Messrs. section C. Cambatta & Co. (Private) Ltd., Bombay, have filed these appeals, and the Commissioner of Excess Profits Tax, Bombay, is the respondent.
We are concerned in these appeals with three chargeable accounting periods, each ending respectively on December 31, beginning with the year, 1943 and ending with the year, 1945.
807 The appellants carry on various businesses, and one such business was the running of a theatre and restaurant, called the Eros Theatre and Restaurant.
In October, 1943, a subsidiary Company called the Eros Theatre and Restaurant, Ltd. was formed.
The paid up capital of the subsidiary Company was Rs. 7,91,100 divided into 7,911 shares of Rs. 100 each.
7,901 shares were allotted to the appellant Company as consideration for assets, goodwill, stock in trade and book debts which were taken over by the subsidiary Company, and the remaining 10 shares were held by the Cam batta family.
The assets which were transferred were as follows: Assets: Assets transferred.
Rs.1,28,968 Stock in trade.
Rs.40,000 Book debts. .
Rs.100 Rs.1,69,068 They together with the capital reserve of Rs. 6,21,032 made up the amount of Rs. 7,90,100.
In the books of the subsidiary Company, the share capital account was shown separately as follows: Rs. 2,50,000 debited to the various assets account.
Rs. 5,00,000 debited to the goodwill account.
Rs. 40,000 debited to the stock in trade account.
Rs. 100 debited to the book debts account.
It will thus appear that goodwill was not shown separately in the appellants ' account books, but only in the accounts of the subsidiary Company.
In working out the capital of the two Companies for excess profits tax, a sum of Rs. 5,00,000 was claimed as goodwill as part of the capital of the subsidiary Company.
Both the Department as well as the Tribunal held that section 8(3) of the Excess Profits Tax Act applied; and the goodwill was not taken into account in working out the capital.
The Tribunal declined to state a case, but the High Court directed that a reference be made on two questions, which were framed as follows: 808 "(1) Whether on the facts of the case, the Appellate Tribunal was right in applying section 8(3) of the Excess Profits Tax Act? (2).
Whether in the computation of the capital employed. in the business of the assessee, the Tribunal erred in. not including the value of the goodwill or any "portion thereof?" The High Court by its judgment and order answered the first question in the negative and the second, in the affirmative.
It held that sub section
(5) and not sub section
(3) of section 8 of the Excess Profits Tax Act was applicable.
It, therefore, held that "the Tribunal should have allowed for the value of the goodwill whatever it thought was reasonable at the date of the transfer.
" When the matter went before the Tribunal again, three affidavits and a valuation report by a firm of architects were filed.
The goodwill, according to the report of the architects, amounted to Rs. 25 lakhs.
It may be mentioned here that the subsidiary Company was using the premises under a lease granted on November 20, 1944, for three years beginning from April 1, 1944, on a rental of Rs. 9,500 per month.
The Tribunal came to the conclusion that no goodwill had been acquired by the business of the Theatre as such, and that whatever goodwill there was, related to the site and building itself.
They then proceeded to consider what value should be set upon the goodwill on the date of the transfer of the subsidiary Company as directed by the High Court.
They took into account certain factors in reaching their conclusions.
They first considered the earning capacity of the business, and held that prior to 1942 the business had not made profits, and that the name of Eros Theatre and Restaurant thus by itself had no goodwill at all.
They, therefore, considered that the only goodwill which had been acquired attached to the lease, which the trustees had given to the Eros ;Theatre and Restaurant Ltd., and computing the goodwill as the value of the lease to the subsidiary Company, they felt that Rs. 2 lakhs was a liberal estimate of the value of the goodwill in the hands of Eros Theatre and Restaurant, Ltd. at the material time.
809 Petitions under sections 66(1) and 66(2) read with a. 21 of the Excess Profits Tax Act were respectively rejected by the Tribunal and the High Court; but the appellants obtained special leave from this Court, and filed these appeals.
In our opinion, a question of law did arise in the case whether the goodwill of the Eros Theatre and ' Restaurant, Ltd., was calculated in accordance with law.
The Tribunal seems to have taken into account only the value of the leasehold of the site to the subsidiary Company, and rejected other considerations which go to make up the goodwill of a business.
No doubt, in Cruttwell vs Lye(1), Lord Eldon, L. C. observed that goodwill was "nothing more than the probability that the old customers would resort to the old place".
The description given by Lord Eldon has been considered always to be exceedingly narrow.
The matter has to be considered from the nature of the business, because the goodwill of a public inn and the goodwill of a huge departmental stores cannot be calculated on identical principles.
The matter has been considered in two cases by the House of Lords.
The first case is Trego vs Hunt (2), where all the definitions previously given were considered, and Lord Macnaghten observed that goodwill is "the whole advantage, whatever it may be of the reputation and connection of the firm, which may have been built up by years of honest work or gained by lavish expenditure of money".
In a subsequent case reported in Inland Revenue Commissioners vs Muller & Co.s.
Margarin, Ltd. (3), Lord Macnaghten at pp.
223 and 224 made the following observations:.
"What is goodwill? It is a thing very easy to describe, very difficult to define.
It is the benefit and advantage of the good name, reputation, and connection of a business.
It is the attractive force which brings in custom.
It is the one thing which distinguishes an old established business from a new business at its first start. . .
If there is one attribute common to all cases of goodwill in it is the attribute (1) 346.
(2) (3) 810 of locality.
For goodwill has no independent existence.
It cannot subsist by itself. 'It must be attached to a business.
Destroy the business, and the goodwill perishes with it, though elements remain which may perhaps be gathered up and be revived again".
These two cases and others were considered in two 'Australian cases.
The first is Daniell vs Federal Com missioner of Taxation (1), where, Knox, C. J. observed: "My opinion is that while it cannot be said to be absolutely and necessarily inseparable from the premises or to have no separate value, prima facie at any rate it may be treated as attached to the premises and whatever its value may be, should be treated as an enhancement of the value of the premises".
In the second case reported in Federal Commissioner of Taxation vs Williamson (2), Rich, J., observed at p. 564 as follows: "Hence to determine the nature of the goodwill in any given case, it is necessary to consider the type of business and the type of customer which such a business is inherently likely to attract as well as the surrounding circumstances. .
The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom".
In Earl Jowitt 's Dictionary of English Law, 1959 Edn., "goodwill" is defined thus: "The goodwill of a business is the benefit which arises from its having been carried on for some time in a particular house, or by a particular person or firm, or from the use of a particular trade mark or trade name" It will thus be seen that the goowill of a business depends upon a variety of circumstances or a combination of them.
The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, (1) ; (2) ; 811 though locality always plays a considerable part.
Shift the locality, and the goodwill may be lost.
At the same time, locality is not everything.
The power to attract custom depends on one or more of the other factors as well.
In the case of a theatre or restaurant, what is catered, how the service is run and what the competition is, contribute also to the goodwill.
From the above, it is manifest that the matter of goodwill needs to be considered in a much broader way than what the Tribunal has done.
A question of law did arise in the case, and, in our opinion, the High Court should have directed the Tribunal to state a case upon it.
Civil Appeal No. 776 of 1957 is allowed.
The High Court will frame a suitable question, and ask for a statement of the case from the Tribunal, and decide the question in accordance with law.
The costs of this appeal shall be borne by the respondent; but the costs in the High Court shall abide the result.
There will be no order in Civil Appeal No. 777 of 1957.
C. A. No. 776 of 1957 allowed.
[/INST]Section 2(5) of the , properly construed, does not by itself confer the power on the appropriate Government to make a reference.
That power is really contained in section 10(i) of the Act.
In deciding whether it should or should not make a reference under section 12(5) of the Act the appropriate Government need not base its decision solely on the report of the conciliation officer, but is free to take into consideration all other relevant facts and circumstances under section 10(1), and where it refused to make a reference it must record and com municate its reasons therefore to the parties concerned.
Such reasons, however, must be germane, and not extraneous or irrelevant, to the dispute.
But in exercising such wide powers as are conferred by section 10(1), the appropriate Government must act fairly and reasonably and not in a punitive spirit, and although considerations of expediency may not be wholly excluded, it must not be swayed by any extraneous considerations.
Consequently, in a case where the issues in dispute related to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused to refer the dispute for adjudication under section 12(5) was that the employees had adopted go slow tactics during the relevant year, although the company had nevertheless voluntarily paid three months ' bonus for that year and the report of the conciliation officer was in favour of the employees, Held, that the Government acted on irrelevant considerations and its decision being wholly punitive in character a clear case for the issue of a writ of mandamus was made out.
Held, further, that since the work done by the employees prima facie justified the claim for classification and it was in consonance with the practice prevailing in other comparable concerns, the misconduct of the respondents could be no ground for refusing reference as the claim was in regard to the future benefit to the employees.
228 The claim of bonus being also prima facie justified by the profits earned during the relevant year in accordance with well settled principles of industrial adjudication, the order of refusal was in the nature of a punitive action that was wholly inconsistent with the object of the Act.
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<s>[INST] Summarize the judgementCivil Appeal No. 1537 of 1970.
Appeal by special leave from the judgment and order dated the 10/30th June, 1969 of the Bombay High Court, Nagpur Bench, Nagpur in Appeal No. 90 of 1962.
1178 U. R. Lalit and A. G. Ratnaparkhi, for the Appellant.
section section Khanduja for the Respondent.
The respondent filed a suit in the Court of the Second Joint Civil Judge, Amrawati alleging that the house situated near Saraf Bazar in Amrawati had been purchased by her in 1950 for Rs. 4,000 and thereafter improvements had been affected by her to the property.
Being in need of money, she entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and a rent note.
These documents were executed on January 7, 1953.
She alleged that the documents were never intended to be acted upon, and that the rent paid by her represented in fact interest at 18% on the loan.
She continued in possession of the house property throughout and, it is said, carried on repairs from time to time.
It was stated that the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent.
As two suits had resulted in decrees, she considered it necessary to file the present suit for a declaration that she was, and continued to be, owner of the house property.
In defence, the appellant maintained that the sale deed represented a genuine, transaction, and ownership of the house property had passed to the appellant.
It was pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
The trial court held that the sale deed was never intended to be acted upon and decreed the suit.
The appellant appealed to the District Court, Amravati, but the learned District Judge did not accept the case that a sale had taken place.
He held, however, that the transaction between the parties constituted a mortgage.
He modified the trial court decree to conform to that finding.
The High Court of Bombay, in second appeal, did not agree with the finding of the lower appellate court that the transaction was a mortgage and affirmed the findings of the trial court that the sale deed and rent note were sham documents, that the decrees of the 1179 Court of Small Causes did not operate as res judicata and that section 92 of the Indian Evidence Act did not prevent the respondent from establishing the true nature of the transaction.
Accordingly, the High Court set aside the decree of the lower appellate court and resorted that of the trial court.
When this appeal was heard by us, it appeared that the parties may settle the dispute by negotiated compromise.
It seems, however, that no compromise has been possible.
Accordingly, we proceed to dispose of the appeal on its merits.
Two points have been raised before us.
The appellant urges that the Small Causes Court decrees, in view of the general principles of res judicata, precluded the trial of the question whether the sale transaction was a genuine transaction.
The other point concerns the operation of section 92 of the Evidence Act.
The successive suits were filed by the appellant against the respondent in the Court of Small Causes for recovery of arrears of rent.
In each suit the appellant contended that she was owner of the property and the respondent was her tenant.
The tenancy was alleged on the basis of the document dated January 7, 1953 which on its terms purported to be a sale deed by the respondent in favour of the appellant.
The respondent resisted the suits.
The court decreed the suits on the finding that the document was a sale deed, and therefore the respondent was not the owner of the property but merely a tenant of the appellant.
The question is whether this finding operates as res judicata in the instant suit.
The High Court repelled the plea of res judicata on the ground that section 11 of the Code of Civil Procedure governed the case, and that as a Court of Small Causes is not competent to try a suit for a declaration of title to immovable property, the court which passed the decrees relied on by the appellant was not competent to try the present suit and therefore an imperative condition of section 11 was not satisfied.
It is contended before us on behalf of the appellant that the High Court erred in applying the statutory provisions of section 11 of the Code, and should have invoked instead the general principles of res judicata.
On that, it is submitted, all that was necessary to find was whether the Court of Small Causes was competent to try the two earlier suits and decide the issues arising therein.
We have been referred to Gulabchand Chhotalal Parikh v, State of Bombay where 1180 this Court has taken the view that the provisions of section 11 of the Code are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit, and that on the general principles of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit.
It is not necessary, it was said, "that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter".
The observations were made in considering the question whether decisions on matters in controversy in writ petitions under Article 32 or Article 226 of the Constitution could operate as res judicata in subsequent regular suits on the same matters in controversy between the same parties.
A number of other cases have been cited on behalf of the appellant in support of the plea of res judicata.
We have considered them and we do not think that they help the appellant.
In Muhammad Abdul Ghafur Khan vs Gokul Prasad and others the Allahabad High Court limited itself to observing that a Court of Small Causes possessed a discretion on whether to return the plaint under section 23, Provincial Small Cause Courts Act on a finding that the relief claimed depended on proof of title.
The same High Court in Madan Kishor and Another vs Mahabir Prasad and others merely observed that it was for the Court of Small Causes to decide under section 23 of the Provincial Small Cause Courts Act whether a question of title was involved in the suit and on finding so it was open to it to return the plaint.
That was also the view expressed by it in Ram Dayal Sonar vs Sukh Mangat Kalwat.
So also in Ganga Prasad vs Nandu Ram, the Patna High Court said that the Court of Small Causes had power under section 23 to return the plaint where it was of opinion that the question of title raised was so intricate that it should not be decided summarily.
To the same effect was the view expressed by the Lahore High Court in Ganesh Das vs Feroze Din. 1181 In Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, the Bombay High Court declared that a Court of Small Causes could render a finding on an issue as to title to immovable property but only in a suit which did not ask for that relief and merely for payment of a sum of money.
Our attention was drawn to Asgarali Roshanalli and another vs Kayumalli Ibrahimji, but we find nothing there of assistance to the appellant.
Reliance was placed on the decision of the Allahabad High Court in Lala Jageshwar vs Shyam Behari Lal.
There a learned Single Judge took the view that as a Court of Small Causes is a Court of exclusive jurisdiction the restrictive conditions imposed by s 11 of the Code of Civil Procedure requiring "two fold competency" of the Court whose decision is to operate as res judicata cannot be invoked.
It was sufficient, he observed, that the decision had been rendered by a court of competent jurisdiction and it was not necessary that that court should also be competent to decide the subsequent suit.
The judgment was brought in appeal to this Court but while disposing of the appeal, Shyam Behari Lal vs Lala Jageshwar Prasad, this Court declined to decide whether a Court of Small Causes could be regarded as a Court of exclusive jurisdiction.
We find, however, that the view taken by the High Court in Lala Jageshwar Prasad (supra) was expressly overruled by a Full Bench of the High Court in Manzurul Haq and another vs Hakim Mohsin Ali and it was laid down that a Court of Small Causes could be described as a court of "preferential jurisdiction" but not as court of "exclusive jurisdiction".
It was also held by the Full Bench that a decision rendered by a Court of Small Causes in a suit for arrears of rent would not operate as res judicata in a subsequent suit filed in the Court of the Munsif for recovery of arrears of rent for a different period and for ejectment.
That the principle of res judicata could not be availed of where a decision given by a Court of Small Causes was relied on in a subsequent regular civil suit was the view also taken by the Punjab High Court in Pateshwar Parshad Singh vs A. section Gilani.
It seems to us that when a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot 1182 be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purposes of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
It has long been held that a question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
Poholi Mullick vs Fukeer Chunder Patnaik, Chet Ram and others vs Ganga, Anwar Ali vs Nur Ul Haq and Another, Khandu valad Keru vs Tatia valad Vithoba.
See also Mohd. Yusuf and another vs Abdul Wahid and S.A.A. Annamallai Chettiar vs Molaiyan and others.
Our attention has been drawn to Explanation VIII to section 11 in the Code of Civil Procedure recently inserted by the Code of Civil Procedure (Amendment) Act, 1976.
Section 97(3) of the Amendment Act declares that the new provision applies to pending suits, proceedings, appeals and applications.
In our opinion the Explanation can be of no assistance, because it operates only where an issue has been heard and finally decided in the earlier suit.
Accordingly, we hold that the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata in the present suit.
The next contention on behalf of the appellant is that sub s.(1) of section 92 of the Evidence Act bars the respondent from contending that there was no sale and, it is submitted, the respondent should not have been permitted to lead parole evidence in support of the contention.
Section 91 of the Evidence Act provides that when the terms of contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the 1183 terms of such contract, grant or other disposition of property, or of such matter, except the document itself.
Sub section
(1) of section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms And the first proviso to section 92 says that any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, want or failure of consideration, or mistake in fact or law.
It is clear to us that the bar imposed by sub section
(1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether not recorded in the document, was entered into between the parties.
Tyagaraja Mudaliyar and another vs Vedathanni.
The Trial Court was right in permitting the respondent to lead parole evidence in support of her plea that the sale deed dated January 7, 1953 was a sham document and never intended to be acted upon.
It is not disputed that if the parole evidence is admissible, the finding of the court below in favour of the respondent must be accepted.
The second contention on behalf of the appellant must also fail.
In the result, the appeal is dismissed with costs.
S.R. Appeal dismissed.
[/INST]Being in need of money, respondent entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and rent note, of her house situated near Sarafa Bazar in Amravati.
These documents were executed on January 7, 1953.
The respondent continued in the possession of the house property throughout and carried on repairs from time to time.
Since the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent and the said suits had resulted in a decree, the respondent filed a suit for declaration that she was and continued to be owner of the house property.
The documents executed on January 7, 1953, it was said, were never intended to be acted upon.
In defence, the appellant maintained that the sale deed represented a genuine transaction, and ownership of the house property had passed to her.
It was further pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
Dismissing the appeal by special leave, the Court ^ HELD: 1:1.
When a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purpose of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
A question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
[H81 G 1182A C] 1177 1:2.
Explanation VIII to section 11 of the Code of Civil Procedure operates only where an issue has been heard and finally decided in the earlier suit.
[1182 D E] 1:3.
In the instant case, the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata.
[1182 E] Poholi Mullick vs Fukeer Chunder Patnaik, (1874) 22 Suth W.R. 349; Chet Ram and Others vs Ganga, 1886 Allahabad Weekly Notes; Anwar Ali vs Nur Ul Haq and Another, ; Khandu Valad Keru vs Tatia valad Vithoba, (1871) 8 Bombay H.C.R.A.C. 23(24) (DB); Mohd. Yusuf and another vs Abul Wahid, A.I.R. 1948 All.
296 and S.A.A. Annamalai Chettiar vs Molaiyan and others, A.I.R. 1970 Mad. 396, approved.
Muhammad Abdul Ghafur Khan vs Gokul Prasad and others, A.I.R. 1914 All.
527; Gulabchand Chhotalal Parikh vs State of Bombay, ; Madan Kishor and Another vs Mahabir Prasad and others, A.I.R. 1929 All. 816; Ram Dayal Sonar vs Sukh Mangal Kalwar, A.I.R. 1937 All. 676; Ganga Prasad vs Nandu Ram, A.I.R. 1916 Patna 75; Ganesh Das vs Feroze Din, A.I.R. 1934 Lahore 355, Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, XV Bombay Law Reporter 773; Asgarali Roshanalli and another vs Kayumalli Ibrahimji, A.I.R. 1956 Bombay 236: Lala Jageshwar Prasad vs Shyam Behari Lal, A.I.R. 1967 All. 125; Shyam Behari Lal vs Lala Jogeshwar Prasad, ; Manzural Haq and another vs Hakim Mohsin Ali, A.I.R. 1970 All. 604; Pateshwari Parshad Singh vs A. section Gilani, A.I.R. 1959 Punjab 420, referred to and dissented from.
The bar imposed by sub section (1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
[1183 C F] Tyagaraja Mudaliyar and another vs Vedathanni, A.I.R. 1936 Privy Council 70, followed.
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<s>[INST] Summarize the judgementN: Criminal Appeal Nos.
100 146 of 1976.
Appeals by Special Leave from the Judgment and Order dated 29 8 75 of the Andhra Pradesh High Court in Crl.
Rev. Cases Nos. 256 302/75 and 437 483/75 respectively.
Niren De, Attorney General for India (In Crl. A.100, 101 and 112 of 1976) P. Ram Reddy (Crl. A.102 111 and 113 145/76); P. P. Rao and R. K. Deshpande for the appellants in all the appeals.
Sachin Chaudhary (In Crl. A.100/76); section V. Gupte (In Crl. A.101/76) T. Ramam, B. Parthasarthi for Respondents in Crls.
A. Nos.
101 105, 107 118 120 139 and 141 146/76.
The Judgment of the Court was delivered by 609 BEG, J.
These appeals, by Special Leave, raise an apparently simple question which appears to be essentially one of fact.
But, as the real question to be answered was not correctly posed before itself by the High Court of Andhra Pradesh, it misdirected itself as to what was to be really decided by it and also how it should be decided according to rules of ordinary logic as well as law.
Ordinarily, this Court does not interfere with findings of fact.
But, where the errors of logic as well as law, discussed below, appear to us to be gross and to have occasioned a miscarriage of justice, we are constrained to interfere.
The crucial question to be decided may be put as follows: What did the respondents understand when they obtained permits for the despatch of "broken rice (raw, boiled)" shown in their export permits? If the respondents understood what their permits meant, they could not, under the guise of these permits, transport any other kind of rice.
It was their duty to abide by the terms of their permits, and to show, when proceeded against, that they did so.
Each permit shows: quantity permitted to be sent; the duration of the validity of the permit; the name of the consignor; the name of the station from which rice was to be despatched; the means of despatch (shown as "by rail only"); the name and address of the consignee (shown as "self"); the State to which the consignment was to be booked (shown as Kerala State), purpose of the consignment (shown as trade account).
The permit was described as an "export permit".
The details mentioned above were given in a schedule, the permit was addressed "to the Miller", and its operative part said: "In exercise of the powers conferred under clause 3 of the Southern States (Regulation of Export of Rice).
Order, 1964 read with G.O.Ms.
No. 2495 F & A Dt. 17 10 1964 the Collector hereby permits the transport of rice products mentioned in the Schedule subject to the conditions specified below".
The specified conditions, in addition to those mentioned in the details given above were: "1.
This permit is not transferable.
It is liable for cancellation at any time by the issuing authority for the reasons to be recorded in writing.
It is valid only for the period mentioned in the permit and the consignment must be booked from the despatching station before the expiry of such period.
Any permit that is taken out but not utilised should be returned immediately to issuing authority.
The stuff should be got checked by the Assistant Grain Purchasing Officer assisted by the Food Inspector concerned while loading into the wagon and a certificate should be 610 got recorded on the permit itself that the stuff loaded is broken rice and not whole rice and the quantity loaded.
In respect of self permits the permit holder, should furnish to the Collector, West Godavari, Eluru (A.P.) and the District Supply Officer, Tedepalligudam and the Collector of the importing District within one month from the date of issue of the permit the particulars of the Station to which the consignment is booked names and addresses of the buyers".
The allegation against the respondents was that they had broken the conditions of their permits inasmuch as their consignments, which had been seized, whilst being transported in railway wagons from Andhra Pradesh to Kerala, consisted of rice instead of "broken rice".
After the issue of show cause notices and the replies filed by the respondents, a number of writ petitions was filed on a number of grounds in the High Court of Andhra Pradesh questioning the validity of confiscation proceedings under Section 6A of the (hereinafter referred to as 'the Act ').
These writ petitions were dismissed on 25th October, 1971.
After the dismissal of the Writ Petitions mentioned above, the Revenue Officer passed orders, on 18th November, 1971, confiscating only what was estimated as the quantity of "whole rice", according to the standards applied in drawing up an analysis report from samples which the Revenue officer accepted as correct.
The respondents then appealed to the District and Sessions Judge who, on 16th February 1972, set aside the orders of the Revenue officer and directed him to decide again the question involved in the cases in accordance with law, after giving full opportunity to the respondents to object to the analysis which was to be carried out afresh in their presence.
The District Judge did not consider the report of the Assistant Marketing officer of Chitur, after an analysis carried out in the presence of the District Revenue officer, to be a sufficient compliance with the requirement to give due opportunity to the respondents to show what the consignments contained.
It may be mentioned here that the reports upon which proceedings were commenced in respect of a very large quantity of rice had been filed by the Inspector of Police of the Vigilance Section of the Civil Supplies ' Department.
It was clearly mentioned in these reports that the rice which was seized by the police in the course of its transit in a number of wagons of a goods train proceeding from Andhra Pradesh to Calicut in Kerala State was not "broken rice".
The respondents are regular Millers whose business it is to know the varieties and the nomenchature of various types and qualities of rice.
They could not, therefore, be ignorant of what was the case against them.
Moreover, when the cases were actually remanded to the Revenue officer with specific directions to give the respondents fuller opportunity to show cause and meet the cases against them there could be no possible excuse for the respondents not to put in evidence of their side of the case if they had a case to put up in defence.
611 The Revision Applications by the State against the orders of District and Sessions ' Judge were dismissed by the High Court on 29th March, 1973.
During the pendency of the revision applications in the High Court.
notices of auction of boiled rice were issued under the orders of the High Court.
The rice was sold as ordinary "boiled rice".
It is alleged on behalf of the State, that the price for which the boiled rice.
seized from the Railway wagons, was sold on 5th October, 1972.
was about Rs. 30 lakhs.
This price, it was submitted, could only be fetched by "whole rice".
We are, however, more concerned with what took place after the High Court had upheld the order of the District & Sessions ' Judge remanding the case for full hearing and adduction of evidence by both sides.
In his final order of 4th December, 1973, after the remand, the District Revenue Officer gave the whole history of the case and pointed out the opportunities the respondents had been given for substantiating their case if they had one worth consideration.
The District Judge had remanded the case principally because the first report of the analyst, issued by the Assistant Director of Marketing, Chitur, had been made without an analysis carried out in the presence of the respondents although it was made in the presence of the District Revenue Officer.
The District Judge had held that the Asstt.
Director of Marketing should have himself given evidence before his report could be treated as evidence.
After the case had been remanded, there was a fresh analysis with fresh samples taken under the orders of the High Court.
And, this second analysis took place in the presence of the respondents.
The Assistant Director of Marketing, who made the analysis, was produced in evidence.
The respondent had full opportunity of cross examining him and also of giving their own versions.
But, they contented themselves with some cross examination of the Assistant Director of Marketing in the course of which it was not suggested to the Assistant Director that the test of "broken rice" was itself incorrect.
On the other hand, in answer to one of the questions in cross examination, the Assistant Director of Marketing replied: "I agree that any grain which is less than 3/4th of the whole grain is a broken.
According to Serial Grading Rules.
1966, rice includes brokens, but it is classified separately".
This meant that the respondents knew, and, therefore, suggested that the test applied by the Asstt.
Director, Marketing that any grain less than 3/4th of the whole length was to be deemed as "broken", was correct.
The cross examination was directed towards showing that, accepting this test, known to both sides, the consignment was of "broken rice".
612 It is true that the Assistant Director, in his evidence, admitted that he had not actually measured a whole grain.
He said that he had adopted the method of differentiation by looking at the grains with the naked eye and by picking them up with his hand using his own fingers.
He also admitted that, in ten out of the 50 samples he had analysed, the percentage of brokens in the analysis conducted in 1973 was less than that of 1971 from 2 to 10% but in others it was greater.
The Revenue Officer, after a careful consideration of all the facts of the case and the whole background, including the test laid down in the Hand book on Grading Foodgrains and Oilseeds, had reached the conclusion that the whole of the quantity seized was liable to be confiscated because no sample taken from the bags contained a minimum percentage of 60% of "broken" grains satisfying the test adopted, that is to say, grain less than 75% of its normal length would be deemed to be broken.
The Revenue officer treated the opinion of the Assistant Director as that of an expert which ought to be accepted.
The District and Sessions ' Judge, in appeals from the orders of the Revenue officer, reconsidered the whole case at considerable length and allowed the appeals partially by holding that percentage which could be fairly classified as broken had to be deducted after an addition to it of 2% as allowable "foreign matter".
The Sessions ' Judge 's interpretation of the remand order, as affirmed in revision by the High Court, was that the Revenue Officer could only determine the quantities of "broken" rice and whole rice to decide what proportion was and not whether the whole of the seized rice was liable to confiscation as not covered by the permits.
It appears that there had been an order by the Revenue Officer releasing 12% of the total rice as equivalent of "broken rice" which had not been set aside and had become final.
On the question whether the respondents could be said to have a mens rea the learned Sessions ' Judge observed: "I am not prepared to accept the contention that they are under a mistaken impression that whole rice, when boiled could become boiled brokens.
I do not also admit that they are not having any mens rea.
I am of the opinion that they had certainly managed with the officers, and attempted to transport whole rice (boiled) under the guise of brokens (boiled).
Therefore, it cannot be said that they have no mens rea in this case when they attempted to transport whole rice as brokens.
It is a fact that huge quantities of rice are involved and the money involved is also huge.
But the crime that these appellants attempted to prepetrate can also be considered as huge (Grave) in consonance with the quantity of rice they attempted to transport.
Therefore, I am of the opinion, that these appellants do not deserve sympathy and it does not require any more alteration of the lower Court 's orders, than the one I have already indicated above".
Hence, with the abovementioned notification of the orders of the Revenue Officer by adding 2% for "foreign matter" to the amount 613 released as equivalent of "broken rice", the respondents ' appeals were dismissed by the Sessions ' Judge on 20th November, 1974.
Both sides filed revision applications.
The High Court had before it two sets of Revision applications.
One of these was by the State of Andhra Pradesh against that part of the order of the learned Sessions ' Judge by which he held that the Revenue Officer had no jurisdiction, after the remand order, to order confiscation of the whole quantity of rice.
The State claimed the price of the whole of the seized consignment.
The other set of revision applications before the High Court was of the respondent millers against the affirmations of the orders of the Revenue Officer.
The respondents submitted that no part of the consignment was liable to be confiscated as it was not proved that it was not broken rice.
They, therefore, urged that they should get the price of the whole quantity sold.
The High Court also went into the history of the case.
It held that the object of the remand order "was to take samples of the stocks for the purpose of analysis in the presence of the rice millers and after the analysis and report of the Assistant Director, Marketing, Chitur, to give an opportunity to the rice millers to cross examine him with regard to it".
It held: "There is nothing in the remand order from which it can be said that the learned Sessions ' Judge intended the entire matter to be reopened including that of the released stocks with regard to which, according to the learned Sessions ' Judge, the matter had become final because of the view taken by him in the appeals preferred by the State that the State has no right of appeal as provided under Section 6 A of the ".
The High Court upheld the contention that the State Government had no right of appeal to the Sessions ' Judge.
It held that only a person aggrieved by an order of confiscation and not just anybody aggrieved by an order under Section 6 A had a right of appeal.
It is, however, not necessary for us to go into this question as it has not been argued by either side.
The High Court held that there could be a contravention of the Southern States (Regulation of Export of Rice) order, 1964, by the rice millers if they attempted to transport essential goods requiring permit under the Regulation Order of 1964 from the State of Andhra Pradesh to Kerala.
It, however, proceeded to hold that, as it was not proved that what was being transported was "broken rice", there was no contravention.
It reached this conclusion by a somewhat strange reasoning that, since the percentages of whole rice in the samples analysed were not known, it could not be held that the consignment was of a kind of rice for which any permit was required.
We are constrained to observe that we are not able to follow the reasoning of the High Court that, as the definition of rice in clause 2(B), in the Regulation order of 1964, says that rice "includes broken rice and paddy", it necessarily follows that the converse must be true so 614 that "broken rice must include rice".
It would have been quite correct if the High Court had said that "broken rice" is also "rice".
As the definition of rice is a comprehensive one, it includes "broken rice as part of rice", But, to hold that this meant that "broken rice" must include whole rice is to accept that a part includes the whole, if the whole includes a part, it necessarily means that the part cannot possibly be equated with the whole.
The natural, and, indeed, the only reasonably open logic would be: if the whole includes a part, nothing which is merely a part of the whole could be equated with the whole, we think that the High Court misdirected itself seriously by accepting an obviously fallacious reasoning on this question.
The High Court said: "By merely establishing that the goods are not broken rice, no offence or contravention is committed.
It must fur their be established that the goods are rice in which case only there will be contravention of the control orders as the rice millers were not exporting the goods under permits issued for export of rice.
Having regard to the uncertainty as to what the balance material other than the brokens contained in the samples, it is not possible to say with any assurance that the rice millers have contravened the control orders by attempting to export rice".
It went on to add: "It may be said that having regard to the circumstances of the case it is reasonable to assume that the rice millers have deliberately put some rice in the goods they were trans porting.
Otherwise, normally, the price of whole rice being more, they would not have allowed it to go into the brokens, and, unless there were some substantive quantities of whole rice in the goods which the rice millers were transporting, the Inspector of Police, Vigilance Cell Civil Supplies Nellore, would not have thought of seizing the goods.
It is common knowledge and judicial notice can be taken that rice or broken rice is very much costlier in Kerala State than in the Andhra Pradesh State.
It is quite possible that broken rice in Kerala State was then even costlier than whole rice in Andhra Pradesh State and it may be in such circumstances the rice millers while exporting the goods allowed more whole rice to go into the brokens so that the entire thing could be sold as broken rice and even by that to get a better price than in Andhra Pradesh for the quantity of whole rice allowed into the brokens.
But at the same time, in the absence of any guidelines by fixing standards for rice and broken rice it is difficult to say that the rice millers have done so with the necessary animus that in so doing they would be going outside the permits issued to them and they would be contravening the control orders.
When there were no standards fixed with regard to whole rice and broken rice and when there is an admixture of both whole rice and broken rice, it is difficult 615 to say when a particular admixture can be said to be broken rice or whole rice.
On an uncertain ground or on vagueness, I do not think any person can be made liable for an action which will be penal in nature".
A ground given by the High Court to justify the millers ' case, that the rice was broken rice, was: "In the present case, there is also the fact that both the Assistant Grain purchasing Officer and the food inspector inspected the goods when they were loaded into the wagons and certified that the goods loaded to be broken rice.
Across the Bar, Shri Babu Reddy has stated that no action was taken by the Government against those officers on the ground that colluding with the rice millers they falsely certified that goods loaded to be broken rice.
He has also submitted that not only that no action was taken against them, but they were also promoted to higher posts subsequently perhaps, in usual course.
Of course, there is no material before the Court with regard to it.
But suffice it to say that the fact remains that those two officers certified the materials to be broken rice".
A surprising conclusion of the High Court, which conflicts with the earlier conclusion that there was an attempted transport of rice which would contravene the Regulation order, was stated as follows by the High Court: "The rice millers were having the permits for exporting BROKEN RICE and they were not having any permits for exporting RICE.
Even assuming that the goods which the rice millers were transporting were not broken rice, it is not enough, to prove the contravention, to show that the goods they were transporting were not broken rice.
It must be proved that the goods which the rice millers were exporting were rice for which they have no permits.
If the goods which the rice millers were transporting could neither be said to be broken rice nor rice, there would be no contravention in either of which case no permits will be necessary under the control orders.
The consequences of the contravention of the control orders being penal in nature, the rice millers cannot be penalised by confiscating the goods on uncertain ground or vagueness.
I have no doubt that the Government have failed to establish that the rice millers in attempting to export the goods in question outside the State have contravened the two control orders".
We can only make the passage from the High Court 's judgment, set out above in the last paragraph, intelligible to ourselves by believing that what the High Court meant was that the control order does not make it necessary to have a permit for the transport of goods containing a mixture of broken rice and rice by requiring a permit for such a mixture.
If this be the meaning, as it probably is, we think that it 616 constitutes a complete oversight or misreading of the Regulation Order 1964, clause 3 of which says: "3.
Regulation of export of rice from specified areas.
No person shall export or abet the export of rice from any place within a specified area to a place outside that area except under and in accordance with permit issued by the State Government or an officer authorised by that Government in this behalf".
It follows that the person who transports has to prove that he has a permit for the rice he is transporting.
Learned Attorney General has, very rightly, pointed out that the whole case of the respondent Millers from the outset, when they sent a reply to the show cause notice, was that they were transporting what was wholly "broken rice".
In other words, their case was that they knew that they were holding the permit.
They never said that they did not know what their permit meant or had misunderstood it.
They did not plead that they had been cheated by somebody.
Who sent something on their behalf which was not authorised by them.
We think that Section 106 of the Evidence Act was clearly applicable to such a case.
It says: "When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him".
The illustrations to this section are also helpful: "(a) When a person does an act with some intention other than that which the character and circumstances of the act suggest, the burden of proving that intention is upon him.
(b) A is charged with travelling on a railway without a ticket.
The burden of proving that he had a ticket is on him".
So far as the actual intentions of the respondent Millers are concerned, the High Court recorded a finding, set out above, that it appeared that they had deliberately mixed whole rice with broken rice, because, unlike the situation in Andhra Pradesh, broken rice sells at a higher price in Kerala than it does in Andhra Pradesh.
If this had been the correct state of affairs, it would have been reasonable for the Millers to transport broken rice to Kerala, where it fetches a higher price, and keep whole rice which sells at a higher price in Andhra Pradesh, for sale in their own State.
Apart from this obvious flaw in the reasoning of the High Court, it is difficult to understand how the High Court could act on such an assumption about relative prices.
It thought it could take judicial notice of such a state of prevailing prices of rice in the two States.
It was certainly not a fact commonly or generally known to people that broken rice fetches a much higher price in Kerala than even whole rice.
Such as assertion has to be proved to be correct.
It was unreasonable to assume that, even if that was so, the millers of Andhra Pradesh would 617 be so anxious to cheat the purchasers in Kerala as to deliberately mix some whole rice with broken rice instead of selling the whole rice in Andhra Pradesh and broken rice in Kerala.
The more natural inference, from patent facts, was obviously that there was some advantage in mixing some "broken rice" with "whole rice" for which the millers had no permit.
Thus, the learned Judges of the High Court have themselves expressed a view indicating that the Millers were quite conscious of the distinction which existed, in accordance with the accepted practice, between what could be deemed to be "whole rice" and what could be described as "broken rice".
If they were labouring under some mistake of fact and had no intention to commit an offence, which the character and circumstances of their acts suggested, the burden of proving this was certainly upon them.
Again, what was covered by the permit would be deemed to be known to the Millers who were carrying on the business of exporting rice of various kinds, grades, and descriptions.
It is their business to see that they carry on their trade in accordance with the terms of the permits they actually obtained.
It is true that it appears, as the High Court observes, that the Millers had, apparently, been given the green signal by the officers who were expected to inspect the consignments and certify that it was "broken rice".
It is difficult to know what evidence the High Court was relying upon, apart from the conditions attached to the permits and the presumption that their duties were carried out by their officers concerned, to hold what they had inspected and certified correctly.
The respondents, who had objected to the first analysis report, the ground, inter alia, that the analyst did not enter the witness box could be met with a similar objection to the alleged inspection reports of some officers.
The only evidence produced in the case was that of the Assistant Director of Marketing who performed the analysis in the presence of the Millers after the remand order.
If the respondents were relying upon some inspection carried out by the officers in compliance with the conditions of the permit, they ought to have produced that evidence SQ that the officers concerned could have been subjected to cross examination.
An opportunity had been given to the Millers to produce evidence in rebuttal.
They produced none.
On the other hand, the cross examination of the Assistant Director showed that the Millers were accepting the tests laid down in the Hand Book on Grading of Foodgrains and oilseeds as applicable to the descriptions of rice and broken rice.
These terms, as used in the Hand book, must have been well understood by the Millers.
The Foreward to the Hand Book says that it contains instructions based on practice followed in this country for many years by the Directorate of Marketing and Inspection.
The Hand Book is an official publication.
It could be looked into to find out the accepted practice and tests employed by the Assistant Director.
As already observed, the Assistant Director was cross examined on matters contained in the Hand Book.
618 It was not suggested to him that the Hand Book did not contain correct information.
At page 8 of this Hand book, we find: "Broken Rice" In addition to the classes mentioned above broken rice forms a class by itself as it is a bye product of rice milling.
It has been classified into two groups, viz., fine brokens and common brokens.
Fine brokens cover the brokens of long slender and scented varieties of rice and common brokens over the rest".
At page 6, we find: "Brokens.
Brokens shall include pieces of rice kernels which are less than 3/4th of the whole kernel.
Pieces smaller than 1/4th of the kernel are to be treated as fragments".
The cross examination of the Assistant Director showed that the Counsel for the Millers were fully acquainted with the contents of the Hand book and were accepting it as the basis for finding out whether the tests laid down in the Hand book had been observed.
The Hand book contains several schedules.
Schedule 7 gives maximum limits of tolerance for various grades of "mill rice", a term apparently used for whole rice.
The maximum tolerance of brokens in whole rice of first grade is given as 3%, whereas the maximum tolerance of the brokens in the whole rice grade is 20%.
Schedule VIII is for "Parboiled Milled Super fine Rice".
In Schedule X, for "Parboiled, milled common rice", is shown to vary from 10% in Gr.
I to 40% in Gr.
Schedule 14 gives the grade designations and definitions of different qualities of "common broken rice".
It shows that, in order to constitute "broken rice", the percentage of brokens, the maximum limit of tolerance is from not less than 80 to not less than 60% in grade 1 to 3.
The District Judge had reached the conclusion that, quite apart from these technically prescribed tests for the purpose of grading, by the Directorate of Marketing and Inspection, the common sense test was that at least 50% must be brokens in order to constitute what could pass as a marketable consignment of "broken rice".
He had also made the necessary allowances for foreign matter.
We do not think that the test adopted by the District & Sessions ' Judge was either incorrect or unreasonable.
Indeed, we think that the High Court was quite unjustified in interfering with this test on what seems to us like metaphysical reasoning to justify its view that, where the quantities of the whole grains and broken grains in a consignment cannot be accurately determined, the consignment should be deemed to be no longer one of rice which requires a permit.
The learned Attorney General has rightly pointed out to us that at no earlier stage was it the case of the Millers that more mixture of some broken rice with some whole rice is enough to constitute the whole consignment into one of broken rice or of substance which was not "rice" at all.
In our opinion, the High Court has quite erroneously held that such mixtures do not fall within the mischief provided for by the Regulation Order of 1964.
An argument advanced by Mr. Sachin Chaudhari on behalf of the Millers, is that no rice in the course of Milling can really remain whole or unbroken in the sense that the whole length of it will be preserved.
619 He contended that, in that sense, every grain must be broken to some extent.
If that be the correct position, we think that the test laid down in the Hand book on Grading of Foodgrains and Oilseeds, issued by the Directorate of Marketing and Inspection, compiled by the Ministry of Agriculture of the Govt.
of India, is based on sound knowledge of what actually happens to grains of rice in the course of milling.
Still another argument was that it is impossible to determine with the maked eye whether a grain of rice was above or below 3/4th its normal length.
We think that this would not be a difficult task at all for an expert in the line as an Asstt.
Director of Marketing could be deemed to be.
Indeed, even with his naked eye, any person can make out, by looking at the two ends of a grain, how much of a grain of rice appears to be broken.
As we know, a grain of rice is thicker in the middle and tappers at each end.
It is not like a cylinder with a uniform diameter throughout.
From its shape and size, it is possible, even for an ordinary careful observer, to assess the length of a broken grain as compared with its expected length had it been whole.
Mr. section V. Gupte appearing for some respondents, has invited our attention to the differences, in the analysis conducted in 1971 and in 1973, between percentages of broken rice" in samples from the same stocks.
The explanation of these differences according to the learned Attorney General, is indicated in the order of the High Court, dated 29th March, 1973, by which Revision petitions against remand orders were dismissed.
The High Court observed: "During the pendency of these proceedings in this Court admittedly fresh samples had been taken in the presence of the parties and the rest of the grain was directed to be disposed.
These fresh samples are now available for analysis, it is contended by the learned public prosector that on account of lapse of time there is the possibility of even whole rice getting broken and a larger percentage of broken rice being forged in analysing now to be done.
It should be possible for the Analyst to know how long rice stay preserved as whole rice and what is the lapse of time that results in breaking up of even the whole rice and what percentage should be allowed in that connection and come to the conclusion in making analysis of the new samples taken".
The High Court had said that "there should be no difficulty in getting the fresh samples taken analysed also and the analyst giving his opinion with regard to both the samples".
There is not only a difference between the results of the analysis of 1971, as compared with the analysis of 1973, for which samples were taken, afresh from the same bags of rice, but we find that the report of 1973 itself shows, that, out of 50 samples taken from different bags of rice, there is a variation ranging from 12.5%, in the case of two samples from wagon No. SE 53657 to 40% in the case of the sample from wagon, No. SE 57670.
The analysis of another sample from the same wagon SE 57670 gives a percentage of 36.2 of "broken rice".
620 Two samples from the same wagon WR 70715 show 22.5% and 37.5% of broken rice, thus making a difference of 15% between two samples from the same wagon.
In seven samples, the percentages of broken rice were above 35%.
In 16 samples, the broken rice found ranged between 30% and 35%.
Of course, these different percentages may lead to the inference that some broken rice had been deliberately introduced unevenly between rice found in different bags.
But, once the principle is accepted that it is only the rice not covered by the permits which, under the orders of the Court, was to be confiscated, these variations do introduce an element of difficulty in determining precisely what that amount was.
6A of the Act, however, says that the Revenue officer (who exercised the powers of the Collector), "if satisfied that there has been a contravention of the order", that is to say, the Control Order, "may order the confiscation of the essential commodities seized".
It is arguable that the power is there to confiscate whatever essential commodity may have been seized for the purposes of proceeding against the person who has contravened the Control Order, yet, it cannot be denied that this power is discretionary.
Therefore, we do not propose to interfere with the order of the learned Sessions ' Judge, to the effect that, as the Revenue Officer 's order releasing the seized rice to the extent of about 12% had become final, it should not be interfered with except to the extent that the learned Sessions ' Judge added 2% more for foreign matter.
Thereby releasing slightly more in favour of the respondents.
For the reasons given above, we allow these appeals and set aside the judgment and orders of the High Court and restore those of the learned Sessions ' Judge in the cases before us.
M.R. Appeals allowed.
[/INST]The Joint Director of Food stationed in the Port of Visakapatnam sold food grains and fertilizers to the Andhra Pradesh State and other States at the price fixed by the Central Government.
The Sales Tax Officer of the Andhra Pradesh imposed the tax under the Andhra Pradesh General Sales Tax Act, 1957, on the intra State sales and imposed tax under on the inter State sales.
The Joint Director of Food claimed immunity from the tax on the ground that the element of profit motive was absent.
Under the Andhra Pradesh Act, the profit motive is irrelevant.
The High Court of Andhra Pradesh, therefore, dismissed the appeals filed by the Central Government as far as they related to the tax under the Andhra Pradesh Act.
The High Court, however, remanded the three appeals which per tained to the tax under the for deter mining the presence of profit motive in the Central Govern ment while undertaking the dealings in question.
In appeals by Special Leave the appellant contend ed: 1.
Since the sales were by the Central Govern ment, the Joint Director could not be the assessee.
Section 2(b) of the Central Act read with section 9 excludes the Central Government as an exigible entity.
An undertaking to distribute essential com modities by the State in implementation of its governmental obligations cannot be described as trading activity or carrying on of business without doing violence to the concepts of governmental functions and business operations.
Dismissing the appeal, HELD: (1) Since the Joint Director represented the Central Government in the sales he can legitimately be dealt with for sales tax proceedings as representing the Union Government.
[61 C] (2) Section 2(b).
of the Central Act in terms states that a dealer means any person who carries on the business of buying and selling goods and includes a Government which carries on such business.
[61 F] (3) Section 9(3) of the Central Act provides that the tax and penalty collected shall be assigned to the State which recovers the tax.
Therefore, the real beneficiary of the Central Act i.s the State concerned.
In any event there is no flaw in the reasoning of the High Court that the Central Government way tax itself.
[62 A B] (4) The State has the power to carry on the trade or business as is manifest from article 19(6)(ii) and other provi sions.
Systematic activity of buying foodgrains and ferti lizers and selling them by the State although in fulfilment of the beneficiant national policy is never the.
less trade or business.
Necessarily Government may become a dealer which carries on business within the meaning of the different definitions in one Central Act and the State Act.
[62 B E] (5) The question of profit motive is relevant for the purpose of Central Act.
Since the question has not been investigated by the fact finding authorities, the High court has rightly directed the authorities below to go into the said question.
So far as the Andhra Act is concerned since the profit motive is 60 irrelevant because of the special definition in the Act the State Sales Tax Officer is entitled to collect sales tax from appellant in regard to intra State sales even assuming that there is no profit motive.
[62 E H] (6) The Court observed that it is conscious of the social implications of the Sales Tax being leviable on the essential commodities like foodgrains and fertilizers.
Any tax on food and fertilizers is bound to cause an extra burden on the poor who are the ultimate consumers but the court has to interpret the law and apply it.
Necessary objective can be achieved by appropriate notifications or if need be, necessary legislative directions.
[63 A B]
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 2083 of 1972.
70 From the Judgment and Order dated 24.9.
1971 of the Allahabad High Court in Income Tax Appeal No. 535 of 1970.
S.C. Manchanda and Mrs. A Subhashini for the Appellant.
Ms. Rachna Gupta and S.K. Bagga for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal arises out of the decision of the Allahabad High Court dated 24.9.1971.
The High Court by the order impugned dismissed an application under section 256(2) of the Income Tax Act, 1961 (hereinaf ter called the 'Act ').
The assessee, a firm of two partners was at the relevant time a licence vender of country liquor.
For the assessment year 1965 66, the Income tax Officer rejected its account books on the ground that sales and expenses were not verified and the margin of profit shown was low.
It may not be inappropriate in view of the conten tions urged before us, to refer to the order of the Inspect ing Assistant Commissioner for the assessment year 1965 66 under section 271(1)(c) read with section 274(2) of the Act.
For the assessment year 1965 66, the Income Tax Officer, as noted by the Inspecting Assistant Commissioner, rejected the book result showing sales of country liquor at Rs.5,82,234 and the profit margin at 4% for lack of verifia bility of sales and expenses and low margin of profit.
The Income Tax Officer estimated the sales at Rs.7,60,000 being Rs.6,50,000 in Lakhibagh shop and Rs. 1,10,000 in Magra shop, and adopted the net profit rate at 8% thereby comput ing the profit at Rs.60,800 and the total income was comput ed at Rs.60,936 after addition of Rs. 136 for interest receipts.
On appeal, the Appellate Assistant Commissioner confirmed the order of the IncomeTax Officer.
As the total income returned was less than 80% of the correct income computed, the case fell within the ambit of the Explanation to section 271(1) of the Act.
In pursuance to the notice under section 274 read with section 271 of the Act for default under section 271(1)(c) the assessee showed cause.
It was urged on behalf of the assessee before the Inspecting Assistant Commissioner that the returned income was based on the books of accounts and excise registers maintained by the assessee firm and the income was estimated.
It was further urged that the failure to return the correct income if any, did not arise from any fraud or gross 71 or wilful neglect on the part of the assessee firm.
The Inspecting Assistant Commissioner, however, held that by producing what the Inspecting Assistant Commissioner termed to be defective account books, it could not be said that the assessee had shown correct income.
The Inspecting Assistant Commissioner further noted that the sales and expenses were unverifiable.
The Inspecting Assistant Commissioner was further of the opinion that the addition made by the Income tax Officer was due to non production of the material data which the assessee firm ought to have produced for proper determination of its income.
In arriving at the net profit @ 8%, the Income tax Officer had made the allowance for expenses and purchases at 92% of the sales at Rs.7,60,000 i.e. at Rs.6,99,200 which covered all the ex penses and purchases found reasonable.
The Inspecting As sistant Commissioner was, therefore, of the opinion that the assessee firm was grossly negligent and had not discharged the onus of proving that the said difference between the income returned and the correct come did not arise from any gross or wilful neglect on the part of the assessee and as such, in view of the Explanation to section 271(1), the provisions of section 271(1)(c) were clearly attracted.
On this basis the Inspecting Assistant Commissioner levied a penalty of Rs.8,300 under section 271(1)(c) read with sec tion 274(2) of the Act.
The assessee went up in appeal before the Tribunal.
The Tribunal noted the facts.
It may be noted that subsequent to the order of the Inspecting Assistant Commissioner, that is to say on 26th September, 1968, the quantum appeal was heard and partly allowed by the Appellate Tribunal.
By its order dated 26th September, 1968 the Tribunal held that when viewed in the light of the licence fee paid by the assessee, estimates of the turnover were on the high side.
The lower rates of profit were placed in cases of other liquor con tractors and that in the circumstances, the rate of net profit for both the shops should be 7% on estimated sales of Rs.6,25,000 for Lakhi Bagh shop and of Rs. 1,00,000 for the Magra shop.
In view of this order, the income finally deter mined for the assessment year was Rs.50,750.
It is the case of the appellant that 80% of the income finally assessed is Rs.40,600 which is much higher than the income returned at Rs.30,138.
However, on behalf of the assessee, it was contended that the assessee did not conceal the particulars of income nor furnish inaccurate particulars thereof, that the income returned was based on the books of account maintained in the regular course of business, that the assessee could only declare the income as reflected in the books of account, that the difference between the re turned income and the 72 assessed income did not arise from any fraud or gross or wilful neglect on the part of the assessee and that it could not be considered in the circumstances that the assessee came within the mischief of Explanation to section 271(1)(c) of the Act.
After reviewing certain other cases, the Tribunal was of the view that like the cases referred to by the Tribunal 's order, the assessee had maintained certain types of books of account and it had appeared that it had honestly believed that the same were sufficient for the true ascertainment of his profits and from the facts he disclosed it could not be said that he had been grossly or wilfully negligent in filing such a return of income as he did and as such there was no fraud.
In conformity with the other orders referred to by the Tribunal in the impugned order, it was held by the Tribunal that in the instant case, the Inspecting Assistant Commissioner had erred in his finding and therefore, the penalty order was cancelled.
From this decision of the Tribunal under section 256(1), a reference was sought to the High Court on the following question: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in cancelling the penalty imposed under section 271(1)(c)?" The Tribunal found that it was clear from a perusal of the order passed by the Tribunal that it was not in doubt that the assessee returned the income on the books of ac count maintained in the regular course of business and that the difference between the income returned and the income assessed arose mainly on account of excess profit, in view of the various defects in the account books and the applica tion of a higher net profit rate on estimated turnover.
Following the earlier orders of the Tribunal in similar cases, the Tribunal held that if the assessee maintained certain types of books of account and honestly believed the same to be sufficient for the true ascertainment of his profits, it could be considered as making an estimate of income on a proper basis and it could not be said that in filing the return of income as reflected in the books of account, the assessee was grossly or wilfully negligent, much less fraudulent.
The penalty order was vacated on this basis.
The Tribunal was of the opinion that on this finding no question of law arose and as such there was no scope for reference of the said question to the High Court.
the appli cation under section 256(1) was, therefore, rejected.
The revenue went up before the High Court under section 256(2) 73 of the Act seeking a reference on the question mentioned hereinbefore.
The High Court by the judgment under appeal after referring to the facts mentioned hereinbefore was of the view that no question of law arose in this case.
The High Court opined in the impugned judgment that the finding of the Tribunal that the assessee acted honestly notwith standing the defective nature of the account books main tained by him was a finding of fact.
In the premises, the reference application was dismissed.
As mentioned hereinbe fore, this appeal arises from the said decision of the High Court.
After amendment by the Finance Act, 1964, section 271 of the Act along with the Explanation reads as follows: "271: Failure to furnish returns, com plying with notices, concealment of income, etc.
(1) If the Income tax Officer or the appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person ( i i ) . . . . . . . . . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, (iii) In the cases referred to in clause (c) in addition to any tax payable by him a sum which shall not be less than 20% but shall not exceed one and a half times the amount of tax, if any, which would have been avoided if the income as returned by such person had been accepted as correct income.
Explanation: Where the total income returned by any person is less than 80% of the total income (hereinafter in this explanation re ferred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for 74 the purpose of making or earning any income included in the total income, but which has been disallowed as a deduction), such person shall, unless he proved that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccu rate particulars of such income for the pur pose of clause (c) of this sub section.
" It is clear that if the Income Tax Officer and the Appellate Assistant Commissioner were satisfied that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income, he can direct that such person should pay by a penalty the amount indicated in sub clause (ii) of clause (c) of section 271(1) of the Act.
Before the amendment, difficulty arose and it is not necessary to trace the history, under the law as stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particu lars or had concealed the income.
Difficulties were found to prove the positive element required for concealment under the law prior to amendment, this positive element had to be established by the revenue.
To obviate that difficulty the explanation was added.
The effect of the explanation was that where the total income returned by any person was less than 80% of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he did so, he should be deemed to have concealed the particulars of his income or furnished inaccurate particulars, for the purpose of section 271(1).
The position is that the moment the stipulated difference was there, the onus that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted on the assessee but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
If in an appropriate case the Tribunal or the fact finding body was satisfied by the evidence on the record and inference drawn from the record that the assessee was not guilty of fraud or any gorss or wilful neglect and if the revenue had not adduced any further evidence then in such a case the assessee cannot come within the mischief of the section and suffer the imposition of penalty.
That is the effect of the provision.
Our attention was drawn to several decisions to which out of deference, to Shri Manchanda who argued before us on behalf of the revenue, we shall refer.
Vishwakarma Indus tries vs Commissioner of 75 Income Tax, Amritsar 1, is a decision of the Full Bench of the Punjab and Haryana High Court where Sand hawalia, C.J. speaking for the Full Bench observed that the object and intent of the legislature in omitting the word "deliberately" from clause (c) of section 271(1) of the Income Tax Act, 1961 and adding an Explanation thereto by the Finance Act, 1964, was to bring about a change in the existing law regarding the levy of penalty so as to shift the burden of proof from the department on to the assessee in the class of cases where the returned income of the assessee was less than 80% of the assessed income.
The learned Chief Justice noted that the significant thing about the change made in clause (c) of section 271(1) was the designed omission of the word "deliberately" therefrom, whereby the requirement of a designed furnishing of inaccu rate particulars of income was obliterated.
According to the learned Chief Justice, the language of the Explanation indicated that for the purposes of levying penalty the legislature had made two clear cut divisions.
This had been done by providing a strictly objective and an almost mathe matical test.
According to the Chief Justice, the touchstone therefor was the income returned by the assessee as against the income assessed by the department which was designated as "the correct income".
The case where the returned income was less than 80% of the assessed income can be squarely placed into one category.
Where, however, such a variation is below 20% that would fall into the other category.
To the first category, where there is a larger concealment of income, the provisions of the Explanation become at once applicable with the resultant attraction of the presumptions against such an assessee.
Once the Explanation is held to be applicable to the case of an assessee, it straightaway raises three legal presumptions, viz. (i) that the amount of the assessed income is the correct income and it is in fact the income of the assessee himself; (ii) that the failure of the assessee to return the correct assessed income was due to fraud; or (iii) that the failure of the assessee to return the correct assessed income was due to gross or wilful neglect on his part.
But it must be emphasised that these are presumptions and become rule of evidence but the presumptions raised are not conclusive presumptions and are rebuttable.
We are of the opinion that the view of the Full Bench of the Punjab and Haryana High Court is a correct view when it states that it only makes a presumption but the presumption is rebuttable one and if the fact finding body on relevant and cogent materials comes to the conclusion that in spite of the presumption the assessee was not guilty, such conclu sion does not raise any question of law.
76 Our attention was drawn to the decision of the Division Bench of the Allababad High Court in Addl.
Commissioner of Income Tax, Lucknow vs Lakshmi Industries and Cold Storage Co. Ltd., There the High Court found that the assessee had not given any explanation.
So, on the facts found, the inference of the Tribunal that the amounts had been added and the evidence had been found unsatisfactory was not correct.
Penalty was exigible in that case and the High Court found that the Tribunal was wrong in cancelling the penalty.
As mentioned hereinbefore, it depends upon the facts and circumstances of each case.
If a party comes within the mischief of the Explanation then there is a presumption against him and the onus to discharge the presumption lies on the assessee but being a presumption it is a rebuttable one and if on appropriate materials, that presumption is found to be rebutted no question of law can be said to arise.
The Full Bench of the Andhra Pradesh High Court in Commissioner of Income Tax vs
H. Abdul Bakshi & Bros., again reiterated that the presumption spelt out becomes a rule of evidence.
Presumptions raised by the Explanation to section 271(1)(c) are rebuttable presump tions.
The initial burden of discharging the onus of rebut tal is on the assessee.
Once that initial burden is dis charged, the assessee would be out of the mischief unless further evidence was adduced.
Here there was none.
Similarly, the Full Bench of the Patna High Court in the case of Commissioner of Income Tax, Bihar vs Nathulal Agar wala and Sons, had occasion to consider this.
The High Court reiterated that the onus to discharge the presumption raised by the Explanation was on the asses see and it was for him to prove that the difference did not arise from any fraud or wilful neglect on his part.
The court should come to a clear conclusion whether the assessee had discharged the onus or rebutted the presumptions against him.
The Patna High Court emphasised that as to the nature of the explanation to be rendered by the assessee, it was plain on principle that it was not the law that the moment any fantastic or unacceptable explanation was given, the burden placed upon him would be discharged and the presump tion rebutted.
We agree.
We further agree that it is not the law that any and every explantion by the assessee must be accepted.
It must be acceptable explanation, acceptable to a fact finding body.
77 Mrs. Gupta, appearing for the assessee, drew our atten tion to the observations of the Division Bench of the Gau hati High Court in Commissioner Income Tax, Assam, Nagaland, Manipur & Tripura vs Chhaganlal Shankarlal, Our attention was also drawn on behalf of the assessee to the decision of the Division Bench of the Allahabad High Court in Commissioner of Income Tax vs Nadir Ali and Company There the court observed that under section 271( 1)(c) read with the Explanation, a penalty could be imposed if the income returned was less than 80% if the assessee did not prove that the disparity between the income assessed and the income returned by him was not due to gross neglect or fraud.
The fact that the assessee was not main taining his books of account in a particular way did not show that he was guilty of gross neglect.
The Income tax Act did not prescribe the manner in which the account books should be maintained.
When the assessee filed his return on the basis of accounts which were maintained in the regular course of business it could not be said that he was guilty of gross negligence.
It could not be expected from the assessee to file a return showing a higher income than what was worked out merely because the department had applied a higher rate of profit in the earlier years.
It was held by the Allahabad High Court that on the facts, the assessee had sufficiently discharged the burden.
The position therefore in law is clear.
If the returned income is less than 80% of the assessed income the presump tion is raised against the assessee that the assessee is guilty of wilful neglect or of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the relevancy.and sufficiency of the materi als.
If such a fact finding body beating the aforesaid principles in mind comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
No question of law arises.
In this case the Tribunal has borne in mind the relevant principles of law and has also judged the facts on record.
It is not a case that there was no evidence or there was such evidence on which no reasonable man could have accepted the explanation of the assessee.
In that view of the matter, in our opinion, the Tribunal tight ly rejected the claim for reference under section 256(1) and the High Court correctly did not entertain the application for reference under section 256(2) of the Act.
The appeal, therefore, fails and is accordingly dismissed with costs.
M.L.A. Appeal dis missed.
[/INST]The Income tax Officer rejected the account books of the respondent assessee on the ground that the sales and ex penses were not verified and the margin of profit shown was low.
He adopted the net profit rate at 8% thereby com puting the profit at Rs.60,800 and the total income was computed at Rs.60936 after addition of Rs. 136 for interest receipts.
On appeal the Appellate Assistant CommiSsioner confirmed this order of the Income tax Officer.
As the total income returned was less than 80% of the correct income computed, he held that the case feb within the ambit of s.27 1(1) of the Act, and issued a show cause notice under sec tion 274 read with section 271 to the assessee.
It was contended on behalf of the assessee before the Appellate Assistant Commissioner (i) that the assessee did not conceal the particulars of income nor furnish inaccurate particu lars; (ii) that the income returned was based on the books of account maintained in the regular course of business; (iii) that the assessee could only declare the income as ref1ected in the books of account; (iv) that the difference between the returned income and the assessed income did not arise from any fraud or gross or unlawful neglect on the part of the assessee; and (v) that it could not be consid ered in the circumstances that the assessee came within the mischief of s.27 1(1)(c) of the Act.
The Appellate Assistant Commissioner rejected these contentions, confirmed the order of the Income tax Officer and in view of the Explanation to section 271(1) levied a penalty of Rs.8,300 under section 271(D(c) read with section 274(2) of the Act.
The respondent assessee went up in appeal to the Tribu nal which cancelled the penalty order 'and finally deter mined the income of the assessee at Rs.50,750 holding: (a) that the assessee had maintained certain types of books of account and had honestly believed that the same were suffi cient for the true ascertainment of his profits and, from 68 the facts he disclosed, it could not be said that he had been grossly or wilfully negligent in filing the return of income and as such there was no fraud; (b) that the differ ence between the income returned and the income assessed arose mainly on account of excess profit, in view of the various defects in the account books and the application of a higher profit rate on estimated turnover.
The application of the appellant revenue seeking refer ence under s.256( D of the Act, was rejected by the Tribunal on the ground that no question of law arose.
The appellant revenue went before the High Court under section 256(2) of the Act seeking a reference on the ques tion of cancelling the penalty imposed under sec.
271(1)(c) of the Act, and this application was also dismissed on the ground that the finding of the Tribunal that the assessee acted honestly notwithstanding the defective nature of the account books maintained by him was a finding of fact and therefore no question of law arose.
Dismissing the appeal of the appellant revenue, this Court, HELD: 1. I If the Income tax Officer and the Appellate Assistant Commissioner were satisfied that the assessee had concealed the particulars of his income or furnished inaccu rate particulars of such income, he can direct that such person should pay by way of a penalty the amount indicated in sub clause (ii) of clause (c) of section 271(1).
Under the law as it stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particulars or had concealed the income.
Difficulties were found to prove the positive ele ment required for concealment under the law prior to amend ment.
This positive element had to be established by the revenue.
To obviate that difficulty, the explanation was added.
The effect of the Explanation is that where the total income returned by any person is less than 80% of the total income assessed, the onus is on such person to prove that the failure to file the correct income does not arise from any fraud or any gross or wilful neglect on his part and unless he does so, he should be deemed to have concealed the particulars of his income or furnished inaccurate particu lars, for the purpose of section 271(1).
The position is that the moment the stipulated difference was there, the onus that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted on 69 the assessee but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
1.3 If in an appropriate case the Tribunal or the fact finding body was satisfied by the evidence on the record and inference drawn from the record that the assessee was not guilty of fraud or any gross or wilful neglect and if the revenue had not adduced any further evidence then in such a case the assessee cannot come within the mischief of the section and suffer the imposition of penalty.
That is the effect of the provision.
1.4 Presumptions raised by the Explanation to section 271(1)(c) are rebuttable presumptions.
The initial burden of discharging the onus of rebuttal is on the assessee.
Once that initial burden is discharged, the assessee would be out of the mischief unless further evidence was adduced.
1.5 If the returned income is less than 80% of the assessed income, the presumption is raised against the assessee that the assessee is guilty of wilful neglect or of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the relevancy and suffi ciency of the materials.
If such a fact finding body bearing the aforesaid principles in mind comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
No question of law arises.
In the instant case, the Tribunal has borne in mind the relevant principles of law and has also judged the facts on record.
It is not a case that there was no evidence or there was such evidence on which no reasonable man could have accepted the explanation of the assessee.
In that view of the matter the Tribunal rightly rejected the claim for reference under section 256(1) and the High Court correctly did not entertain the application for reference under sec tion 256(2) of the Act.
If a party comes within the mischief of the Explana tion to section 27 1 then there is a presumption against him and the onus to discharge the presumption lies on the asses see but being a presumption ' it is a rebuttable one and if on appropriate materials, the Tribunal has rebutted that presumption, no question of law can be said to arise.
</s>
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<s>[INST] Summarize the judgementtition Nos. 501, 643 44, 645, 649 and 1866 of 1981.
(Under article 32 of the Constitution of India) R. K. Garg, V.J. Francis, Sunil Kumar Jain and D. K. Garg for the Petitioners in WP.
501/81.
M. K Ramamurthi, J. Ramamurthi and Miss R. Vagai for the Petitioners in WPs.
643 44/81.
Vimal Dave and Miss Kailash Mehta for the Petitioners in WP.
No. 645/81.
A.K. Goel for the Petitioners in WP.
649/81.
Dalveer Bhandari and H. M. Singh for the Petitioners in WP.
1866/81.
L. N. Sinha, Attorney General, M. K Banerjee, Soliciter General, Miss A. Subhashini and R P. Singh for Respondent No. 1 in all the matters.
L. N. Sinha, Attorney General, O.C. Mathur and Sri Narain, for Respondent No. 2 in all the matters.
P. H. Parekh for the Intervener in WP.
501/81.
Somnath Chaterjee, J. Ramamurthi and Miss R. Vaigai for the Intervener Ajoy Kumar Banerjee in WPs.
643 44/81.
The following Judgments were delivered GUPTA, J.
The validity of the provisions of the Life Insurance Corporation (Amendment) Act, 1981 and the Life Insurance Corporation (Amendment) ordinance, 1981 which preceded it is challenged in this batch of writ petitions.
The writ petitions have a history behind them which can be conveniently divided into three chapters.
However, it will be easier to follow this history if we referred to some of the provisions of the Life Insurance Corporation Act, 1955 first.
The Life Insurance Corporation was constituted under the to provide for the nationalisation of life insurance business in India 'by transferring all 252 such business to the Life Insurance Corporation of India.
Under section 11(1) of the Act the services of the employees of insurers whose business has vested in the Corporation are transferred to the Corporation.
Sub section (2) of section 11 provides: "Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy holders, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, not withstanding anything contained in sub section (1), or in the , or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination.
" There is an explanation to this sub section which is not relevant for the present purpose.
Section 48 of the Act empowers the Central Government to make rules to carry out the purposes of the Act.
Sub section (2) of section 48 in clauses (a) to (m) specifies some of the matters that the rules may provide for.
Sub section (3) of section 48 states: "Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive session, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses 253 agree that the rule should not be made, the rule shall A thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule." Section 49(1) empowers the Life Insurance Corporation of India to make regulations to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of the Act.
Clauses (a) to (m) of sub section (2) of section 40 specify some of the matters the regulations may provide for.
The matter referred to in clause (b) of sub section (2) is "the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents.
" Clause (bb) speaks of the terms and conditions of service of persons who have become employees of the Corporation under sub section (1) of section 11.
Turning now to the history of the litigation, the first chapter begins with two settlements reached on January 24, 1974 and February 6, 1974 between the Life Insurance Corporation and its class III and class IV employees.
These were settlements under section 18 read with section 2(p) of the .
The settlements were identical in terms; four of the five unions of workmen subscribed to the first settlement while the remaining union was a signatory to the second.
The settlements cover a large ground including the claim for bonus.
Clause 8 of each of the settlements was as follows: "BONUS: (i) No profit sharing bonus shall be paid.
However, the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and IV employees.
(ii) An annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary (i.e. basic pay inclusive of special pay, if any, and dearness allowance and additional dearness allow 254 ance) actually drawn by an employee in respect of the financial year to which the bonus relates.
(iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the settlement on bonus dated the 26th June, 1972.
" Clause 12 of the settlements inter alia provides: "This settlement shall be effective from 1st April, 1973 and shall be for a period of four years.
i.e. from 1st April 1973 to 31st March 1977.
" In 1975 an ordinance was promulgated called the Payment of Bonus (Amendment) ordinance which was subsequently replaced by the Payment of Bonus (Amendment) Act, 1976.
The reference to this ordinance and the Act would not have been relevant because section 32 (i) of the original made the said Act not applicable to the employees of the Life Insurance Corporation, but the Central Government appears to have decided also that the employees of establishments not covered by the would not be eligible to get bonus and ex gratia cash payment in lieu of bonus would be made.
Accordingly payment of bonus for the year 1975 76 to the employees of the Corporation was stopped under instructions from the Central Government.
On a writ petition filed by the employees of the Corporation in the Calcutta High Court, a single Judge of that court issued a writ of mandamus directing the Corporation to act in accordance with the terms of the settlement.
Thereafter the Life Insurance Corporation (Modification of Settlement) Act, 1976 was passed.
Some of the employees of Corporation challenged the constitutional validity of the Act by filing writ petition in this Court.
In Madan Mohan Pathak vs Union of India and Ors.(1) this Court held that the 1976 Act offended Article 31(2) of the Constitution and was as such void and issued a writ of mandamus directing the Union of India and the Life Insurance Corporation to forebear from implementing or enforcing the provisions of the 1976 Act and to pay annual cash bonus for the , years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 to Class Ill and Class IV employees in accordance with the terms of the settlements.
The second chapter began on March 31, 1978 when the Corporation issued a notice under section 19(2) of the Industrial Dis 255 putes Act declaring its intention to terminate the settlements on the expiry of the period of two months from the date the notice was served.
On the same day another notice was issued by the Corporation under section 9A of the stating that it proposed to effect a change in the conditions of service applicable to the workmen.
The change proposed was set out in the annexure to the notice which reads: "AND WHEREAS for economic and other reasons it would not be possible for the Life Insurance Corporation of India to continue to pay bonus on the aforesaid basis; Now, therefore, it is our intention to pay bonus to the employees of the Corporation in terms reproduced hereunder: "No employee of the Corporation shall be entitled to profit sharing bonus.
However, the Corporation may, having regard to the financial condition of the Corporation in respect of any year and subject to the previous approval of the Central Government, grant non profit sharing bonus to its employees in respect of that year at such rate as the Corporation may think fit and on such terms and conditions as it may specify as regards the eligibility of such bonus.
" These notices were followed by a notification issued by the Corporation under section 49 of the on May 26, 1978 substituting a new regulation for the existing regulation No. 58 of the Staff Regulations.
Simultaneously the Life Insurance Corporation (Alteration of Remuneration and other terms and Conditions of Service of Employees) order, 1957, called the Standardisation order, made by the Central Government in exercise of the powers conferred on it by section 11(2) of the was amended with effect from June 1, 1978 substituting a new clause (9) for The original clause concerning bonus.
Clause (9) of the Standardisation order and Regulation 58 of the Staff Regulations after amendment read as follows: "No employee of the Corporation shall be entitled to profit sharing bonus.
However, the Corporation may, having regard to the financial condition of the Corporation in respect of any year and subject to the previous approval 256 of the Central Government, grant non profit sharing bonus to its employees in respect of that year at such rate as the Corporation may think fit and on such terms and conditions as it may specify as regards the eligibility for such bonus. " The validity of the said two notices and the notification issued for the purpose of nullifying any further claim of the workmen to annual cash bonus in terms of the Settlements of 1974 was challenged by the workmen by filing a writ petition in the Allahabad High Court.
The High Court allowed the writ petition and the Corporation preferred an appeal to this Court.
Another writ petition which had been filed in the Calcutta High Court challenging the said notices and the notification was transferred to this court, and the appeal and this writ petition were heard and disposed of by a common judgment.
The two cases were Civil Appeal No. 2275 of 1978, (The Life Insurance Corporation of India vs D.J. Bahadur and others)(1) and Transfer case No. I of 1979 (Chandrashekhar Bose and others vs Union of India and Ors.)(2).
By a majority the appeal preferred by the Corporation was dismissed and the transfer petition was allowed and a writ was issued by this Court to the Life Insurance Corporation directing it "to give effect to the terms of the settlements of 1974 relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation.
" The second chapter closed with this decision.
The third chapter begins with the promulgation of the Life Insurance Corporation (Amendment) ordinance, 1981 on January 31, 1981.
The following changes made in the principal Act by the ordinance are material.
In sub section (2) of section 48 of the principal Act a new sub clause (cc) was inserted with retrospective effect from June 20, 1979.
Clause (cc) relates to "the terms and conditions of service of the employees and agents of the Corporation, including those who became employees and agents of the Corporation on the appointed day under this Act.
" Three new sub sections (2A), (2B) and (2C) were added to section 48.
Sub section (2A) says that the regulations and other provisions as in force immediately before the commencement of the ordinance with respect to the terms and conditions of service of the employees and agents of the Corporation shall be deemed to be rules made under clause (cc) of 257 sub section (2).
Sub section (2B) provides that the power to make rules under clause (cc) of sub section (2) shall include (i) the power to give retrospective effect to such rules, and (ii) the power to amend by way of addition, variation or repeal the regulations and other provisions referred to in sub section (2A) with retrospective effect, but not from a date earlier than June 2(), 1979.
Sub section (2C) reads as follows: "The provisions of clause (cc) of sub section (2) and sub section (2B) and any rules made under the said clause (cc) shall have effect, and any such rule made with retrospective effect from any date shall also be deemed to have had effect from that date, notwithstanding any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in the or any other law or any agreement, settlement, award or other instrument for the time being in force.
" Certain consequential changes were also made in section 49 of the Act.
In clause (b) of section 49(2) which has been quoted above, the words "and the terms and conditions of service of such employees or agents" were omitted.
This was necessary because the terms and conditions of service of the employees and the agents with regard to which the Corporation was empowered to make regulations by section 49(1) of the principal Act is now a matter included in clause (cc) of section 48(2) as one of the matters covered by the rule making authority of the Central Government under section 48(1) of the Act.
The ordinance also omits clause (bb) from section 49(2).
Clause (bb) also quoted earlier included the terms and conditions of the service of the persons who had become employees of the Corporation under section 11(1) of The Act.
The terms and conditions of service of such persons are now included in the new clause (cc) of section 48(2).
By notification dated February 2, 1981 the Central Government in exercise of the powers conferred by section 48 of the made the rules called the Life Insurance Corporation of India Class III and IV employees (Bonus and Dearness Allowance) Rules, 1981.
The relevant rule is rule 3 : which has been given retrospective operation from July 1, 1979.
Sub rule (1) of rule 3 provides; "No Class III or Class IV employee 258 of the Corporation shall be entitled to the payment of any profit sharing bonus or any other kind of cash bonus.
" Sub rule (2) of rule 3 states that notwithstanding what sub rule (1) provides every Class III and Class IV employee shall be entitled to a payment in lieu of bonus (a) for the period commencing from July 1, 1979 and ending on March 31, 1980 at the rate of 15 per cent of his salary; and (b) thereafter for every year commencing on the 1st April and ending on the 31st day of March of the following year, at such rate and subject to such conditions as the Central Government may determine having regard to the wage level, the financial circumstances and other relevant factors.
There is a proviso to this sub rule which says that (i) no payment in lieu of bonus shall be made to any employee drawing a salary exceeding Rs. 1600 per month; and (ii) where the salary of an employee exceeds Rs. 750 per month but does not exceed Rs. 1600 per month, the maximum payment to him in lieu of bonus shall be calculated as if his salary were Rs. 750 per month.
For the purposes of this sub rule, "salary" was explained as meaning basic pay, special pay, if any, and dearness allowance.
Sub rule (3) of rule 3 rescinds regulation 58 of the Staff Regulations and all other provisions relating to the payment of bonus to the employee to the extent they are inconsistent with rule 3 Writ petition No. 501 of 1981 under Article 32 of the Constitution was filed in this Court on February 5, 1981 by Shri A.V. Nachane and the All India Life Insurance Corporation Employees Federation.
Bombay, challenging the validity of the ordinance and the aforesaid rules.
Similar writ petitions by other associations of the employees of the Corporation followed In the meantime the ordinance was repealed and replaced on March 17, 1981 by the Life Insurance Corporation (Amendment) Act, 1981 which received the assent of the President of India on the same day.
The writ petitions were suitably amended after the Amendment Act came into force.
The provisions of the Act are similar to those of the ordinance except that the Amendment Act adds a new sub section, sub section (3).
to section 49 of the principal Act.
The new sub section (3) which provides that the regulations made under section 49 shall be laid before each House of Parliament are similar in terms to sub section (3) OF section 48 requiring the rules made by the Central Government under the Act to be laid before each House of Parliament.
Section 4 of the Amendment Act repeals the ordinance but provides that "notwithstanding such repeal, anything done or any action taken under the principal Act as amended by the said 259 Ordinance shall be deemed to have been done or taken under the principal Act as amended by this Act The validity of the Amendment Act and the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981 have been challenged on several grounds.
It was argued that the Act and the rules were violative of Article 14, 19(1) (g) and 21 of the Constitution.
It was further contended that the said Act was invalid on the ground of excessive delegation of legislative functions.
Another contention raised was that in any event sub section (2C) of section 48 was invalid to the extent it permitted retrospective operation to rule 3 to override the order of this Court disposing of D. J. Bahadur 's case.
The challenge based on Article 19(1)(g) and Article 21 does not appear to have any substance.
Apart from anything else, a claim based on the 1974 settlements is certainly not a fundamental right that could be enforced through this Court.
As regards Article 21, the first premise of the argument that the word 'life ' in that Article includes livelihood was considered and rejected in In re: Sant Ram.
The contention that Article 14 is infringed arises on the provision of sub section (2C) of section 48 that any rule made under clause (cc) of sub section (2) of that section touching the terms and conditions of service of the employees of the Corporation shall have effect notwithstanding anything contained in the .
It is true that after rules are made regarding the terms and conditions of service, the right to raise an industrial dispute in respect of matters dealt with by the rules will be taken away and to that extent the provisions of the will cease to be applicable.
It was argued that there was no basis on which the employees of the Corporation could be said to form a separate class for denying to them the protection of the .
The reply on behalf of the Union of India and the Life Insurance Corporation was that the remuneration that was being paid to class III and class IV employees of the Corporation was far in excess of what was paid to similarly situated employees in other establishments in the public sector.
Some material was also furnished to support this claim though they were certainly not conclusive.
The need for amending the as appearing from the preamble of the Amendment Act and the ordinance is as follows: ". for securing the interests of the Life Insurance Corporation of India and its policy holders and 260 to control the cost of administration, it is necessary that revision of the terms and conditions of service applicable to the employees and agents of the Corporation should be undertaken expeditiously.
" Referring to the preamble of the Act the Attorney General appearing for the Union of India and the Corporation submitted that the problem of mounting cost of administration led to the making of in the impugned law.
He added that it was felt that no improvement in the situation was possible by the process of adjudication and a policy decision was taken that in the circumstances the proper course was legislation and that is why the Amendment Act was passed and the impugned rules were framed.
The learned Attorney General submitted that it was for Parliament to decide whether the situation was remediable by adjudication or required legislation.
According to him the as amended and the rules made after amendment placed the Corporation in the same position as other undertakings, that the advantages being enjoyed by the employees of the Corporation which were not available to similarly situated employees of other undertakings have been taken away removing what he described as discrimination in favour of the employees of the Life Insurance Corporation.
We have already said that the material produced on behalf of the Union of India and the Corporation to show that the terms and conditions of service of the employees in several other undertakings in the public sector compared unfavourably to those of the Corporation employees was not conclusive.
But the burden of establishing hostile discrimination was on the petitioners who challenged the Amendment Act and the rules.
It was for them to show that the employees of the Life Insurance Corporation and the employees of the other establishment to whom the provisions of the were applicable were similarly circumstanced to justify the contention that by excluding the employees of the Corporation from the purview of the they had been discriminated against.
There is no material before us on the basis of which we can hold that the Amendment Act of 1981 and the rules made on February 2, 1981 infringe Article 14.
We do not think that on the facts of this Case Express Newspapers (Private) Limited and another vs Union of India,(1) Moti Ram Deka etc.
vs General Manager N.E.F. Railways, Maligaon, Pandu etc.,(2) relied on by the petitioners, have any application.
261 It was contended that sub section (2C) added to section 48 of the by the Amendment Act of 1981 was invalid because of excessive delegation of legislative functions and that if sub section (2C) which is an integral part of the Amendment Act was ultra vires, the entire Amendment Act would be unconstitutional The Amendment Act introduced clause (cc) in section 48(2) authorising the Central Government to make rules in respect of the terms and conditions of service of the employees and agents of the Corporation.
Sub section (2C) of section 48 provides inter alia that rules made under clause (cc) shall have effect notwithstanding anything contained in the or any other law for the time being in force.
The argument is that the rules made under section 48(2) (cc) can virtually repeal the and other laws to the extent they are inconsistent with these rules.
Repealing a law, it was submitted on the authority of In re Delhi Laws Act,(l) was an essential legislative function which had been delegated to the Central Government and that the delegation was therefore excessive.
It is now well settled that it is competent for the legislature to delegate to other authorities the power to frame rules to carry out the purposes of the law made by it (see In re the Delhi Laws Act,(l) Raj Narain Singh vs The Chairman, Patna Administration Committee, Patna and another,(2) and D.S. Garewal vs State of Punjab and another(3) but the essential legislative functions cannot be delegated.
What is essential legislative function has been explained by Mukerjee., J. in the Delhi Laws case as follows: "The essential legislative function consists in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of con duct.
It is open to the legislature to formulate the policy as broadly and with as little or as much details as it thinks proper and it may delegate the rest of the legislative work to a subordinate authority who will work out the details within the framework of that policy." In Raj Narain Singh vs The Chairman, Patna Administration Committee, Patna, and another(2) a bench of five Judges of this Court held 262 that an executive authority can be empowered by a statute to modify either existing or future laws but not in any essential feature.
In the instant case section 48(2C) read with section 48(2) (cc) authorises the Central Government to make rules to carry out the purposes of the Act notwithstanding the or any other law.
This means that in respect of the matters covered by the rules the provisions of the or any other law will not be operative.
The argument is that sub section (2C) or any other provision introduced in the principal Act by the Amendment Act does not lay down any legislative policy nor supply any guidelines as to the extent to which the rule making authority would be competent to override the provisions of the or other laws.
Reference was made to Municipal Corporation af Delhi vs Birla Cotton Spinning and Weaving Mills, Delhi and another,(l) Gwalior Rayon Silk Manufacturing (Weaving) Company Limited vs Assistant Commissioner of Sales tax and others,(2) for the proposition that unlimited right of delegation is not inherent in the legislative power itself.
The question therefore is, does the Amendment Act of 1981 lay down no legislative policy or furnish no guidance to indicate the nature and extent of the modifications that the rules will be permitted to make in the existing laws to carry out the purposes of the as amended in 1981 ? Learned Attorney General relied on the decision of this Court in Harishankar Bagla and another vs State of Madhya Pradesh (3) This was a case under the Essential Supplies (Temporary Powers) Act, 1946.
Section 3(1) of that Act says that the Central Government for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
Sub section (2) of section 3 states that without prejudice to the generality of the powers conferred by sub section (1), such an order may provide inter alia for regulating by licences or permits or otherwise the production or manufacture and transport, distribution, disposal, acquisition; use or consumption of any essential commodity.
Section 6 of that Act provides inter alia that any order made under section 3 shall have effect notwithstanding any 263 thing inconsistent therewith contained in any enactment other than A that Act.
In exercise of the powers conferred by section 3 of that Act the Central Government made the Cotton Textiles (Control of Movement) order, 1948.
Clause 3 of the said order requires a person to take a permit from the Textile Commissioner to enable him to transport cotton textiles.
One of the question that arose in Harishankar Bagla 's case was whether section 6 of the Essential Supplies (Temporary Powers) Act permitted rules to be made by the Central Government repealing by implication an existing law, which was an essential legislative function and could not validly be delegated.
Mahajan C.J., speaking for the court said: "Section 6 does not either expressly or by implication repeal any of the provisions of pre existing laws, neither does not abrogate them.
Those laws remain untouched and unaffected so far as the statute book is concerned.
The repeal of a statute means as if the repealed statute was never on the statute book.
It is wiped out from the statute book.
The effect of section 6 certainly is not to repeal any one of those laws or abrogate them.
Its object is simply to by pass them where they are inconsistent with the pro visions of the Essential Supplies (Temporary Powers) Act, 1946, or the orders made thereunder.
In other words, the orders made under section 3 would be operative in regard to the essential commodity covered by the Textile Control order wherever there is repugnancy in this order with the existing laws and to that extent the existing laws with regard to those commodities will not operate.
By passing a certain law does not necessarily amount to repeal or abrogation of that law.
That law remains unrepealed but during the continuance of the order made under section 3 it does not operate in that field for the time being.
" We think the Attorney General was right in his submission that what has been said of section 6 of the Essential Supplies (Temporary Powers) Act should hold good for sub section (2C) of section 48 of the which is similar in terms in so far as it authorises the Central Government to make rules bypassing the existing laws.
Mahajan C.J., also holds that assuming that the rules framed under the Act had the effect of repealing the l l existing laws, the power to repeal is exercised not by the delegate but by the Act itself.
This is what he says on this point: 264 "Conceding, however, for the sake of argument that to the extent of a repugnancy between an order made under section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any Act of the delegate, but the repeal is by the legislative Act of the Parliament itself.
By enacting section 6 Parliament itself has declared that an order made under section 3 shall have effect notwithstanding any inconsistency in this order with any enactment other than this Act.
This is not a declaration made by the delegate but the Legislature itself has declared its will that way in section 6.
The abrogation or the implied repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3.
The power of the delegate is only to make an order under section 3.
Once the delegate has made that order its power is exhausted.
Section 6 then steps in wherein the Parliament has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsistency therewith contained in any enactment other than this Act.
Parliament being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre existing law and no exception could be taken on the ground of excessive delegation to the Act of the Parliament itself.
" The Attorney General relied strongly on these observations in submitting that it is not really the rules framed by the Central Government in exercise of the delegated authority that override the or any other existing law but the power of abrogating the existing laws is in sub section (2C) of section 48 enacted by Parliament itself.
The observations quoted above from Harishankar Bagla 's case which was decided by a bench of five Judges appear to support the Attorney General 's contention.
The question however remains to be answered, does the as amended in 1981 state any policy to guide the rule making authority ? We have earlier referred to the observations of Mukerjea J., in the Delhi Laws case that the legislature can formulate a policy as broadly and with as little or as much details as it thinks proper and may delegate the rest of the Iegislative work to a subordinate authority who will work out the details within the framework of the policy.
In Harishanker Bagla 's 265 case one of the questions for decision was whether section 3 of the A Essential Supplies (Temporary Powers) Act, 1946 amounts to delegation of legislative power outside the permissible limits.
It was held that legislature had laid down a legislative principle which was "maintaining or increasing supplies of any essential commodity," and "securing their equitable distribution and availability at fair prices.
" That statement was held as offering sufficient guidance to the Central Government in exercising its powers under section 3.
In the instant case the policy as stated in the preamble of the Amendment Act is that "for securing the interests of the Life Insurance Corporation of India and its policy holders and to control the cost of administration, it is necessary that revision of the terms and conditions of service applicable to the employees and agents of the Corporation should be undertaken expeditiously".
The policy stated here is at least as clear as the one held in Harishanker Bagla 's case offering sufficient guidance to the Central Government in exercising its powers under that Acts We have referred to section 48(3) of the which requires that every rule made by the Central Government under this Act shall be laid before each House of Parliament and that if both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be.
This Court in D.S. Grewal vs State of Punjab and another(supra) observed as follows in respect of a similar provision requiring the rules made by the delegated authority to be laid on the table of Parliament and making the rules subject to modification, whether by way of repeal or amendment on a motion made by Parliament: "This makes it perfectly clear that Parliament has in no way abdicated its authority, but is keeping strict vigilance and control over its delegate.
" In view of what has been held in Harishanker Bagla and D. section Grewal, both of which were decided by a larger bench, we do not find it possible to accept the contention that the Act is invalid on the ground of excessive delegation of legislative functions.
It was contended on behalf of the petitioners that in any event the provisions of the Amendment Act of 1981 could not nullify the effect of the writ issued by this Court in D. J. Bahadur 's case.
In our opinion this contention has substance.
Clause (cc) of section 48(2) empowers the Central Government to make rules with regard 266 to the terms and conditions of service of the employees and agents of the Corporation.
Sub section (2A) of section 48 provides that the regulations made under section 49 of the Act and "other provisions ' as in force before the commencement of the Amendment Act with respect to the said terms and conditions are to be deemed as rules made under clause (cc) of section 48(2).
Sub section (2B) of section 48 says that the power to make rules conferred by clause (cc) of sub section (2) shall include the power to add, vary or repeal the regulations and "other provisions" referred to in sub section (2A) with retrospective effect from a date not earlier than June 20, 1979.
Clearly a writ issued by this Court is not a regulation nor can it be described as 'other provision ' which expression possibly includes circulars and administrative directions.
Sub section (2C) of section 48 however provides inter alia that any rules made under clause (cc) with retrospective effect from any date shall be deemed to have had effect from that date notwithstanding any judgment, decree or order of any court, tribunal or other authority.
The order disposing of D. J. Bahadur 's case, made on November 10, 1980 reads: "In view of the opinion expressed by the majority, the appeal is dismissed with costs to the first, second and third respondents, and the Transfer Petition No. 1 of 1979 stands allowed insofar that a writ will issue to the Life Insurance Corporation directing it to give effect to the terms of the settlements of 1974 relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation.
Costs in respect of the Transfer Petition will be paid to the petitioners by the second respondent.
" The Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981 were made by the Central Government on February 2, 1981 in exercise of the powers conferred by section 48 of the as amended by the Life Insurance Corporation (Amendment) ordinance, 1981.
Rule 3 of these rules relates to the subject of bonus concerning class III and class IV employees of the Corporation.
The substance of this rule has been set out earlier in this judgment.
Clearly rule 3 seeks to supersede the terms of the 1974 settlements relating to bonus.
By virtue of rule 1(2), rule 3 'shall be deemed to have come into force on the Ist day of July, 1979".
The question is, can rule 3 read with rule ](2) nullify the effect of the writ issued by this Court on November 10, 1980 in D.J.Bahadur 's case ? In seems to us rule 3 cannot make the writ 267 issued by this Court nugatory in view of the decision of the majority in Madan Mohan pathak vs Union of India & ors.
etc.(supra) to which reference has been made earlier.
In Madan Mohan Pathak 's case it was contended that since the Calcutta High Court had by its judgment dated May 21, 1976 issued a writ of mandamus directing the Life Insurance Corporation to pay annual cash bonus to class III and class IV employees for the year April 1, 1975 to March 31, 1976 as provided by the 1974 settlements and this judgment had become final, the Life Insurance Corporation was bound to obey the writ of mandamus and pay as ordered by the High Court.
The court was dealing with the Life Insurance Corporation ( Modification of Settlement) Act, 1976 in that case.
Section 3 of that Act provided that the terms of the settlements in so far as they related to the payment of annual cash bonus to class III and class IV employees would not have any force or effect and be deemed not to have had any force or effect from April 1, 1975 Bhagwati J., speaking also for Iyer and Desai., JJ.
Observed: "Here, the judgment given by the Calcutta High Court, which is relied upon by the petitioners, is not a mere declaratory judgment holding an impost or tax to be invalid.
so that a validation statute can remove the defect pointed out by the judgment amending the law with retrospective effect and validate such impost or tax.
But it is a judgment giving effect to the right of the petitioners to annual cash bonus under the Settlement by issuing a writ of Mandamus directing the Life Insurance Corporation to pay the amount of such bonus.
If by reason of retrospective alteration of the factual or legal situation, the judgment is rendered erroneous, the remedy may be by way of appeal or review, but so long as the judgment stands, it cannot be disregarded or ignored and it must be obeyed by the Life Insurance Corporation.
We are, therefore, of the view that in any event! irrespective of whether the impugned Act is constitutionally valid or not, the Life Insurance Corporation is bound to obey the writ of Mandamus issued by the Calcutta High Court .
" Beg.
C.J. who delivered a separate but concurring judgment, after pointing out the "hurdle in the way" of the petitioner 's claim based on Article 19(1)(f) of the Constitution, which was that the Act Life Insurance Corporation (Modification of Settlement) Act, 1976) was 268 passed during the emergency, observed: "The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognising the settlements in favour of Class III and Class IV employees of the Corporation.
Rights under that judgement could be said to arise independently of Article 19 of the Constitution.
I find myself in complete agreement with my learned brother Bhagwati that to give effect to the judgement of the Calcutta High Court is not the same thing as enforcing a right under Article 19 of the Constitution.
It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment.
Nevertheless, the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would in my opinion, be invalid for trenching upon the judicial power.
I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself.
These could not be touched by an ordinary act of Parliament.
Even if section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights.
Therefore, according to the interpretation r prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from the High Court could not be taken away in this indirect fashion. ' The Attorney General referred to a number of earlier decisions of this Court wanting us to infer that the observations quoted above from the judgment in Madan Mohan Pathak 's case did not state the correct law hl view of the said decisions.
But these observations expressed the majority view of a bench of seven judges bearing 269 directly on the point that arises for decision in the instant case and A are binding on us.
We therefore hold that rule 3 operating retrospectively cannot nullify the effect of the writ issued in D. J. Bahadur 's case which directed the Life Insurance Corporation to give effect to the terms of the 1974 settlements relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation.
The Life insurance Corporation (Amendment) Act, 1981 and the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981 are relevant legislation.
However in view of the decision in Madan Mohan Pathak 's case, these rules, in so far as they seek to abrogate the terms of the 1974 settlements relating to bonus, can operate only prospectively, that is, from February 2, 1981, the date of publication of the rules.
The petitions are allowed to this extent only.
In the circumstances of the case we make no order as to costs.
CHINNAPPA REDDY, J.
I have had the advantage of perusing the opinion of my brother Gupta J., I agree with his conclusion that the Life Insurance Corporation (Amendment) Act I of 1981 can operate but prospectively in so far as it seeks to nullify the terms of the 1974 settlements in regard to the payment of bonus.
On some of the other questions I have certain reservations.
I do not, however, desire to express any opinion on those questions as my brother Pathak J., has indicated that he is inclined to agree with Gupta J., on those questions.
Perhaps I will do well to add a few words of my own on the question of retrospectivity.
I am spared the necessity of stating the facts as those that are necessary have been stated by my brother Gupta J.
The 1974 settlements provided, among various other matters, for the payment of annual cash bonus (not a profit sharing bonus) to their Class Ill and Class IV employees at the rate of 15 per cent of the annual salary.
The settlements were to be operative from 1st April 1973 to 31st March 1977.
That the settlements were to be operative from 1st April 1973 to 31st March 1977 did not mean that the settlements would cease to be effective peremptorily from 1 4 1977 and, therefore, the annual cash bonus stipulated under the settlements would cease to be payable from that date onwards.
The settlements would continue to be binding even after 31 3.1977 and would not be liable to be terminated by the issuance of a unilateral notice by the employer purporting to terminate the settlements.
The settlements would cease to be effective only when they were replaced 270 by 'a fresh settlement, an industrial award or relevant legislation '.
This is the law and this was what the law was pronounced to be in Life Insurance Corporation of India vs D. J Bahadur(1) on a consideration of the relevant provisions and precedents.
The attempt made to supersede the settlements, in so far as they related to the payment of bonus, by enacting the Life Insurance Corporation (Modification of Settlement) Act 1976 failed, firstly because the Act was held to violate the provisions of Article 31(2) of the Constitution and secondly because the Act could not have retrospective effect so as to absolve the Life Insurance Corporation from obeying the writ of mandamus issued by the Calcutta High Court, which had become final and binding on the parties.
This was the decision of this Court in Madan Mohan Pathak vs Union of India(a), all the seven judges who constituted the Bench agreeing that the Act violated the provisions of Article 31(21 and four out of the seven judges, namely, Beg C. J., Bhagwati, Krishna Iyer and Desai JJ., taking the view that the Act did not have the effect of nullifying the writ of mandamus issued by the Calcutta High Court and the other three Judges, Chandrachud, Fazal Ali and Shinghal JJ, preferring not to express any view on that question.
The second attempt to nullify the 1974 settlements in regard to payment of bonus, by issuing notices under section 19(2) and Section 9 A of the and by amending the Standardization order and the Staff Regulations, was frustrated by the judgment of this Court in Life Insurance Corporation of India vs D.A. Bandar, the Court taking the view that the two settlements could only be superseded by 'a fresh settlement, an industrial award or relevant legislation '.
In this case, the Court issued a writ to the Life Insurance Corporation "to give effect to the terms of the settlements of 1974 relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation".
The effect of the two judgments in Madan Mohan Pathak 's case and D. J, Bahadhur 's case was clear: the settlements of 1974, in so far as they related to bonus could only be superseded by a fresh settlement.
an industrial award or relevant legislation.
But any such supersession could only have future effect, but not retrospective effect so as to dissentient the Class III and Class IV employees of the Life Insurance Corporation from receiving the cash bonus which had been earned by them, day by 271 day and which the Life Insurance Corporation of India was under an obligation to pay in terms of the writ issued in D. J. Bahadur 's case.
The present attempt made by the 1981 amending Act and the rules thereunder to scuttle the payment of bonus with effect from a date anterior to the date of the enactment must, therefore, fail.
The employees are entitled to be paid the bonus earned by them before the date of publication of the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 19 81.
N.V.K. Petitions partly allowed.
[/INST]HELD: In the face of the appellant 's promotion a few months before his compulsory retirement under F. R. 56 (d) and nothing even mildly suggestive of ineptitude or inefficiency after his promotion, it is impossible to sustain the order of the Government retiring him from service.
[79 G] When the Government exonerated him of the charges levelled against him, the basis of the adverse entry in his confidential file was knocked out.
By reason of the promotion of the selection post of Deputy Commissioner and posting as a Member of the Sales Tax Appellate Tribunal, the effect of the entry was further blotted out.
Since then, there was no adverse entry in his service record to discredit him or hinting even remotely that he had outlived his utility as a Government servant.
Had there been another adverse entry after his promotion it would have been possible to read them all in conjunction and say that it was time for him to quit Government service.
But that was not so.
It was therefore odd that he was retired a few months after his promotion.
[79 A C] 76 All this is not to say that previous history of a Government servant should be completely ignored once he is promoted.
Sometimes past events might help to assess the present conduct, but when there was nothing in the present conduct casting any doubt on the wisdom of the promotion there was no justification for needless digging into the past.
[80 A B] Swami Saran Saksena vs State of U.P., [1980] I SCR 923; Baldev Raj Chadha vs Union of India & Ors., [1981] I SCR 430; State of Punjab vs Dewan Chuni Lal, ; ; and Union of India etc.
vs M. E. Reddy & Anr., ; ; referred to.
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